Case Name: SHERIDAN COUNTY ELECTRIC CO-OP., INC., et al., Appellants, v. FERGUSON, et al., Respondents
Court: Montana Supreme Court
Jurisdiction: Montana
Decision Date: 1951-02-17
Citations: 124 Mont. 543
Docket Number: No. 9011
Parties: SHERIDAN COUNTY ELECTRIC CO-OP., INC., et al., Appellants, v. FERGUSON, et al., Respondents.
Judges: MR. JUSTICES METCALF, BOTTOMLY and FREEBOURN, concur.
Reporter: Montana Reports
Volume: 124
Pages: 543–562

Head Matter:
SHERIDAN COUNTY ELECTRIC CO-OP., INC., et al., Appellants, v. FERGUSON, et al., Respondents.
No. 9011.
Submitted December 7, 1950.
Decided February 17, 1951.
227 Pac. (2d) 597.
Mr. Justice Angstman dissented in part.
Messrs. Sanders, Holbrook and Cresap, Sidney, for appellants.
Mr. Vernon Hoven, Plenty wood, for respondent.
Mr. Frederic P. Holbrook, Jr., argued orally.

Opinion:
ME. CHIEF JUSTICE ADATE:
Sheridan County Electric Co-op., Inc., is a Montana corporation organized under Chapter 172, Laws of 1939, and engaged in supplying electricity and electrical services to certain rural areas. In improving and expanding its facilities and services to certain unserved areas and because of the lack of living accommodations for its employees,- — the absence of banking facilities and the interrupted mail service at its principal place of business at Westby, Montana, the corporation's board of trustees at a regular meeting unanimously voted to move the corporation's office to Medicine Lake, Montana.
E. C. Ferguson, a minority stockholder of the corporation, objecting to the action so taken by the board, brought suit in the district court of Sheridan county against the corporation and its nine trustees for the sole purpose of obtaining an injunction to restrain and enjoin the contemplated move and on February 14, 1949, on Ferguson's ex parte application therefor, the district judge granted a temporary restraining order enjoining the defendant corporation and its trustees from moving any of the corporation's business records, files or office equipment and ordering the defendants to show cause on March 8, 1949, "why a permanent injunction as prayed for should not issue."
On the return day defendants by their counsel interposed a motion to dissolve the temporary restraining order and filed an affidavit and brief in support thereof whereupon the court continued the hearing to March 18th and ordered that in the meantime the temporary restraining order be continued in effect upon, the plaintiff Ferguson filing a statutory bond to the effect that he "will pay to the defendants, such damages in extent of the sum of fifteen hundred and no/100 ($1,500.00) dollars as such defendants may sustain, by reason of the tern porary order of the Court, if the Court finally decides that .the plaintiff is not entitled to such relief." (Emphasis supplied.)
Thereupon and on the same day Ferguson complied with the court's order and with the statute, R. C. M. 1947, sec. 93-4207, by filing a $1,500 bond executed by himself as principal and Lloyd Kittleson and Anton Nelson as sureties. The judge approved the bond and continued the restraining order in effect.
Thereafter the court reset the hearing for March 21st at which time the court made an order dissolving the restraining order but defendants were afforded no relief therefrom for immediately and on the same day the judge, on the ex parte application of Ferguson and his affidavit that day filed, continued the restraint imposed upon defendants by granting a further order restraining defendants from doing the same acts theretofore enjoined, continuing in effect the bond theretofore given and requiring that they appear on April 12, 1949, "to show cause, if any they have, why a temporary injunction as prayed for should not issue."
On April 12th, the return day, the court on motion of defendants' counsel, ordered the temporary restraining order dissolved and assessed $50 costs against Ferguson who, nine days later, served and filed a notice of appeal from the order of dissolution.
On May 11, 1949, Ferguson, by written praecipe filed with the clerk of court, dismissed his action against the defendant corporation and its trustees.
Thereafter Sheridan County Electric Co-op. Inc. and its trustees brought this action against Ferguson as principal and his sureties, Kittleson and Nelson, on the injunction bond executed by them to recover damages resulting from the wrongful issuance of the injunction alleging loss in excess of $1,500 for the time, trouble, travel expense, counsel fees and expenses of counsel in procuring the dissolution of the restraint imposed. In their answers Ferguson and his sureties denied that plaintiffs had sustained any damages and as affirmative defenses pleaded that Ferguson, • the principal, received no consideration for the bond and that he and his sureties were discharged from all liability thereunder by the payment by Ferguson of $100 costs assessed by the court in its order of dissolution.
A jury was impanelled to try the issues and testimony and documentary evidence was introduced by plaintiffs at the conclusion whereof the court granted defendants' motion for non-suit and rendered judgment of dismissal from which judgment the plaintiff corporation and its trustees have appealed.
The injunction bond which Ferguson and his sureties executed is that provided for in R. C. M. 1947, section 93-4207, which provides that it be conditioned "to the effect 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(Emphasis supplied.)
No cause of action arises upon the injunction bond until it is finally determined that the injunction ought not to have been granted and both the bond and the statute so provide.
The final determination may be by a final judgment of the court or something equivalent thereto but after such final determination the sureties are bound thereby.
Ferguson having appealed from the court's order of April 12th dissolving the temporary restraining order, such order of dissolution had not become final. Such was the situation on May 11th when Ferguson dismissed his injunction suit against the corporation and its trustees. However, by his act in dismissing his suit, Ferguson abandoned his appeal and admits that he is not entitled to the injunction. Thus on May 11th and not before was it finally decided that the plaintiff Ferguson was not entitled to the injunction. That a dismissal of the suit in which the temporary restraining order issued constitutes a final adjudication that plaintiff was not entitled .to such injunction order thereby making the sureties liable, see Davidson Grocery v. United States Fidelity & Guaranty Co., 52 Idaho 795, 21 Pac. (2d) 75; Beech v. United States Fidelity & Guaranty Co., 54 Idaho 255, 30 Pac. (2d) 1079, 92 A. L. R. 264; Harlow v. Mason, 98 Kan. 353, 157 Pac. 1175; Kennedy v. Liggett, 132 Kan. 413, 295 Pac. 675.
It is immaterial whether the final decision is accomplished without a trial on the merits, Stewart v. Miller, 1 Mont. 301, or by a voluntary dismissal of the action, Stearns on Suretyship, 4th Ed., p. 340, n. 114; Yale v. Baum, 70 Miss. 225, 11 So. 879; Wilshire Mortgage Corp. v. O. A. Graybeal Co., 41 Cal. App. 2d 1, 105 Pac. (2d) 966, or merely by dismissal of the complaint, Moore v. Maryland Casualty Co., 100 Cal. App. 658, 280 Pac. 1008; Johnson v. Howard, 167 Miss. 475, 141 So. 573; Beatty v. Casselman, 115 Neb. 104, 211 N. W. 617; American Exchange Nat'l Bank v. Goubert, 135 App. Div. 371, 120 N. Y. S. 397. Compare Lippitt & Lippett v. Smallman, 20 Cal. App. 595, 129 Pac. 956; De Berard v. Prial, 34 App. Div. 502, 54 N. Y. S. 534; Whitehead v. Tulane, 11 La. Ann. 302.
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. R. C. M. 1947, sec. 17-301; McDermott v. American Bonding Co., 56 Mont. 1, 5, 179 Pac. 828.
At the trial F. P. Holbrook, Esq., appearing as a witness for the plaintiffs herein, testified that he and his associates in the practice of law had represented the corporation and its trustees in procuring dissolution of the injunction orders and that in so doing they made a trip to Westby. on March 15th and a trip to Plentywood on March 21st at an expense of $32.70 for which amount they were reimbursed by plaintiffs and that for the professional services rendered by counsel, to and including March 21st in procuring dissolution of the restraint so imposed, they made a charge to plaintiffs herein of $1,700. Such evidence stands undisputed in the record and it made out a prima facie case of liability against the principal and his sureties. Hatch v. National Surety Corp., 105 Mont. 245, 72 Pac. (2d) 107.
Upon motion for nonsuit or directed verdict the evidence must be viewed from the standpoint most favorable to plaintiff and every fact must be deemed proved which the evidence tends to prove. Gilligan v. City of Butte, 118 Mont. 350, 360, 166 Pac. (2d) 797. No case should ever be withdrawn from a jury when reasonable men might draw different conclusions from the evidence. Nangle v. Northern Pac. Ry. Co., 96 Mont. 512, 523, 32 Pac. (2d) 11. It was fatal error for the trial court to grant the nonsuit herein.
It was likewise prejudicial error for the trial court to exclude plaintiffs' offered evidence as to damages sustained through the continued restraint imposed upon them to and including April 12th by reason of the restraining order granted by the district judge on March 21st. There was not a single day from February 14th to April 12th that the corporation and its officers were not restrained by court order issued at the instance of the plaintiff Ferguson. Such restraint, though wrongful, was continuous and as efficient under the socalled temporary restraining orders as it would have been if effected through any other form of injunction. While the injunction suit never progressed beyond the temporary restraining order stage yet Ferguson's purpose was to procure the permanent injunction for which he prayed in his complaint.
In Miles v. Edwards, 6 Mont. 180, 183, 184, 9 Pac. 814, 816, this court said: "In Prader v. Grim, 13 Cal. [585] 587, an order was issued requiring the defendants to show cause, August 29, 1856, why an injunction should not issue pursuant to the prayer of the complaint. 'In the mean time' the defendants were enjoined. Nothing with reference to the preliminary order was done until September 20th, when a new bond was required. October 10th the restraining order was dissolved. In an action upon the bond evidence was offered and refused of damages sustained subsequently to August 29th, and prior to September 20th. The refusal of such evidence was held to be error. The vitality of a restraining order is not limited necessarily, or even usually, by the date mentioned in it. ' '
Where, as in Ferguson's suit, the sole purpose of the action was to obtain injunctive relief, then after dissolution of the injunction and upon final adjudication counsel fees are recoverable for defense of the entire suit. Miles v. Edwards, supra; Creek v. McManus, 13 Mont. 152, 32 Pac. 675; McDermott v. American Bonding Co., supra. See, 164 A. L. R., p. 1099, Annotation III a. Compare: City of Helena v. Brule, 15 Mont. 429, 39 Pac. 456, 852; Montgomery v. Gilbert, 24 Mont. 121, 60 Pac. 1038.
The fact that the person suing on the bond became obligated for attorney's fees in the injunction suit is sufficiently shown by proof that he employed an attorney who procured a dissolution of the injunction and of the reasonable value of his services. Cook v. Greenough, 14 Mont. 352, 36 Pac. 357. It is immaterial whether the counsel fees have been paid or merely incurred, — in either event they are recoverable. Plymouth Gold Min. Co. v. United States Fidelity & Guaranty Co., 35 Mont. 23, 29, 88 Pac. 565, 10 Ann. Cas. 951; McDermott v. American Bonding Co., supra. Also see: Richardson Lubricating Co. v. Bedell, 209 Mo. App. 238, 237 S. W. 192, 195; Littleton v. Burgess, 16 Wyo. 58, 91 Pac. 832, 16 L. R. A., N. S., 49.
Damages sustained by a defendant during the interval between the issuance of the temporary restraining order and the giving of the bond are recoverable, Alaska Improvement Co. v. Hirsch, 119 Cal. 249, 47 Pac. 124, 51 Pac. 340, as well as the damages suffered up to the time of the final dissolution of the restraint imposed. Moore v. Lachmund, 59 Or. 565, 117 Pac. 1123; Mason v. United States Fidelity & Guaranty Co., 60 Cal. App. 2d 587, 141 Pac. (2d) 475.
The bond here involved is that contemplated by and provided for in E. C. M. 1947, section 93-4207. By signing the bond the defendants contracted with reference to the above statute and their contractual liability is determinable'by the terms of the bond and the provisions of the statute and- thereunder reason able expenses are recoverable, including attorney's fees and costs of procuring the dissolution of the temporary restraint imposed from February 14th, the date of the commencement of such restraint, to the date of the final determination of the injunction suit by the dismissal thereof on May 11th. Compare Foster v. Royal Indemnity Co., 83 Mont. 170, 175, 271 Pac. 609; Miles v. Edwards, supra; Mason v. United States Fidelity & Guaranty Co., supra.
The contention that the principal Ferguson received no consideration for the bond is, without merit. A bond executed pursuant to and in substantial compliance with the provisions of a statute needs no consideration. State v. Paxton, 65 Neb. 110, 90 N. W. 983; Mason v. United States Fidelity & Guaranty Co., supra. Compare R. C. M. 1947, sec. 13-510. Likewise a bond executed in response to a discretionary order of the court is not void for want of consideration. Whereatt v. Ellis, 103 Wis. 348, 79 N. W. 416, 74 Am. St. Rep. 865; Larsen v. Winder, 20 Wash. 419, 55 Pac. 563. Nor on a dissolution of the injunction does the acceptance by the defendant therein of the statutory costs taxed effect a waiver of his right to recover counsel fees as damages on the injunction bond. Steel v. Gordon, 14 Wash. 521, 45 Pac. 151; State ex rel Citizens' Nat'l Bank v. Graham, 68 W. Va. 1, 69 S. E. 301.
Where as here the principal had the benefit of the injunction order and accepted the terms imposed as to the condition of the bond, both he and the sureties were bound thereby. American Exchange Nat'l Bank v. Goubert, supra; Mason v. United States Fidelity & Guaranty Co., supra.
On this appeal defendants have assigned cross specifications oh the overruling of their demurrer to the complaint, — the denial of their motion to make the complaint more definite and certain, — the denial of their motion for a bill of particulars and the overruling of their objection to the introduction of any evidence. At the outset defendants appeared in the action by filing a general demurrer to the complaint and simultaneously therewith filed a motion for a bill of particulars. The court overruled the demurrer and denied the motion whereupon defendants filed a motion to make the complaint more definite and certain and such motion was denied.
The filing by defendants of their demurrer to the complaint constituted a waiver of any and all defects in the complaint attackable only by motion. By filing such demurrer defendants are deemed to have waived not only their right to object to the claimed defects in the pleading, but also to have waived the defects themselves, if any there be. State ex rel. Bingham v. District Court, 80 Mont. 97, 257 Pac. 1014, 1015; State ex rel. Westlake v. District Court, 118 Mont. 414, 427, 167 Pac. (2d) 588, 591, 163 A. L. R. 911. Compare Paramount Publix Corporation v. Boucher, 93 Mont. 340, 19 Pac. (2d) 223; Beale v. Lingquist, 92 Mont. 480, 15 Pac. (2d) 927, 929; Cooke v. Myers, 86 Mont. 423, 283 Pac. 1114, 1115; Hogevoll v. Hogevoll, 117 Mont. 528, 538, 162 Pac. (2d) 218; Krinsky v. Stevens Coal Sales Co., 309 Mass. 528, 36 N. E. 2d 411, 414; Walker v. Burkham, 63 Nev. 75, 161 Pac. (2d) 649, 165 Pac. (2d) 161.
The statute expressly provides that uncertainty of averment in the pleading can be reached by special demurrer. R. C. M. 1947, sec. 93-3301, subd. 7. See Herbst Importing Co. v. Hogan, 16 Mont. 384, 387, 41 Pac. 135; Adams v. Durfee, 67 Mont. 315, 318, 215 Pac. 664; State v. Silver Bow Refining Co., 78 Mont. 1, 22, 252 Pac. 301.
Had defendants desired to challenge the complaint on the grounds that it is ambiguous, unintelligible or uncertain, such challenge could have been included in their demurrer. R. C. M. 1947, sec. 93-3301, subd. 7. Both the motion for a bill of particulars and the motion to make more definite and certain were properly overruled.
The complaint sufficiently states a good cause of action for damages occasioned by the wrongful granting of the injunction in the suit' wherein the bond was given, City of Helena v. Brule, supra, and it follows that defendants' demurrer and their objection to the introduction of the evidence, both predicated upon, the claimed insufficiency of the complaint, were wholly lacking, in merit.
Defendants' motion for nonsuit purports to have been based on twelve separately stated "grounds." Not only is there no merit in any of the "grounds" stated but many are merely idle and frivolous, but nonetheless vexatious, contentions.
, Our Codes, R. C. M. 1947, sec. 93-4201 to 93-4216, inclusive, govern the issuance of injunction orders. There are three kinds of such orders, namely, (1) "restraining orders," (2) "temporary injunctions" and (3) "perpetual injunctions."
, Any order which requires a person to refrain from a par- , ticular act for any period of time, no matter what its purpose, is an "injunction." This applies to a "restraining order." R. C. M. 1947, sec. 93-4201; Labbitt v. Bunston, 80 Mont. 293, 260 Pac. 727, 730.
A "restraining order" is an interlocutory order issued upon an application for an injunction and generally made without notice to the opposite party and intended only as a restraint upon him to preserve the status of the matters in litigation until a hearing on an order to show cause may be held and concluded and the propriety of granting a "temporary injunction" can be determined. Compare Rea Bros. Sheep Co. v. Rudi, 46 Mont. 149, 159, 127 Pac. 85; Wetzstein v. Boston & M. Consol. Copper & Silver Min. Co., 25 Mont. 135, 63 Pac. 1043, 1044.
In a suit for a perpetual injunction, a "temporary injunc tion" is merely an ancillary writ or provisional remedy which the plaintiff is at liberty to apply for or not as he desires and it is generally issued on notice and after hearing, its only object being to maintain the status quo until .plaintiff may have opportunity for a trial of his suit on the merits. Unless sooner dissolved it is effective until final hearing on the merits.
A "permanent" or "perpetual injunction" is in no sense a provisional remedy. It issues as a judgment which finally settles the rights of the parties after final determination of all the issues raised.
Ferguson's injunction suit terminated before it had entered into either the "temporary injunction" stage or the "permanent injunction" stage. However the court's restraining orders subjected the defendants therein to continuous restraint from February 14th to April 12th inclusive.
In the early case of Miles v. Edwards, supra, 6 Mont, at pages 184-187, 9 Pac. at pages 817-818, this court said: "What has already been said is sufficient to indicate that the life of a restraining order, in the language of the one under consideration, has no specific term of existence. If it is desirable to terminate its existence, the place of its birth must also be the scene of its death. In courts such orders have their beginnings and their ends. To put courts in motion, some action, by motion or otherwise, must be taken by parties or their attorneys."
Again: "A little reflection convinces [one] that the mere fact that the respondent was present by counsel to resist the continuance of the restraining order may have deterred the appellants from every effort for a continuance, and induced them to dismiss without contest. Were such the fact, and the contrary does not appear, than it was a 'cause' for compensating respondent's attorneys, imposing upon respondent a moral and a legal liability, which, being discharged, constitutes an element of damages against which the bond undertook to protect him.
"The point which Appellants seem most persistently to press is that the bond given was to protect against damages arising from the temporary restraining order, and that attorney's fees cannot be recovered for anything done in resisting a final injunction. ® The theory and argument of appellants is that the temporary or preliminary restraining order, and the final restraining order, are separate and distinct things; and that proof of the value of attorney's services, and the amount thereof paid in the case generally, leaves it uncertain what amount was earned and paid separately upon the preliminary injunction and the final injunction, and therefore nothing can be recovered. The distinction is without a difference. The purpose of the action was to procure an injunction of one thing. At first it was wholly procured, though but for a limited time. By the terms of the preliminary order the parties were as fully enjoined 'until the hearing' as by any final order they could have been enjoined. It cannot be claimed that if the preliminary order was in force 'until the hearing,' that its efficacy ceased when the hearing began, because the object of the hearing was to determine whether the order was rightfully made; and until the end of the hearing that point could not properly be determined. It, then, was essential and proper that throughout the entire hearing the rights of respondents should *be represented and protected by counsel. Before a full and final hearing the only possible judgments that could have been given were for the continuance or the cessation of the restraint imposed by the preliminary order. The uncontradicted testimony is that the $300 paid for attorneys' fees was paid for attorneys' services in doing 'whatever pertained to said order, for preventing an injunction from issuing, and getting rid of the order issued.'
' "The respondents were bound to appear at the hearing, and to remain until' the hearing closed. It was proper that they should be represented throughout by counsel. It was right that they should pay their attorneys. It is just that they should recover from the appellants the amount so paid if the services were necessary and the price was reasonable. The very terms of the bond are to 'pay to said defendant (respondent) any and all damages he may sustain by reason of said order, or the issuing thereof. ' Here, so far as appears, no services were rendered for which compensation was made and damages claimed, except about the injunction. ' ' To like effect see Mason v. United States Fidelity & Guaranty Co., supra.
The judgment is reversed and the cause remanded with directions to grant plaintiffs a new trial.
MR. JUSTICES METCALF, BOTTOMLY and FREEBOURN, concur.