American Surety Co v. Baldwin Baldwin v. American Surety Co

• Decision Date: 14 November 1932
• Docket Number: Nos. 3,21,s. 3
• Citation: 86 A.L.R. 298,77 L.Ed. 231,287 U.S. 156,53 S.Ct. 98
• Parties: AMERICAN SURETY CO. v. BALDWIN et al. BALDWIN et al. v. AMERICAN SURETY CO
• Court: U.S. Supreme Court

287 U.S. 156

53 S.Ct. 98

77 L.Ed. 231

AMERICAN SURETY CO.

v BALDWIN et al.

BALDWIN et al.

v. AMERICAN SURETY CO.

Nos. 3, 21.

Argued Oct. 13, 14, 1932.

Decided Nov. 14, 1932.

Messrs. Wm. Marshall Bullitt, of Louisville, Ky., Allan C. Rowe, of New York City, and Oliver O. Haga and Frank Martin, both of Boise, Idaho, for American Surety Co.

[Argument of Counsel from page 157 intentionally omitted] Mr. James F. Ailshie, Jr., of Boise, Idaho, for Baldwin and others.

Mr. Justice BRANDEIS delivered the opinion of the Court.

In each of these cases, the American Surety Company of New York seeks to be relieved from a judgment in favor of the Baldwins entered against it by an Idaho court for.$22,357.21 and interest, on a supersedeas bond. No. 3, which is here on certiorari to the Supreme Court of Idaho, brings the record of the cause in which that judgment was entered. 286 U.S. 536, 52 S.Ct. 499, 76 L.Ed. 1275. No. 21 is here on certiorari to the United States Circuit Court of Appeals for the Ninth Circuit, which reversed the decree of the federal court for Idaho denying the surety company's application to enjoin the enforcement of the judgment and dismissing the bill. 286 U.S. 537, 52 S.Ct. 500, 76 L.Ed. 1276. In each case it is claimed that the judgment is void under the due process clause of the Fourteenth Amendment.

The bond was given upon the appeal of the Singer Sewing Machine Company and Anderson, its employee, to the Supreme Court of Idaho from a judgment for $19,500 recovered against them by the Baldwins in an Idaho district court for an automobile collision. The defendants had given a joint notice of appeal 'from that certain judgment * * * against the defendants and each of them, and from the whole thereof.' Pursuant to the statutes (Idaho Compiled Statutes, §§ 7154 and 7155), two bonds were given by the surety company; both being executed only by it. One was in the sum of $300 for costs; the other was the supersedeas bond in the sum of $25,000 here in question, copied in the margin. ¹ It recited that 'if the said judgment appealed from, or any part thereof, be affirmed' and 'if the said appellant does not make such payment within thirty days from the filing of the remittitur from the Supreme Court in the court from which the appeal is taken, judgment may be entered on motion of the respondents in their favor against the undersigned surety.'

The Supreme Court affirmed the judgment as to Anderson and reversed it as to the Singer Company. Baldwin v. Singer Sewing Machine Co. and Anderson, 49 Idaho, 231, 287 P. 944. Upon the filing of the remittitur, the appropriate new judgment against Anderson was entered in the trial court. That judgment having remained unpaid more than thirty days, the Baldwins, without giving notice to either of the original defendants or to the surety company, moved the trial court to enter judgment against the latter. On June 23, 1930, judgment was so entered against the surety company in the sum of.$22,357.21 and interest, with a provision 'that the plaintiffs have execution therefor.'

The surety company concedes that by executing the supersedeas bond it became, by the laws of Idaho, a party to the litigation,² and that, if the effect of the bond was to stay the judgment as against Anderson, consent had thereby been given to the entry of judgment without notice and the judgment would be unassailable. Compare Pease v. Rathbun-Jones Engineering Co., 243 U.S. 273, 279, 37 S.Ct. 283, 61 L.Ed. 715, Ann.Cas.1918C, 1147. Its contention is that the bond, properly construed did not stay the judgment as against Anderson, but solely as against the Singer Company; that hence the surety company had not consented to the entry of a judgment against it upon Anderson's failure to pay; and that, since the judgment against it was entered without giving it notice and the opportunity of a hearing on the construction and effect of the bond, the judgment is void under the due process clause of the Fourteenth Amendment.

First. The certiorari granted in No. 3 to review the judgment rendered by the Supreme Court of Idaho on May 2, 1931 (50 Idaho, 606, 299 P. 341), must be dismissed for failure to make seasonably the federal claim. The proceedings culminating in that judgment were these. On June 26, 1930, three days after the entry by the Idaho district court of judgment against the surety company on the supersedeas bond, it filed a motion in that court to vacate and set aside the judgment. The grounds there urged in support of the motion were wholly state grounds. They were that the judgment was void, because there had been no breach of condition of the bond, properly construed; that the judgment had been entered without notice to either the surety company or the Singer Company; and that the enforcement of the judgment would be contrary to good conscience and equity. After hearing arguments on the motion, the Idaho district court ordered that the judgment be vacated and set aside, and that the execution issued pursuant thereto be quashed. The Baldwins appealed to the Supreme Court of Idaho; and, upon the presentation of their appeal, no federal question was raised by either party. The Supreme Court, on May 2, 1931, reversed the order vacating the judgment. It declared that the only issue before the trial court on motion to vacate was its own jurisdiction to render the judgment against the surety company on the supersedeas undertaking; that such jurisdiction existed by virtue of the surety company's execution of the undertaking in the cause; that the question which had necessarily been presented was, 'Did the surety company, in its undertaking, become a party liable for every part of the judgment appealed from which might be affirmed by the Supreme Court, or did it stipulate only as to such judgment or part thereof as might be affirmed against the Singer Sewing Machine Company?' that the trial court thus had the power and duty to construe the bond; that 'whether it decided right or wrong, its decision was a judgment which could be reviewed for error, if there was error, only by' the Supreme Court on appeal; and that the alleged error could not be raised on motion to vacate. 50 Idaho, 609, 614—616, 299 P. 341, 344.

The surety company petitioned for a rehearing. In that petition, besides reiterating several of its previous contentions, it urged, for the first time, that the rendition of the judgment on its undertaking violated the due process clause of the Fourteenth Amendment.³ The petition was denied without opinion. The federal claim there made cannot serve as the basis for review by this Court. The contention that a federal right had been violated rests on the action of the trial court in entering judg- ment without giving notice and an opportunity to be heard. The same ground of objection had been raised throughout the proceedings, but solely as a matter of state law. There had been ample opportunity earlier to present the objection as one arising under the Fourteenth Amendment. Compare Corkran Oil Co. v. Arnaudet, 199 U.S. 182, 193, 26 S.Ct. 41, 50 L.Ed. 143; Godchaux Co. v. Estopinal, 251 U.S. 179, 181, 40 S.Ct. 116, 64 L.Ed. 213; Live Oak Water Users' Ass'n v. Railroad Comm., 269 U.S. 354, 357, 46 S.Ct. 149, 70 L.Ed. 305. This is not a case where, as in Saunders v. Shaw, 244 U.S. 317, 320, 37 S.Ct. 638, 61 L.Ed. 1163, the federal claim arose from the unanticipated disposition of the case at the close of the proceedings in the state Supreme Court. Compare Ohio ex rel. Bryant v. Akron Metropolitan Park Dist., 281 U.S. 74, 79, 50 S.Ct. 228, 74 L.Ed. 710, 66 A.L.R. 1460. Nor is the federal claim based, as in Brinkerhoff-Faris Trust & Savings Co. v. Hill, 281 U.S. 673, 678, 50 S.Ct. 451, 74 L.Ed. 1107, upon the unanticipated act of the state Supreme Court in giving to a statute a new construction which threatened rights under the Constitution. Compare Missouri ex rel. Missouri Insurance Co. v. Gehner, 281 U.S. 313, 320, 50 S.Ct. 326, 74 L.Ed. 870.

Second. In No. 21, the Circuit Court of Appeals should have affirmed the decree of the federal court for Idaho which denied the surety company's application for an interlocutory injunction and dismissed the bill. For the federal remedy was barred by the proceedings taken in the state court which ripened into a final judgment constituting res judicata.

The surety company was at liberty to resort to the federal court regardless of citizenship, because entry of the judgment without notice, unless authorized by it, violated the due process clause of the Fourteenth Amendment. Compare National Exchange Bank v. Wiley, 195 U.S. 257, 25 S.Ct. 70, 49 L.Ed. 184; Cooper v. Newell, 173 U.S. 555, 19 S.Ct. 506, 43 L.Ed. 808. And it was at liberty to invoke the federal remedy without first pursuing that provided by state procedure. Simon v. Southern Ry., 236 U.S. 115, 35 S.Ct. 255, 59 L.Ed. 492; Atchison, Topeka & Santa Fe Ry. Co. v. Wells, 265 U.S. 101, 44 S.Ct. 469, 68 L.Ed. 928; Firestone Tire & Rubber Co. v. Marlboro Cotton Mills (C.C.A.) 282 F. 811, 814. But an adequate state remedy was available; and, having invoked that and pursued it to final judgment, the surety company cannot escape the effect of the adjudication there. Compare Mitchell v. First National Bank, 180 U.S. 471, 480—481, 21 S.Ct. 418, 45 L.Ed. 627; Lion Bonding Co. v. Karatz, 262 U.S. 77, 90, 43 S.Ct. 480, 67 L.Ed. 871.

The Supreme Court of Idaho had jurisdiction over the parties and of the subject-matter in order to determine whether the trial court had jurisdiction. Clearly, the motion to vacate, made on a general appearance, and the appeal from the order thereon, were no less effective to confer jurisdiction for that purpose than were the special appearance and motion to quash and dismiss held sufficient in Baldwin v. Iowa State Traveling Men's Ass'n, 283 U.S. 522, 51 S.Ct. 517, 75 L.Ed. 1244; And there was an actual adjudication in the state court of the question of the jurisdiction of ...