State ex rel. Reins v. Sixth Judicial District Court

HUNT, J. The consideration of the undertaking of these delators was a stay of execution pending the determination of the appeal from the District to the Supreme Court in the case of Beck v. O'Connor et al., 21 Mont. 109, 53 Pac. 94. If ho stay c'oú'ld have been had until the judgment of this Court has rendered, the sureties might never have executed the bond. Certain present conditions often exist under which a man will assume a liability upon an appeal and stay bond which under other circumstances he would not. The suspension of a levy under an execution against a judgment debtor until his appeal can be heard by the Supreme Court may operate so advantageously to such an appellant as to impose upon the sureties on the stay bond comparatively slight risk of eventually having to pay the judgment appealed from should the same be affirmed; while a levy before the appeal is heard and determined might have the effect of ruining the appellant, and removing every opportunity, otherwise close at hand, to prepare himself to pay the judgment, if affirmed, and to protect his sureties against payment on their part. Stay of execution being a consideration of great value, sureties who execute an undertaking therefor have a right to rely upon the letter of their bond, and to stand upon the entirety of the expressed consideration therein, and their liability cannot be extended by implication. (Smith v. Lovell, 2 Mont. 332.) This principle is formulated in Sections 3680 and 3681 of the Civil Code, which provide that a surety cannot be held beyond the express terms of his contract, and that, in the interpretation of the terms of a contract of suretyship, the same rules are to be observed as in the case of other contracts. In the application of these general rules it is necessary that relators be secured the consideration, and the entire consideration, named in the express terms of their bond or undertaking, unless they have done that which has excluded them from the benefits of the rules. Let us see if they have. The record shows that they agreed that, in consideration of a stay of execution of the judgment appealed from, they became bound in the sum named in the undertaking that if said judgment ap — 454 — pealed from, or any part thereof, was affirmed, or the appeal was dismissed, by the Supreme Court, appellant Beck would pay respondents Cooper and O’Connor the amount directed to be paid, and all damages and costs awarded against appellant on the appeal. They did not agree to pay if any stay was given, but did if a stay was given until the appeal was affirmed or dismissed by the Supreme Court. But what occurred ? Nearly a whole year before this Court handed down its opinion in the appealed suit of Beck v. O'Connor et al., supra, affirming the judgment of the lower court, execution on the judgment appealed from had been issued by an order of the district court, made at the instance of respondents Cooperand O’Connor, the property of the appellant Beck had been levied upon and sold, and the proceeds of such sale had been applied on the judgment appealed from. So far, this action of respondents was in total disregard of the contract of the sureties, and put the respondents in an attitude of announcing to the sureties that, as respondents, they would no longer rely upon the undertaking for a stay, but had abandoned the same, and had resorted to their execution by levying upon the appellant’s property. Now, we inquire whether the bondsmen can avail themselves of this action of respondents to claim exoneration from liability on the stay bond. Counsel say the sureties cannot, even though their contract is express in its terms, because of their omission to justify on the stay bond, as required by Section 1732 of the Code of Civil Procedure, after exception to their sufficiency was made in due form by O’Connor and Cooper. This omission, it is argued, was the sureties’ own act, and, because of it, execution was no longer stayed; wherefore it is concluded that O’Connor and Cooper, respondents in the appealed suit, had a right to proceed under the execution, and, if the judgment was not satisfied by the execution against Beck, they could still hold the sureties should the judgment be affirmed on appeal to this Court. This argument has an unsound basis, for it necessarily involves the proposition that a justification to an undertaking, if required of the sureties — 455 — after they have been excepted to, becomes so blended with the undertaking itself that nonobservánce of the statute requiring the justification not only fails to longer stay the execution, but reaches to the letter of the undertaking itself,' by importing into its terms an agreement to pay the judgment appealed from, if affirmed or dismissed, notwithstanding the fact that the express consideration of a stay pending the determination of the appeal by this Court has failed. The exact fault of this reasoning seems to us to lie in a confusion of the consequences of a failure on the part of sureties to justify with those following the levy of an execution by respondents before the appeal is determined by this Court. Mere failure to justify does not relieve the sureties guilty of the omission, and constitutes no defense against their liability. (Blair v. Hamilton, 32 Cal. 50; Murdock v. Brooks, 38 Cal. 596.) Their contract to pay the judgment appealed from, upon affirmance or dismissal thereof, is not at all affected (People v. Shirley, 18 Cal. 121; Lee v. Watson, 15 Mont. 228, 38 Pac. 1077), nor is their obligation in the least lessened, by neglect to prove their solvency, provided the consideration of a stay is not taken away from them by the voluntary act of the respondents. The statute requiring a justification is directory, and meant to be for respondents’, not appellant’s, benefit. Respondents here could have waived the statutory provisions entirely by never moving to have the sureties justify; yet the sureties’ undertaking would have stood as of full force and effect so long as its consideration was not impaired, until the determination of the appeal or the dismissal thereof by this Court. We do not question the correctness of the doctrine recognized in Moffat v. Greenwalt, 90 Cal. 371, 27 Pac. 296, which will not allow sureties on a stay bond to claim release where, through their own omissions, they have failed to justify under a statute like Section 1732, requiring them to do so if their sufficiency is excepted to. Unquestionably, that is the law. But that rule does not conflict at all with the right of sureties to have the stay of execution granted and named as the consideration of their undertaking, if they are to be called upon to pa/y thejudg — 456 — ment when affirmed; and it is this right that these sureties have never waived. It was not, therefore, the nonobservance of the statute which relieved the sureties of liability at all, for it did not; but it was the act of the respondents in levying the execution against the property of the judgment debtor, and selling the same when they need not have done so, and should not, if they meant to rely upon the sureties’ undertaking for a stay, executed for their benefit. Respondents had a right, under Section 1732, supra, to proceed with the execution after the time had elapsed in which the sureties should have justified, no matter whether the appeal had been heard or not; for execution was no longer stayed, and, under such circumstances, the sureties could have interposed no obstacle to the levy upon the appellant’s property; but, in pursuing that course, they destroyed the consideration named in the sureties’ contract, deprived them of the benefit of it, and, having done so, they cannot now fix the sureties’ liability under contingencies not embraced in their undertaking, or the several statutes, including Sections 1726 and 1730 of the Code of Civil Procedure, with relation to which the undertaking was given. Having made their election to proceed with the levy and sale thereunder, we think they chose to treat the stay bond as ineffectual, and we hold that they have waived their right to a judgment against the sureties. As bearing more or less upon the case, we cice Columbia & P. S. Railroad Co. v. Braillard, 12 Wash. 22, 40 Pac. 382, and Powers v. Chabot, 93 Cal. 266, 28 Pac. 1070. It is hardly necessary to add that, in discussing the liability of the sureties on the stay bond, we do not mean to imply that the bond is not good to perfect the appeal itself. We believe it is. (Schacht v. Odell, 52 Cal. 447; Hill v. Finnigan, 54 Cal. 311; Hayne, New Trials and App. p. 678. ) Our opinion only goes to the effectiveness of the obligation to secure the ancillary relief of staying execution on the judgment from which the appeal is prosecuted. 2. As to remedy by certiorari: Was the action of the district court in entering judgment in favor of the respond — 457 — ents Beck and O’Connor, against the sureties on the stay bond, in excess of the jurisdiction of that court ? We believe it was. As hereinbefore decided, when the respondents proceeded with the levy and sale, they elected to abandon the security of the stay bond, and released the sureties upon their undertaking to pay the judgment affirmed by this Court. Respondents’ position became analogous to that of a plaintiff who dismisses one of two causes of action against a defendant. This he may do according to the provisions of the Code (Code of Civil Procedure, Sec. 1004); and if he so acts defendant is no longer bound to pay attention to that cause which plaintiff has dismissed (Loeb v. Willis, 100 N. Y. 235, 3 N. E. 177). Relator’s case is stronger, however; for, until the judgment appealed from was affirmed by this Court, and until the remittitur was filed with the Clerk of the District Court, and until appellant had failed for thirty days thereafter to pay the judgment, no judgment could have been rendered against the sureties, for until then the court acquired no jurisdiction over their persons, under the stipulations of their contract or otherwise. Furthermore, at that time they were under no obligation to go into the district court, for the reason that the records of that court showed the prior order authorizing execution and levy, together with the fact of levy and sale, which (always considering the bond for a stay only) operated as a complete release to the sureties, and put them beyond the jurisdiction of the court in subsequent ex parte proceedings attempted to be had against them under the terms of the stay bond and the statute under which the bond was given. (Watts v. Overstreet, 78 Tex. 571, 14 S. W. 704.) The contingencies necessary to happen before the sureties’ liability was fixed had not only failed to happen, but, by respondents’ prior action, they had been prevented from happening; and, in our judgment, the court had lost jurisdiction over these relators. The case is one, therefore, where the action of the court in entering judgment against the sureties, and authorizing execution thereunder to be issued, was more than a mere irregularity or error of law occurring in the course of proceedings — 458 — which the court was authorized to conduct, and amounted to an excess of the power of the court, and became subject to be reviewed by this writ. It is therefore ordered that the judgment and order of, the district court in and for Carbon county, made and entered on November 21, 1898, against these relators as sureties upon the stay bond in the case of Beck v. O’Connor, in so far as it affects said relators as sureties on the stay bond, be, and the same is hereby, set aside and annulled. Brantly, C. J., and Pigott, J., concur.