Gilbert v. American Sur. Co.

• Citation: 121 F. 499
• Decision Date: 07 October 1902
• Docket Number: 886.
• Parties: GILBERT, Sheriff, v. AMERICAN SURETY CO. OF NEW YORK et al.
• Court: United States Courts of Appeals. United States Court of Appeals (7th Circuit)

121 F. 499

GILBERT, Sheriff, v. AMERICAN SURETY CO. OF NEW YORK et al.

No. 886.

United States Court of Appeals, Seventh Circuit.

October 7, 1902

L Evans, for plaintiff in error.

Alfred S. Austrian, for defendants in error.

The American Preservers Company, a corporation of the state of West Virginia, on May 11, 1891, brought suit in replevin against Andrew D. Bishop in a court of the state of Illinois and caused a writ to be therein issued, directing the sheriff to take certain described property from the possession of Bishop and to deliver the same to the plaintiff in the writ upon receiving proper bond in double the value of the property, stated to be of the value of $9,000. The property mentioned was taken from Bishop and delivered to the American Preservers Company, the plaintiff in the writ, the sheriff taking from the plaintiff the bond in suit executed by the Preservers Company as principal and by the American Surety Company as surety, conditioned as follows: 'Now therefore, if the American Preservers Company, plaintiff, shall prosecute its said suit to effect and without delay, and make return of the property recovered and taken under and by virtue of said writ of replevin issued in said cause, if return thereof shall be awarded, and shall save and keep harmless the said sheriff for having replevied the said property, and shall pay all costs and damages occasioned by wrongfully suing out said writ of replevin, then this obligation to be void; otherwise to remain in full force and effect.'

The issues in the replevin suit are stated at length in Bishop v. American Preservers Company, 157 Ill. 284, 41 N.E. 765, 48 Am.St.Rep. 317. The trial of that suit resulted in a judgment for the plaintiff, which upon appeal was affirmed by the Appellate Court, and, upon further appeal to the Supreme Court, was reversed, and a new trial awarded upon the ground of the improper exclusion of evidence. The cause was thereupon redocketed in the trial court, and by an order therein entered on December 15, 1898, amending an order of May 5, 1898, the replevin suit was dismissed without a trial upon the merits, and a return of the property taken under the writ, together with the costs of suit, was adjudged. From the judgment awarding a writ of retorno the Preservers Company, plaintiff in the suit, appealed to the Appellate Court, and the judgment of dismissal with retorno habendo was there affirmed, and subsequently, upon further appeal, affirmed by the Supreme Court of the state.

This suit is brought against the principal and surety upon the replevin bond to recover, failing a return of the goods, the value of them, and damages by way of attorney's fees and expenses incurred in the defense of the replevin suit.

To the declaration the defendants in error inter alia pleaded that the property in the replevin suit sought to be recovered was the property of the American Preservers Company. To this it was replied that the property mentioned was not the property of the Preservers Company, but was the property of Bishop, because Bishop, being engaged in the business of manufacturing fruit butters and like products, was induced, by threats that otherwise his business would be ruined, to enter into a trust combination to prevent competition and to secure a monopoly in the manufacture of like articles of food throughout the United States (this agreement is set forth at large in the opinion of the court in 157 Ill. 284, 41 N.E. 765, 48 Am.St.Rep. 371); that his goods then on hand, inventoried at $9,063.03, were transferred by bill of sale under seal executed by him in July, 1888, to the American Preservers Company, for which he received 331 shares of stock of that company, of the par value of $33,100, which he assigned to the trustee of the trust, and received in lieu thereof 662 certificates of trust, of the par value of $66,200; that said bill of sale was executed to aid the trust in controlling the entire manufacture of fruit butters and like products throughout the United States, and to create a monopoly in such manufacture and sale and to stifle competition; that such bill of sale constitutes the title of the American Preservers Company to the goods in question, and was held by the Supreme Court of Illinois in the case mentioned to be void, and that such ruling is conclusive and binding upon the parties to the suit; that in December, 1888, and in March, 1889, Bishop tendered his trust certificates to the general manager of the trust, and demanded a return of the property covered by its bill of sale, which being refused, he was induced to continue the management of the business and to render to the trust reports thereof until March, 1891, when he was advised that the trust agreement was illegal; that at the making of the bill of sale he was in possession of the property therein mentioned, and ever since that time has been in such possession, except so far as articles have been changed through sales and purchases.

At the trial it was shown that upon delivery of the bill of sale in July, 1888, Bishop was employed by the American Preservers Company at a salary of $50 per week, to conduct the business sold by him to it, was placed in possession of the property as its agent for the purpose, opened a new set of books, insured the property in the name of the American Preservers Company, and made reports periodically to the company of the business, and continued so to do and to receive his stipulated salary, until just prior to the 11th of May, 1891, the date of the commencement of the replevin suit. The court refused to allow proof of the facts stated in the replication, directed the jury to return a verdict for the plaintiff, and to assess 'the plaintiff's damages at debt $22,000, and damages at the sum of one cent, said debt to be satisfied upon payment of said damages of one cent and costs of suit,' which was done. To review the judgment entered upon such verdict this writ of error is brought.

Before JENKINS and BAKER, Circuit Judges, and BUNN, District Judge.

JENKINS Circuit Judge, after stating the facts, .

It is provided by statute of the state of Illinois that in an action upon a bond given upon replevin the obligors in the bond may plead, in mitigation of damages, title to the property in dispute in the replevin suit, when the merits of the case have not been determined in that suit. 3 Starr & C.Ann.St.Ill.c. 119, par. 26, p. 3388; Stevison v. Earnest, 80 Ill. 513. It was therefore open to the defendants in error to show in this suit that the title to the property involved in the replevin suit was in the American Preservers Company. This was shown by the bill of sale executed by Bishop to that company. That title, however, was sought to be rendered nugatory by evidence that the bill of sale was given in pursuance of an illegal trust agreement in restraint of trade; in other words, that Bishop, who had sold his plant and had received the stipulated consideration, and for nearly three years thereafter had been in the service of the vendee at a stipulated salary, could defeat his vendee's title, and hold as his own the plant sold by him of which he was in possession only as agent of his vendee, and including goods subsequently purchased by the vendee, because the agreement under which the bill of sale was executed was in restraint of trade.

It is primarily urged in support of this contention that the Supreme Court of Illinois had so ruled in the replevin suit between Bishop and the American Preservers Company (157 Ill 284, 41 N.E. 765, 48 Am.St.Rep. 317), and that its decision is res judicata between the parties to that suit, and therefore conclusive in this suit. The vice of this contention is not difficult to be ascertained. It is not doubted that a decree of a court of competent jurisdiction is conclusive, in a second suit between the same parties or their privies, of every matter that was decided therein and that was essential to the decision made, and we have so held. David Bradley Manufacturing Company v. Eagle Manufacturing Company, 18 U.S.App. 349, 6 C.C.A. 661, 57 F. 980. In the replevin suit, however, there was no judgment determining the merits of the cause. ...