Case ID: wis_144/html/0611-01.html
Source: Caselaw Access Project
Author: {"author": "BaeNes, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Umbreit, Respondent, vs. American Bonding Company of Baltimore, Appellant.
    
      January 10 —
    January 31, 1911.
    
    
      Injunction "bond: Liability of surety: By what lato governed: State and federal courts: Payment of damages “awarded."
    
    1. Tbe liability of a surety on an injunction bond given in a suit in a federal court pursuant to a law of tbe United States is governed by tbe principles adopted and applied by tbe federal courts, not by tbe state law.
    2. Under tbe laws of tbe United States as expounded by its courts tbe condition of a bond for payment of sucb damages as may be awarded by reason of tbe issuance or continuance of an injunction is not broken so as to make the surety liable until tbe amount of tbe damages is assessed and determined and tbe principal obligor has refused to pay tbe amount awarded.
    Appeal from an order of tbe circuit court for Milwaukee county: W. J. Tueuee, Circuit Judge.
    
      Reversed.
    
    Tbe complaint in substance sets forth that one Albert W. May commenced an action in tbe United States circuit court for tbe Eastern district of Wisconsin against tbe plaintiff, praying for an accounting for tbe proceeds of a judgment in tbe custody of tbe clerk of tbe circuit court for Milwaukee county, Wisconsin; that an order was entered directing said clerk to retain tbe proceeds of said judgment during tbe pend-ency of sucb action, and an injunction bond in tbe usual form was given; that thereafter a final decree was entered in said action, dismissing tbe bill of complaint for want of equity and directing tbe temporary injunction theretofore issued in said suit to remain in force for thirty days so that a supersedeas bond might be filed for tbe purpose of an appeal, if said May so elected; that thereafter said May applied to tbe court for an appeal from said decree, and tbe court directed that sucb appeal be allowed upon said May giving a bond according to law in tbe sum of $750, “which bond should operate as a supersedeas bond to continue in force the temporary injunction theretofore issued during the pendency of said appeal,;” that said May, with the defendant in this action as surety, executed and filed a supersedeas bond approved by the judge of the court, a copy of which is made a part of the complaint; that said action was determined by the United States circuit court of appeals for the Seventh circuit and the decision of the lower court was affirmed; that plaintiff sustained damages by reason of said injunction to the amount of $584.59, no part of which has been paid; and that Albert W. May is a nonresident without the jurisdiction of the court in which the action was brought and is an insolvent. A bill of particulars was attached to the complaint showing the various items that went to make up the aggregate amount of damages claimed. The bond was in the sum of $150. The condition of the bond was that “if the said Albert W. May shall prosecute his said appeal to effect and shall answer all damages and costs that may be awarded against him if he fail to make his plea good, then the above obligation to be void; otherwise to remain in full force and virtue.. This bond shall operate as a supei'-sedeas bond.”
    To this complaint the defendant interposed a general demurrer on the ground that the complaint did not set forth facts sufficient to constitute a cause of action. An order was entered overruling such demurrer, and from such order this appeal is taken.
    Eor the appellant there was a brief by Churchill, Bennett & Churchill, attorneys, and Warren B. Wilson, of counsel, and oral argument by Mr. W. H. Churchill and Mr. Wilson.
    
    Eor the respondent there was a brief by Joseph B. Doe, attorney, and A. C. Umbreit, in pro. per., and oral argument by Mr. Doe.
    
   BaeNes, J.

The liability of a surety on an injunction bond given in a suit in the federal courts pursuant to a law of the United States is not governed by the local law of a particular state, but is governed by the principles of jurisprudence adopted and'applied by the federal courts. Bein v. Heath, 12 How. 168; Tullock v. Mulvane, 184 U. S. 497, 513, 22 Sup. Ct. 372. By the laws of the United States as expounded by its courts, where the surety undertakes to pay such damages as may be “awarded?’ by reason of the issuance or continuance of an injunction, there is no breach of the condition of the bond as to the surety until the amount of the damages is assessed and determined by a court of competent jurisdiction, or in some other lawful way, and the principal ob-ligor has refused to pay the amount awarded; and no action can be maintained on the bond against the surety in the absence of such assessment. Bein v. Heath, supra; Deakin v. Lea, 11 Biss. 34, 38. It is the duty of this court to declare the federal law as it finds it, and what is here decided has no application to bonds given in actions and proceedings in the courts of this state. In view of what has £een said, it is unnecessary to determine whether the complaint shows the bond sued on to be only an ordinary supersedeas bond or a super-sedeas and injunction bond combined, and we do not determine that question.

The action is not brought on an award and the complaint shows affirmatively that none has been made. It follows that the complaint does not state a cause of action against the surety and that it was error to overrule the demurrer.

By the Court. — The order appealed from is reversed, and the cause is remanded with directions to enter an order sustaining the demurrer.