Holcomb v. Rice — 30 N.Y. St. Rep. 255

Majority

p. 255

James E. Holcomb, App’lt, v. George Rice et al., Resp’ts.^[1]

(Court of Appeals,

Filed March 21, 1890.)

Headnote

1. Injunction—Damages sustained by reason of.

Upon a proceeding to ascertain the damages sustained by a party in consequence of an injunction restraining him. in the exercise of some legal right, it is proper to allow, as part of the damages, the expenses incurred upon the reference, such as costs and expenses incurred on the return of an order to show cause why a temporary injunction obtained by plaintiff to restrain foreclosure proceedings should not be continued.

2. Same.

The sureties upon such an undertaking could not include as a payment on account of their undertaking the amount at which they bid in the premises upon the foreclosure sale. Their undertaking was to indemnify the defendant mortgagee upon the injunctions obtained by plaintiff pending his action to restrain foreclosure proceedings and sale under the mortgage. If they purchased the premises to protect themselves, that fact in no wise affects the question of the damages assessable against them.

Appeal from general term, supreme court, third department, affirming order of special term allowing $82.45 for costs and expenses, incurred by the defendant on the return of the order to show cause why the temporary injunction should not be continued.

The referee in this action allowed the sum of $82.45 for costs and expenses incurred by the defendant on the return of the order to show cause why the temporary injunction obtained by plaintiff to restrain foreclosure proceedings should not bo continued. The defendant had succeeded in preventing the continuance of the injunction based upon the undertaking given; he had succeeded in obtaining an order requiring the giving of a new undertaking in the sum of $4,000, whereas the first undertaking was in the sum of $1,000; the order also required the undertaking to contain special clauses, making the sureties liable for any deficiency, as well as for all the costs of the action, and the statutory foreclosure, in addition to the usual clause for damages caused by the granting of an injunction. The order further provided in substance, that if such conditions were not complied with, the injunction should be vacated, and the application for the continuance thereof

p. 256

denied with costs. The general term, on appeal from Ms decision, held that the objection to the item for services and expenses of counsel in attending the justification of sureties was not well taken and affirmed the order of the special term confirming the referee’s report.

Leslie W. Russell, for app’lt; Edwin Countryman, for resp’ts.

Upon a proceeding to ascertain the damages sustained by a party in consequence of an injunction, restraining him in the exercise of some legal right, it is proper to allow as a part of the damages the expenses incurred upon the reference. Aldrich v. Reynolds, 1 Barb. Ch., 613 ; Lawton v. Green, 64 N. Y., 326 . After complying with the terms of the undertaking, by paying the costs of the foreclosure proceeding, the costs in the action and the deficiency upon the sale of the mortgaged premises, there still remained a margin in the amount of the undertaking sufficient to coyer the damages allowed by the court upon the confirmation of the referee’s report. The sureties could not include as a payment on account of their undertaking the amount at which they bid in the premises upon the foreclosure sale. Their undertaking was to indemnify the defendant mortgagee upon the injunction obtained by the plaintiff pending Ms action to restrain foreclosure proceeings and sale under the mortgage. If they purchased the premises to protect themselves, that fact in nowise affects the question of the damages assessable against them. The delay in taking the proceeding to assess the damages against the sureties did not affect the claim on the undertaking. In the settlement between the mortgagee and the sureties after the foreclosure sale, the balance of the claim for damages was left open for future adjustment. The referee so found and there was evidence to support his finding.

The other questions have been rightly disposed of and the order should be affirmed, with costs:

All concur.