Montgomery v. American Employers' Ins.

22 F. Supp. 476, 1938 U.S. Dist. LEXIS 2435
CourtDistrict Court, D. Delaware
DecidedFebruary 10, 1938
DocketNos. 1-3
StatusPublished
Cited by1 cases

This text of 22 F. Supp. 476 (Montgomery v. American Employers' Ins.) is published on Counsel Stack Legal Research, covering District Court, D. Delaware primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Montgomery v. American Employers' Ins., 22 F. Supp. 476, 1938 U.S. Dist. LEXIS 2435 (D. Del. 1938).

Opinion

NIELDS, District Judge.

Three writs of scire facias against sureties on three separate bonds were tried together before the court without a jury.

May 1, 1929, a judgment for $80,500 was recovered in this court in the suit of Henry G. Montgomery against Realty Acceptance Corporation, being No. 25, March [477]*477term, 1927. The defendant in that judgment took an appeal and furnished a supersedeas bond in the sum of $90,000 with American Employers’ Insurance Company as surety. The appeal proceeded in due course. Eventually this judgment was affirmed. Montgomery v. Realty Acceptance Corp., 3 Cir., 51 F.2d 642; Realty Acceptance Corp. v. Montgomery, 284 U.S. 547, 52 S.Ct. 215, 76 L.Ed. 476.

Thereupon, on March 5, 1932, Realty Acceptance Corporation, defendant in the judgment, filed a bill in equity in this court to restrain the plaintiff in the judgment from having execution for more than $14,-918.13, and an order was entered for the issuance of a preliminary injunction. As a condition to the issuance of the injunction, the court, taking into consideration the original supersedeas bond of $90,000 that already stood as security for the judgment, required a bond in the sum of $10,000. American Employers’ Insurance Company was again accepted as surety. May 10, 1934, this court dismissed the bill in equity and dissolved the preliminary injunction. Realty Acceptance Corp. v. Montgomery, D. C., 6 F.Supp. 593. On the same day Realty Acceptance Corporation moved for the restoration of the preliminary injunction pending appeal. Appeal was allowed, the court requiring an additional bond in the sum of $15,000 to cover any deficiency in the amounts that might be collected on the $90,000 and $10,000 bonds. The $15,000 bond was given with the United States Casualty Company as surety. The decree dismissing the bill of complaint was affirmed on appeal. Realty Acceptance Corp. v. Montgomery, 3 Cir., 77 F.2d 762.

Suit No. 1 was brought by scire facias on the $90,000 bond. Suits Nos. 2 and 3 were brought by scire facias on the two bonds of $10,000 and $15,000 each. Pleas in bar were filed in each suit.

In suit No. 1 the defendant filed three pleas in bar. The first plea recites an application to the Circuit Court of Appeals to remand the case to this court for the purpose of taking certain alleged newly discovered evidence bearing solely upon the amount of the judgment. The plea also recites subsequent proceedings in the Court of Appeals and in the Supreme Court of the United States holding the order remanding the case to be irregular, improper and invalid and as though it had never been made. The plea further alleges that by reason of these proceedings the appeal was prosecuted with effect and that what transpired in the course of the proceedings were a bar to the suit on the bond against the surety.

The second plea in suit No. 1 alleges a variance between the language of the statute and the language of the bond. The statute provides that the court shall take good and sufficient security that the plaintiff in error or the appellant shall prosecute his writ or appeal to effect, and, if he fail to make his plea good, shall answer all damages and costs. The word “plea” used in the statute has as its counterpart in the bond the word “appeal,” the condition of the bond being that Realty Acceptance Corporation shall prosecute its appeal to effect and answer all damages and costs if it fail to make its “appeal” good. It is contended therefore that the use of the word “appeal” instead of the word “plea” vitiates the bond.

The third plea in suit No. 1 alleges that, while the injunction in the equity suit forbade alienating the judgment of $80,500, the plaintiff in the judgment assigned $1,-000 of the judgment to Continental Purchasing Company; that this assignment placed plaintiff in contempt of this court and until he purges himself of the contempt plaintiff cannot avail himself of the processes of this court.

In suit No. 2 on the $10,000 bond the first plea alleges that the condition of the bond is not in accord with the statute requiring the giving of the bond and therefore tlie bond is a nullity. The statute, 28 U.S.C.A. § 382, provides: “Except as otherwise provided in section 26 of Title 15, no restraining order or interlocutory order of injunction shall issue, except upon the giving of security by the applicant in such sum as the court or judge may deem proper, conditioned upon the payment of such costs and damages as may be incurred or suffered by any party who may be found to have been wrongfully enjoined or restrained thereby.” The theory of the plea is that the bond should have been given in the language of the statute.

The second and third pleas in suit No. 2 are substantially like the first plea. The fourth plea is like the third plea in suit No. 1 alleging the violation of the injunction by the assignment of $1,000 of the judgment while the injunction was in force.

The first plea in suit No. 3 on the $15,000 bond is the same as the first plea in suit No. 2 and alleges the bond was not in the language of the statute. The second plea in suit No. 3 is based on the alleged violation [478]*478of the injunction and is like the third plea in suit No. 1. The third plea in suit No. 3 alleges that the bond was executed under an order entered in the equity suit subsequent to the adjournment of the term at which the original judgment was entered. The fourth plea in suit No. 3 alleges that the bond was executed pursuant to an order in the equity suit and not pursuant to an order in the law case, and that the court was without authority to require. that a supersedeas bond be executed in the law case. The fifth, sixth, and seventh pleas in suit No. 3 are like pleas in suit No. 2 to the effect that bonds should not be conditioned to meet the facts of the case but should be conditioned in the language of the statute providing for the giving of bonds in injunction cases.

To all the above pleas plaintiff joined issue.

In suit No. 1 on the $90,000 bond there are three defenses: (1) That the appeal from the judgment of $80,500 was prosecuted to effect and the bond discharged; (2) that the condition of the $90,000 bond did not comply with the statute providing for giving bonds on appeal; (3) that the plaintiff, Montgomery, was guilty of contempt of this court in the equity suit and therefore is not entitled to maintain this action.

In suit No. 2 on the $10,000 bond there are two defenses: (1) That the bond does not comply, with the statute governing the taking of injunction bonds; (2) that the plaintiff, Montgomery, was guilty of contempt in the equity suit in having assigned $1,000 of the judgment.

In suit No. -3 on the $15,000 bond there are four defenses: (1) That the $15,000 bond failed to comply with the terms of U.S.R.S. § 1000, 28 U.S.C.A.

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Related

American Employers' Ins. v. Montgomery
101 F.2d 1005 (Third Circuit, 1939)

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Bluebook (online)
22 F. Supp. 476, 1938 U.S. Dist. LEXIS 2435, Counsel Stack Legal Research, https://law.counselstack.com/opinion/montgomery-v-american-employers-ins-ded-1938.