Midland Company v. Broat
| Decision Date | 22 July 1892 |
| Parties | Midland Company v. Richard H. Broat |
| Court | Minnesota Supreme Court |
June 20, 1892, Argued
Appeal by plaintiff, The Midland Company, from an order of the District Court of Hennepin County, Canty, J., made January 30, 1892, overruling a demurrer to the second defense and counterclaim in defendant's answer.
This action was brought by the plaintiff, The Midland Company, a corporation organized and existing under and by virtue of the laws of the State of Illinois, and doing business at Chicago Illinois, on a promissory note for $ 1,205.37, executed and delivered by defendant, Richard H. Broat, a resident of Minneapolis, Minnesota, to D. H. Tolman, and indorsed and delivered by Tolman to plaintiff. The defendant's second defense and counterclaim alleges, that on May 6, 1891, while defendant was temporarily in Chicago, the plaintiff brought a suit in chancery against him in the Circuit Court for Cook County, Illinois, and caused a writ of ne exeat republica to be issued against him, and that in pursuance of the order of the judge who directed the issuance of the writ, the plaintiff duly executed and filed in court a ne exeat bond in the sum of $ 5,000, conditioned that "if the said Midland Company shall prosecute the said bill or petition with effect and without delay, and pay or cause to be paid to the said Broat, his heirs or assigns, and reimburse to the said Broat, all such costs and damages as shall be sustained by the wrongful suing out of the said writ of ne exeat, then said obligation shall be void; otherwise to be and remain in full force and virtue." The counterclaim further alleges that the bond was duly executed, approved and delivered to defendant, and that the writ was issued and delivered to the sheriff of Cook County, and defendant was arrested thereon and confined in jail wrongfully and without probable cause that thereafter, upon a hearing duly had before the court the writ and proceedings against him were quashed and adjudged unwarranted, wrongful and without just cause. He was released from custody, and the proceedings finally determined in his favor. The counterclaim further alleges that the defendant suffered damages in the sum of $ 5,000 by reason of the wrongful issuance of the writ of ne exeat, setting out in detail the items of his damages, and claims that he has a cause of action against plaintiff on said bond in the sum of $ 5,000.
To this defense and counterclaim, plaintiff demurred, on the ground that it did not state facts sufficient to constitute a counterclaim or defense to the cause of action set forth in the complaint. The demurrer was overruled, and plaintiff appeals.
Order affirmed.
McWilliams Frost & Brown, for appellant.
1. A cause of action arising from the failure to comply with the conditions of a statutory ne exeat bond, does not constitute a cause of action "arising on contract" within the meaning of 1878 G. S. ch. 66, § 97, and for the following reasons: First. The clause referred to was intended to exclude all causes of action arising from torts. The cause of action alleged is purely an action to recover for malicious prosecution, though in form an action on a bond. Second. The word "contract," as used in the statute, cannot be interpreted so as to include a statutory bond. Such a bond lacks two essential elements of a contract, -- mutuality, and the consent of the parties. It is a statutory obligation in the nature of a penalty. Furber v. McCarthy, 54 Hun 435; McCoun v. New York Cent., etc., R. Co., 50 N.Y. 176; O'Brien v. Young, 95 N.Y. 428; Bidleson v. Whytel, 3 Burrows, 1545; Irvine v. Myers & Co., 6 Minn. 558, (Gil. 394.)
2. The courts of this state have no jurisdiction to enforce the liability arising on a bond executed pursuant to a statute of another state, and in the course of the prosecution of an action in that state. Such a bond is in the nature of a penal obligation, which a foreign state will not undertake to execute. Statutes enabling such bonds to be sued on by parties injured concern the remedy, and have no extra-territorial force. Wharton, Confl. Laws, §§ 4, 485; Pickering v. Fisk, 6 Vt. 102; Hunt v. Pownal, 9 Vt. 411; Dimick v. Brooks, 21 Vt. 569; McFee v. Ins. Co., 2 McCord, 503; Indiana v. John, 5 Ohio 218; Illinois R. S., ch. 97, § 5. If not strictly a penal bond, the bond in question is certainly an official bond, and as such is not enforceable in a foreign jurisdiction. Scoville v. Canfield, 14 John. 338. The bond in question was by statute directed to be given in the course of an action in equity. Any action upon said bond must be brought in the same court in which the original suit was brought. Murfree, Bonds, §§ 36, 387, 478; McDermott v. Doyle, 11 Mo. 444; Davis v. Packard, 6 Wend. 328.
Benton, Roberts & Brown, for respondent.
1. The court had jurisdiction to enforce the liability on this bond. The remedy sought on the bond is not merely derived by force of the statute, but is in accordance with the remedy known to the common law and to the laws of this state, and for that reason is enforceable in this state. Price v. Doyle, 34 Minn. 400; Holbrook v. Klenert, 113 Mass. 268; Sweetser v. Hay, 2 Gray, 49. But even if the bond was purely statutory and unknown to the common law, still it is enforceable in this state. The law of the place where a contract or obligation is made is to govern as to the nature, validity, construction and effect of such contract or obligation; being valid in such place, it is to be considered equally valid, and will be enforced in every other state. The lex fori governs simply as to the remedy. 2 Kent, Comm. 453-460. This court even extends the rule to rights of action ex delicto accruing in another state, in cases where there would be no such right of action in this state. First Nat. Bank v. Gustin, etc., Milling Co., 42 Minn. 327; Herrick v. Minneapolis & St. L. Ry. Co., 31 Minn. 11. The courts of this state will enforce rights arising from statutes of another state, except in cases of strictly penal statutes, or unless immoral, or contrary to the policy or laws of this state. Dennick v. Railroad Co., 103 U.S. 11; McLeod v. Conn. & Pass. R. Co., 58 Vt. 727; Com. v. Bassford, 6 Hill, 526; Murfree, Bonds, § 393.
2. The cause of action arising on a statutory bond is one arising on contract. A bond is a contract, even though it be given to secure damages for a tort. 1 Chitty, Pleadings, (16 Am. Ed.) 123; Burnap v. Wight, 14 Ill. 301; Wickham v. Weil, 17 N.Y.S. 518, expressly disapproving Furber v. McCarthy, 54 Hun 435, relied on by appellant. It has all the elements of a contract, as to assent. The defendant is presumed to assent, as a law-abiding citizen, to the giving of the bond required by law, and certainly is presumed to assent to the conditions made for his benefit. The consideration was the using the privileges of the statute. At any rate, a consideration is presumed, a bond being a sealed instrument. McMillan v. Ames, 33 Minn. 257. The only things necessary to make a contract under seal operative are, (1) execution, (2) delivery. Hatch v. Hatch, 9 Mass. 307. On all of these points we cite again, Wickham v. Weil, 17 N.Y.S. 518: Miller v. Centerville, 57 Iowa 640.
The plaintiff is a nonresident corporation, whose place of business is the city of Chicago, in the state of Illinois and the defendant is, and at the time of the transaction mentioned in the answer was, a resident of the city of Minneapolis, in this state. On the 6th day of May, 1891, while he was temporarily in the city of Chicago, the plaintiff brought suit in chancery against him, and caused a writ of ne exeat to be issued against him pursuant to the laws of the state of Illinois, as alleged in the answer in this action, and, in pursuance of law and the order of the judge who directed the issuance of the writ, the plaintiff did duly file in court for the benefit of the defendant a certain ne exeat bond, executed by the plaintiff with surety, in which the plaintiff acknowledged itself to be bound unto the defendant in the sum of $ 5,000, conditioned as follows: "Whereas, the said Midland Company has filed in the circuit court of Cook county its bill in chancery praying for a writ of ne exeat against the said Broat, and whereas, the Honorable L. C. Collins, one of the judges of the said court, has, upon the filing of said bill, indorsed an order under his hand thereon, directing the clerk of said court to issue a...
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