Sweet v. Mowry

PARKER, J. Upon the question whether the market value of the bonds was depreciated below the price which the savings bank contemplated offering, by the injunction itself, rather than by the litigation then inaugurated, we are not disposed to disturb the conclusion which the referee reached. We think, with him, that on the whole evidence the depreciation which evidently followed the commencement of the action, and the conclusion of the bank 34 not to bid at all, should be ascribed to the uncertainty which the litigation suggested as to the validity of the bonds, rather than to the fact that the defendants were temporarily enjoined from accepting bids upon the day they had advertised to receive them. The burden is upon the defendants, who claim to have sustained the damages, to show by satisfactory proof that the loss would not have been incurred except for the issuing of the injunction. Dwight v. Railroad Co., 54 Barb. 271. as to the other question,—whether the counsel fees incurred upon the hearing on the return of the order to show cause can be properly charged as damages,—we also think that the referee’s conclusion was the correct one. When the application for an injunction was first made, the judge had the right to deny it until notice of the application was given the defendants, or he might then grant an order requiring them to show cause why such injunction should not be granted. Whichever course he took, he had the right to then “enjoin the defendants until the hearing and decision of the application.” Code Civil Proc. § 699. In this case, he made an order to show cause, and enjoined the defendants until the further order of the court. The defendants were then confronted with the following situation: They were threatened, with an injunction pendente lite, to be granted on the 11th of June, unless they could show cause why it should not be. To make such a showing they must employ counsel, and evidently the order which required them to make that showing, and not 'the order restraining them from acting in the mean time, was the one which imposed upon them the burden of employing counsel. The injunction order would continue until June 11th, whether the defendants employed counsel to appear on that day or not, but in no event would it continue any longer, for it was then to be superseded by a new order of court. Although the order made June 7th, in terms, is to continue “until the further order of court,” we give it no other meaning or greater force than is allowed it by section 609,—that is, “until the hearing and decision of the application,”—and therefore we say that when such decision was made, whichever way it might be, an order would be made that would supersede the restraining order already granted. Hence, counsel were not employed to dissolve that injunction. The defendants would have been relieved from that order, whether they appeared on the 11th or not, but they might have been troubled with another order then made, granting an injunction against them pendente lite, and hence they took measures to prevent such an order from being granted. They went to the expense of hiring counsel, not because the temporary injunction had been granted, but to prevent another and more extensive one from being made. If the judge had made the order to show cause, and not granted the temporary injunction, the defendants would have had the same condition before them, and the same expense to incur. Hence, it cannot be said that such expense was caused by reason of such injunction. Hot having been rendered necessary by the temporary 35 injunction, they cannot be assessed as damages in this proceeding. Randall v. Carpenter, 88 N. Y. 293. As to the expense of the proceeding before the referee, inasmuch as no damages were found to have been sustained by reason of the injunction, they should not be charged as damages against the plaintiff. He did not render the inquiry necessary, and there-" fore he should not be required to pay the expense of it. Randall v. Carpenter, above cited. The order of the special term should be reversed, and an order entered confirming the report of the referee. All concur.