New York & Long Branch Railroad v. Dennis

The opinion of the court was delivered by Beasley, Chief Justice. This case comes before this-court under the following circumstances: The New York and Long Branch Railroad Company, the plaintiff in error, was defendant in a suit in chancery, brought in the name of the attorney general, on the relation of Easton and McMahon-calling in question the right of such company to erect a bridge-over the Raritan river, at Perth Amboy. That case is reported in 9 C. E. Green 49. Upon the filing of that bill the Chancellor granted a restraining order, and required a bond,, which was executed by the defendants in this suit, the condition of which was in the words following, to wit: “ Now,, therefore, the condition of the above obligation is such, that if the above bounden James T. Easton and James McMahon shall well and truly pay, or cause to be paid, unto the said, the New York and Long Branch Railroad Company, Edward G. Brown, H. R. Campbell and J. B. Campbell, such, damages as they, or any of them, may sustain by reason of the restraining part of said order, if the court shall eventually decide that the complainants were not equitably entitled to such restraining order, then the above obligation to be void,, otherwise to remain in force." Subsequently such proceedings were taken in this chancery suit that, upon argument, this restraining order was dissolved,. — 359 — an injunction refused, and the hill dismissed. Thereupon tin's present suit was brought in the Supreme Court on the bond above described, and at the trial the plaintiff proved the instrument and the decree of the Chancellor dissolving the restraining order, refusing the injunction and dismissing the bill. Upon the case thus made the plaintiff was ordered to be called. We are not possessed of the advantage of having the views of the judge before whom this case was tried, and therefore cannot be certain with respect to the ground on which this non-suit was ordered; but, from intimations in the briefs of counsel, I am led to conclude that it proceeded from the opinion that a forfeiture of the bond sued on could not be shown by simply proving that the Chancellor had decided that the complainants in the suit in equity were not, by the law and the fact, entitled to the restraining order at the time it was made, but that, in addition to this, it must appear that the application for such order was made in bad faith. This opinion seems to have been induced by the remarks of the court in the case of Smith v. Kuhl, 11 C. E. Green 98, in which it was said that these bonds are intended to secure bona fid.es in the application for the injunction, and to provide indemnity to the party enjoined against the effects of an injunction unfairly obtained. The question is, can this view be sustained ? The first and fundamental difficulty with which it is encountered, is that it cannot be made to harmonize with the language of the instrument in question. That language is plain and perfectly reasonable and intelligible, and is entirely unaffected by the context; and such language, existing in either a contract or in a rule of court, cannot be controlled or made to mean something that it does not import. The rule is universal that a court is not warranted in adding to or taking away anything from such language. The bond in question declares its own liability to forfeiture “ if the court shall eventually decide that the complainants were not equitably entitled to such restraining order.” This the court has decided, for it will hardly be pretended that the restraining — 360 — order would have been dissolved and the bill dismissed if the complainants were “equitably entitled” to it. It is consequently an obvious, and, as it seems to me, an indisputable addition of an extraneous matter to require that, to make this bond forfeited, mala fides in the application for the restraining order must be exhibited. The instrumental condition calls for the existence of a single state of facts, viz., the absence of an equitable right to the restraining order; the proposed construction calls for the existence of two states of fact, viz., the absence of such equitable right, and mala fides. This latter term seems to me like the introduction of a pure interpolation into this condition, for it is certain that a man may not be equitably entitled to an injunction, no matter how honest his intentions and proceedings may be in applying for it. For example: a merchant is enjoined when about to ship his goods to a foreign part; the bill has been filed by a creditor for discovery, and the injunction obtained on the ground that the contemplated removal of the goods is in fraud of creditors; the discovery turns to the discomfiture of the complainant; he made his application in good faith, supposing that he was entitled to an injunction, but in point of fact he was not so entitled, as is manifested by the supposed defendant’s answer. If, in such á case as this, a bond similar to the one in suit had been given, would its forfeiture be saved by the fact that the suit was instituted and carried on with an honest intention? It is impossible to say that justice would be served by such an interpretation, for there is surely no reason why the creditor, in the casé put, should obtain his discovery at the expense of the unoffending defendant, but it is the better and, as I think, the conclusive objection to such an interpretation, to say that it will not square with the clear terms of the instrument to be construed. Nor have I found that elsewhere in the practice of courts of equity, this limited effect has been given to these injunction bonds. It seems to have been the prevailing opinion that it is but common justice that the loss incident to preliminary in — 361 — junctions, which are founded to some extent on decisions adverse to defendants before they are heard, should fall on the party seeking them, if, in the end, it appears he was in the wrong. Both parties being innocent of wrongful intention, he who occasions the loss should bear it. This is the rule at law and in equity, and is the dictate of natural justice. The practice in the English courts has long been settled. The complainant is held on his bond, without any reference to his intention being good or bad. If he fails to sustain the equity of his bill he must pay the damages incurred. Daniell’s Chan. Prac. In Novello v. Jones, 31 L. & Eq. Rep. 280, a bond had been given on the continuance of an injunction, and the question arising as to its enforcement, Knight Bruce, L. J., said he would consider it unjust to the defendant “ to disregard or not give effect to the undertaking, which was the price of the continuation of the injunction.” And in the same case, Turner, L. J., expressed his views in these terms: “The plaintiff came upon a title at the time doubtful, there being conflicting decisions upon it by the superior courts of law, and therefore it was that in granting the injunction the court put the plaintiff on this undertaking;' and the result having ultimately turned out unfavorable to the plaintiff, it seems to follow that it is the duty of the court to carry the undertaking into effect.” Thus the complainant was held on his bond, although there was no pretence of mala fides, his defeat being occasioned by the settlement against him of a doubtful question of law. Bonds having a similar scope are in frequent use on the equity side of several of the courts of this country, and I have failed to find any instance of an instrument of this kind being employed merely for the end of indemnifying the defendant against the evil consequences of the fraud or bad faith of the complainant. There is also another consideration of much weight tending in the same direction. These bonds are taken in our practice by force of the forty sixth rule of the Court of Chancery. This rule is of long standing, and is substantially a copy of — 362 — one of the rules of practice of the old court of equity of the State of New York, and the obligations given by force of this original rule have been repeatedly construed by the courts within whose jurisdiction it prevailed. In such adjudications it does not appear to have occurred to the mind of any judge that a decision eventually made to the effect that the complainant was destitute of a title to the equitable relief to which the injunction was ancillary, did not work a forfeiture of the bond without any regard to the question whether the complainant in applying for the writ had acted with candor and fairness. There is quite a crowd of cases of this character which I will cite without other comment than the remark that they hold that, in the language of one of them, “ the object of the rule was to afford to the party enjoined full and ample security for all damages he might sustain by reason of the allowance of an injunction against him, without giving him an opportunity to be heard in opposition to such allowance.” Leavitt v. Dabney, 2 Sween. 617; Cayuga Bridge Co. v. Magee, 2 Paige 116; Sullivan v. Judah, 4 Paige 444; Carroll v. Sand, 10 Paige 298; Edwards v. Bodine, 11 Paige 223; Loveland v. Burnham, 1 Barb. Ch. 66; Lawton v. Green, 64 N. Y. 326. This construction is, as I have already said, the only one that comports with the explicit terms of this class of instruments. Nor does it appear that any practical objection can be made against such exposition of them, for they are entirely under the control of the Chancellor until he issues his order to put them in suit. If the equity of any possible case should require such order to be withheld, it is within the discretion of the Chancellor to take such course. But when the suit is permitted, and it is brought, a court of law can look only to the language of the instrument, in order to ascertain its legal effect, and must put it in force according to its terms. In the present case, the decision of the Chancellor, finding that the complainant had no title to the equitable relief prayed for, and dismissing the application for injunction, the bill operated as a forfeiture of the bond, in the absence of all — 363 — evidence showing that such decree was founded on some fact which did not exist when the restraining order was granted ; and the consequence is, that at the trial there should have been an assessment of damages founded on such forfeiture. The judgment of the Supreme Court, I think, should be reversed.