Neugent Garment Co. v. U.S. Fid. & Guar. Co.

• Decision Date: 01 April 1930
• Citation: 202 Wis. 93,230 N.W. 69
• Parties: NEUGENT GARMENT CO. v. UNITED STATES FIDELITY & GUARANTY CO.
• Court: Wisconsin Supreme Court

202 Wis. 93

230 N.W. 69

NEUGENT GARMENT CO.

v.UNITED STATES FIDELITY & GUARANTY CO.^a1

Supreme Court of Wisconsin.

April 1, 1930.

Appeal from an order of the Municipal Court for Brown County; N. J. Monahan, Judge. Affirmed.

Action by Neugent Garment Company against United States Fidelity & Guaranty Company, begun May 31, 1929, to recover on an undertaking given to dissolve an attachment. From an order entered August 21, 1929, sustaining a demurrer to the answer, the defendant appealed.

The answer alleged that the plaintiff attached the property of Millard's, Inc.; that an undertaking was executed by the defendant to secure the release of the attachment, by which the defendant agreed that it would “on demand pay to the plaintiff the amount of the judgment, with all costs, that may be recovered against the defendant in this action”; that the attached property was thereafter delivered to Millard's, Inc., and that twenty-eight days after the date of the attachment Millard's, Inc., was adjudged an involuntary bankrupt. The answer did not allege that Millard's, Inc., was insolvent at the date of the attachment. The court sustained the demurrer to the answer on the ground that it did not state facts sufficient to constitute a defense.North, Parker, Bie, Duquaine, Welsh & Trowbridge, of Green Bay, for appellant.

Kittell, Jaseph, Young & Everson, of Green Bay, for respondent.

STEVENS, J.

[1] 1. The first question presented is what liability was imposed upon the defendant by the undertaking given for the purpose of securing a release of the attachment. This question is no longer an open one in Wisconsin. In Dierolf v. Winterfield, 24 Wis. 143, 144, it was held that a defendant in attachment must elect whether to traverse the attachment or to give an undertaking for the release of the property, and that the giving of the undertaking was a waiver of the right to traverse. Thereafter the statute, which is now section 266.16 of the Statutes, was amended by adding thereto: “The defendant, notwithstanding the delivery of such undertaking, may deny any or all of the allegations of the affidavit annexed to the writ of attachment as provided in section 266.19.”

The plaintiff relies upon the provision of the undertaking by which the defendant agreed to “pay * * * the amount of the judgment” that might be recovered by the plaintiff. In Thompson v. Royal Indemnity Co., 197 Wis. 43, 46, 48, 221 N. W. 415, 416, it was held that the amendment to section 266.16 of the Statutes referred to above permitted the defendant in attachment proceedings to avail himself of both the traverse and the undertaking to secure a redelivery of the property, and that the statute “no longer permits the attaching creditor to maintain that the mere recitals in such a statutory bond as we have here estop or bar the defendant from questioning the validity of the attachment through the traverse, or the surety from relying upon such a successful traverse. * * * In practical effect the giving of an undertaking such as is here involved, even though it be absolute in terms, is no more than a substitute for the attached property.”

In the case just cited it was held that there was no right to attach. But the rule that the undertaking stands in the place of and is a mere substitute for...