Sheridan County Electric Co-Op., Inc. v. Ferguson

227 P.2d 597, 124 Mont. 543, 1951 Mont. LEXIS 10
CourtMontana Supreme Court
DecidedFebruary 17, 1951
Docket9011
StatusPublished
Cited by24 cases

This text of 227 P.2d 597 (Sheridan County Electric Co-Op., Inc. v. Ferguson) is published on Counsel Stack Legal Research, covering Montana Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Sheridan County Electric Co-Op., Inc. v. Ferguson, 227 P.2d 597, 124 Mont. 543, 1951 Mont. LEXIS 10 (Mo. 1951).

Opinions

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[547]*547porary 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 [548]*548had 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 [549]*549Co., 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.

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Sheridan County Electric Co-Op., Inc. v. Ferguson
227 P.2d 597 (Montana Supreme Court, 1951)

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Bluebook (online)
227 P.2d 597, 124 Mont. 543, 1951 Mont. LEXIS 10, Counsel Stack Legal Research, https://law.counselstack.com/opinion/sheridan-county-electric-co-op-inc-v-ferguson-mont-1951.