Behre v. Anchor Ins.

297 F. 986 | 2d Cir. | 1924

ROGERS, Circuit Judge

(after stating the facts as above). The plaintiffs sought by their bill to enjoin the Anchor Insurance Company of New York from removing from the United States or otherwise-disposing of the sum of $213,000.08, which it is alleged it received from the Alien Property Custodian, but which the plaintiffs claim belongs to them. The injunction is one pendente lite. It appears that the defendant, who is enjoined, is engaged in the business of insurance, and, being a New York corporation, it is under the supervision of the'superintendent of insurance of the state of New York. Its affairs were carefully examined into by representatives'of that official' late in 1922, and the injunction was granted in May following. The report officially made to the superintendent of insurance as of December 31, 1922, shows that its assets at that time, not taking into consideration the fund of $213,000.08 herein involved, exceeded its liabilities by more than $1,300,000. It thus appears that this defendant, a few months before this injunction was issued, was far from being in an insolvent condition; and there is nothing'in the record to show that its condition changed for the worse between December 31, 1922, and May 16, 1923, when the injunction issued.

The supplemental bill contains no allegation of the defendant’s insolvency;' but it does contain an allegation that the plaintiffs will suffer irreparable injury if thé injunction is not issued. It alleges that the plaintiffs “believe and aver that the defendant intends to transmit the said fund abroad” to the Jakor Insurance Company of Moscow, Russia, so that the plaintiffs will be unable to follow or recover it, by which we understand that the plaintiffs mean that, if the fund were transmitted to Moscow, they would be unable to recover it; but it would not be necessary to follow the fund t’o Moscow. If the defendant is solvent, and wrongfully and with notice of the plaintiffs’ rights pays over the money to some one not entitled to receive it, the plaintiffs will be able to compel the defendant to pay over to the plaintiffs the moneys which belong to them, and it is impossible to see how in that event any irreparable damage has resulted.

If the money in the hands of this defendant belongs in fact to these plaintiffs, no one will deny that they have a remedy at law for its recovery. It is also true that equity sometimes interferes for the preservation of property which is the subject of litigation; but, when it does so, it is because such interposition is necessary for the protection of the property. Thus, for example, if the person in possession is insolvent, and there is consequent danger of the possible loss of the fund pending litigation, the injunction issues to preserve the status quo until the end of the litigation.

To warrant the "issuance of an injunction, the injurious act sought to be prevented must be suqh as to afford a reasonable ground for believing that injury will be done if no injunction is granted, and that it is not sought because of mere fear or apprehension. Jenny v. Crase, 1 Cranch, C. C. 443, Fed. Cas. No. 7,285; Reynolds v. Everett, 144 N. Y. 189, 39 N. E. 72; Buffalo v. Pocahontas, 85 Va. 222, 7 S. E. 238. Upon the facts disclosed in this record there is no reasonable ground for believing that, if these plaintiffs establish their right to the fund of $213,000.08, which they claim is theirs, they will have any trouble in obtaining payment of it. The facts disclosed do not show that any irreparable injury is immediately impending, and will be visited upon the plaintiffs before the case can be brought to a final hearing; and in the absence of such a showing a preliminary injunction is ordinarily not granted. Camunas v. New York & P. R. S. Co., 260 Fed. 40, 171 C. C. A. 76; State of Ohio v. Cox (D. C.) 257 Fed. 334; Love v. Atchison, Topeka, etc., R. Co., 185 Fed. 321, 107 C. C. A. 403; Milk Co. v. Baker (C. C.) 168 Fed. 111; Miller v. Mutual Reserve Fund Life Association (C. C.) 109 Fed. 278; Ahern v. Newton & B. St. Ry. Co. (C. C.) 105 Fed. 702; Ryan v. Seaboard, etc., R. Co. (C. C.) 89 Fed. 385; De Neufville v. New York & Northern Ry. Co. (C. C.) 84 FRd. 391; Zinsser v. Cooledge (C. C.) 17 Fed. 538; Fremont v. Merced Min. Co., 9 Fed. Cas. 772, No. 5,095; United States v. Duluth, 25 Fed. Cas. 923, No. 15,001.

The general rule is that equity does not interfere to restrain the payment of money, where there is a complete remedy at law, there being no allegation of the insolvency of the person, or, if such an allegation be made, it is shown to be untrue in fact. Dulaney v. Scudder, 94 Fed. 6, 36 C. C. A. 52; Lawson v. Virgin, 21 Ga. 356; Zellenkoff v. Collins, 23 Hun (N. Y.) 156; Rogers v. Marshall, 38 How. Pr. (N. Y.) 43; Brownston v. Cropper, 1 Litt. (Ky.) 173; Davis v. Fulton, 1 Overt. (Tenn.) 121. And a bank will not be enjoined from paying out money where it has such notice that payment would be at its .peril. Pettey v. Dunlap Hardware Co., 99 Ga. 300, 25 S. E. 697. And see Perry v. Thompson, 108 Ala. 586, 18 South. 524.

A mere allegation that an apprehended act will inflict irreparable injury is not enough to justify the issuance of an injunction. Facts must be alleged from which it can be reasonably inferred that such would be the result; and if no such facts are alleged, and this bill alleges none, the bill is fatally defective. Cruickshank v. Bidwell, 176 U. S. 73, 81, 20 Sup. Ct. 280, 44 L. Ed. 377. In this case the allegation of the bill is that the plaintiffs “believe and aver” that the defendant intends to transmit the fund abroad. In the equity courts allegations upon information and belief, unsupported by proof, are insufficient to sustain an injunction. 2 Foster’s Federal Practice, 1436; In re United Wireless Telegraph Co. (D. C.) 201 Fed. 445.

Equity rule 25, subd. 5, provides that:

“If special relief pending tiie suit be desired, the bill should be verified by the oath of the plaintiff, or some one having knowledge of the facts upon which such relief is asked.”

The supplemental bill in'this case is verified by the attorney for the plaintiffs upon the ground that the plaintiffs are not within the county where deponent has his office. There is no allegation anywhere in the bill that there is any other reason why the plaintiffs do not verify the bill, nor why some one having knowledge of the facts does not verify it. Most of the allegations of the bill purport to be made upon knowledge, although upon examination of these allegations it is apparent that they are of such a character that the attorney cannot have knowledge of them. Some of the allegations, however, purport to be made upon information and belief; but there is nothing to show why the attorney believes that the statements are true, other than the general allegation in the verification that the sources of his information and the grounds of his belief are conversations with the plaintiffs and contracts, letters, and correspondence which the attorney has examined. And it appears that the affidavit, in support of the motion for injunction, is also verified by the attorney It does not appear which of the allegations is made upon knowledge, and which upon information and belief. The source of his knowledge is left vague and indefinite. No one having knowledge of the facts upon which the relief is asked has verified any of the papers. See Scheuerle v. Onepiece Bifocal Lens Co. (D. C.) 241 Fed. 270, 273.

But if the complainants in their bill had set forth the necessary allegations, and had properly verified them, no injunction should have issued pendente lite; for the affidavit made by the president of the defendant company and submitted at the hearing upon the motion for the injunction was sufficient to prevent the issuance of such an injunction. His affidavit upon a motion of the character of this one was sufficient to overcome the equities of the bill. Where the equities of a bill are denied fully and explicitly under oath, a-court usually does not issue an injunction in limine, but allows the matter to await a final hearing. Société Anonyme Du Filtre Chamberland, etc., v. Consolidated Filters Co., Inc. (D. C.) 248 Fed. 358, 360; Photo-Drama Motion Picture Co. v. Social Uplift Film Corporation (D. C.) 213 Fed. 374; Owsley v. Yerkes (C. C.) 185 Fed. 686, 688; Woodside v. Tonopah & G. R. Co. (C. C.) 184 Fed. 358, 360.

It is true that the granting of a preliminary injunction lies within the discretion of the court. Buffington v. Harvey, 95 U. S. 99, 24 L. Ed. 381. The discretion must be exercised according to the well-known and established principles of the equity courts. The discretion with which the court is invested is not a freedom to act in any manner the court may arbitrarily determine. But it must exercise a sound discretion according to the recognized and well-established rules of equity. And there can be no doubt that, if the court clearly abuses its discretion, the appellate court can and should correct its error. Shea v. Nilima, 133 Fed. 209, 66 C. C. A. 263.

Order reversed.