Maryland Casualty Company v. Tow , 71 Ga. App. 178 ( 1944 )

1. Under its plain and unambiguous terms the bond sued on was not merely an injunction bond; but was one conditioned to pay the obligee all costs and damages incurred by him in consequence of the filing of the action against him, in the event he prevailed on a trial of the case on its merits.

2. The kinds of expenses sued for were recoverable in this case; the necessity for their expenditure and the reasonableness of the amounts being, of course, questions for the jury.

3. It was not error to refuse to permit an attorney to give testimony which in effect sought to vary and contradict the unambiguous terms of the bond sued on, and which stated his conclusion as to what the bond meant.

4. The charge which in effect instructed the jury that the plaintiff was entitled to recover some amount as a matter of law was not erroneous.

5. The motion to assess damages for a frivolous appeal is denied.

DECIDED MAY 24, 1944. Martin Tow sued Maryland Casualty Company on a bond executed by R. S. Evans as principal and the casualty company as surety, in which the plaintiff was obligee. The petition alleged substantially the following: In 1941 R. S. Evans filed a suit in Fulton superior court against Martin Tow, seeking to recover $25,000. His petition alleged that Tow was a non-resident of the State of Georgia and a resident of the Republic of Argentina; that Tow could not be served personally; that there were certain certificates of stock belonging to Tow in a safety-deposit box in the Fulton National Bank of Atlanta, which could be seized and subjected to his claim against Tow. He prayed for a temporary receiver to take charge of Tow's assets in the safety-deposit box, and to hold them subject to the order of court; for a judgment on a contract against Tow; that the securities be sold and the proceeds credited on the judgment; that Tow be restrained from changing the status of the securities; that service be perfected by publication; for rule nisi; and for other relief. An ex parte receiver was appointed, service by publication and rule nisi were ordered, and the trial judge continued the receivership, restrained Tow from changing the status of the property, and ordered that Evans file a bond payable to Tow, in the sum of $15,000, with security, "conditioned to pay said defendant all damages that may have been, or may be, sustained by him, and all costs that may have been or may be incurred by him, in consequence of the filing of this suit by the plaintiff, and of the appointment of the receiver therein, and the granting of a restraining order and injunction therein, in the event the plaintiff shall fail to recover in said case, and said receivership be denied and said restraining order and/or injunction be dissolved." The order requiring the bond provided that the granting of the relief to the plaintiff was conditional upon the giving of the bond conditioned as above set forth. Evans executed the bond so required as principal, and Maryland Casualty Company, as surety, after which the receiver qualified and took possession of the securities in the safety-deposit box. Tow appealed from the judgment continuing the receivership and injunction and finding that service had been properly perfected, which was affirmed by the Supreme Court of Georgia. The case of Evans v. Tow was tried, and resulted in a verdict in favor of Tow, and a decree was entered dissolving the injunction and denying a permanent receiver, and directing a return of the certificates of stock to Tow. The present action was to recover costs and expenses, including attorneys' fees, preparation and reporting the Evans v. Tow case, traveling expenses, living expenses, etc. General demurrers were filed to the petition in the case under review on the grounds that no cause of action was set forth, because it appeared that the judgment requiring the bond and stating the conditions thereof had been sustained by the Supreme Court; and that it affirmatively appeared that the alleged damages were occasioned by the defense of the action of Evans v. Tow on its merits, rather than upon the successful resistance of the injunction and receivership, and were not contemplated by the conditions of the bond and could not form the basis of the action brought. The demurrers were overruled and exceptions pendente lite filed to the order overruling them. The trial resulted in a verdict for Tow for $3500. The company's motion for a new trial was overruled, and it excepted to the orders overruling the demurrers and the motion for a new trial. 1. The bond sued on was conditioned as follows: "Now, therefore, if the said R. S. Evans shall pay to the said Martin Tow all damages that may have been sustained, or may be sustained by him, and all costs that may have been, or may be incurred by him in consequence of the filing of said suit by the plaintiff, and of the appointment of the receiver therein, and the granting of a restraining order and injunction therein, and in the event the plaintiff shall fail to recover in said case, and said receivership be denied and said restraining order and/or injunction be dissolved, then this bond to be void; else of full force." The contention of the surety company is that under a proper interpretation of the bond, the condition is to pay damages, costs, etc., caused by a continuation of the receivership and injunction, and not those arising from a trial of the merits of the case. We cannot agree with this contention. In the first place, the plain provisions of the condition of the bond are that all damages are covered which "may have been ormay be" incurred in consequence of the filing of the suit, the appointment of a receiver, and the granting of the restraining order. These unambiguous provisions start with the filing of the suit and follow through the relief granted in the action, and clearly refer to costs and expenses of a trial on the merits of the case as well as the other features. In the second place the rule that a defendant cannot ordinarily recover the costs and expenses of defending a lawsuit in which he prevails (in cases other than where instituted with malice and without probable cause) does not apply to a case like this one. Under the strict terms of the law, before property of a non-resident may be seized by attachment the plaintiff must give a bond conditioned to pay the defendant non-resident all damages and costs incurred in consequence of suing out the attachment, in the event the plaintiff shall fail to recover in the case. Code, § 8-111. The mere fact that a plaintiff is unable to give such a bond does not authorize the intervention of a court of equity so as to bring about such a seizure of the property of a non-resident without the giving of the bond. Grimmett v. Barnwell, 184 Ga. 461, 469 (192 S.E. 191, 116 A.L.R. 257), and cit. In this case legal attachment was impossible, and a court of equity intervened. Whether the court was compelled to require a bond of the plaintiff, similar to an attachment bond, it was certainly authorized to do so. "Equity is ancillary, not antagonistic, to the law; hence equity follows the law where the rule of law is applicable, and the analogy of the law where no rule is directly is applicable." Code, § 37-103. A court of equity was authorized, at least, to follow the rule of law that the property of a non-resident should not be seized by resident courts on an unestablished claim in personam. The court could have required the bond in this case before assuming jurisdiction in the first instance. Before any effective relief was granted, and before the court perfected jurisdiction by an actual seizure of the property, the bond was required and executed. The effect of the requiring of the bond was the same as if the bond had been required in the first instance, as is shown by the provisions of the order requiring the bond and those of the bond itself. The bond here cannot be said to be an injunction bond, strictly speaking. Those are bonds given mostly in cases where a court of equity has jurisdiction of the parties and subject-matter, and where the jurisdiction of the court does not depend on the actual seizure of the res. The injunction bond does not cover the damages and costs of the main case on its merits, but only those arising in consequence of the granting of an injunction. Whether the injunction here was effective against a non-resident does not concern us. The fact is there is a more important matter involved, and that is the continuance of the receivership. It seems to us that the jurisdiction of the court would have ceased, and the main case would have become functus officio if the receivership had not been continued and the court had not continued to hold possession of the stock certificates. The non-resident defendant did not waive service, and he was not served. The case was one solely in rem. The fact is that failing to recover in the main case on its merits, and failing to hold the receivership, under the facts in this case, are one and the same thing, because, if the receivership fell the main case fell, and if the main case fell the receivership fell. If the plaintiff was entitled to prevail in one he was entitled to prevail in the other. So it appears that the court actually conditioned the bond on the plaintiff's prevailing on the merits of the case, and followed the legal analogy in so doing. The ruling by the Supreme Court that the court had jurisdiction of the res, and that service was properly perfected, has no bearing on the issue here (Tow v. Evans, 194 Ga. 160, 20 S.E.2d 922), any more than a ruling by an appellate court that a levy was legal in an attachment case would have a bearing on the legality or meaning of the attachment bond. In the case just cited there was no exception to the order requiring the bond as a condition to the continuance of the relief sought. There is now no effort to reform the bond or attack it on the grounds of fraud, accident, or mistake. The plain and unambiguous terms of the bond should and must be followed. The ruling in Jones v.Rountree, 11 Ga. App. 181 (74 S.E. 1096), is clearly not in conflict with what is here ruled. The bond there was given to obtain a supersedeas to a judgment denying an injunction. Such a supersedeas had the effect of granting an injunction, and the bond given amounted to a pure injunction bond. There was no reference in the bond to the outcome of the case on its merits. The other cases cited by the plaintiff in error from other jurisdictions involve injunction bonds and have no bearing on the question here involved. The court did not err in overruling the demurrers.

2. The expenses incurred by Tow are all included in the language of similar bonds as held in the following cases: Oakes v. Smith, 121 Ga. 317 (1, 2) (48 S.E. 942); Carrington v.Wilharbla Realty Co., 67 Ga. App. 898 (20 S.E.2d 860);Hinton-Bellah Inc. v. Thebit, 62 Ga. App. 672 (9 S.E.2d 779); Jones v. Lamon, 92 Ga. 529 (4) (18 S.E. 423).

3. Error is assigned on the refusal of the court to permit an attorney for Evans to testify what took place at the time the bond was required, the ground of the motion alleging that the attorney would have testified as follows (material matter only being included): "Mr. Branch said, as I recall it, that if they are going to tie up the stock in a receivership he felt a bond should be given. There was some discussion as to the bond, and the question of the value of the stock at that time came up. Mr. Branch reached for the annotated Code, turned to the section of attachment bonds, and said: `This is the type of bond we should like to have.' There was further discussion about the amount of the bond, and whether it should be given. The he asked the question about the value of the stock, and it came up that if anything happened to the stock, if it went up in value or down in value, Mr. Tow had an opportunity to sell it, that they probably would arrange for a release. The only thing I recall that went into the fixing of the amount of the bond was the question of what might be the value of the stock, and what Mr. Tow might lose in the event he should lose the sale of that particular block of stock. The bond would stand to pay him any damages, if he was not able to dispose of the stock in the event of loss of his case." It was not error to refuse to allow the witness to give this testimony. It was a conclusion of the witness and an effort to contradict and vary the plain and unambiguous terms of the bond. The fact that the witness had the idea that the bond served but one purpose does not alter the fact that its execution resulted in the court's continued jurisdiction in the main case, and prevented the removal of the property from the State so as to be beyond the reach of the plaintiff and the courts of this State.

4. The court in effect directed a verdict for the plaintiff, but left to the jury the questions as to what items were necessarily incurred by Tow and the reasonableness of the same. The evidence demanded a finding for the plaintiff, and the charge was not error for the reason assigned, namely, that a verdict for the plaintiff was not demanded by the evidence in some amount.

5. The motion to assess damages for frivolous appeal is denied.

6. The court did not err in overruling the demurrers and the motion for a new trial.

Judgment affirmed. Sutton, P. J., and Parker, J., concur.