Cimiotti Unhairing Co. v. American Fur Refining Co.

• Decision Date: 03 January 1908
• Citation: 158 F. 171
• Parties: CIMIOTTI UNHAIRING CO. et al. v. AMERICAN FUR REFINING CO. et al.
• Court: U.S. District Court — District of New Jersey

158 F. 171

CIMIOTTI UNHAIRING CO. et al. v. AMERICAN FUR REFINING CO. et al.

United States Circuit Court, D. New Jersey.

January 3, 1908

Louis C. Raegener and S. L. Moody, for complainants.

Henry Schreiter, for defendant American Fur Refining Company.

LANNING District Judge.

By their bill of complaint the complainants sought an injunction to restrain the defendant from an alleged infringement of patent No. 383,258 for a machine for removing the stiff hairs from seal skins and other furs. A preliminary injunction was issued under an order dated August 28, 1902, which contained this provision:

'This order is upon condition that complainants give a bond with good and sufficient surety or sureties, to be approved by the court, in the sum of $15,000, to indemnify the defendant corporation until the entry of an interlocutory decree upon final hearing herein, against loss or injury due to the improvident or erroneous grant of this order and provided the court finally dismisses the bill of complaint herein.'

On September 1, 1902, the court approved an undertaking presented by the complainants, but executed only by the Lawyers' Surety Company of New York, by which that company declares that it 'hereby undertakes in the sum of fifteen thousand dollars to indemnify the defendant corporation in the above-entitled matter so enjoined until the entry of an interlocutory decree upon final hearing herein against loss or injury, not exceeding the said sum of fifteen thousand dollars, due to the improvident or erroneous grant of this order, and provided the court finally dismisses the bill of complaint herein, such loss or injury and damages therefor to be ascertained as the court shall direct. ' The order for a preliminary injunction was sustained by the Court of Appeals. On final hearing a decree adjudging infringement was granted, and the Court of Appeals reversed the decree, and ordered the bill to be dismissed, and the Supreme Court affirmed the Court of Appeals. See (C.C.) 117 F. 623, 118 F. 838, 55 C.C.A. 513, 120 F. 672, 123 F. 869, 59 C.C.A. 357, and 198 U.S. 399, 25 Sup.Ct. 697, 49 L.Ed. 1100. On February 9, 1904, this court made an order directing a master 'to take proofs in the case, to ascertain and report to the court what loss and damages defendants have suffered, if any, by reason of the granting of the preliminary injunction against them on the 28th day of August, 1902, and until the entry of the interlocutory decree entered herein on the 21st day of February, 1903. ' By his report, dated June 7, 1907, the master finds that the defendant, the American Fur Refining Company, has sustained the following loss and damages:

1. Loss of profits from September 3, 1902, to February 21, 1903

..

$12,591 12

2. Trade lost during the same period

...............................

3,000 00

3. Expenses incurred solely by reason of the injunction

............

2,815 58

----------

Total

.....................................................

$18,406 70

To this report the complainants have filed exceptions, and the present hearing is on those exceptions.

The first and second exceptions raise the question whether the aggregate amount of loss and damages should not be limited by the $15,000 for which the bond of the surety company was given. The damage arising from the grant of an injunction pendente lite, in the absence of any statute or rule of court regulating the practice, is damnum absque injuria. For this reason the court sometimes requires a bond of indemnification against damages to be given as a condition of the grant. As the court has discretionary power to grant an injunction without such bond, it has discretionary power to fix the amount of the bond in case one be required. When a bond is given, its penal sum is notice to the applicant for injunction of the maximum risk he must assume if the injunction be issued. He cannot be required to assume a burden greater than that which the chancellor in the exercise of his discretion has imposed. I think $15,000, the sum mentioned in the court's order and the penal sum mentioned in the bond, fixes the maximum amount that can be assessed against the defendant company for the loss and damage sustained by the defendants. There is no statute or rule restricting the discretion of a federal court in fixing the amount of an injunction bond, or in imposing terms as a condition of granting an injunction. Russell v Farley, 105 U.S. 433, 26 L.Ed. 1060; Meyers v. Block, 120 U.S. 206, 214, 7 Sup.Ct. 525, 30 L.Ed. 642. The master reports that he has ascertained the amount of damages sustained by the defendant corporation without reference to the penal sum mentioned in the surety company's bond, for the reason that the order of the court required him so to do. In this I think he was right. The rule that was to guide him in the performance of his duty was contained in the order of reference, and in that alone. It required him to ascertain and report to the court what damages, if any, the defendant company had sustained. If the damages found by him exceed the amount of the bond, or the amount specified in the injunction order, the court must take that fact into consideration when the time comes for making its decree of assessment, and limit the amount to a sum not exceeding the penal sum mentioned in the bond.

No question is raised concerning the power of this court to assess the damages. In Russell v. Farley, supra, the Supreme Court, though not deciding the point, said it was inclined to think such power exists. It was so held in Lea v. Deakin (C.C.) 13 F. 514; Coosaw Mining Co. v. Farmers' Mining Co. (C.C.) 51 F. 107; and Tyler Mining Co. v Last Chance Mining Co., 90 F. 15, 32 C.C.A. 498. In West v. East Coast Cedar Co., 113 F. 742, 51 C.C.A. 411, it was held that, in any event, the court has the power, in such a case as the present one, to ascertain the amount of damages. In my judgment there is no want of power in this court to assess the damages. As pointed out by Mr. Justice Bradley in Russell v. Farley, the court of chancery in England exercises it, and the practice of that court, except as it may be modified by acts of Congress or by rules of court, has been generally adopted in equity cases by our federal courts. What damages, then, shall be assessed? The injunction bond fixes the amount. It is all 'loss or...