Harrison v. Hind & Harrison Plush Co.

Scott, J.: The plaintiff appeals from an order confirming the report of a referee as to the damages suffered by the defendants by reason of an injunction, and charging the plaintiff with the costs of the reference. • In March, 1907, the plaintiff obtained a preliminary injunction restraining certain corporate acts by the defendant" corporation. The usual undertaking on injunction was given. The motion to continue the preliminary injunction was denied, and before trial the action was discontinued by order upon condition that the plaintiff would stipulate that such discontinuance should be without prejudice to the rights of the defendants to enforce the undertaking on injunction, and that the plaintiff should pay the defendants’ taxable costs. The stipulation was given, although it was probably not necessary to preserve the defendants’ rights, for the discontinuance of the action by the plaintiff was equivalent to a final decision that the plaintiff was not entitled to the injunction. (N. Y. C. & H. R. R. R. Co. v. Village of Hastings, 9 App. Div. 256.) Thereupon a reference was ordered to ascertain and determine the damages sustained by the defendant by reason of the injunction. Before the referee such damages, consisting wholly of counsel fees upon the motion to continue the injunction, were fixed without opposition at $500, and the referee reported that sum as the amount of such damages. The order appealed from confirms [462] liis report and allows to the defendants the cost of the proceedings before the referee. The plaintiff now insists that the damages fixed cannot exceed the amount of the undertaking, and that in such damages must be included the taxable costs of the action and the expenses • of the reference. Reliance for this contention is placed upon Lawton v. Green (64 N. Y. 326) and Harrison v. Harrison (75 Hun, 191). In Lawton v. Green it was held that the defendant’s entire recovery was-limited by the amount of the injunction .bond (in that case as in this $250) and that the court had no power to require the defendant to pay in addition to his provable damages the expenses of the reference to ascertain the amount of such damages. That case was decided under the old Code of Procedure. The present Code of Civil Procedure expressly provides .for the recovery of costs in such a case as this. Section 623 authorizes a reference in proceedings to assess the damages resulting from an injunction. Section 3236 provides for the allowance of motion costs, in the discretion of the court or judge, upon a reference made pursuant to section 623, and section 3251 provides that upon a reference specified in section 3236 the court or judge may award' costs, not exceeding ten dollars, besides necessary disbursements for referee’s fees. (O’Connor v. N. Y. & Yonkers Land Co., 8 Misc. Rep. 243.). In Harrison v. Harrison the court decided that in that case the taxable costs of the action must be deducted from the amount reported by the referee. It appeared, however, that the referee had erroneously included in the damages all the costs and expenses of defending the action, instead of limiting them, as he should have done, to the expense of procuring the vacation of the injunction. Since the general costs and expenses of the action constituted no part of the damages resulting from the injunction, the court, by deducting the taxable costs from the award, left to be recovered only the damages properly recoverable. Heither of these cases, therefore, is decisive of the present appeal. It is further objected that since the injunction bond is limited to $250, the referee should have found no greater damage than that sum. The referee was directed to ascertain the damage suffered by the defendants and was bound to report in accordance with the proofs presented before' him. • The amount thus found, when confirmed by the court, is .conclusive as to the amount of the damage suffered [463] by the defendants, but does not determine the surety’s liability which is limited, by the amount of the bond, as well as the amount of the damages as fixed. If the damages found amount to less than the amount of the bond, the surety is liable only for the amount so found. If the damages actually suffered by the defendants equal or exceed the amount of the bond, the surety becomes liable for the amount of his undertaking and no more. It is unimportant to him, therefore, whether the amount of the damages be fixed at the exact amount of his undertaking or at a larger sum. It is likewise of no importance to the plaintiff what damages are fixed by the referee, for a plaintiff who obtains an unwarranted injunction is not liable to the defendants for the damages sustained thereby, unless the action has been brought and the injunction obtained maliciously, and then the damages can be determined and recovered only in an action for malicious prosecution. (Lawton v. Green, supra ; Mark v. Hyatt, 135 N. Y. 306.) It follows that the order was right and must be affirmed, with ten dollars costs and disbursements. Patterson, P. J., Ingraham, Laughlin and Clarke, JJ., concurred. Order affirmed, with ten dollars costs and disbursements.