Case Name: FIRST NATIONAL BANK OF PORTLAND, a Corporation, Appellant, v. DENBRAE SHEEP COMPANY, a Corporation, and UNITED STATES FIDELITY & GUARANTY COMPANY, a Corporation, Respondents
Court: Idaho Supreme Court
Jurisdiction: Idaho
Decision Date: 1927-06-30
Citations: 44 Idaho 447
Docket Number: No. 4566
Parties: FIRST NATIONAL BANK OF PORTLAND, a Corporation, Appellant, v. DENBRAE SHEEP COMPANY, a Corporation, and UNITED STATES FIDELITY & GUARANTY COMPANY, a Corporation, Respondents.
Judges: Wm. E. Lee, C. J., and T. Bailey Lee, J"., concur.
Reporter: Idaho Reports
Volume: 44
Pages: 447–461

Head Matter:
(No. 4566.
June 30, 1927.)
FIRST NATIONAL BANK OF PORTLAND, a Corporation, Appellant, v. DENBRAE SHEEP COMPANY, a Corporation, and UNITED STATES FIDELITY & GUARANTY COMPANY, a Corporation, Respondents.
[258 Pac. 365.]
Frank D. Ryan, for Appellant.
J. W. Galloway, for Bespondent Denbrae Sheep Company.
Gustin & Pence and John J. McCue, for Bespondent United States Fidelity & Guaranty Co.

Opinion:
TAYLOR, J.
Plaintiff appeals from a judgment entered after a demurrer to its complaint was sustained. Plaintiff brought this action to recover judgment against defendant Denbrae Sheep Company and United States Fidelity & Guaranty Company upon two redelivery bonds given under C. S., sec. 6811, on attachment in another action in the same court, wherein one Hand was plaintiff and Denbrae Sheep Company a defendant.
The material allegations of the complaint are: That in an action by Hand in the district court, property of the defendant Denbrae Sheep Company was attached on October 13, 1923; that the clerk posted statutory notice of the attachment, and the first publication thereof, as required by C. S., sec. 6781, as amended by Sess. Laws 1921, c. 206, was made upon October 18, 1923; that on November 14, 1923, plaintiff brought an action against the same defendant upon a promissory note; that summons was served upon November 23, 1923, the default of the defendant entered on July 7, 1924, and judgment rendered the same day in favor of the plaintiff, for the amount due on said note and the attorney's fees and costs; that plaintiff placed an execution in the hands of the sheriff on July 22, 1924, which execution was thereafter returned unsatisfied by reason of facts hereinafter recited.
In the meantime, on November 16, 1923, the defendant Denbrae Sheep Company, in the action of Hand v. Denbrae Sheep Company, served notice of a motion to have the court fix a bond to release the property from attachment. Thereupon, the parties to that action stipulated that in lieu of appearance upon such motion, the property should be appraised, and the court should, upon such appraisal, make an order discharging the property from attachment upon defendant's execution of a bond in statutory form in the amount fixed by the report of the appraisers. The court, in pursuance of this stipulation and appraisal, ordered certain property released upon the giving of a bond in the amount fixed by the appraisal, $6,281.72. This bond was executed, filed and approved December 4, 1923, given by the defendant Denbrae Sheep Company and United States Fidelity & Guaranty Company, and the property was redelivered to the defendant sheep company. By simila.-r procedure, another redelivery bond was given in the sum of $2,091.90, and approved on January 10, 1924, and further property released. This bond is the basis of the second cause of action.
About January, 1924, plaintiff Hand filed an amended complaint. The Denbrae Sheep Company did not appear or file an answer-, and thereafter its default was entered therein; that before the entry of this default, the Portland Cattle Loan Company and the Brownlee Sheep Company, corporations, each filed separate complaints in intervention in the Hand action, and asked to be made parties to said action, each setting up and claiming some interest in the property which had been attached and seized by the sheriff under the writ of attachment. To each of these complaints in intervention, the plaintiff Hand filed a separate answer alleging "that she was not interested in the question of whether or not the intervenors had any interest in the property attached, because and by reason of the giving and filing of the redelivery bonds" in that matter.
That after plaintiff herein had obtained judgment in its action, counsel for the plaintiff Hand and counsel for the intervenors Portland Cattle Loan Company and Brownlee Sheep Company in the Hand action, without knowledge or consent of plaintiff, appeared before the judge of the district court on August 2d, "and moved and caused the said judge of said court to enter an order in said Hand action, dismissing the same, and attempting and purporting to discharge the property which had been attached from the lien of attachment in said Hand case, and attempted and purported to discharge the sureties on said redelivery bonds from further liability thereunder."
Plaintiff alleges, upon information and belief, that prior to August 2, 1924, the Portland Cattle Loan Company had taken chattel mortgages on the attached property, and paid to the plaintiff Hand $3,200, more or less, in cash, and in consideration thereof plaintiff Hand assigned, transferred and delivered to the Portland Cattle Loan Company all rights, claims and demands that she possessed under and by virtue of her claims set forth in the Hand suit, and that at the time of the dismissal of the Hand action, all of plaintiff Hand's interest in the claims sued upon was owned by the Portland Cattle Loan Company, and that she had no further interest therein, and that the real party in interest in the Hand action was the Portland Cattle Loan Company.
That some 15 to 20 days prior to August 2d, the attorney for plaintiff notified the attorney for the intervenors Portland Cattle Loan Company and Brownlee Sheep Company, that plaintiff herein "had obtained its judgment against the said Denbrae Sheep Company" for the amount claimed herein.
That the action of Hand v. Denbrae Sheep Company was dismissed, and that attorneys for the parties who procured the order of dismissal attempting and purporting to discharge the sureties on the redelivery bonds "did so, for the purpose of cheating, hindering, defrauding and preventing this plaintiff from procuring and realizing the moneys due it under said redelivery bonds, and they did so knowingly, wilfully, and with the fraudulent intent and purpose at said time of so hindering, cheating, defrauding and preventing this plaintiff from realizing on said redelivery bonds, and with the knowledge on their part at the time that this plaintiff had a lien on the moneys represented by said redelivery bonds, and was claiming the same and was intending to enforce collection of its demands against the defendants in this action." (Denbrae Sheep Company and United States Fidelity & Guaranty Company.)
That the acts of the judge, in signing, making and entering the order purporting and attempting to discharge the sureties on the redelivery bonds from liability thereon, were done without the knowledge, upon the part of the court, of the existence of this plaintiff's lien and claim and rights upon said redelivery bonds, under the provisions of chapter 206 of the Session Laws of 1921.
The complaint then alleges the conclusion of the pleader that the acts and order of the court in attempting to relieve the sureties from the obligations of said bonds, were and are void and of no' effect, and this plaintiff is entitled to recover herein the full penal sums of said bonds.
The complaint further alleges that plaintiff delivered to the sheriff, in its action against the Denbrae Sheep Company, an execution upon the judgment therein; that the return of the sheriff shows that most of the property redelivered to the defendant in the Hand action was hay, and had been consumed; that the remainder thereof was covered by chattel mortgages to the Portland Cattle Loan Company, and for that reason the sheriff refused to levy upon it, and the execution was returned unsatisfied.
The material question to be determined in this action is in effect stated in the conclusion pleaded by the plaintiff, that it is entitled to maintain this action against the defend ant and the surety company upon the redelivery bonds executed in the Hand case, by reason of having commenced its action within the time prescribed by chapter 206 of the Session Laws of 1921, and that the "liens against said attached property and the right of action on any bond or bonds executed and given by the defendants herein in said Hand action, inured to the benefit of this plaintiff," under the provisions of that chapter.
The plaintiff made no appearance or attempt to appear in the Hand case, did not in any way call to the attention of the court, by proceedings in that case, that it was attempting to secure the benefit of the attachment therein; in no way advised the court in that action of any claimed right to prorate in the proceeds of the property attached therein; did not at any time move therein against the order dismissing that action or dissolving the attachment or releasing the sureties.
Appellant cites, in support of its contentions that a redelivery bond such as here, although conditioned to redeliver the attached property or pay the plaintiff "in case the plaintiff recover judgment in the action," inures to its benefit, decisions of other courts wherein such bond has been held to be answerable to any subsequent creditor, but in each and all of those jurisdictions where such holding has been made, perhaps even in disregard of a dismissal of the original attachment, or of the defendant recovering there instead of the attaching plaintiff, statutory provisions require the subsequent creditor to become a party to the attachment action, and it is therein that a prorating is determined. (Hanness v. Smith, 22 N. J. L. 332; Phoenix Iron Co. v. New York Wrought Iron R. R. C. Co., 27 N. J. L. 484; Taylor v. Elliott, 51 Ind. 375. See, also, Rouss v. Wallace, 10 Colo. App. 93, 50 Pac. 366.)
Appellant's pleading of the dismissal of the Hand action and exoneration of the redelivery bond must be accepted in effect most strongly against it as an adjudication of those matters, final until set aside.
"Consequently such a judgment cannot be collaterally attacked in courts of the same state by showing facts aliunde the record, although such facts might be sufficient to impeach the judgment in a direct proceeding against it." (Weil v. Defenbach, 36 Ida. 37 (44), 208 Pac. 1025.)
The weakness of plaintiff's position is that it pleads that in an action where the court, but for the fraud alleged, had a right to enter a judgment or order of dismissal, and thereby in effect or by an additional order exonerate the redelivery bond, exactly that was done.
The intervenors in the Hand action, Portland Cattle Loan Company and Brownlee Sheep Company, tendered therein an issue as to their interest in the attached property. One claiming an interest in attached property has a right to intervene in the action in which it is attached. (C. S., sec. 6655; Kaesemeyer v. Smith, 22 Ida. 1, 123 Pac. 943, 43 L. R. A., N. S., 100; Pence v. Sweeney, 3 Ida. 181, 28 Pac. 413.)
Plaintiff, claiming a right by reason of commencing an action within 30 days of the commencement of the Hand action, must have been at least as cognizant of the issues therein as it demands that the parties thereto be of its action.
Plaintiff, having a right to intervene in an action in which it claims a right, in which in fact by law it gains the only right which it had or claims — a right to prorate under the statute in the property therein involved- — owed a duty to the parties, the court, and itself, to take steps to have the title therein, and its right to prorate in the property, made an issue in the action in which that issue was tendered to the court, wherein the parties with which it had a right to prorate, if any, and the property in which it claimed such right, were before the court.
Plaintiff took no such steps while the property or the bond for redelivery was before the court in an action in which that matter was properly determinable, but suffered that action and those claims, making adverse claims to the attached property, to be before the court for at least six months after the complaints in intervention were filed, and as to one bond seven months after it was given, and after that length of time when the eonrt in which it could have tendered such issue determined the matter in an action in which plaintiff could have, but did not appear, it now asks that, without making parties the only ones which it charges with fraud, and without alleging any fraud against the present parties, it be permitted to import that issue into this case, and set aside the dismissal of that case and the exoneration of the bond in this collateral way.
Considered as an action to set aside the order of dismissal and exoneration of the bond, in effect a judgment, the complaint is wholly insufficient for such purpose. (34 C. J., p. 485, sec. 759, p. 490, sec. 769, p. 491, sec. 772.) Without an adjudication that the order dismissing the attachment suit and exonerating the bond be set aside, there can be no recovery in this action, nor can such adjudication be had herein under the allegations of the complaint.
The judgment is affirmed. Costs to respondents.
Wm. E. Lee, C. J., and T. Bailey Lee, J"., concur.