Mason, Gooch & Hoge Co. v. Mechanics' Lien & Trust Co.

Opinion op the court by JUDGE HOBSON Reversing. The Home Construction Company, being indebted to the Mason, Gooch & Hoge Company in a large amount, undertook to pledge to it certain locomotives and cars owned by the construction company as security for the debt, and as evidence of the pledge issued to it a paper called a “warehouse receipt.” The Mason, Gooch & Hoge Company borrowed from the German National Bank of Covington, Ky., something like $15,000, and to -secure the loan placed with it as collateral the warehouse receipt which it had received from the construction company. The Mechanics’ Trust Company had a large debt against the Home Construction Company, upon which it obtained a personal judgment against it. Execution was issued on the judgment and levied on the locomotives and cars above referred to. After this levy was made, the Mason, Gooch & Hoge Company, the German National feank, W. F. Dandridge, who was named as trustee in the warehouse receipt, H. P. Mason ánd Charles [712] E. Hoge, who. were sureties iu the debt to the bank, instituted an injunction suit in the Franklin circuit court enjoining the sheriff from selling the engines and cars under the execution on the ground that they had a prior lien on the property by virtue of the warehouse receipt. The circuit court sustained the plaintiffs, but upon appeal to this court it was held that the warehouse receipt created no lien on the property, and the judgment was reversed, with directions to the circuit court to dismiss the plaintiffs’ petition. Mechanics’ Trust Co. v. Dandridge, etc., 37 S. W., 288, 18 Ky. Law Rep., 625. On the return of the case to the circuit court the petition was dismissed and the injunction dissolved, but no order was entered assessing damages on the injunction.' Thereafter this suit was brought in the Kenton circuit court against the plaintiffs in that action and their sureties on the injunction bond. Among other things, the defendants pleaded that there had been no assessment of damages in the action in which the injunction was obtained, and relied on this in bar of the action, insisting that a finding of damages by the court which dissolves the injunction is a condition precedent to the right of action on the bond. Section 295 of the Civil Code reads as follows: “Upon the dissolution,-in whole or in part, of an injunction to stay proceedings upon a judgment, the damages shall be assessed by the court; which may hear the evidence and decide in a summary way, or may, at its discretion, cause a jury to be impaneled to find the damages. If the collection, payment or use of money be enjoined, the damages may be any rate per cent, on the sum released by the dissolution, which, in the discretion of the court, may be proper, not exceeding ten per cent. And, if the delivery of property have been delayed by the injunction, the value of the use, hire or rent [713] thereof shall be assessed; judgment shall be rendered against the party who obtained the injunction for the damages assessed; and the assessment shall be conclusive against the surety of such party.” This provision of the Code is taken verbatim from section 325 of the former Code, and has more than once been construed by this court. In Crawford v. Woodworth, 9 Bush, 745, Crawford had obtained a judgment to sell a tract of land and some oxen, and thereafter Wood-worth, asserting a claim to the oxen, filed his petition enjoining Crawford from selling them as directed in the judgment. The injunction was dissolved, but the damages were not .assessed. Then Crawford filed a suit to recover damages upon the bond. The court held that the petition stated no cause of action as it did not show that the damages had been assessed by the court in dissolving the injunction. After setting out the provisions of section 325 of the. Code then in force, which, as we have said, were verbatim the same as section 295 now in force, the court said: “This mode of proceeding is not merely cumulative, but is the only remedy afforded a party for recovering special damages upon the dissolution of an injunction; and5 as conclusive of this question, the language of the section is not only that -the court shall assess damages, but this assessment is made conclusive against all the obligors in the bond, including the surety.” This case was followed in Logsden v. Willis, 14 Bush, 183, and was again followed in Mallory v. Dauber’s Ex’r, 83 Ky., 241, 7 R., 243, where Mallory had enjoined the selling of certain land under execution on the ground that it was his property. His injunction was modified by the circuit court without the assessment of damages.- He appealed, and Dauber prosecuted a cross-appeal, complaining that the injunction had not been dissolved, and that there had been no assessment of damages by the court in dissolv [714] ing the injunction. The court, however, affirmed the judgment on the original and cross appeals, holding that, only nominal damages should be given, and that it would not reverse the judgment in order that nominal damages might be assessed. The court said: “If, therefore the appellant had an equity as against the appellee, although the injunction was improperly granted, the court had the power to give mere nominal damages on its dissolution; but, having failed to dissolve the injunction, this court will not reverse on the cross-appeal for that error alone, in order that the court below may determine the damages the appellee is entitled to recover.” The question was again presented to the court in Hayden’s Admr. v. Phillips’ Admr., 89 Ky., 1, 11 R., 239, 11 S. W., 951, where Hayden had enjoined a writ of possession in the sheriff’s hands for execution. The injunction was dissolved, but upon the dissolution the court did not assess damages for the wrongful suing out of the injunction, and in this condition of things Phillips filed suit against Hayden on the injunction bond, and recovered judgment in the circuit court. On appeal to this court the judgment in his favor was reversed, and the cause remanded to the circuit court, with directions to sustain the demurrer to the petition. After referring to the previous cases, the court said: “It may now be regarded as settled that the remedy given by section 295 of the Code for the assessment' of special damages upon the dissolution of an injunction enjoining proceedings on a judgment is exclusive of all other remedies.” We can not now depart from a rule of construction of the statute so authoritatively settled. Section 285 of the Code provides that an injunction to stay proceedings on a judgment shall not be. granted in an action brought in any other court than that in which, the judgment was rendered. The words of this section, “to stay proceedings on a judgment,” [715] are, in effect, the same as in section 295, and under it it has been often held that a sale of property under execution can not be enjoined except in the court which rendered! the judgment on which the execution issued. C. & O. R. R. Co. v. Reasor, 84 Ky., 369, 8 R., 374, 1 S. W., 599; Mallory v. Dauber’s Exr, 83 Ky., 241, 7 R., 243; McConnell v. Rowe, 1 S. W., 582, 8 Ky. Law Rep., 343; Stahl v. Brown, 84 Ky., 325, 8 R., 279, 1 S. W., 540. It is perfectly clear from the previous decisions of this court that it has proceeded upon the idea that the words “to stay proceedings upon a judgment,” in section 295, mean the same thing as the like words in section 2S5, and include an injunction to stay proceedings on an execution issued on a judgment no less than to stay the judgment itself in other respects. An execution which is issued on a judgment is a proceeding to enforce it, and the court has evidently treated these sections as embracing all injunctions to stay proceedings on a judgment. We therefore conclude that, the damages not having been assessed in the action in which the injunction was dissolved, no recovery can be had in this action on the injunction bond therefor. Judgment reversed, and cause remanded for further proceedings consistent herewith. Petition for rehearing by appellee overruled.