Court Opinion

ID: 7998857
Source: CourtListenerOpinion
Date Created: 2022-09-09 01:47:34.216785+00
Date Added: 2024-06-11T16:35:38.754955
License: Public Domain

RylaND, Judge,
delivered the opinion of the court.
From the above statement, the assessment of damages upon the dissolution of the injunction, becomes the main point for the consideration of this court.
This injunction cannot be said to be a proceeding to restrain the collection of money, in this case. Here, there was no judgment at law, the enforcement of which, by execution, was restrained and enjoined. Sections 11 and 13 of the act concerning injunctions, Rev. Code, 1845, are as follows :
“ Sec. 11. No injunction shall issue in any case, until the complainant execute a bond with sufficient security, to the other party, in such sum as the court or judge shall deem sufficient to secure the amount, or other matter to be enjoined, and all damages that may be occasioned by such injunction, conditioned that the complainant shall abide the decision which shall be made thereon, and pay all sums of money, damages and costs, *352that shall be adjudged against him, if the injunction shall be be dissolved.
“ Sec. 18. Upon the dissolution of an injunction, in whole or in part, damages shall be assessed by a jury, or, if neither party require a jury, by the court; but if money shall have been enjoined, the damages thereon shall not exceed ten per centum on the amount released by the_dissolution, exclusive of legal interest and costs.”
On judgments at law, the dissolution of an injunction restraining the collection of the money, can allow of damages being assessed, at not more than ten per cent. That, in addition to legal interest. It is obvious that, in some cases, when injunctions have been granted to restrain an act from being' done other than to collect money, such as the one in this present case, the damages may necessarily be much greater than the delay of receiving a sum of money for a few months could ordinarily produce ; and if damages only can be measured by per cent., in many cases there would be no criterion to ascertain them by. From the words of the act, too, we can see, that to restrain the collection of money, was not alone in the mind of the legislators. “Amount or other matter to be enjoined.” Here, the complainant below did not seek to enjoin and restrain the defendants from the collection of a judgment or of a sum of money, but to prevent them from proceeding to sell property, the trust fund, and in that act, on the part of the complainant, serious injury may have been committed ; no less than the destruction in a greater or less degree of the value of the entire fund ; and can it be said, that ten per cent, is to be the amount of damages to be awarded, on the dissolution of an injunction in such cases ? Ten per cent, on what ? The original debt, for the payment of which the trust was made ? That will not do. Nor can the defendants be compelled to resort to the bond on which that injunction was originally allowed. The condition of the bond is, “ pay all sums of money, damages and costs that shall be adjudged against him, *353if the injunction be dissolved.” Now, before suing on this bond, after dissolution, “ the damages must be adjudged,” and the non-payment of the amount adjudged forms the breach of the bond, so far as damages are concerned.
No argument can be drawn from the liability arising on the bond, in order to ascertain how, and what amount of damages must be adjudged. The bond is to secure the payment of the money when adjudged. The trust property in this case was sold at the maturity of the first note ; that note was for something over one thousand dollars.
The property was incapable of division. It was sold entire. The property was liable to be sold on the default of payment of either of the notes. The complainant’s intestate, James Kennedy, became the purchaser, for $2,800. Shortly after the sale, he offered to Hammond, the trustee, one of the defendants below, the money to pay the amount of the first note, interest, and costs of advertising, and expenses of sale, &c., with a receipt from Emerson and Childs for the balance of the $2,800, and demanded a deed. Hammond refused to accept the tender, or to make a deed until the full amount of the debt secured by the property was paid. Now, what right had Emerson and Childs to receive the proceeds of this trust sale over the above notes ? Say the trust property, that is, the lease on it, had been assigned to them; they took it, with the incum-brance upon it. Now, if this sale, on the maturity of the first note, passed the entire interest in the trust estate to the purchaser, free from the incumbrance of the second note, then that sale, if Emerson and Childs had a right to receive the amount over the first note, and expenses, was an injury to the cestui que trust, instead of a benefit; for by it he lost the security for half the debt originally secured by this trust property.
At the maturity of the second note, steps were taken to sell the trust property ; then the complainant below steps in, and by his bill prevents the sale by injunction. Upon the dissolution of this injunction, the trust property being destroyed, partly *354by fire, and the lease forfeited to the original lessor ; the trust property j I may say, lost to the cestui que trust, the damages in consequence were assessed at the amount of the debt originally secured and interest, and I think very properly.
Let us look at the facts in this case. Hall, Allen and Childs were the proprietors of the lease from Chambers, off the steam saw mill. They gave their deed of trust on the-property to secure two notes. Afterwards, Hall sold all his-interest in the premises to Childs and Emerson, expressly subject to the debt mentioned in the trust deed. Then Alien-sells his interest in the property to Childs and Emerson, in like manner subject to the payment of the debt. Then Childs transfers the property to Emerson, subject to the payment of the debt. Lastly, Emerson transfers the property to John Maguire, in the same manner, subject to the debt; so that Maguire becomes the owner of the property, and, in respect to the prior parties, is the principal debtor, and they merely his securities to the holder of the trust debt. Maguire procures Kennedy to bid off the property at the trustee’s sale, and prosecutes the present suit for his own benefit, using Kennedy’s name. Maguire has all along been in possession, receiving a large rent, $2,000 per year, until the mill was burned down in 1849. The deed of trust contained a stipulation that the premises should be insured, and that the insurance should stand as security to the creditor. Maguire collects the insurance for his own benefit. This, too, pending the injunction. So, too, pending the injunction, the landlord enters into the premises for a forfeiture, and Maguire suffers him to keep possession, and to make leases to other parties. Ma-guire, after making the trust debt his own, appropriates the security for the debt, to his own use, and insists that the original creditor, Orris Hall, shall look to the makers of the notes individually, and not to the trust fund.
The notes are still due; the trust property was sold; Ma-guire gets possession through Kennedy’s purchase, pays no part of the debt for which the property was sold, rents out this *355very trust property for $2,000 a year, apd indemnifies Kennedy to prosecute this proceeding, in which tbe injunction was obtained. Had tbe second sale proceeded, tbe debt in all probability might have long ago been made out of tbe trust property. Pending this proceeding, that property bas become lost to tbe cestui que trust, and, because tbe original makers of tbe notes are supposed to be worth $3,000, Maguire contends that tbe cestui que trust bas not been damaged, and that be must look to tbe notes.
Tbe case in 11 Johns. Rep. 136, Yates v. Joyce, bas not any, or but slight application to any principle involved in this case. That case bas tbe following head note: “Where A., tbe assignee of a judgment against B., which was a lien on tbe property of B., was about to take out execution, and seize a certain lot of land, and C., knowing this, pulled down and carried away certain buildings from off tbe land, whereby A. was deprived of tbe benefit of bis judgment, &c., it was held, that A. might maintain an action on the case against C. for fraudulently removing tbe property of B., and converting it to bis own use, with intent to defeat tbe judgment of A.” Tbe court, in tbe opinion given, said: “It is a sound principle, that where tbe fraudulent misconduct of a party occasions an injury to tbe private rights of another, be shall be responsible in damages for tbe same, and such is tbe case presented by tbe pleadings in this cause.” In tbe case of Lane v. Hitchcock, 14 Johns. Rep. 213, tbe court remarked: “This case is supposed to be within tbe principles which governed tbe decision in Yates v. Joyce, 11 Johns. Rep. 136. In tbe case now before us, proof was offered on tbe trial, that tbe mortgagor was insolvent, and bad no other property than tbe mortgaged premises, out of which tbe debt of tbe plaintiff might be satisfied; but there was no averment in tbe declaration to warrant such proof. These were material and indispensable facts, in order to give tbe plaintiff a right of action; and to allow this proof without tbe averment would take tbe defendant by surprise.” Tbe case in 17 Wend. 554, Bank of *356Rome v. Mott, bag still less bearing on tbe case now before us. So likewise tbe case of Gardner v. Heartt, 3 Denio, 232. Tbe casein 19 Wend. 518, Glover v. Payn, was cited for tbe purpose of warning tbe courts not to take guardianship of adults as well as infants.
In tbe case of Campbell and others v. Macomb and others 4 Johns. Cb. Rep. 584, tbe Chancellor says : “Tbe sale of tbe whole of tbe mortgaged premises was indispensable in this case, because they were not capable of being sold in parcels or of being divided, without manifest injury to all tbe parties concerned. When tbe whole premises are thus necessarily sold, it is tbe direction of tbe statute, (N. R. L. 490) that tbe court apply tbe proceeds of tbe sale, not only in payment of tbe interest, instalment, or portion due, but towards payment of tbe whole or residue of tbe demand, which bath not become due or payable, provided tbe same bears interest. But this provision is made from tbe necessity of tbe case, and more than is due is not to be raised out of the mortgaged premises, when that necessity does not exist. If tbe mortgagor, or tbe party bolding tbe equity of redemption, comes before tbe sale, and brings in tbe amount due, with costs, there is no justice or equity in suffering tbe sale to proceed. Tbe object of tbe decree was not to raise any part of tbe debt not due, yet tbe raising of tbe entire debt may become an unavoidable consequence of tbe sale, because tbe court, in order to raise what is due, is obliged to sell tbe whole of tbe mortgaged premises, as they happen to consist of one entire subject, incapable of being conveniently or safely divided.-”
Tbe case in 1 Maulé and Selwyn, 706, was one of construction of tbe terms of a defeasance. Tbe defeasance is, “that the plaintiff shall not be at liberty to issue execution until default made in payment of tbe said sum by instal-ments, and in tbe manner before mentioned.” It was held, that tbe failure to pay one instalment was such a default as permitted tbe execution to issue, and that for tbe whole debt.
In Salmon v. Clagett, 3 Bland’s Chan. Rep. 179, the Chan*357cellor said : “ Where a debt, secured by a mortgage, is made payable by instalments, it is well settled that the mortgage becomes forfeited by the non-payment of the first instalment, and may be foreclosed immediately after that time. If a bill be filed for that purpose, the debtor may, however, prevent a foreclosure or sale, by paying the instalment then due ; but if he fails to do so, then the mortgage may be entirely foreclosed, or so much of the property may be sold as will satisfy the sum due at that time ; and the decree will be allowed to stand, as a security for the other instalments as they become due — as in case of a judgment at law for an annuity. Rut if the mortgaged property cannot be conveniently or safely sold in parcels, then it must be disposed of entire, and the whole debt raised and paid, with a rebate of interest on sums not due at the time of paying over the proceeds of the sale to the creditor. This is done from necessity, and as an unavoidable consequence of the peculiar nature of the case.” See also Knapp v. Burnham, 11 Paige, 332.
In Mussina v. Bartlett, 8 Porter, 284, the.court remarked : “Itfrequently so happens that the property mortgaged consists of one, entire parcel, which could not be divided, or would be greatly lessened in value by division. Suppose, in such a case, a decree should be had for a sale before the entire sum intended to be secured fell due, could the mortgagor insist upon being paid the excess produced by the sale ? We apprehend not. If he could, the right to coerce a sale upon the first default, instead of being beneficial, would often be injurious to the mortgagee, if he were to avail himself of it; for, having paid over the excess, the premises being sold, his security would be gone, and he thrown upon the personal responsibility of the mortgagor.” See Baker v. Lehman, 1 Wright, Ohio Rep. 524.
In Kimmell v. Willard's administrator, 1 Douglass, Mich. Rep. 223, the court remarked: “ We think that the mortgagee might have bidden for the premises when exposed to sale, the whole amount unpaid on the mortgage, whether *358for interest or principal; and any attempt on tbe part of the mortgagor to enforce in a court of law the payment of the difference between the amount actually due, and the amount of the bid, would have been averted by the interposition of a court of equity, which would, under the circumstances, regard the equitabls rights of the mortgagee as countervailing the strict legal rights of the mortgagor. In other words, equity would regard the money realized from the sale as the primary fund for the payment of the instalments not due, inasmuch as the ■ effect of the sale would be to disincumber the estate of the mortgage, which stood before as a pledge for the payment of the debt. Upon this point we have no doubt. Again, it would have violated no principle of law to have exposed the premises for sale, charged expressly with the payment of the future in-stalments. In such case, the sale would have discharged the estate of the mortgage ; but still a court of equity would lend its aid to the mortgagee, and regard the estate in the hands of a purchaser as charged with the debt. This aid would be granted, not because of any claim arising out of or by virtue of the mortgage, but in consequence of its having operated so as to discharge the mortgagor from all personal liability; and for the more obvious reason that an agreement would be implied as between the mortgagee and the purchaser, to consider the balance due the former, as a lien in equity upon the premises.”
In the case of Cox v. Wheeler, 7 Paige’s Chan. Rep. 248, it was held by the Chancellor, that when a mortgage is payable by instalments, the mortgagee has a right to sell the premises discharged of the lien of future instalments, and retain the whole amount of his mortgage and costs out of the proceeds of the sale. And if he chose to sell subject to the incumbrance of the instalment, which was not then due, in legal intendment, the premises would bring so much less on the sale, and the purchaser would take the premises subject in equity to the payment of the incumbrance thereon. In such a case, the mortgaged premises become in equity the primary fund for *359the payment of the amount of the incumbrance. And if the mortgagee becomes himself the purchaser, the incumbrance becomes merged in his legal estate in the equity of redemption, and the debt is in equity extinguished.
In Aldrich v. Reynolds, 1 Barb. Chan Rep. 613, it was held, that the value of the growing crops taken off by the mortgagor, during the time for which the sale of the premises was suspended by an injunction, formed a part of the damages sustained by reason of an injunction staying the complainant from selling the premises under his decree ; that the counsel fees, which he was obliged to pay to obtain a dissolution of the injunction, likewise should be included in assessing the damages ; the costs of reference to a master to ascertain the amount of damages should likewise be included, and the interest upon the whole sum, the collection of which had been suspended by the injunction.
From the view we take of the subject, there is no analogy between this case and those reported in 11 and 14 Johns., above cited. There, in order to enable the plaintiff to maintain his action against a third party, he must show his injury, and show the intent of the third party in inflicting it. So in the case in 17 Wend.
In this case, in the opinion of this court, the damages were properly assessed, and there is no error in the act of the court below in assuming to give, or in giving the instruction. Its judgment is therefore affirmed, with the concurrence of the other judges.