Alliance Trust Company v. Stewart

• Decision Date: 25 March 1893
• Citation: 21 S.W. 793,115 Mo. 236
• Parties: The Alliance Trust Company, Appellant, v. Stewart et al
• Court: Missouri Supreme Court

21 S.W. 793

115 Mo. 236

The Alliance Trust Company, Appellant, v. Stewart et al

Supreme Court of Missouri, First Division

March 25, 1893

Appeal from Jackson Circuit Court. -- Hon. John W. Henry, Judge.

Reversed and remanded.

Pratt Ferry & Hagerman for appellant.

(1) No damages should have been assessed. 10 American & English Encyclopedia of Law, 814; Foster v. Bank, 58 Vt 658; Uhrig v. St. Louis, 47 Mo. 528. (2) The debt due Sheidley was improperly allowed as damages. First. Neither the statute (Revised Statutes, 1889, sec. 5498) nor the injunction bond contemplated security for the debt. High on Injunctions [3 Ed.] secs. 1668, 1674; Moore v. Hallum 1 Lea, 511; Staples v. Handley, 12 S.W. 339; Menken v. Frank, 57 Miss. 732; Portsmouth, etc., Co. v. Byington, 12 Ohio 114; Teaff v. Hewitt, 1 Ohio St. 511. Second. The damages must be the direct and proximate result of the injunction. Speculation and remoteness are to be avoided. 10 American & English Encyclopedia of Law, 995-996; 2 High on Injunctions [3 Ed.] sec. 1663; Bercher v. Parker, 40 Mo. 118; Uhrig v. St. Louis, 47 Mo. 528; McKinzie v. Mathews, 59 Mo. 99; Holloway v. Holloway, 103 Mo. 274; Center v. Hoag, 52 Vt. 401; Kerngood v. Gusdorf, 5 Mackey (D. C.), 161; Hotchkiss v. Platt, 8 Hun, 46; Harvey v. Berry, 1 Baxter (Tenn.), 252. The allowance of the debt was contrary to such rule. Third. The debt was not lost to Sheidly by the injunction. Stewart was the only one enjoined from selling. Sheidley not having been enjoined could have sold through the sheriff or by foreclosure proceedings in court. Fourth. The debt has never been lost because the note secured by the deed of trust was merely collateral to other notes upon which there was ample personal security. (2) The court should not have allowed eight per cent interest to run upon a portion of the judgment. The statute allows but six per cent (Revised Statutes, sec. 5974), unless the contract sued on provides a higher rate. The bond upon which the assessment was made does not so provide. (3) All the costs in the case should not have been assessed as damages on the bond, because those made after dissolution were not caused by the injunction. Reason and authority so declare. Lillie v. Lillie, 55 Vt. 471; Teasdale v. Jones, 40 Mo.App. 243. (4) The injunction was solely against Stewart, yet damages were awarded in the name of Sheidley. Holloway v. Holloway, 103 Mo. 274; Andrews v. Woolen Co., 50 N.Y. 282. (5) $ 50 for taking depositions was not an expense caused by the injunction. The deposition was for use in the main case only. Holloway v. Halloway, 103 Mo. 274; 2 High on Injunctions [3 Ed.] sec. 1689.

L. P. Cunningham and Thomas Dolan for respondents.

(1) Sheidley's debt was lost by reason of injunction. (2) Sheidley was not required to take care of prior deed of trust. (3) The injunction having been dissolved is conclusively presumed to have been wrongfully issued. High on Injunctions [3 Ed.] sec. 1665; Smith v. Wells, 46 Miss. 64; Cummings v. Muggs, 94 Ill. 186. (4) Respondent was not limited to nominal damages. (5) There was no error in allowing the Sheidley debt as damages. Kennedy v. Hammond, 16 Mo. 341; Revised Statutes, 1889, sec. 5498; City, etc., v. Alexander, 23 Mo. 483; Riddlesbarger v. McDaniel, 38 Mo. 142; Meysenberg v. Schlieper, 48 Mo. 426; Roberts v. White, 73 N.Y. 376. (6) Sheidley was not required by law to pay the debt secured by the first deed of trust. (7) Sheidley was enjoined and prevented from collecting his debt. High on Injunctions, sec. 1677; Cumberland, etc., v. Coal Co., 39 Barb. 16. (8) $ 50 expense for taking the deposition was proper. Holloway v. Holloway, 103 Mo. 285; Hammerslough v. Ass'n, 79 Mo. 81. (9) The injunction was not solely against Stewart. The damages were properly awarded in favor of Sheidley. (10) The attorney's fee of $ 75 was properly allowed.

OPINION

Macfarlane, J.

This appeal is from a judgment of the circuit court of Jackson county for damages assessed upon an injunction bond after the dissolution of a temporary injunction.

The petition charges that plaintiff is a corporation, and the owner of a certain lot therein described, subject to a deed of trust dated December 22, 1888, executed by one R. M. Stewart and wife, then the owners of the lot, to defendant A. J. Stewart as trustee; that said deed of trust purports upon its face to have been given to secure a promissory note of the same date for $ 10,000, payable six months after date to defendant Bogarte; that, said note and deed of trust were in fact given by said Stewart as collateral security for certain other debts due by him, and the amount of such other indebtedness must determine the amount due upon said note; that, after said note had become due on the twelfth day of April, 1889, and was in the hands of the Union National Bank of Kansas City for collection, plaintiff, who wished to redeem said land from said deed of trust, called upon said bank for the purpose of paying the note, and was advised that there was due thereon the sum of $ 6,560; that thereupon, on the same day, plaintiff tendered said amount to said bank, and demanded said note, but said bank, for reasons unknown to plaintiff, refused to receive payment on, deliver up, or cancel said note; that said note was afterwards indorsed without recourse and delivered to defendant George Sheidley, but without consideration; that on the ninth of November, 1889, plaintiff paid to said defendant Sheidley the sum so tendered, viz. $ 6,560, which plaintiff charged was the full amount due thereon; that previously, on the ninth day of October, 1889, defendant Stewart caused said land to be advertised for sale under said deed of trust; that an accounting was necessary to ascertain the amount really due on said note; that it believed the amount so paid was the whole amount due, and the deed of trust ought to be satisfied. Plaintiff offered to pay whatever might be found due on said note upon a proper accounting, asked that the sale be enjoined until an account could be taken, and for all proper relief.

A temporary injunction was granted, and a bond for $ 5,000 given in November, 1889. An answer and motion to dissolve the injunction were filed by defendants.

In October, 1890, on the suggestion of plaintiffs, that the property had been sold under a prior deed of trust, the injunction was dissolved, and a motion filed by defendants for an assessment of damages.

Upon a hearing of the motion the following facts were developed: There were four several deeds of trust upon the land made by R. M. Stewart, then the owner, subject to which plaintiff held the title. First. To secure the Lombard Investment Company, $ 10,000; second, to secure C. Douht, $ 7,500; third, to secure to defendant E. M. Bogarte, $ 10,000; fourth, to secure George Sheidley, $ 5,000. The third deed was subject to the first and second, and fourth to the other three, and so expressed in the deeds.

The third, or Bogarte deed and note, to which the injunction applied, were merely collateral for the following notes: One for $ 5,000, one for $ 2,500, and one for $ 1,500, each signed by E. M. Stewart and defendant J. A. Stewart, who was also trustee in the deed of trust, and one for $ 600, signed by R. M. and Susan A. Stewart. The $ 1,500 note was also signed by one J. W. Stewart and J. A. S. Burnsides. It was shown that through negotiations between R. M. Stewart and Sheidley it was ascertained that the latter could obtain the Bogarte indebtedness upon payment of $ 6,500. The notes were sent to the bank in order that the transfer might be effected; and while in the bank, plaintiff, as owner of the land, tendered that amount, which was refused.

Afterwards, on the thirteenth day of September, 1889, the $ 10,000 Bogarte note, and the four notes for which it was collateral, were transferred to defendant Sheidley without recourse. The day after the injunction was granted, plaintiff paid Sheidley the $ 6,500 and interest. Sheidley was causing Stewart, the trustee, to advertise the land for sale under the Bogarte deed of trust, when the injunction was granted, November 10, 1889. On the twenty-eighth day of April, 1890, the land was sold under the first deed of trust, made to secure the note for $ 10,000 to the Lombard Investment Company, for non-payment of an installment of interest, amounting to about $ 300, and a deed made by the trustee to the purchaser. No depreciation in the value of the property between granting the injunction and the sale was shown.

On the twenty-eighth day of October, 1890, plaintiff filed in court a statement setting forth the sale, and stating that the property had been sold to a third person, and that "any interest of the parties to this suit has been forever barred and foreclosed. Plaintiff therefore enters its dismissal of said suit." Defendants objected to this dismissal until account should be taken of the balance due on the Bogarte notes, claiming that Sheidley, under the pleadings, had a right to a judgment against plaintiffs for any balance that might be found to be due. The suit was however dismissed, and the injunction dissolved.

The damages were assessed by the court as follows: "$ 4,488.44, being the balance with interest of the $ 10,000 note mentioned in petition; $ 36 for advertising trustee's sale which was enjoined; $ 50 for expenses of Mr. Dolan taking depositions in Indiana, and $ 75 for attorneys' fees; and all costs of court were taxed against plaintiff."

Judgment was entered against plaintiff for the amount assessed as for breaches of the injunction bond, and it appealed.

I. The conditions of the bond require, in case of a breach, that the obligor should "pay all damages that may be occasioned by such injunction, and will abide by the decision...