McDermott v. American Bonding Co. of Baltimore
| Decision Date | 14 April 1919 |
| Docket Number | 3981. |
| Citation | 179 P. 828,56 Mont. 1 |
| Parties | McDERMOTT et ux. v. AMERICAN BONDING CO. OF BALTIMORE (two cases). |
| Court | Montana Supreme Court |
Appeal from District Court, Silver Bow County; J. B. McClernan Judge.
Actions by Peter T. McDermott and wife against the American Bonding Company of Baltimore. From the judgment rendered, both parties appeal. Remanded, with directions to modify judgment in favor of plaintiffs.
Walsh Nolan & Scallon, of Helena, and Roote & Hopkins, of Butte for appellants.
John E. Corette and Carl J. Christian, both of Butte, for respondent.
In 1907, John H. O'Meara and John Kerrigan commenced an action in the district court of Silver Bow county against Peter T. McDermott and Annie C. McDermott, his wife, for an accounting and an injunction pending the determination of the suit. The plaintiffs alleged that they were copartners with Peter T. McDermott in the sale of the Burke and Balaklava mining claims; that the copartners had secured from the owner of the claims the right to sell them for a price which would net the owner $275,000; that any excess over that amount should belong to them as commission for making the sale; that they sold the claims for $400,000; that McDermott collected $10,000 of the commission and refused to account for any part thereof, except $700 paid to O'Meara; that he had transferred the remaining $9,300 to his wife, and, assuming to own in his own right the remaining $115,000 still due, had assigned his claim to it to his wife-all with the intent to defraud O'Meara and Kerrigan. An order to show cause was issued and on the return thereof, and after a hearing, an injunction issued which restrained the McDermotts from receiving or collecting to exceed one-half of the commission remaining unpaid "until after the final determination" of the case. In order to secure the injunction, the plaintiffs gave a statutory bond in the sum of $10,000, with the American Bonding Company as surety. On February 8, 1908, the cause was tried upon the merits, resulting in findings to the effect that O'Meara and Kerrigan were not copartners with McDermott in the sale of the mining claims and that they were not entitled to an injunction or to any other relief. A judgment was rendered and entered in favor of the McDermotts, and the injunction, which had been in effect from July 30, 1907, was dissolved. Thereafter this action was commenced by the McDermotts to recover damages alleged to have been suffered by them by reason of the injunction. The items constituting the damages claimed are: Attorney's fees, $5,000; interest on the money impounded, $2,396; court costs and witness fees, $153.10; and certain other expenses not material now. The trial court found in favor of plaintiffs for $2,500, the amount paid for attorney's fees, and against them upon each of the other items, and judgment was entered accordingly. Both parties have appealed.
The bonding company complains of the award made for attorney's fees, and the McDermotts complain of the action of the court in denying recovery upon the other items of damages enumerated in their complaint.
The bond required before an injunction issues must provide:
"That the plaintiff will pay to the party enjoined such damages, not exceeding an amount to be specified, as such party may sustain by reason of the injunction, if the court finally decide that the plaintiff was not entitled thereto." Section 6646, Rev. Codes.
The measure of damages in an action on the injunction bond is the amount which will compensate for all the detriment proximately caused by the injunction during the time it is operative, or which in the ordinary course of things, would be likely to result therefrom. Section 6048, Rev. Codes; 14 R. C. L. 482. The controversy presented by these appeals arises out of the application of these principles to the facts of this particular case.
1. Attorney's Fees.-It is the general rule in this jurisdiction, and in most of the states, that attorney's fees paid or contracted to be paid in securing the dissolution of an injunction are recoverable as damages in an action on the injunction bond. Counsel for both parties apparently rely upon the former decisions of this court to sustain their respective contentions. The cases referred to establish these principles:
(a) If the injunction was the only relief sought in the original action, the attorney's fees paid, or contracted to be paid, are recoverable, and it is immaterial whether the injunction was dissolved upon motion or upon a final determination of the case on the merits. Miles v. Edwards, 6 Mont. 180, 9 P. 814; Creek v. McManus, 13 Mont. 152, 32 P. 675.
(b) If relief other than the injunction was sought in the original action, and the injunction was not dissolved until the trial of the cause on the merits, then to authorize recovery the party seeking such relief must show that the attorney's fees were paid, or contracted to be paid, for the special service of securing such dissolution, as distinguished from services rendered in the general management of the case on its merits or other branches thereof. Campbell v. Metcalf, 1 Mont. 378; Allport v. Kelley, 2 Mont. 343; Creek v. McManus, 17 Mont. 445, 43 P. 497.
(c) If relief other than injunction was sought in the original action and the injunction was dissolved on motion prior to the trial on the merits, but the fees paid or contracted to be paid counsel were for his services in the case generally, no recovery of such fees can be had in an action on the injunction bond. In other words, to warrant recovery there must be a segregation of the fees paid for securing the dissolution, from the fees paid for the other services rendered in connection with the case. Campbell v. Metcalf, above; Parker v. Bond, 5 Mont. 1, 1 P. 209.
We think it should be held upon principle that attorney's fees paid, or contracted to be paid, for services rendered in procuring the dissolution of an injunction, are to be limited to compensation for such services as are rendered before a hearing of the cause on the merits, except (1) in a case where a trial of the merits is the only available means of testing plaintiff's right to the injunction, and (2) in a case where timely motion to dissolve has been made but in the discretion of the court a decision of the motion is withheld until the conclusion of the trial of the merits. Andrews v. Glenville Woolen Co., 50 N.Y. 282; 2 High on Injunctions, § 1687.
The general language employed in Plymouth Gold Mining Co. v. United States Fidelity & Guaranty Co., 35 Mont. 23, 88 P. 565, 10 Ann. Cas. 951, is to be understood in the light of the facts presented by that case, and, when so understood, is not inconsistent with any of the rules announced above.
The record discloses that, immediately after the case of O'Meara et al. v. McDermott et al. was instituted and the order to show cause...
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