Sweet v. Mowry

1. Injunction—Damages—Counsel Fees. Plaintiff in an action for an injunction procured an order requiring defendants to show cause why an injunction pendente lite should not be granted, and restraining them until the further order of the court. On the return of such order, the injunction pendente lite was refused, and the temporary injunction was vacated. Afterwards, final judgment was rendered for defendants, who then obtained a reference to ascertain the damages caused by the temporary injunction. Held, that defendants could recover for fees of counsel on the hearing of the order to show cause, and on the hearing before the referee, but they could not recover counsel fees on account of the temporary injunction, as it would continue until the return of the order to show cause, whether defendants employed counsel or not. 2. Same—Expenses of Reference. Where it was found on the reference that defendants sustained no damage by reason of the temporary injunction, they were not entitled to the expenses of the reference as damages, since such finding showed that plaintiff did not render the reference necessary, and therefore he should not be charged with the expenses of it.

Appeal from special term, Onondaga county. Action by William A. Sweet against Henry J. Mowry and others, composing the Syracuse water board, the city of Syracuse, and others, for an injunction. From an order confirming in part, and disallowing in part, the report of the referee appointed, after judgment was rendered in favor of defendants, to ascertain the amount of damages that defendants sustained in consequence of a temporary restraining order, both parties appeal. The defendants, or some of them, being officers of the city of Syracuse, were about to issue $500,000 of city bonds, under the provisions of certain acts of the legislature known as the “Syracuse Water Acts,” and had advertised for sealed proposals for the purchase of them; such proposals to be received and opened on the 9th day of June, 1890, at 3 o’clock in the afternoon. The plaintiff claimed that such acts were unconstitutional, and on the 9th day of June, 1890, commenced an action against all the defendants herein to perpetually enjoin them from proceeding under such acts, and on June 7th applied to a justice of this court for an injunction pendente lite. On such application the justice made an order to show cause, returnable on the 11th day of June, 1890, why such injunction should not be granted, and in the same order restrained the defendants, until the further order of the court, from taking- any further proceedings under the statutes in controversy. Such order was served upon the defendants June 9th, and was, before 3 o’clock of that day, so modified that the defendants were permitted to. receive and open any bids which might be tendered for bonds in response to said advertisement. Upon obtaining such order, a bond was executed by the plaintiff and a surety in the sum of $250. Prior to the commencement of such action and the issuing of such order, the Onondaga Oounty Savings Bank resolved to bid for $300,000 of such bonds at a premium of 2y2 percent. above their par value. During the forenoon of June 9th, the commencement of such action and the issuance of such order became known to the officers of said bank, and they thereupon reconsidered their former resolution, and determined to make no bid whatever. The highest bid received on June 9th was an average of three-sixteenths of .1 per cent, premium for the bonds, and all of them were subsequently sold in the fall of 1890 to such bidder. On June 11th, upon the return of such order to show cause, the defendants appeared by counsel in response thereto, and argued before the court at special term the questions raised thereby. The court, reserving its decision for some days after argument, then and there made an order requiring the plaintiff to furnish an increase of security, to the extent of $10,000, as a condition for the further continuance of the injunction order, and an undertaking in that amount was thereupon given by the plaintiff and his sureties. On the 16th day of June, 1890, the court rendered its decision, denying the application for an injunction pendente lite, and vacating the temporary injunction then existing. 11 N. Y. Supp. 114. The action proceeded to judgment, which resulted in the defendants’ favor, and such judgment was subsequently affirmed in the court of appeals. 27 N. E. Rep. 1081. Afterwards, on September 19, 1891, an order was obtained by the defendants, referring it to a referee to ascertain the damages sustained by them by reason of such injunction. Upon the hearing before the referee, the defendants claimed damages as follows: For loss sustained in the difference between the selling price of $300,000 of bonds and what would have been received had the Onondaga Oounty Savings Bank bid for the same, $6,937.50; for counsel fees and expenses incurred in the removal of such injunction order, $3,000; also, for legal services and expenses on such reference. The referee reported that the defendants had suffered no damages by reason of the injunction, either in the sale of bonds, or expenses of removing it. He found, however, that $1,000 was a reasonable compensation to, counsel for services rendered in the hearing upon the return of the order to show cause. He also found that $200 was a reasonable compensation for the defendants’ counsel fees on the hearing before him. On a motion at special term to confirm such report, the court confirmed the report as to the damages claimed to have been suffered on the sale of the bonds, but disallowed it as to the other items, and fixed as the defendants’ damages the $1,000 counsel fee, and the counsel fees and expenses on the hearing before such referee. From such order, both defendants and the plaintiff appeal to this court.