State v. Friedman et al.
| Decision Date | 27 April 1914 |
| Parties | State v. Friedman et al. |
| Court | West Virginia Supreme Court |
1. Injunction-Interlocutory Injunction 'Expiration.
An injunction, awarded upon an interlocutory application, to remain effective until further order, is merged in and superseded by subsequent decree on merits awarding a perpetual injunction. Having served as temporary restraint, its functions then ceased, (p. 12).
2. Same Action on Bond Damages Recoverable.
Damages sustained by interlocutory injunction awarded pending hearing on merits, or until further order, including fees for services of counsel on appeal, where injunctive relief alone is sought, are recoverable in an action on bond of indemnity; but not damages, exclusive of such fees, from an injunction awarded at hearing on merits, though on appeal therefrom the decree is reversed and the bill dismissed, (p. 12).
3. Same Action on Bond Evidence.
While not conclusive, proof of past profits from an established business is competent and proper as a basis from which to estimate actual damages resulting thereto from unlawful interruption of such business by injunctive process, (p. 15).
4. Damages Evidence of Profit Competency.
Profits derived from an established business, the value of which is ascertainable with reasonable accuracy, are not contingent or speculative and therefore not within the rule excluding proof thereof as an element of damages in an action as for breach of contract, (p. 15).
Error to Circuit Court, Marion County.
Action of debt on an injunction bond, by the State against Abraham Friedman and others. Judgment for plaintiff, and defendants bring error.
Reversed, and Remanded for New Trial.
Howard N. Ogden, for plaintiffs in error.
Tusca Morris and Harry Shaw, for defendant in error.
This case is here upon a writ of error to a judgment against Abraham Friedman, in an action of debt on an injunction. bond. He obtained an injunction in the intermediate court of Marion county to restrain Galliher, his employees and all other persons acting with or for him, from further carrying on the business of selling spiritous liquors in certain rooms immediately over Friedman's saloon, and from doing certain specified acts to the annoyance of Friedman and the patrons of his saloon. Upon the award of the injunction, Friedman executed the bond, which contained the usual conditions; and, by its due execution, the injunction became effective August 31, 1907.
On final hearing on answer, motion to dissolve, and affidavits, the intermediate court, by decretal order of September 12, 1907, made the injunction perpetual. However, on December 19, 1907, on appeal, the circuit court reversed the former decree, dissolved the injunction, and dismissed the bill. Then Galliher brought this action, and obtained a judgment on the verdict of a jury, which the circuit court affirmed. He sought recovery of damages accruing to his business during the time intervening between the date at which the preliminary injunction became effective and the date of the final decree on appeal.
Two main questions are presented. They relate to the period (1) within which plaintiff is entitled to recover damages to his business, and (2) within which he is entitled to recover fees of counsel employed by him in the injunction suit.
No authority binding on this court aids in determining the first branch of the inquiry. The rule, as stated in 22 Cye. 1050, is that damages accruing after the preliminary injunction is made permanent can not be recovered, although the decree is afterwards reversed and the suit dismissed; because the order for a preliminary injunction is merged by a decree for a perpetual injunction. The following additional authorities sustain the proposition: Webber v. Wilcox, 45 Cal. 301; Lambert v. Haskell, 80 Cal. 611; Bem/is v. Spalding, 9 Ky. D. 764; Houghton v. Cortelyou, 208 U. S. 149; Mining Co. v. Mining Co., 90 Fed. 155.
In the Lambert ease, the court said:" When the truth of the charge has been investigated and a final decree made, there is no longer any necessity for a preliminary injunction.
It has served its purpose, and its functions cease. If its functions do not cease, then of course it remains in force. But the final decree is also in force. The injunction awarded by a final decree is not suspended by an appeal. Hence, there would be the anomaly of two injunctions in the same case, each restraining the same act, and each valid. But, overlooking the anomaly, how could it be said, in such a case, that the party is injured by the preliminary injunction? If it were out of the way, he would still be restrained by the final injunction. Likewise, in the Webber case, the same court said: "When the decree for a perpetual injunction was rendered, the order for the preliminary injuncton was merged, or ceased to have any effect; and thereafter the case stood in the same condition, in respect to damages, as it would have done had no preliminary order been made." Where the injunction order authorizes the continuance of its inhibition until the further order of the court, and the court upon a final hearing refuses to dissolve, and enters a new order operating as a permanent restraint, the first order expires by its own limitation. Sweeney v. Hanley, 126 Fed. 99; see also Houghton v. Cort'elyou, supra. An injunction granted upon an interlocutory application is superseded by a decree made at the hearing of the cause. It does not thereafter remain in effect, unless expressly continued. Daniels Ch. PI. & Pr. (6th Am. Ed.) 1680.
It is important here to note that the preliminary injunction order was to remain in force only "until the further order of this (the intermediate) court"; and that the undertaking of the obligors was "to pay all costs and damages which may be awarded against him (Friedman) and all damages which may be sustained by the defendants, or either or any of them, by reason of this (the preliminary) injunction, in case the same shall be dissolved'If the injunction against which the bond was intended as an indemnity was not dissolved, there could be no liability for damages accruing after the decree of perpetuation. This was the extent to which the obligors pledged their personal security. They did not assume liability beyond the terms of their contract, Only such damages are recoverable as clearly fall within the terms of the injunction bond, A bond of indemnity against damages is essentially a contract to be construed in accordance with the general rules applicable to such undertakings, with the difference that the undertaking of a surety on an injunction bond must be so construed as not to extend his liability beyond the terms of the obligation by which he is bound. Orniglen v. Smith, 78 Ill. 250; Furgeson v. Tipton, 1 B. Mon. 28; Edmison v. Falls Co., 10 S. I). 440; 10 Am. & Eng. Enc, L. 991; United States v. Boyd, 15 Pet. 208; Miller v. Stewart, 9 Wheat. 702. "So when the injunction is dissolved upon the hearing and judgment is given in favor of defendants, and plaintiff appeals, the sureties upon the injunction bond are not liable for damages sustained in consequence of the appeal; and this is true even though after the appeal is prayed the court below orders the injunction to be continued until the decision of the appellate court, since such order is regarded as a new injunction, and the sureties are not liable for damages thereafter accruing." 2 High Inj. §1636.
The conclusion follows that plaintiff's damages to his business recoverable in this action are those only which resulted pending the period during which the restraint was effective by virtue of the preliminary order; that is, from August 31 to September 12, 1907. Had the court granted the injunction at the hearing on the merits, without the preliminary restraint, an indemnity would have been...
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