Coeur D'Alenes Lead Co. v. Kingsbury

55 P.2d 1307, 56 Idaho 475, 1936 Ida. LEXIS 62

• Court: Idaho Supreme Court
• Decided: March 14, 1936
• Docket: No. 6218.
• Status: Published

Opinions

BUDGE, J.

This action is an aftermath of the case of Wayne v. Marquardt, 54 Ida. 211, 30 Pac. (2d) 369. Greenough, Kingsbury and Hanson, directors, and Marquardt, secretary, of respondent corporation, called a meeting of respondent’s shareholders for July 7, 1931, at which meeting a new board of directors was elected, consisting of W. E. Greenough, Carlson, Burton, R. W. Greenough and Wayne. The two last named were on the same day elected secretary and president, respectively, of the corporation. Demand was then made upon the former officers and directors for all the books and records of the corporation, all of the property of the corporation, consisting mainly of certaiu capital stock in the Atlas Mining Company, and whatever funds there were in the treasury of the corporation. The former officers having possession of the above-described items of property refused to turn the same over to the newly elected officers, whereupon a suit in mandamus was brought against them. That action, tried in January, 1932, resulted in a decree confirming the election of the new officers and required Hanson and Marquardt, the former president and secretary-treasurer, respectively, to immediately deliver up to R. W. Greenough, the new secretary-treasurer, “all of the books, records, files, accounts, documents, stock-certificates, correspondence, funds and moneys, and all papers and all property” of respondent corporation. After entry of the aforesaid judgment Hanson and Marquardt appealed to this court and for the purpose of staying execution furnished a supersedeas bond in the amount of $1,000, being the amount fixed by the court upon an ex parte order upon application of appellants.

On March 5, 1934, the appeal in the case of Wayne v. Marquardt, supra, was decided adversely to appellants and in due time the remittitur was filed in the court below. Notice of the filing of the remittitur and a demand to deliver up the documents or personal property was given to appellants. Approximately one month after the filing of the remittitur and after failure and refusal of appellants to comply with the order and judgment entered in the lower court, in effect affirmed upon appeal, the present action was instituted to recover on the supersedeas bond. Appellants filed a demurrer to the complaint, which was overruled, and thereafter appellants filed a joint answer to which a demurrer was sustained and appellants then answered separately; demurrers were sustained as to the separate answers, appellants refused to plead further and judgment was then entered in favor of respondent for $1,000, the sum named in the supersedeas bond, together with interest and costs, and this appeal was taken.

Error is sought to be predicated upon the action of the court in overruling the demurrer to the complaint. It is conceded that the supersedeas bond upon which the suit was brought was given under and pursuant to the provisions of I. C. A., section 11-205. It is urged by appellants that a supersedeas or slay bond given pursuant to the foregoing statute is not a bond for liquidated damages upon which liability for the full amount attaches upon thé failure of the party to promptly comply, or deliver the documents or personal property, but that recovery can be had thereon only for actual damages suffered and established, and in order to state a cause of action it was incumbent upon respondent to allege all of the facts and circumstances, together with a statement of the damage incurred by respondent.

Where the sum mentioned in a supersedeas bond is in the nature of a statutory penalty for nonperformance of a statutory duty it is not necessary to show actual damage and the whole sum may be recovered. (Clark v. Barnard, 108 U. S. 436, 2 Sup. Ct. 878, 27 L. ed. 780.) It therefore appears necessary to construe the provisions of I. C. A., section 11-205. It will be observed from a reading of the statute that it provides for two or alternative methods by which execution may be stayed pending appeal if the judgment or order appealed from direct the assignment or delivery of documents or personal property, providing:

‘ ‘ If the judgment or order appealed from direct the assignment or delivery of documents or personal property, the execution of the judgment cannot be stayed by appeal unless the things required to be assigned or delivered be placed in the custody of such officer or receiver as the court or judge thereof may appoint; or unless an undertaking be entered into on the part of the appellant with at least two sureties, and in such amount as the court or judge thereof may direct, to the effect that the appellant will obey the order of the appellate court upon the appeal. ’ ’

Had appellants chosen not to have given the supersedeas bond the judgment or order of the court might have been executed to the extent that the documents or personal property in appellants’ possession could have been placed in the custody of such officer or receiver as the court or judge thereof appointed. Had the documents or personal property been delivered to and placed in the custody of such officer, promptly upon the coming down of the remittitur respondent would have had the right to the possession of such property and there would have been no delay nor damage occasioned or incurred by an unlawful retention of such property on the part of appellants. However, appellants chose the latter alternative or provision of the statute, and, in order to prevent a delivery of the documents or personal property into the custody of an officer or receiver, gave the supersedeas bond. The sureties therein obligated themselves jointly and severally to respondent “under all statutory obligations with reference to stay of proceedings pending determination of said above entitled cause in the Supreme Court .... in the sum of $1,000.00.” The statutory obligation was that the appellant would “obey the order of the appellate court upon the appeal.” The evident purpose and object of the statute is to secure to the successful litigant, upon an affirmance of the judgment or order of the court, and upon the coming down of the remittitur, prompt delivery of the documents or personal property directed by the judgment or order appealed from to be assigned or delivered. Likewise, it is the evident intent and purpose that a supersedeas bond may be given in an amount fixed by the court in lieu of placing an officer or receiver in charge of the documents or personal property, the bond being conditioned upon the same sort of compliance with the judgment or order as would have resulted had the documents or personal property been placed in the custody of such officer. In other words, a breach of the covenant of the bond would exist upon the failure of appellants to make the documents or personal property equally as available to respondent as they would have been had they been placed in the custody of an officer or receiver appointed by the court or judge thereof, namely, prompt delivery irrespective of damage which might or might not be caused by a failure to deliver. To hold otherwise would in effect defeat the evident purpose and object of the statute. Had the documents or personal property been placed in the custody of an officer or receiver, upon the determination of the appeal respondent would have secured prompt possession thereof with neither damage nor delay. Yet, appellants’ argument, carried to its logical conclusion, is in effect, that even though the documents were never returned to respondent, still there could be no recovery on the supersedeas bond without proof of actual damages. Appellants themselves concede that the value of the documents is almost unascertainable, saying:

“Necessarily the books, records, etc., while of value to the corporation, are a nullity as far as anyone else is concerned, and to place a value thereon would be well-nigh impossible. ’ ’

It may well be said that, likewise, the damages flowing from withholding such documents or personal property are also so uncertain and intangible as to be in effect unascertainable. In such circumstances the damages will be regarded as liquidated and will be measured by the amount of the bond. (Southern Surety Co. v. Petrolia Land Co., (Tex. Civ. App.) 252 S. W. 204; Clark v. Barnard, supra; United States Film Co. v. United States Fidelity & Guaranty Co., 44 Cal. App. 227, 186 Pac. 364; Sun Printing & Publishing Assn. v. Moore, 183 U. S. 642, 22 Sup. Ct. 240, 46 L. ed. 366; 5 Cyc. 848; Shelby v. Bohn, 25 Ind. App. 473, 57 N. E. 566; Runnels v. Laswell, (Mo. App.) 272 S. W. 1032); and see for a consideration of numerous authorities Northwestern Terra Cotta Co. v. Caldwell, 234 Fed. 491.

The obligation of the sureties on such an undertaking as that given herein is not to pay such damages as the party may suffer, not exceeding the amount of the bond, as may be the case in some stay bonds, but is an obligation to obey the order of the appellate court upon the appeal, without reference to any question of damages to the other party, the whole sum of the bond being recoverable in the event of nonperformance. We are of the opinion that the complaint therefore stated a cause of action and the court did not err in overruling the demurrer thereto.

The second specification of error is to- the effect that the court erred in making and entering judgment, appellants urging that they were not in default; that their separate answers specifically deny the existence of any indebtedness due or any breach of the covenants of the bond and state facts which constitute a defense to the alleged cause of action.

Respondent after alleging in its complaint the giving of the supersedeas bond and other matters in connection therewith alleges a breach in the following language:

“That the defendants have at all times failed, neglected and refused, and still fail, neglect and refuse to either obey the judgment and/or order of the above entitled court from which said appeal was taken, and which judgment and/or order was affirmed by said supreme court as aforesaid, or to pay this plaintiff the amount of said undertaking for stay of proceedings, namely, $1,000. And neither.the said Herman Marquardt and/or Walter H. Hanson, nor any one whomsoever, has delivered to plaintiff said books, records, monies, property, documents, files or correspondence, as required by said judgment and/or order.”

Appellants’ separate answers consist of admissions, denials and affirmative defenses. Ignoring for the time being the affirmative matter contained in the separate answers and the demurrers directed thereto the separate answers disclose that while appellants admit they have not paid respondent the amount of the undertaking, and likewise admit many of the allegations of the complaint, particularly with reference to the giving of the supersedeas bond, the alleged breach set forth in the complaint of a neglect and refusal to obey the judgment or order of the court is denied in the following language :

“This answering defendant denies that he has failed to comply with said judgment but admits that he has failed to pay the plaintiff the amount of said undertaking for stay of proceedings, to-wit, $1,000.00.”

Further, the separate answers in effect traverse the allegations of the complaint setting forth the breach, denying in haec verba the breach in the manner and form as alleged in the complaint, as follows:

“This answering defendant denies each and every other allegation, statement, matter, and/or thing contained in said complaint not hereinbefore specifically admitted, said denial being intended to be as full and complete as though each and every allegation so referred to were denied in haec verba herein and at this place.”

The only portions of respondent’s demurrers to the separate answers which do not relate specifically to the affirmative matter of the answers, recite:

“That the said amended answer does not state facts sufficient to constitute a defense or counterclaim to plaintiff’s cause of action.”

The rules governing pleas or answers in civil cases generally apply to a plea or answer in an action on a bond. Thus a plea must be responsive to the allegations of the complaint as by traversing issuable facts which go to the merits of the case. (9 C. J., sec. 187, p. 105.) It appears that by their answers appellants not only specifically denied that they had failed to comply with the judgment but likewise specifically traversed and denied that they had breached the contract in the manner and form alleged by respondent, which it would appear constituted a substantial denial of the breach, raising an issue. In Miller v. Elliott, 1 Ind. 484, 50 Am. Dec. 475, in a suit upon a bond the court said:

“The first plea alleged that the defendant had not broken his said covenants in manner and form as the plaintiff had above thereof complained against him, concluding to the contrary. We think that, upon the authority of the case of The State v. Scott et al., 6 Blackf. 263, the demurrer to this plea ¡(the demurrer being general) should have been overruled. The plea is a substantial denial of the breaches. ’ ’

“In debt on a bond conditioned for the performance of covenants, where all the covenants are in the affirmative, a plea of performance generally is sufficient, and it must come from the other side to show a breach committed by defendant.” (9 C. J., sec. 193, p. 108.)

The averment of the contrary of what is alleged in the complaint is equivalent to an ordinary denial (Nesbitt v. DeMasters, 44 Ida. 143, 255 Pac. 408, 409) serving the purpose of raising direct issue upon respondent’s allegation. (Smith v. Marley, 39 Ida. 779, 230 Pac. 769.)

The affirmative matter contained in appellants’ separate answers cannot be construed as being out of harmony with the foregoing denials or as admitting a failure to comply with the judgment. We are of the opinion that the separate answers of appellants put in issue the question of whether or not there had been a breach as alleged in the complaint and that the court erred in sustaining the demurrers thereto in this respect and in entering a default judgment against appellants.

Paragraphs II, III and IY of respondent’s demurrers are specifically directed to the affirmative defenses contained in appellants’ separate answers, and, also appellants’ demurrer to the complaint contains other matters not considered nor passed upon herein. However, no assignment of error specifically or particularly raises any question with respect to the court’s action upon such matters and there are no authorities cited nor argument contained in the briefs upon such questions and they therefore need not be considered. (State v. Richardson, 56 Ida. 150, 50 Pac. (2d) 1012.)

In view of the conclusion reached, it appears to be unnecessary, if not improper, for this court to consider or pass upon the question of respondent’s right to a recovery of interest and costs in addition to the sum named in the bond.

It follows from what has been said that the judgment should be reversed and the cause remanded to the trial court with instructions to overrule the demurrers to the separate answers and to proceed in accordance with the views herein expressed, and it is so ordered. Costs awarded to appellants.

Givens, C. J., concurs.