Metro. Lumber Co. v. Fordham Nat. Bank

• Decision Date: 14 February 1929
• Docket Number: No. 93.,93.
• Citation: 144 A. 879
• Parties: METROPOLITAN LUMBER CO. v. FORDHAM NAT. BANK et al.
• Court: New Jersey Supreme Court

144 A. 879

METROPOLITAN LUMBER CO.

v. FORDHAM NAT. BANK et al.

No. 93.

Court of Errors and Appeals of New Jersey.

Feb. 14, 1929.

Syllabus by the Court.

Appeal from Court of Chancery.

Suit by the Metropolitan Lumber Company against the Fordham National Bank and others. Decree for defendants (141 A. 742), and complainant appeals. Affirmed.

Milton M. Unger, of Newark, for appellant.

John G. Flanigan, of Jersey City, and William J. Cogan, of Bayonne, for respondents.

PARKER, J. The decree directed that preliminary injunctive restraints be vacated, that complainant pay to defendants Flanigan and Cogan, who are counselors at law of this state, the sum of $2,000 with interest and costs, and an additional counsel fee of $800, and that the bill be dismissed with costs to the Fordham National Bank. This, of course, was a final disposition of the cause, although, as will be seen, there was nothing in the nature of a final hearing.

The principal object of the bill is to set aside a mortgage of the lumber company to the bank, dated December 30, 1927, and also an assignment of rents, to defendants Flanigan and Cogan. The Vice Chancellor advised an order to show cause with temporary restraint on February 1. 1928; continued it on February 7, with directions that certain affiants to affidavits submitted for complaint appear and submit to cross-examination pursuant to rule 204; and further continued the matter on February 24. Upon the affidavits submitted, and the record before him, he held that the injunction should be dissolved (a) because preliminary injunction should not go against a national bank; (b) because the bill, being verified merely on information and belief, was not sufficiently verified to bold an injunction; (c) because the material allegations of the bill were fully denied in the answering affidavits. He then proceeded to consider, on the affidavits and counter affidavits, a motion to dismiss the bill, and, considering that on these affidavits the complainant had not shown the duress alleged in the bill, granted the motion to dismiss it. All these rulings are before us on this appeal.

We agree with the learned Vice Chancellor that the, equities of the bill were fully met by the answering affidavits and that in consequence the preliminary injunction was properly vacated. Citizens' Coach Co. v. Camden Horse Ry. Co., 29 N. J. Eq. 299; Ye Olde Staten Island Dyers & Cleaners v. Barrett Nephews & Co., 98 N. J. Eq. 702, 130 A. 528. This renders it unnecessary to consider the matter of awarding a preliminary injunction against a national bank, or the alleged insufficient verification of the bill in the first instance, though for present purposes we shall assume that the ruling below on the latter point was correct.

But we are unable to concur in the dismissal of this bill on the ground taken in the court below. This action amounted to the summary award of a final decree for defendant, based, not upon a final hearing and findings of fact on the evidence taken thereat, but upon a final adjudication of facts on ex parte affidavits and cross-examination under the rule, which affidavits and cross-examination were directed, and could properly be directed, solely to the question whether there should be an ad interim restraint. We are not aware of any statute, rule of practice, or decision of this court which supports such action. Section 4 of the Chancery Act of 1915 (P. L. at page 185) provides for the striking out of a sham defense, and an instance of such action appears in Penrose v. Absecon Land Co., 94 N. J. Eq. 436, 120 A. 207; Id., 94 N. J. Eq. 814, 118 A. 698; but, in the absence of a variance from the regular procedure by consent of parties, as in Reforso Knitting Mills v. M. & N. Construction Co., 144 A. 877, No. 24 of the present term (decided by consent on affidavits and stipulation), a bill in equity which properly states a case of equitable cognizance, will not be dismissed on the facts until after a final hearing in regular course, or on facts appearing conclusively of record. In Steitz v. Old Dominion Co., 89 N. J. Eq. 265, 104 A. 214, the bill was held to state a cause of action, and motion to dismiss was denied; in Mansfield v. Kraus (N. J. Err. & App.) 137 A. 440, we reversed a dismissal, which seems to have been directed because of certain informal statements of fact aliunde the record, and resting our decision on the face of the bill; as was done likewise in Rau v. Doremus (N. J. Err. & App.) 139 A. 170. In McGarvey v. Young, 100 N. J. Eq. 174, 134 A. 744, affirmed (N. J. Err. & App.) 137 A. 918, the bill, answer, and reply showed conclusively a case of res judicata. We conclude, therefore, that, if the bill in the present case showed on its face a situation calling for equitable relief, it was error to dismiss it, even though a preliminary injunction was properly vacated, even though the original verification may have been irregular, and even though the bill may not have been verified at all; for an injunction may go at final hearing on an unverified bill, if it states facts justifying injunctive relief and is supported by the evidence at the hearing. 2 Dan. Ch. Practice, *1681, and cases cited; 32 C. J. 336. It is every day practice for the Court of Chancery to...