Opinion
May 2, 1906.
David N. Salisbury, for the appellant.
James M.E. O'Grady, for the respondents.
The learned referee, in his opinion, says:
"If the question were a new one, I should find difficulty in coming to the conclusion that this expense was incurred by the defendants `by reason of the injunction,' and such it must be to come within the terms of the undertaking. The injunction was self-limited. Whatever order the court might make upon the return of the order to show cause would supersede the original order granting the injunction in question. If the court had granted the plaintiff's motion it would have granted a new injunction to continue during the pendency of the action. Having denied the plaintiff's motion there was no need for the court to vacate the original order because it fell of its own weight. The defendants were concerned in making diligent preparation to oppose the motion, not in order that they might dissolve the preliminary injunction because that would dissolve itself, on the determination of the motion, but to prevent the granting of a new injunction which would continue until final judgment and might be fraught with serious consequences. If it is suggested, that if the defendants had not appeared the plaintiff might have failed to bring the motion on for argument and, therefore, the injunction would have continued by force of its own terms, the rejoinder is sufficient that to prevent this the defendants need only appear and take the plaintiff's default and a denial of his motion, and that preparation was necessary only to prevent the new and more serious evil of the new injunction.
"This view is sustained by Sweet v. Mowry (71 Hun, 381), in which the opinion was written by Justice PARKER, and in which the facts were similar to those in the case at bar.
"A contrary view has, however, been taken in the case of Perlman v. Bernstein ( 93 App. Div. 335), and as this case has been affirmed by the Court of Appeals in 179 New York, I feel that the decision in the case at bar must be controlled by it, unless it can be distinguished in its facts."
We think the two cases are clearly distinguishable. Perlman v. Bernstein ( supra) was an action brought to set aside a lease made by the plaintiff to Bernstein and by the latter assigned to the defendant Hammer; the latter was out of possession and had instituted a proceeding in the Municipal Court of the city of New York to remove the plaintiff from the leased premises and to recover their possession. The injunction order was contained in an order to show cause, and restrained the defendants until the further order of the court from entering upon or into the store mentioned in a lease of the premises, and from using the store as a drug store or pharmacy or any similar business, or for any other business than the sale of general merchandise; and also enjoined and restrained the defendant Hammer, until the further order of the court, from prosecuting the proceeding in the Municipal Court for the possession of the store and the removal of the plaintiff therefrom, and required the defendants to show cause at Special Term why the injunction "herein contained" should not be continued during the pendency of the action. (N.Y. Supr. Ct. Cases Br. Counsel [N.Y. St. Law Lib.], vol. 5324, case No. 13; App. Div. Records [First Dept.], vol. 1375, case No. 2.) As stated in the opinion, the injunction order entirely tied the defendant's hands and prevented his enjoyment of the leased premises, and also the prosecution of any steps to obtain their possession. The complaint demanded inter alia, a perpetual injunction restraining the defendants from using the store as a drug store or pharmacy or from carrying on therein the drug or a similar business, and also that they be restrained from prosecuting the proceeding brought in the Municipal Court. The defendants appeared on the return day of the order to show cause, and succeeded in having the injunction set aside; the order denied the motion to continue the injunction during the pendency of the action, and further ordered that the "said injunction heretofore granted herein * * * be and the same hereby is vacated and set aside."
The distinguishing feature of the case at bar is that here the injunction was temporary. It was to continue only until the hearing and determination of the motion for an injunction pendente lite. The defendants employed counsel to oppose that motion, not to move to vacate an order which upon the hearing and decision of the motion would be no longer of any force or effect. No order to vacate the temporary restraining order was required, and none was made. The motion for an injunction during the pendency of the action was simply denied, with ten dollars costs. As was said by Mr. Justice PARKER in Sweet v. Mowry ( supra), the defendants would have been relieved from that order whether they appeared pursuant to the order to show cause or not. "They went to the expense of hiring counsel, not because the temporary injunction had been granted, but to prevent another and more extensive one from being made. If the judge had made the order to show cause and not granted the temporary injunction, the defendants would have had the same condition before them, and the same expense to incur."
The decision in Perlman v. Bernstein ( supra) was placed upon the ground that the expenses incurred were allowed as a direct result of the injunction. The ground of the decision is stated in the opinion of the court, as follows: "The defendant, when he appeared in court upon the return of the order to show cause was there, not alone for the purpose of preventing the issuance of a further injunction, but was also there for the purpose of procuring the dissolution of the injunction which had been granted. The order which was entered upon such hearing recites that the defendant was successful in procuring the injunction order, which had been granted, to be vacated and set aside; and such services were clearly incurred on account of the injunction, within the cases to which we have called attention, as well as others." The distinguishing features may not be broad, but they are clear, and were so understood by the court in Perlman v. Bernstein. Mr. Justice HATCH, writing for the court, says: "The ground upon which the learned court at Special Term refused confirmation of the report was, that the damages sustained did not result from the granting of the injunction, but were expended in preventing the issuance of a subsequent order continuing the injunction. Under such circumstances the cases cited of Sweet v. Mowry (71 Hun, 381), Randall v. Carpenter ( 88 N.Y. 293) and others cited by the learned court below, sustain his conclusion. These cases, however, have no application to the one presented by this record," referring to a previous decision in the same case ( 83 App. Div. 203). In concluding his opinion, Mr. Justice HATCH said: "It is evident, therefore, that this case is distinguishable from the cases cited by the learned court below, and calls for the application of a different rule."
We conclude that the rule is settled that the costs and expenses of opposing a motion made upon an order to show cause why an injunction pendente lite should not be granted where the temporary restraining order is limited to expire upon the hearing of the motion, are not recoverable as damages because of the preliminary injunction.
The appeal from the order confirming the referee's report properly brings up for review the question of the right of the defendants to the damages which have been awarded.
The order of reference was a matter of right. It could not be determined what damages the defendants were entitled to recover by reason of the preliminary injunction until the facts were before the court. While it is held that the damages here awarded are not recoverable, it is not held that no damages can be recovered because of a preliminary injunction such as was included in the order to show cause. There may be damages directly affecting a party to his injury by reason of a temporary injunction which would be recoverable.
The practice adopted here is the same as that followed in Sweet v. Mowry. We think it is correct.
It follows that the order appealed from should be reversed.
All concurred, except KRUSE, J., who dissented.
Order reversed, with ten dollars costs and disbursements, and motion denied, with ten dollars costs.