Beech v. American Surety Company of New York, 6188

• Decision Date: 02 November 1935
• Docket Number: 6188
• Citation: 51 P.2d 213,56 Idaho 159
• Parties: TOM BEECH, Respondent, v. AMERICAN SURETY COMPANY OF NEW YORK, Appellant
• Court: Idaho Supreme Court

51 P.2d 213

56 Idaho 159

TOM BEECH, Respondent, v. AMERICAN SURETY COMPANY OF NEW YORK, Appellant

No. 6188

Supreme Court of Idaho

November 2, 1935

INJUNCTION-DAMAGE AS A RESULT OF ISSUANCE-LIABILITY ON BOND-MEASURE OF DAMAGES - MARKET VALUE - EVIDENCE-OWNER OF PROPERTY AS WITNESS-ATTORNEY FEES.

1. In action for damages on bond given to assure observance of injunction restraining owners from disposing of sheep evidence that owners had negotiated for sale of sheep for delivery on day bond was given held admissible notwithstanding it was not in writing, for purpose of establishing market value of property at time bond was given with fact that contract was not enforceable between buyer and seller going to weight of testimony as to whether owners could have actually realized price specified (I. C. A., sec 62-104).

2. In action for damages on bond given to assure observance of injunction restraining owners from disposing of sheep, owner held entitled to testify as to value of sheep regardless of whether he had qualified as expert on values of sheep.

3. Where receiver was appointed purely as ancillary to injunction restraining owners from disposing of sheep and for sole purpose of seeing that injunction was obeyed, and did not take actual possession of property nor feed or care for property, damages sustained as result of not being able to sell sheep during pendency of injunction held to have resulted wholly from issuance of injunction, and not as result of appointment of receivers, and hence were recoverable in action on injunction bond.

4. Measure of damages in action on bond given to assure observance of injunction restraining owners from disposing of sheep held to be difference between value of property on date bond was given and injunction became effective, and value on date property was turned back to owners.

5. In action for damages on bond given to assure observance of injunction restraining owners from disposing of sheep, where it appeared that at time property was turned back to owners there was no open market for sale of so large a flock of sheep and that a couple of weeks were required to market entire band, market value at such time held to consist of composite of markets of different dates.

6. In action for damages on bond given to assure observance of injunction restraining owners from disposing of sheep, allowance of attorney fees held error in absence of showing as to any particular sum paid for procuring dissolution of injunction as distinguished from defending action on merits.

APPEAL from the District Court of the Eleventh Judicial District, for Minidoka County. Hon. Adam B. Barclay, Judge.

Action for damages on injunction bond. Judgment for plaintiff. Affirmed.

Judgment affirmed with costs to respondent. Petition for rehearing denied.

Richards & Haga, for Appellant.

A surety upon an injunction bond is not responsible for any damage that may result from the placing of property in custodia legis through a receiver. (Sutherland on Damages, vol. 2, 3d ed., p. 1436; Harvey v. Berry, Demoville & Co., 1 Baxt. (Tenn.) 252; High on Injunctions, vol. 2, p. 1591; Wood et al. v. Hollander et al., 84 Tex. 394, 19 S.W. 551; Kerngood et al. v. Gusdorf, 5 Mackey (16 D. C.), 161.)

A person cannot sustain legal damage and cannot be compensated for being wrongfully restrained from doing something he had no legal right to do. (Guthrie v. Biethan, 25 Idaho 706, 710, 139 P. 718.)

A surety on an injunction bond is only liable for the actual, direct, proximate and natural result of the injunction and, where only suspension of possession is claimed, in the amount measured by the difference between the value of the personal property at the time the bond was given and the value when the property was surrendered. (Sutherland on Damages, vol. 2, 3d ed., p. 1444; Osage Oil & Refining Co. v. Chandler, 287 F. 848; Cal. Jur., vol. 14, p. 309.)

Where motion to dissolve temporary injunction is made after the same became ineffective through the appointment of a receiver, no attorneys' fees can be allowed nor can any damages be recovered unless the court held that the injunction was unlawfully and wrongfully issued. (Galbreath v. Thayer, 53 A. L. R. 288; Charters v. Fidelity & Deposit Co., 32 Idaho 612, 614, 186 P. 921.)

The liability of a surety on a bond is measured by the terms of its contract and the court is without authority to modify or extend by implication or otherwise the terms or conditions stipulated in such bond. (Miller v. Stewart et al., 9 Wheat. (U.S.) 680, 6 L.Ed. 189; Scholtz v. American Surety Co., 35 Idaho 207, 206 P. 187; Sutherland on Damages, vol. 2, 3d ed., pp. 1435, 1437.)

H. V. Creason and Walters, Parry & Thoman, for Respondent.

The surety on a bond given on a temporary injunction is liable for all damages arising out of the injunction even though a receiver has been subsequently appointed. (Lehman v. M'Quown, 31 F. 138; Hotchkiss v. Platt, 8 Hun (N. Y.), 46.)

This court has definitely established it as the rule of law in this state that when a plaintiff finally fails to maintain in an action in which a temporary injunction has been issued that the injunction bond is liable for damages even though no appeal was ever taken from the order granting the temporary injunction. (Davidson Grocery Co. v. United States F. & G. Co., 52 Idaho 795, 21 P.2d 75; Beech v. United States F. & G. Co., 54 Idaho 255, 30 P.2d 1079.)

The proof showed the average weight of the lambs and their average value at the time the temporary injunction was issued. It revealed the death loss and the cost of feeding during the period of restraint. It gave the gain in weight during the period of restraint and the value of the sheep at the time the restraint ended both in the opinion of the witnesses and as shown by the actual sales made as soon as it was possible to sell the sheep thereafter. This is more than adequate to sustain the damages claimed by plaintiff here, particularly in the absence of any proof to the contrary on the part of the appellant. (55 C. J. 1053; Sutherland on Damages, 4th ed., vol. 2, pp. 1435, 1448, 1457.)

Since attorneys were employed to prepare and present a motion to dissolve the temporary injunction, and rendered services in that regard, the reasonable fees for such services is a proper element of damages. (Beech v. United States, F. & G. Co., supra; Davidson Grocery Co. v. United States F. & G. Co., supra; Miller v. Donovan, 13 Idaho 735, 92 P. 992, 13 Ann. Cas. 259.)

AILSHIE, J. Givens, C. J., and Budge, Morgan and Holden, JJ., concur.

OPINION

AILSHIE, J.

This action arises out of the case of Bowman v. Adams, decided by this court in 45 Idaho 217, 261 P. 679. That action was brought to enforce specific performance of a contract to sell a band of about 13,000 sheep and for injunction against loading and disposing of them. An order was issued restraining defendants from loading or shipping any sheep until further order of the court; injunction bond was filed in the sum of $ 1,000. Motion to dissolve the restraining order was denied and under order of court, continuing the injunction and increasing amount of bond, plaintiff filed a bond in the sum of $ 10,000. Later on the same day a receiver was appointed for the purpose of enforcing the injunction and on the next day, January 13, 1923, he assumed "control and possession" of the sheep "as a watchman and guardian, . . . . to see that they were not sold, transported and encumbered, shipped, or in any manner disposed of in violation of the terms and conditions of said injunction." Motions to dissolve the injunction and the order appointing receiver were denied by the court. Later the Western Bond and Mortgage Company was made a party defendant and on January 17th was allowed to take possession of the sheep on condition of filing a bond in the sum of $ 50,000, which it did. The sheep were sold the latter part of January.

In June, 1924, the original case of Bowman v. Adams was tried in the lower court and judgment was entered in favor of Bowman for $ 26,004. On appeal this court reversed the judgment on Nov. 21, 1927, and remanded the cause for new trial as to the defendants Adams and Beech. (Bowman v. Adams, supra.) Pursuant to the decision and remittitur of this court, and upon motion of the Western Bond and Mortgage Company, the district court on Jan. 21, 1928, entered its judgment dismissing the action as to the Mortgage Company and allowing its costs against the plaintiff in the sum of $ 994.50. On February 7th the cause was again tried in the district court and the court entered an order dissolving the injunction and dismissing the action with prejudice. In November, 1931, defendants Adams and Western Bond and Mortgage Company assigned to Beech all their right, property, claims, demands, etc., in the action. June, 1932, the case of Beech v. United States F. & G. Co. was tried and judgment was entered March, 1933, in favor of the plaintiff and against the surety company in the amount of $ 1,104.82 (which included costs and disbursement incurred) with interest. Upon appeal to this court the judgment was affirmed. (54 Idaho 255, 30 P.2d 1079, 92 A. L. R. 264.)

The present action is on the $ 10,000 bond given January 12, 1923, on continuance of the injunction, and was instituted on February 3, 1933. Answer was filed denying in general the allegations of the complaint. Later it was stipulated in open court that all testimony be submitted to the court without a jury. From a judgment rendered on December 8, 1933, for $ 2,990 and costs, against the surety on the injunction bond, defendant appeals.

The various assignments of error made by appellant and the gist of the entire argument all revolve about the single question as to...