Case ID: scl_39/html/0336-01.html
Source: Caselaw Access Project
Author: {"author": "Fbost, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Thomas N. Gadsden vs. The Bank of Georgetown and others.
    
    B. filed a bill in Equity to injoin the sheriff from paying oyer to G. a certain fund in his hands claimed by G. under execution: the commissioner granted an interlocutory order for an injunction, making it a condition thereof that B. should give bond, with surety, to “ save harmless the said G. from all damage which he may sustain by reason of the making of said order and the issuing of said writ of injunction in accordance therewithafter a somewhat protracted litigation it turned out that G. was entitled to the fund in the sheriff’s hands: in an action at law on the bond, it was held, that G. was not entitled to recover, as damages, either a counsel fee and her expenses paid, (not including costs), of the suit in equity, and a counsel fee incurred in the suit at law on the bond, or interest on the fund during the time it was injoined in die sheriff’s hands.
    
      
      Before Withers, J. at Georgetown, Fall Term, 1851.
    The report of his Honor, the presiding Judge, is as follows :
    “ Elly Godbold, sheriff of Marion district, sold under fi. fa. the property of one Gasque ; of the proceeds thereof, $>4,442 29 were applicable to an execution in favor of Gadsden, the plaintiff, against Gasque. On the 23d March, 1847, the Bank of Georgetown filed a bill in Equity, praying “ that an injunction may be awarded to restrain the said sheriff of Marion from paying over to the said Gadsden, or to any one on his account, the funds in his hands arising from the sales of said Gasque’s property, until this Court shall make further order in the matter.” The Commissioner ordered the injunction, upon the Bank of Georgetown entering into bond, with surety. On the 18th July, 1848, the Bank executed a bond, exacted by the Commissioner, in the penal sum of $8,000, with surety, which bond contained, (after reciting the fact of filing the said bill, the prayer thereof, and an order by R. B. Boyleston, Commissioner, “ that an injunction do issue, as prayed for in complainant’s bill,”) the following condition, to wit:
    “ Now, the condition of this obligation is such, that if tlie said The Bank of Georgetown, South Carolina, shall save harmless the said Thos. N. Gadsden from all damage which he may sustain, by reason of the making of said order and the issuing of said writ of injunction in accordance therewith, then this obligation to be void,” &c. The case was pending for some time ; Gadsden had to encounter expenses in attending to it and pro viding his evidence at Marion and Georgetown (whither the cause was once removed by consent). On one or two occasions the Bank was ready, but Gadsden was not. Finally, the injunction was ordered to be dissolved by the Chancellor on Circuit; the Bank appealed ; the case was not reached and heard in the Court of Appeals in Equity until December, 1850, when the Circuit decree was affirmed, with some modification; and Gadsden was ordered to prove the extent of the indebtedness of Gasque.
    
      “ It turned out that Gadsden was entitled to receive, of the money enjoined in Godbold’s hands, the sum of $4,422 26, and this he could have received in February, 1851.
    “ This action was founded on the bond already described, and the plaintiff claimed, as a legal right, to recover for “ damages,” the interest on the money detained from him in equitable proceedings of the Bank, the counsel fee of $500 which he had paid to his Solicitor, the expenses otherwise he had to encounter in adducing his evidence upon the litigations in equity, and $150 for travelling expenses and counsel fee in this case, which was estimated to be what the present case would cost. Evidence was adduced before the jury to sustain the claim for sums actually paid in the course of litigation in equity, (some letter from the President of the Bank of Georgetown, dated 13th of March, 1851, was read, bul I did not gather the purport of it well enough to report the substance; it probably did not touch the question of law, but may be adduced, if thought necessary). I do not know whether the general issue was. pleaded; it was stated, at the bar, that the defendant had craved oyer of the condition of the bond and had pleaded performance; upon which issue was joined.
    “ Defendant moved for a nonsuit, upon the grounds :
    
      “ 1 st. That no such thing as an injunction bond was known in the chancery practice of England, nor here, otherwise than as the creature of statute.
    “ 2d. That our statutes upon the subject contemplated competence of Chancellor or Commissioner to order such bond in no case, except upon proceeding by a defendant at law against a plaintiff at law ; whereas, here a bond has been exacted of a complainant who was no defendant at law.
    “3d. That at all events, by the sel tied course of equity, no security extended beyond the forthcoming of the fund enjoined, without interest; and that counsel fees and expenses could not be recovered.
    • “ 4th. Upon a suggestion from the Bench, the further position was assumed, that the plaintiff was improperly before the Court, inasmuch as he produced no order from Equity giving him leave to place in suit a record pertaining to that jurisdiction ; and. also, that the party had been in a jurisdiction fully competent to administer the relief sought here, if entitled to it at all, had received the judgment of that jurisdiction and should be held estopped.
    “ For the plaintiff it was insisted, that the bond had been voluntarily made, and not by order of the Court of Equity. That if an attempt had been made to enforce it in that jurisdiction, the reply would have been, that there was plain and adequate remedy at law; that if there was error in requiring the bond, there should have been an appeal; that no matter what might be the English practice, such a bond was required here. That the defendant’s objection should have been by demurrer, whereas the plea was performance, whereby was admitted a legal liability and one enforceable here. That as to enforcing the bond in Chancery, that jurisdiction, it was contended, could not award damages.
    
      “ I thought it difficult to support the right of the Commissioner in Equity to take such a bond from such a party as the defendant here. (the complainant in equity) by virtue of the language of our statutes relative to the granting of injunctions. That it was very unsatisfactory to say that a Chancellor could not give full relief in decreeing upon a cause before him between parties, one of whom had assumed an obligation, by order of the officer of that Court, to indemnify the other for damages which might arise to that other from the very proceeding entertained by the Court of Equity, (though it was not to be forgotten that there were sureties sued here who were not parties in equity, unless their undertaking as such might put them in possession of that Court;; at all events I.could hardly question that interest might have been demanded by Gadsden and decreed to him. Yet I could not see clearly that the defendants could urge a nonsuit under a plea of performance, though if the general issue were in, it may possibly vary the question. Nor was I satisfied that the bond might not be held valid as a common law instrument. Upon the whole, considering the questions raised very doubtful, since we had no case to guide us, and looking to the object of presenting them to the Appeal Court, in such a way as to terminate this litigation, I advised a special verdict by the jury, ascertaining severally, the sum for interest on the principal enjoined, and that for counsel fees and expenses, which the parties acquiesced in; calculations were made by the plaintiff’s attorney, and the jury found for the plaintiff $1,204 90, as for interest, and $926 50 for counsel fee and other expenses paid, (including $150 for the present cause,) if the Court should think the plaintiff entitled in law to recover such sums. I ordered the postea to the plaintiff for the interest found, and to the defendants for the other sum. I have received notice of a motion, on the part of defendants, for arrest of judgment, and failing that, for a new trial. Should the plaintiff appeal, I presume this report will, also, serve his purpose therein.”
    The defendants appealed, and now moved in arrest of judgment, on the following grounds, viz :
    1. Because the bond in question created no legal obligation on the defendant, inasmuch as the proceeding in equity was not an application for an injunction to restrain a proceeding at law; and it is submitted that it is only in such a proceeding and at the instance of the defendant at law, that a Commissioner in Equity is closed with authority to require an injunction bond.
    2. Because, admitting the proceeding in question to have been of such a character as authorized the Commissioner to require a bond of the defendant prior to granting the injunction, it is submitted that the instrument in question created no legal obligation on the defendant beyond the amount enjoined, and, least of all, does it extend to damages in the nature of interest, counsel fees, and travelling expenses of the plaintiff’s agents and witnesses pending such litigation.
    3. Because no tribunal in this State is clothed with the power to award damages on an injunction bond beyond the amount enjoined, nor will a Court of law take cognizance of a suit upon such an instrument until the order of the Chancellor for such a purpose is first obtained.
    Failing the foregoing motion, then he moved for a new trial, on the ground:
    Because it is submitted, that his Honor erred in charging the jury that the plaintiff was entitled to recover interest by way of damages, on the amount enjoined, from the time the injunction was awarded until the final disposition of the case by the Equity Appeal Court.
    The plaintiff appealed, upon the following grounds :
    1. Because the counsel fees and expenses incurred by the plaintiff were the natural and proximate consequence of the injunction, obtained at the instance of the defendants, and clearly within the bond to save the plaintiff harmless from all damage sustained or to be sustained by reason of the said injunction.
    2. Because it was a question of fact entirely for the jury to determine, whether the fees and expenses incurred by the plaintiff, were sustained by reason of the injunction; and the jury having, upon proofs, determined that, and the amount thereof, the plaintiff is entitled to the postea for the whole amount of the verdict.
    
      Simonton, Munro, for defendants,
    cited 11 Stat. 110 ; 7 Stat. 164 §5 ; 7 Stat. 188 §15 ; 7 Stat. 209 ; 7 Stat. 330 § 10 ; 6 Stat. 596; Har. Ch. Pr. 1840 ; Story Eq. § 878, et seq ; 1 Bail. 113 ; 2 Bay, 213 ; Ellis vs. Commander, 1 Strob. Éq. 188; 2 Story Eq. § 863, 959 note ; 2 Strob. 324; 4 Strob. 280; 8 Cond. Eng. Ch. R. 48; 3 Danl. Ch. Pr. 1845, note 2; 4 Har. & McH. 21; 6 Leigh, 581; 5 Barb. Ch. Pr. 629; 1 Kelly, 72 ; Sedg. on Dam. 27, 392, 405, 407; 2 Dali. 215; 9 Wheat. 738 ; 13 Wend. 639 ; Peters C. C. R. 301, 321; 3 Cowen, 393.
    
      Petigru, Campbell, contra,
    cited 1 Bail. 213 ; T. Raym. 421; 2 Smith Ch. Pr. 638 ; 2 Danl. Ch. Pr. 1310 ; 3 Peters, 554; 2 Mason, 119; 2 Story Rep. 661; 9 Cranch, 126 ; 3 Wheat. 546, 562 ; 5 Wheat. 122, 127 ; 9 Wheat. 163 ; 3 Pecers, 307; Sedg. on Dam. 112 ; 15 Conn. R. 225 ; 3 T.'R. 374; 8 East, 593 ; 4 Har. & Johns. 9 ; 17 Mass. R. 169.
   The opinion of the Court was delivered by

Fbost, J.

The condition of the bond is that the Bank of Georgetown shall save harmless the said Thomas N. Gadsden from all damage which he may sustain by reason of the making of the said order (for injunction), and the issuing of the said writ of injunction.” The jury found for the plaintiff $1204 90 as for interest, and $926 50 for counsel fee and other expenses paid, (including $150 for the present cause), if the Court should be of opinion the plaintiff is entitled in law to recover the same.

The first inquiry is, whether the plaintiff is entitled to recover the amount of counsel fees and expenses paid by him in his de-fence of the suit in Equity by the Bank of Georgetown, and in the prosecution of this case.

Since the expenses claimed as damages were incurred in the defence of Gadsden to the suit in equity, it is proper to enquire what is the rule in that Court on the subject. “ In the taxation of costs, as between party and party, the principle is, to have a fixed allowance for every proceeding in a suit, which is not to be varied to meet the circumstances of any particular case. Thus the 13s. 4d. which is allowed as instructions for bill, covers in every case all the trouble which the solicitor has in getting together the materials for the suit.” On taxation between a solicitor and his own client, or of costs, as between solicitor and client, to come out of a fund belonging solely to the client, the solicitor is not only entitled to be paid for such proceedings as he took necessarily, and in the exercise of a sound discretion, but also for proceedings not necessary, which the client directed to be taken, after being made to understand the circumstances of the case. (2 Smith Ch. Pr. 637, et seq.) Thus, in Equity, the expenses of the suit are distinguished from costs, and are not allowed as between party and party. Costs in that jurisdiction are discretionary, and it would be in the power of the Court, in a case proper for such amercement, to decree that either party should pay, not only the costs, but also the expenses of his adversary. The payment of costs is expressly or impliedly provided for in every decree. If Gadsden had made a proper case to charge the Bank of Georgetown with his expenses, as well as costs, in defending the suit, he should have made that claim in the Court of Equity. The decree contained no order to that effect: and the claim for his expenses in this suit must be regarded as res judicata.

But if this objection to the plaintiff’s recovery be waived, the rule of the common law does not allow the expenses of a suit in actions on contract to be recovered as damages, in actions of tort, in which damages are discretionary with the jury, they are permitted : and in many cases they may be advised to include, in the estimate of damages, the trouble and expenses which the plaintiff has incurred in prosecuting his action. The Court cannot enquire whether the damages have been so increased : and would not interfere with the verdict, whether they were or not. But if the issue of the case be in favor of the defendant, he cannot recover compensation for his expenses, either by the verdict or by any other action. The claim of the defendant to be indemnified for his charges in the suit, is as well founded, in justice and policy, as the claim of the plaintiff: and the denial of any such claim by the defendant, is conclusive against the same claim by the plaintiff. No case has been cited to maintain the recovery of the expenses of a suit, by way of damages, as a legal claim. Duffield vs. Scott, 3 T. R. 374, cited for the plaintiff, was an action of debt on a bond to indemnify the plaintiff “ in the most general terms, against his wife’s debts, and against all demands by reason of any matter, cause or thing, whatsoever, concerning herand it was decided that the defendant was liable for the costs recovered against the plaintiff, in an action against him, by a creditor of his wife. The case of Sjiarkes vs. Martindale, (8 East, 593), is so wide apart from the question in this case, that it is unnecessary to make a statement of it. Some Admiralty cases were cited, but they have no analogy to a suit at common law with respect to costs. In Courts of Admiralty, costs and expenses are allowed, not technically as costs, but upon the same principle as they are often allowed, as damages, by the Courts of common law, as a recompense for injuries sustained or as exemplary damages.” (Boston Manf. Comp. vs. Fiske, 2 Mason, 121.) There is no legal claim to such damages in a Court of Law. The Judge, in Admiralty, exercises the discretion with respect to them, which in a common law Court is confided to the jury. In Arcambel vs'. Wiseman, (3 Dali. 306), by a decree in the Circuit Court of the United States, counsel fees were allowed, as damages. On appeal, it was adjudged that the charge should not be allowed. The judgment of the Court is rested almost entirely on the ground that “ the general practice of the United States is in opposition to it.” That case was followed by Whittemore vs. Cutter, (1 Gall. 436), in which it is laid down that extraordinary expenses, such as counsel fees and expenses of witnesses, beyond the taxable costs, ought not to be considered as items of actual damage.” The action was for the infringement of a patent. They had been allowed by Judge Story, in the Circuit Court, “ on the same principle as damages in cases of mere tort are allowed.” In the case of the Boston Manf. Comp. vs. Fiske, (2 Mason, 121), which was also an action for the infringement of a patent, these cases were reviewed and reversed, Judge Story delivering the judgment of the Court. But this decision does not affect the question in this case. The infringement of a patent is a tort: and the damages are allowed, in such a case, in the exercise of a discretion which pertains to the jury. The special verdict submits the liability of the Bank to the payment of Gadsden’s expenses, in defending the suit in Equity, to the Court; and it must be decided as a question of law. In Brown vs. Spann, (3 Hill, 324), it was held that, in action on a trover bond, the defendant was not chargeable with the expenses of the plaintiff in defending the action of trover, between the same parties, in which the plaintiff (who was defendant in the trover suit) recovered judgment.

The other question submitted to the judgment of the Court, by the special verdict, is, whether the plaintiff is entitled to recover interest on the fund enjoined, pending the suit in Equity. This requires an examination into the meaning and effect of the condition, that “ the Bank of Georgetown shall save harmless the said Thomas N. Gadsden from all damage which he may sustain, by reason of the making the said order, and the issuing of the said writ of injunction, in accordance therewith.” The first and immediate consequence of the order and injunc-, tion was, that all proceedings on the judgment at law, of Gadsden against Gasque, were superseded : and the case transferred' into the Court of Equity, with the addition of the Bank of Georgetown as a party. That Court thereby acquired complete jurisdiction of the whole subject, and of the rights of all the parties. The granting of the order was a judicial act, by which jurisdiction was assumed, under a specific power of that Court. All the proceedings which ensued were in the regular course of the suit. What damage, then, did the plaintiff sustain by reason-of the said order and the injunction in pursuance thereof, for which the defendant is liable to make compensation in damages to the plaintiff? Damage is the loss or injury which results from an unlawful act. If loss results from an act, not unlawful, it is damnum absque injuria, a loss without a wrong. To affirm that the plaintiff sustained damage by reason of the said order and injunction, is to affirm that the defendant’s resort to the Court of Equity, by invoking the exercise of the jurisdiction in a case of injunction, was unlawful: and that the defendant is liable to compensate the plaintiff, by way of damages, for any loss or prejudice to his rights, which, in the judgment of a Court of law, the plaintiff sustained by the proceedings in the Court of Equity. The jurisdiction of the Court of Equity was continued and supported, through all the proceedings in the suit to the final decree, by the. order for 'injunction. If that had been dissolved, the jurisdiction would have ceased, the subject of litigation would have been released, and the plaintiff would have levied his execution. If the plaintiff can recover damages sustained by reason of the order for the injunction, the defendant must be equally liable for damages sustained by reason of the decree. If the defendant is not protected by an interlocutory order or decree, he must be equally unprotected by the final decree. It is the fundamental law of all Courts, that orders, made within the sphere of their jurisdiction, must protect suitors as well as all other persons acting in obedience to them. A bond thus taken by the Commissioner in Equity from the Bank of Georgetown, on the granting of the order for injunction, conditioned to save Gadsden harmless from all damage he might sustain, by reason of the order, is incompatible with the jurisdiction of the Court and void. When, by the injunction, the Court of Equity took jurisdiction of the judgment at law, it had full power to adjust and decide the rights of all the parties to the suit and do complete justice in the cause. The decree of the Court was final and conclusive of all their rights. No right, redress or compensation which either party might claim against the others, not allowed by the decree, can be asserted and prosecuted in a Court of Law. The Bank of Georgetown had the right to resort to the Court of Equity for the protection of its interests, against the claim of Gadsden, on his judgment against Gasque ; and if the Court of Equity impounded the fund in dispute to abide the final decree in the cause, the Bank cannot be liable to pay to Gadsden the interest, of which he was deprived pending the litigation.

The proper and necessary condition of an injunction bond must be, to abide by and perform the decree of the Court. A bond conditioned to pay any damage the obligee may sustain, by any act or default of the obligor, does not create a liability for damages. It seems only as a security for the payment of damages, which must accrue independently of the bond. If the obligee chooses to relinquish the security afforded by the bond, he might recover the damages in any other proper form of action. If the plaintiff has sustained damage by the act of the defendant ; that is, if the plaintiff has suffered loss by the unlawful act of the defendant, he may recover compensation in an action on the case. But can any instance be found of an action on the case to recover damages sustained by the plaintiff, in consequence of the defendant having filed a bill in Equity against him, and in the progress of the suit having obtained and enforced decretal orders against the plaintiff to his loss and damage?

But what redress can the plaintiff claim against the grant of the injunction? It is a proceeding within the acknowledged jurisdiction of the Court of Equity. If it was granted or continued unadvisedly, is the party to whom it is granted liable to indemnify the adversary party in damages for the erroneous judgment of the Commissioner or Chancellor? Such errors are corrected by appeal, and not repaired by damages. The amount of the judgment was not, on the giving of the bond, paid to the Bank of Georgetown: nor was any order made that Godbold, the sheriff, should pay it into Court. If the fund had been paid into Court, could the Bank have been charged with the interest ? If Godbold had filed, a bill of interpleader between the Bank and Gadsden, and paid the money into Court, a case not unlike the present, could the prevailing party have claimed interest on the fund while impounded, as damages against Godbold ? In another view of the case Gadsden has no equity. He might have moved for a dissolution of the injunction at any time after he had filed his answer, when it must’be assumed, if wrongful, it would have been dissolved. He never made any motion, and the loss he suffered, if it could at all be regarded as wrongful, was by his own acquiescence; volenti non Jit injuria.

It is ordered, the plaintiff’s motion be dismissed, and that the postea be delivered to the defendant.

O’Neall and Wardlaw, JJ. concurred.

Withers, J. I think, if the bond be valid at all, the interest ought to have been recovered by the plaintiff.

Whitner, J. absent.