Quarnberg v. City of Chamberlain

SMITH, J. For some nine or ten years prior to 1902, Hans Quarnberg, the plaintiff in this action, had been a resident of the city of Chamberlain, and for seven or eight years had operated a flour mill, near the bank of the river, at that place; the motive power used being water pressure from artesian wells. In the seven or eight years during which artesian water power was used, he had constructed four wells in succession, for the reason that, after a number of years’ use, the artesian water corroded the ■casing of the wells and caused the flow to decline or cease. Where this occurred, plaintiff put down a new well, whose flow was added to that of the old wells. In September, 1902, the pressure from the wells then flowing had decreased so that he was unable to operate the mill at full capacity, and he began the construction of a new well on his premises. Some time after the beginning of this new well, the defendant, city of Chamberlain, began an injunction action to enjoin him from drilling the well, or further tapping the artesian water supply. In that action, on September 26, 1902, the city caused to be issued and served a temporary restraining order, which was vacated on October 20, 1902, on Quarnberg’s motion. On October 25, 1902, the city perfected an appeal to the Supreme Court, from the order vacating the restraining order, without giving an appeal bond, asserting its right as a municipality to appeal without giving bond. The plaintiff, Quarnberg, questioned the right of the city to appeal without an undertaking, and attempted to resume work on the well. The city thereupon applied to the circuit court for an order restraining him from proceeding with the construction of the well, pending the appeal to the Supreme Court from the order vacating the preliminary injunction. At the hearing the circuit court held that the city was not required to give an undertaking on appeal, and on November 14th granted a supplemental restraining order without bond or undertaking, which was served on Quarnberg, and thereafter he refrained from further work on the well until March 19, 1903, at which time the supplemental — 388 — order was vacated. Pending these proceedings, the original injunction action came on for trial at the December term, 1902, of the circuit court, and on January 3, 1903, that court rendered its decision in favor of Quarnberg on the merits, and judgment was entered dismissing the action on February 7, 1903. Thereupon the city obtained various orders from the circuit court, staying all proceedings on the judgment, until April 1, 1903. During this time, the city failed to perfect its appeal from the final judgment and failed to submit its appeal from the order of October 20th, dissolving the temporary order, at the April term, 1903, of the Supreme Court. On March 12th Quarnberg’s counsel served notice of motion for a dissolution of the order of injunction of November 14, 1902, restraining work on the well, and also for a vaction of the order, extending the time for appeal in the main action until April 1, 1903. On the hearing of this motion, o-n March 19th, the court vacated its supplemental injunction order of November 14, 1902, but refused to vacate the order extending the time for perfecting an appeal from the judgment in the action. On July 17, 1903, Quarnberg obtained an order from the Supreme Court to show cause on July 29th why the record on appeal from the order of October 25, 1902, dissolving the temporary restraining order, should not be returned and filed in that court, and the appeal dismissed for want of prosecution. Thereafter, on September 23, 1903, pursuant to this application, the Supreme Court granted an order finally dismissing the appeal. On March 19, 1903, immediately upon the dissolution by the trial court of the restraining order of November 14, 1902, Quarnberg resumed work on the well, and completed it June 14, 1903. [1] It was the contention of the defendant city throughout that the appeal by the city, from the order of October 20, 1902, vacating the i-njunctional order, operated as a supersedeas and left the original restraining order in full force and effect. We think counsel for the city were correct in this contention, and that such was the effect of the appeal without a supersedeas bond or further order of the court. Section 454, Code of Civil Procedure, provides, in an action between private parties, that the trial' judge may order that an — 389 — injunction granted and thereafter vacated, be continued in force pending an appeal, upon the giving of the undertaking therein prescribed. But section 455 provides that, when a municipal corporation appeals, -the service of the notice of appeal perfects the appeal and stays execution or performance of the judgment or order appealed from. The order of October 20th, vacating the temporary injunction, was duly appealed from by the city, and it is clear that the operation and effect of the order appealed from was stayed by the appeal and the order remained in full force and effect. [2] Thereafter, in November, 1902, Quarnberg attempted to resume work on the well, in violation of -the restraining order pending an appeal, and the circuit court November 14, 1902, on application of the city, issued a second or supplemental restraining order, preventing Quarnberg from violating the pending injunctional order. Appellant’s contention on this appeal, that the restraining order of November 14, 1902, was issued without jurisdiction and was void, can avail defendant nothing, because it is immaterial to the rights of Quarnberg whether he refrained from proceeding with his work on the well, in obedience to one or the other of the injunctional orders. Legally, he was bound to obey the restraining order which was continued in force by the appeal, and, while we do not decide that question, it is not at all clear that the circuit court was without jurisdiction to issue the order enjoining Quarnberg from violation of the injunctional order which was before the Supreme Court at that time for review. . In any event, it is entirely clear that the defendant, Quarnberg, by the operation and effect of the various injunctional orders procured by the defendant city, was restrained from performing and did not perform any work on his well from September 27, 1902, until after March 19, 1903. It appears, however, that on March 19, 1903, and before the dismissal of the appeal by the Supreme Court, Quarnberg, in violation of the injunctional order kept in force by the appeal, resumed work on his well, and continued the same until the completion of the well on June 14, 1903. [3] Tt is clear that this violation of the pending injunctional order in no way released or affected any damage he may have — 390 — sustained because the time during which his damage would have continued to accrue was thereby lessened to the extent of the period during which he acted in violation of the order. The defendant city is not in position to complain of Quarnberg’s act which thus resulted in lessening its liability. Appellant’s contention that, if any damages are recoverable against the city, the trial court erred in allowing proof of damage accruing subsequently to November, 1902, for the reason that the supplemental restraining order of that date was without jurisdiction and void, and did not prevent Quarnberg from proceeding with work oh the well, is disposed of by what we have already said. Whether the trial of the main action in which final judgment was entered February 7, 1903, in any way affected the injunction order pending on appeal, we are not called upon to decide i'n this case, for the reason that the operation and effect of the judgment were stayed until July 1, 1903, by orders of the trial court made upon application of the city for extension of time in which to perfect an appeal from the judgment, and plaintiff had resumed work on the well March 19, 1903, and completed it June 14th, long before the defendant city allowed the judgment to become effective by abandonment of its proposed appeal. [4] The defendant pleaded the statute of limitations in bar of plaintiff’s recovery, alleging: (1) That the action was barred by the statute of limitations which expired six years from September 27, 1902; (2) that the action was barred by the statute of limitations which expired six years from October 1902; (3) that the action was barred by the statute of limitations which expired six years from January 3, 1903 ; (4) that the action was barred by the statute of limitations which expired six years from March 19, 1903. At the trial, plaintiff, in rebuttal of the plea of the statute, offered in evidence the judgment of the Supreme Court in the case of City of Chamberlain, Plaintiff and Appellant, v. Hans Quarnberg, Defendant and Respondent, which recites that: “The judgment and order of .the circuit court within and for Brule county, appealed from herein, be and the same is hereby reversed, and it is further ordered that this action be and it is hereby re — 391 — manded to said circuit court, for further proceedings according to law and -the decision of this court.” The decision in which the foregoing judgment and order were entered will be found reported in 23 S. D. 55, 119 N. W. 1026. An examination of the decision discloses that at the close of the trial on the merits, in the circuit court, final judgment was entered, dismissing the action, on the 7th of February, 1903; that on the 26th of September, 1903, the trial court, on the application of defendant, Quarnberg, made an order appointing a referee to ascertain the damages sustained by defendant, Quarnberg, by reason of the issuance of the injunction of September 26, 1902; that the referee heard the evidence, and on December 30, 1903, made report to the circuit -court; that judgment upon the report was entered, awarding Quarnberg damages in the total sum of $6,292.25, with costs, against the city of Chamberlain, and also against certain persons who had signed an undertaking on the issuance of the original injunctional order; and that an appeal was taken to the Supreme Court, where, for reasons assigned in the decision, the judgment of the circuit court was reversed and the action remanded to the circuit court for further proceedings according to law and that decision. The judgment, thus reversed, was entered in a proceeding in which this plaintiff, Quarnberg, sought an assessment and recovery of the same damages claimed in this action. The judgment of reversal was handed down on February 24, 1909. Thereafter on September 16,' 1909, this action was begun. Code of Civil Procedure, § 73 provides: “If an action be commenced within the time prescribed therefor, and a judgment -therein be reversed on appeal, the plaintiff, or if he die and the cause of action survives, his heirs or representatives may commence a new action in one year after the reversal.” The assessment of damages before a referee was clearly the -commencement of an action within the meaning and intent of this section of the Code of Civil Procedure. Stevens Lumber Co. v. Kansas City Lumber Co., 72 Mo. App. 248; Mc-Omber v. Chapman, 42 Mich. 117, 3 N. W. 288; Weathersly v. Weathersly, 31 Miss. 662; Givens v. Robbins, 11 Ala. 156; Drane v. Hodges, 1 Har. & McH. (Md.) 518. As to what constitutes the commencement of an action, see Coxe v. State, 144 N. Y. 396, — 392 — 39 N. E. 400; Corkings v. State, 99 N. Y. 491, 2 N. E. 454, 3 N. E. 660; Marsh v. St. Croix County Supt., 42 Wis. 355; Woodruff v. Winston, 68 Ala. 412; Lacey v. Newcomb, 95 Iowa, 287, 63 N. W. 704; Guild v. Hale, 15 Mass. 455; Potts v. St. Paul Athletic Park Ass’n, 84 Minn. 217, 87 N. W. 604; Peck v. Randall, 1 Johns. (N. Y.) 165. It is perfectly clear, therefore, that plaintiff’s claim for damages -was not barred by any period of limitátions, for the reason that the present action was commenced within a year after the reversal of the judgment of the circuit court. We come next to a consideration of the question of damages. At the trial, the. court submitted a special verdict which was nominally to cover the amount of damages accruing between September 27, 1902, when the injunction was served, and October 20, 1902, when the same was vacated and an appeal taken to the Supreme Court. This special question as to damages was sub- . mitted to the jury under instructions which assumed, for the purposes of that verdict, that plaintiff would be entitled to recover in the action only such damages as accrued during a certain period. The theory evidently was that, if it should be decided that plaintiff could recover damages for that period, but not for any other, judgment might be. entered on the special verdict without a- new trial. In response to these instructions, -the jury returned a special verdict for $1,166.50, which was itemized,' and consisted of $576, for 24 days’ loss of profits; $150, attorney’s fees on dissolution of temporary injunction; and $440, interest. It is'conceded that the same amount went into and constituted a part of the general verdict for $8,854.56, returned by the jury. It is apparent that the amount of this special verdict was not for damages actually accruing between September 26M1 and October 20th, for the reason that, under the undisputed evidence, it required 2j/j .months to complete the well from the point where work thereon was suspended by the injunctional order, and, if no injunction had issued, the additional power of the new well would not have been available until about December 12, 1902, and no actual damage could have begun to accrue until that time. The damages intended, therefore, must have been such as accrued after December 12, — 393 — 1902, covering- a period of 23 or 24 days. That the damages covered by the special verdict did not cover the actual period between September 26 and October 20, 1902, is made perfectly plain by the instructions to the jury: “I will submit the question 'to you as to what the damages by reason of the sinking of the well being postponed this 23 or 24 days. That would be whatever profits he would have earned had he been allowed to operate the well for that additional time, together with the attorney’s fees and expenses that he was put to in getting the injunction dissolved, together with interest on that from the time, I would say, July 1, 1903. That is in addition now to your general verdict. I have submitted the general question to you as to what the entire damages were from the time the injunction was issued on September 27th until it was finally disposed of in the spring with the addition of 2Yz months that it took him to complete the well.” [5] The special verdict, therefore, is only a finding of the amount of damage accruing in 23 or 24 days out of the entire period over which it is claimed the damages extended, and, the same damages being included in the general verdict, it is unnecessary further to Consider the special verdict, which becomes immaterial. Two questions arise — whether the damages assessed in the general verdict cover any period of time during which no damages were legally assessable, and whether the evidence shows them to be remote or speculative. In considering these questions, a distinction must be observed as to the evidence in the record relating to the general character, conduct, and profits of the business, as a basis for the assessment of damages and that which relates to the period of time during which the plaintiff was prevented from carrying on his business by reason of the injunction. [6] The latter period is defined and limited by the instructions of the court, which we must presume were followed by the jury. [7] After referring to certain special damages for labor necessary to put the well in condition for resuming- the work of drilling and for attorney’s fees expended in procuring a dissolution of the supplemental injunction, the court says: “The chief item of damage that he claims, however, is the loss of what you might — 394 — term the profits that he would have made if he had been permitted to sink this well and operate his mill during the winter and spring of 1902 and 1903.” We are quite clear, therefore, that" the jury were given to understand that the dam-ages -to be assessed in the general verdict Were to cover the period beginning about December 12, 1902, and terminating about June 14, 1903, when the well was completed, and that, in this respect, no error appears in the record. No question of competency of evidence is presented by the record as related to the period covered by the damages. As-stated in appellant’s brief: “All other assignments of error embrace the question as to- the measure of damages. All of the questions as to- the admissibility of 'testimony and the adverse rulings thereon, and the exceptions taken, also the judge’s charge to the jury, are included in the forgeoing question.” [8] In its complaint in the action for an injunction, defendant city averred that, if Quarnberg were permitted to continue the construction of -his well, he could and would obtain a flow of water sufficient to operate his mill, and admits its knowledge that the flow of water so obtained was to be used for manufacturing flour, and it stands conceded that, upon the completion of -the well, Quarnberg, did in fact obtain the flow alleg'ed and sought. The city must be held to have known that loss of profits to plaintiff’s business was-inevitable, and may not deny responsibility for such damages as-were the direct result of its acts. In view of the statute giving-respondent the right -to another action within a year after a reversal of the action in which he sought to recover the identical damages sued for in this action, it is unnecessary to consider appellant’s contention that the action sounds in tort, that a right of action accrued the moment the injunction was served, and the-statute of limitations commenced to run at that date. [9] Appellant’s contention that, as a general rule, profits-which might be -anticipated from a proposed extension of business are too remote, is undoubtedly correct in principle. But this rule is not applicable to the facts in this case. It must be borne in-mind that plaintiff’s business had been established for many years, that he had an established market for the products of his mill, and that the margin -of profits could be -and were shown by the evi — 395 — dence covering a long series of years, as a basis for computing actual damages. There was no contemplated extension of the capacity of the mill, itself, which was undisputed. In this case, plaintiff, by the acts of defendant, was prevented from tapping and turning into his mill, as motive power, the flow of artesian water, to the use of which he was legally entitled. In Woodin v. Wentworth et al., 57 Mich. 278, 23 N. W. 813, plaintiff brought suit against defendants for unlawfully withholding and diverting the waters of a river which furnished motive power for his mill, and to recover profits which would have been made if the water had not been diverted. The diversion was by means of a dam erected by defendants above plaintiff’s mill. It would seem to be immaterial, in such a case, whether the - water he withheld by means of a dam, or by a wrongful injunctional order. The plaintiff was held entitled to- recover profits lost by reason of not being able-to run his grist mill to its full capacity, during the time the water was withheld. In Lambert v. Haskell, 80 Cal. 611, 22 Pac. 327, the same rule was applied to loss of profits resulting from the wrongful issuance of an injunction. It was held that loss of profits in'an established business were not speculative or remote,, and that direct evidence of profits actually made was admissible. In Lakeside Paper Co. v. State, 45 App. Div. 112, 60 N. Y. Supp. 1081, profits in an established business lost by withholding-water from plaintiff’s mill were held recoverable. To the same effect, see Weeks v. State, 84 App. Div. 357, 63 N. Y. Supp. 203; Gibson v. Fischer, 68 Iowa, 29, 25 N. W. 914; Lambert v. Haskell, 80 Cal. 611, 22 Pac. 327; Galveston City Ry. Co. v. Miller (Tex. Civ. App.) 38 S .W. 1132. [10] Appellant further contends that the evidence is insufficient to sustain a verdict for loss of profits, because plaintiff offered no evidence to show the expense of running, supplying, and main-taming the mill. The plaintiff testified that in estimating the average net profits he took into consideration the running expenses, including wages of men, wear and tear on machinery, insurance, taxes, and the amount of capital invested (which would include the cost of wells) ; that the average profit was from 22 to 24 cents per bushel, and the capacity of the mill was 240 bushels. — 396 — per day. Such evidence, however, is not indispensable to a recovery for loss of net. earnings in an established business. It is competent to -prove average net earnings as a basis upon which tlie jury may estimate loss of profits. City of Terre Haute v. Hudnut, 112 Ind. 542, 13 N. E. 686. The testimony as to net profits in an established business is competent, subject to the right of defendant’s counsel to cross-examine as fio all matters which may affect the question of profits. Carron v. Wood, 10 Mont. 500, 26 Pac. 388. In City of Terra Haute v. Hudnut, supra, Justice Elliott says: “ ‘What are the reasonable earnings of that mill per day now?’ The witness answered, ‘There are times during the'year when our net earnings are larger than at others.’ He was then asked, ‘What would be a fair average?’ and he answered, ‘One hundred and fifty dollars per day.' It appears from the cross-examination that the term ‘net earnings,’ as used by the witness, meant profits, and this is the legal meaning of the term. St. John v. Erie, etc., Co., 22 Wall. 146, 22 L. Ed. 743. It will' be observed that 'the question asked does not refer to future profits, but to the average profits that the mill was then earning or had earned. The testimony upon this question was, it is important -to keep in mind, as to the profits that the mill had earned, and was then earning. This is an important factor in the investigation, and distinguishes the case, every clearly, and very distinctly, from those cases in which it is held that evidence of speculative prospective profits is not competent. This question here is: Had the appellees a right to prove what profits their mill had earned in the-past, and what it was earning in the then present? There was no attempt to prove what it might earn in the future. What exists in the present or has existed in the past cannot be considered a matter of speculation. It is not to be forgotten that the mill was and had been in -active operation, with a known and established business. The case is for this reason not at all like one in which the business has not been in existence. It is this fact which distinguishes the case under examination from the case of Western Gravel Road Co. v. Cox, 39 Ind. 260, upon which the appellant places so much stress. In that case the profits were entirely pros — 397 — peotive; they were neither matter of the present nor the past, but were wholly of the future.” The reasoning in this case is directly applicable to the case at bar, and is in accord with the great weight of authority. See Shepard v. Milwaukee Gaslight Co., 15 Wis. 318, 82 Am. Dec. 679; Kentucky Heating Co. v. Hood, 133 Ky. 383, 118 S. W. 337, 22 L. R. A. (N. S.) 588, 134 Am. St. Rep. 457; Chapman v. Kirby, 49 Ill. 211; White v. Mosely, 8 Pick. (Mass.) 356; Goebel v. Hough, 26 Minn. 252, 2 N. W. 847; Gillbert v. Kennedy, 22 Mich. 117; Schile v. Brokhahus, 80 N. Y. 614; Bagley v. Smith, 10 N. Y. 489, 61 Am. Dec. 756; Treat v. Hiles, 81 Wis. 280, 50 N. W. 896; Fairchild v. Rogers, 32 Minn. 269, 20 N. W. 191; Hichorn v. Bradley, 117 Iowa, 130, 90 N. W. 592; Cranmer v. Kohn, 7 S. D. 247, 64 N. W. 125; Nebraska Live Stock Co. v. Burris, 10 S. D. 430, 73 N. W. 919. [11] Appellant contends that the court erred in instructing the jury that they might include,- in their verdict for damages, the amount necessarily expended in procuring the vacation of the injunctional order. Attorney’s fees or expenses are not allowed as damages upon the trial of injunction actions on the merits (Edmison v. Sioux Falls Water Co., 14 S. D. 486, 85 N. W. 1016), but are recoverable when expended in procuring the dissolution of a temporary injunction wrongfully or improvidently issued. This rule is sustained by the great weight of authority. Littleton v. Burgess, 16 L. R. A. (N. S.) note c, beginning page 55; McLennon v. Fenner, 19 S. D. 492, 104 N. W. 218. [12] The verdict in this case, while considerable in amount, is evidently largely made up of interest covering a long period of years, and an examination of the whole record discloses evidence which, if accepted and believed by the jury, is sufficient to sustain the finding as to actual damages. For that reason it cannot be disturbed by this court. [13] No question of constitutional law, such as was suggested in the oral argument, is discussed in appellant’s brief, nor does it appear to have been presented or relied on in the trial court. For these reasons we shall not consider it on this appeal. Lyon v. Bertolero, 23 S. D. 82, 120 N. W. 766; Ross v. Hawkeye — 398 — Ins. Co., 93 Iowa, 222, 61 N. W. 852, 34 L. R. A. 466; Clearwater Bank v. Kurkonski, 45 Neb. 1, 63 N. W. 133. We find no reversible error in the record. The judgment and order of the trial court are affirmed.