Simonitsch v. Bruce

MUNGER, District Judge (after stating the facts as above). [1] The foundation of plaintiff’s claim, as made in his argument and as [333] claimed in his bill, is that the Northern Trust Company, as surety on Macfadden’s bond, as soon as it pays the amount found due by the county court’s decree, will become subrogated to whatever rights Mac-fadden has against the Ellsworth Company. It is said that Macfad-den was held to be liable to the estate, because he permitted the Ells-worth Company to acquire the property of the estate, and that, if he or his surety must pay its value to the estate, then the Ellsworth Company, as the recipient of the property, is liable to reimburse him. On this hypothesis plaintiff contends that he, as the purchaser of all the property of the Ellsworth Company and having assumed all of its obligations, will in fact be the one ultimately liable to pay the amount found due to Bruce: He claims an estoppel against the widow, the guardian, and the present administrator, because the widow, the guardian, and the former administrator agreed to and induced the purchase by the Ellsworth Company of the property from Ellsworth and from Macfadden, as administrator, and therefore that the widow, the guardian, and the new administrator may not now assert that that corporation did not lawfully acquire the property. It is obvious that the availability of this defense on the part of Macfadden was a matter for the consideration of the state courts of North Dakota, when Mac-fadden was called upon to account to the estate, and that the final judgment rendered against him may not be reviewed in this proceed’ ing to determine the correctness of the conclusions on which it was based. No fraud, accident, or mistake is alleged as a ground for avoiding that judgment. It is not a ground for equitable interference with a judgment that a defendant by his own act or omission failed effectually to avail himself of a defense at law, or that the court decided a question of law or fact erroneously. 4 Pom. Eq. Jur. 1361: Phillips v. Negley, 117 U. S. 665, 6 Sup. Ct. 901, 29 L. Ed. 1013: Hendrickson v. Hinckley, 17 How. 442, 15 L. Ed. 123; Walker v. Robbins, 14 How. 584, 14 L. Ed. 552; Creath’s Administrator v. Sims. 5 How. 192, 12 L. Ed. 111; Embry v. Palmer, 107 U. S. 3, 2 Sup. Ct. 25, 27 L. Ed. 346. The plaintiff contends that, as he was not a party to that suit, he is not concluded by the adjudication, and that he may assert this claim of estoppel against the widow, guardian, and present administrator, because, as successor of the Ellsworth Company and guarantor of its obligations, he will be obliged to respond to any claim against it. [2] The theory of plaintiff’s bill is that the widow, the guardian, and the new administrator are estopped to claim that there was an invalid purchase by the Ellsworth Company, that that defense has not been availed of by the Ellsworth Company in any litigation to which it was a party, and that it would have been a complete defense for Macfad-'den, if he had presented it in the suit against him. If this theory is well founded, and it is the .only one presented by the bill, then the plaintiff is not entitled to an injunction, because if there shall be a suit brought by Macfadden or his surety against the plaintiff as the successor of the Ellsworth Company he can urge this claim of estoppel, and if it would have been a sufficient defense in the suit against Mac-fadden it will be a sufficient defense in a suit by Macfadden or his [334] successor in interest against the plaintiff. An injunction is not granted as a matter of course, but only in the sound discretion of the court, when necessary to prevent irreparable injury, for which there is no adequate remedy at law, and not to enforce a right that is doubtful, or to prevent an act the injurious consequences of which are doubtful. Parker v. Winnipiseogee Lake Cotton & Woollen Co., 67 U. S. (2 Black) 545, 17 L. Ed. 333; Consolidated Canal Co. v. Mesa Canal Co., 177 U. S. 296, 20 Sup. Ct. 628, 44 L. Ed. 777; Parcher v. Cuddy, 110 U. S. 742, 4 Sup. Ct. 194, 28 L. Ed. 312; Bliss v. Washoe Copper Co., 186 Fed. 789, 109 C. C. A. 133; Hunnewell v. Cass County, 22 Wall. 464, 22 L. Ed. 752. On the theory presented by plaintiff’s bill he needs no injunction against the enforcement of the final judgment against Macfadden, in-order to protect his rights as the successor to the property and obligations of the Ellsworth Company, so that he may present this defense of estoppel. [3] There is another reason why plaintiff is not entitled to enjoin the collection of the judgment against Macfadden. He voluntarily indemnified the surety on the appeal bond given by Macfadden when the appeal was taken to the Supreme Court of North Dakota. He thereby agreed that he would pay the judgment against Macfadden, if it was affirmed. The surety on the bond and the plaintiff, as the surety’s surety, are each concluded by the terms of the bond from questioning the liability of Macfadden to pay the judgment resulting in that case. Stovall v. Banks, 77 U. S. (10 Wall.) 583, 19 L. Ed. 1036; Wm. W. Bierce, Ltd., v. Waterhouse, 219 U. S. 321, 31 Sup. Ct. 241, 55 L. Ed. 237; Commonwealth of Pennsylvania v. Fidelity & D. Co. (C. C.) 180 Fed. 292; Seymour v. Smith, 114 N. Y. 481, 21 N. E. 1042, 11 Am. St. Rep. 683; Krall v. Libbey, 53 Wis. 292, 10 N. W. 386; Freeman on Judgments, §§ 176, 180; 4 Corp. Jur. 1269. In the case of Stovall v. Banks, supra, the court said: “It lias been argued on behalf of tlie defendants in error that the decree of the superior court, if admitted, would have been only prima facie evidence against the sureties in the bond. Were that conceded, it would not justify the exclusion of the evidence. But the concession cannot be made. The decree settled that the administrator of the intestate, Alfred Eubanks, held in his hands sums of money belonging to the equitable plaintiffs in this suit, as dis-tributees of the intestate’s estate, which he had been ordered to pay over by a court of competent jurisdiction, and the record established his failure to obey the order. Thereby a breach of his administration bond was conclusively shown. Certainly the administrator was concluded; and the sureties in the bond are bound to the full extent to which their principal is bound. A principal in a bond may he liable beyond the stipulations of the instrument, independently of them; but so far as his liability is in consequence of the bond, and by force of its terms, his surety is bound with him. There may be special defenses for a surety arising out of circumstances not existing in this ease, but. in their absence, whatever concludes his principal as an obligor concludes him. He cannot attack collaterally a decree made against an administrator, for whose-fidelity to his trust he has hound himself.” These conclusions require an affirmance of the decree, and an order to that effect will be entered.