Court Opinion

ID: 8861173
Source: CourtListenerOpinion
Date Created: 2022-11-26 17:48:57.717892+00
Date Added: 2024-06-11T17:05:49.657787
License: Public Domain

PHILIPS, District Judge
(dissenting). I am unable to concur In the majority opinion. It extends the accountability of the sureties beyond the letter of their contract. The injunction bond is in the usual form in chancery proceedings. The undertaking was to pay “the damages, not exceeding $7,000, which may be sustained by reason of the injunction in this case, if it is finally decided that said injunction ought not to have been granted.” When the injunction was dissolved, pending the suit in which it was granted, that was, in effect, a decision that it ought not to have been granted. No other damages were re.coverable of the sureties than such as ensued “by reason of the injunction.” The sureties stood in the relation of guarantors, and on well-established principles their liability is to be strictly construed, and not extended by any sort of implication. “The liability of a surety on an injunction bond must be strictly construed, and he cannot be held liable beyond the precise terms of his undertaking.” 1 Beach, Inj. § 227. The implication of law is that in executing such bond the surety does it in the view which the established practice in courts of equity attaches to such proceeding. In Russell v. Farley, 105 U. S. 445, the court recognized the rule of practice to be that, on the dissolution of an injunction, the court may proceed instanter to assess damages on the injunction bond. So in Spell. Extr. Rel. § 931, it is said: “The liability of obligors on an injunction bond is confined to the damages and costs caused by the injunction and adjudged on its dissolution.” But as the language of the text-books and the courts, like the meaning of words, must be “restrained unto the fitness of the matter,” it is to be conceded to the special situation in this case that at the time of the dissolution of the injunction an immediate assessment of the damages might have been impracticable; yet it by no means follows that the sureties were bound for any such losses as ensued after the dissolution by reason of matters supervenient, over which they had no control. When the period of 30 days, prescribed by the order of court, during which the injunction should continue in force, expired, the relation of the sureties to the pending litigation ended. Proceeding in the law action pending in court was then no longer restrained by the injunction. The office of the injunction in that respect was at an end. The plaintiffs therein were at liberty to proceed with the prosecution of the law action to judgment. From every consideration of justice, the duty was then imposed upon the beneficiary of the *530injunction bond to exercise every reasonable diligence and precaution to lessen tbe loss to be claimed from the sureties. Trust Co. v. Stewart (Mo. Sup.) 21 S. W. 796. So in 2 Suth. Dam. p. 65, it is said:
“When an injunction has been improvidently granted or obtained without good cause, the defendant should take seasonable steps to relieve himself from its operation, and thus prevent damages. A party who slept upon his rights and neglected his duty, so that the demand enjoined became barred by the statute of limitations before he finally made a successful motion to dissolve the injunction, was not permitted to recover on the bond for that loss.”
Tbe vital error, in my opinion, into wbicb the majority of tbe court bas fallen, is in treating tbe case as if tbe sureties were parties to the law case, with tbe right and duty of expediting tbe trial therein after tbe dissolution of tbe injunction. Such was not tbe case. Therefore they bad no standing in court to move to bring to early trial tbe cause. As plaintiffs therein were interested parties in having a judgment, it was their right to demand a trial, as it was a duty imposed upon them by every consideration of fair dealing towards tbe sureties to bring on tbe trial at tbe earliest date possible, in order that an execution might go to reach tbe property of tbe defendants.
Neither can I assent to tbe proposition that tbe sureties should be bound as a consequence of their undertaking for any supposed omission of tbe defendants to demand a speedy trial in tbe law action. As said in Sensenig v. Perry, 113 Pa. St. 117, 5 Atl. 11: “No damages, except such as flow directly from tbe injunction as its immediate consequences, are recoverable, for liability upon tbe injunction bond is limited to such damages as arise from tbe suspension or invasion of vested legal rights by tbe injunction.” And out of this rule comes tbe doctrine that damages assessable upon an injunction bond are only such as “are tbe actual, natural, and proximate result of tbe wrong committed.” 2 High, Inj. 1663; 10 Am. & Eng. Enc. Law, 995; Holloway v. Holloway, 103 Mo. 284, 15 S. W. 536. Tbe sureties bad no control over tbe action of their principals in tbe bond after tbe dissolution of tbe injunction; and, as they were bound only for such damages as were tbe direct and natural result of tbe injunction, tbe direct connection between the granting of tbe injunction and any lack of insistence on tbe trial of tbe law action is entirely wanting.
JBut, on tbe other band, what of tbe conduct of tbe plaintiffs, viewed in tbe light of their duty to tbe sureties as above established by tbe authorities? Tbe injunction was finally dissolved on tbe 30th day of October, 1894, to be continued in force 30 days thereafter, but tbe trial of tbe law case was not brought on until December 4, 1896. And what excuse is given by plaintiffs for these extraordinary delays? The trial court, over tbe objection of defendants, permitted the plaintiffs to introduce in evidence a conversation, in pais, bad, in tbe absence of these defendants, between one of tbe attorneys for plaintiffs and tbe judge of tbe district court, tbe substance of wbicb was that some months after tbe dissolution of tbe injunction this attorney had a perspnal interview with Judge Williams, judge of tbe United States district court, in which tbe attorney expressed- a desire to have the law case brought to trial at tbe earliest date prac*531livable, whereat the judge stated to him that he would not try the law ease until the court of appeals had passed upon the ease pending there on the bill in equity hied by the defendants, and that thereafter counsel for plaintiffs took no further action in the matter until after the end of the case pending in the court of appeals. Was this evidence competent against these sureties? It was not a matter occurring in open court Aor were the sureties present nor had they any notice thereof. In a law case the court speaks only by the record. The judge can take.no action respecting the case outside of court, except when specially authorized thereto by statute, which will bind or affect tlie interest of any person. The occasion and place for counsel to have calk'd up the matter in question and urged the speeding of the trial was when the court was in session and in open court. The district judge when proceeding in the circuit court is then, and not out of courl, in a case at law, clothed with the functions and charged with the responsibilities of the circuit court. What he should do on the bench in court, open to the public and to litigants, and what he might say in pais, are wholly different in their legal effect on the rights of other litigating parties. One carries with it the obligations of judicial responsibility; the other is nonjudicial and without responsibility. One is ex cathedra; the other is a brutum Iulmén.
Aside from this, upon what principle of law and justice can it he maintained that the mere election of the judge not to proceed to trial in the law ease until the court of appeals had decided another case before if, should be permitted to extend the liability of the sureties to such a distant date as would suit the pleasure of the court and the parties to the law action to go to trial? The appeal was no longer dependent upon the fact of the injunction bond having been given. The injunction had been dissolved and the bond no longer operated as a supersedeas. Suppose the parties to that appeal had ’neglected for years to put the appeal on hearing, or for various causes incidental to such courts no decision had been reached in that case for five years, at the end of which the principals in the bond were found to be insolvent; would the sureties still be bound on the ground that such a contingency was the direct and natural consequence of the injunction bond? The trial court held, and the majority opinion sustains it, that it was none of these defendants’ business (as it was a matter of court proceeding, which the sureties ought to have anticipated) whether or not the judge of the court saw flt to await the decision of the appellate court ad libitum. The underlying vice of such a proposition is the failure to observe the inflexible limitation which the law affixes to the undertaking of the surety. He is bound for no consequential damages wbicb are not the natural and direct result of his act in executing the bond, such as,in the ordinary, usual, and lawful course of judicial procedure in the case might have been reasonably anticipated. He is not held to have anticipated that the court or litigants after the dissolution of the injunction would do anything in the course of proceeding other than what the law required or permitted. As the parties and the court, on the dissolution of the injunction, were free, so far as the injunction was *532concerned, to proceed at once to trial and judgment in the law case, it was not the result of the injunction that the district judge should decline to proceed to trial because he preferred to wait and see what the court of appeals would decide in another case.
It not infrequently happens that the trial judge holds up for a long period the trial and decision of a cause pending, awaiting the determination of a like question in some higher court. But it has never been held by courts of ultimate authority that he could do this to the injury of the bondsmen in an injunction who were helpless to compel him to act. However conservative the district judge in his purpose in awaiting the decision of the court of appeals, he had no such judicial discretion as could in one degree extend the liability of the collateral conditional undertaking of these bondsmen. And when the proof of this extra judicial action of the district judge was offered the surety had just right to say, “Non hsec in fcedera veni.” It will not do to say that this was harmless error. There was evidence sufficient to go to the jury to have warranted them in finding that, if the judgment in this case had been timely taken after the dissolution of the injunction, more money could have been realized on the execution against the judgment debtors than was ultimately recovered. Neither counsel for plaintiffs below nor the trial court put the ruling upon any such ground. But, both in ruling upon the objection to the admissibility of this conversation between the attorney and the judge and in the charge to the jury, the court expressly told the jury that it was none of the defendants’ business what was the result of the action of the judge of the court in declining to put the case to trial. The excellent lawyers who brought this action on the injunction bond recognized the principle of law that sureties were only bound for such loss as was occasioned by the injunction, and therefore they alleged in the petition that the principals in said bond had become insolvent before the dissolution of the injunction. This allegation was disproved by the fact that on the execution issued-on the final judgment over $4,000 were realized out of the property of the principals. And notwithstanding the limit of liability of the sureties was fixed, by the bond at $7,000, after the collection of this $4,000 and more, the liability of the sureties on the judgment was assessed at $7,000, which was brought about by charging the sureties with accumulated interest on the debt for a number of years after the dissolution of the injunction. I think the court erred in admitting the testimony respecting the interview between plaintiffs’ attorney and Judge Williams, and that the court erred in its charge to the jury in respect of the delay in prosecuting the law action as to its effect on the liability of the sureties, and that the judgment should be reversed, and a new trial ordered.