33 Vt. 486 | Vt. | 1860
The questions in this case arose upon the report of special masters, appointed by the court of chancery to ascertain the damages sustained by the defendants in consequence of the issuing of an injunction by said court, restricting the defendants from the use and occupation of the "Western Vermont Railroad.
The masters have found and reported that Knapp & Briggs have sustained' damage to a specified amount, and that the Troy & Boston Company have also sustained damage to another amount, and from different causes. The Chancellor decreed the payment of these several sums to the several parties, according to such report.
It is now insisted that the decree of the Chancellor was erro
In determining this question, we will look first at the bond itself. The bond is taken as a part of the proceedings in this suit. It is made with the names of the parties complainants, and parties defendants, and in the bond reference is made to them as such. It is taken to “ the said Shepherd Knapp & George Briggs, and the said Troy & Boston Railroad Company,” as the defendants in said suit, and although this bond on its face, according to the well-settled rule of construction, would probably be construed to be a joint bond, still the manner in which the obligees are described, and spoken of, in the bond, in connection with the expressed purpose, for which it was taken, would seem to indicate an intention to take the bond to the defendants in the same separate character they occupied in the bill, and to indemnify them for such damages as they should in such character sustain. The bond upon its face is not expressed to be either a joint, or a several bond; and the rule we think is well settled at the present day, that in such case a bond will be construed to be either a joint, or a several bond, according to the interest of the parties to be affected by it; certainly in a court of equity.
Parsons, in his work on contracts, on page fifteen, in a note, where all the authorities are brought together and examined, lays down the following as the result, upon the point now under consideration : “That by express words clearly indicative of the intention, a covenant may be joint, or joint and several, to or with the covenantors, or covenantees, notwithstanding the interests are several. So they may be several, though the interests are joint. But the implication, or construction of law, where the words are ambiguous, or are left to the interpretation of law, will be, that the words have an import corresponding to the
That the interest of the defendants, in the damages that ensued in consequence of the injunction are several, is not questioned ; they are not only presented as several, acted upon and reported by the master as several, but the interests they represent, and the positions they occupy in relation to the case, as it is set forth in the orator’s bill, is such, that any damage that may be occasioned to them by the injunction, must necessarily be several, as a joint injury could not well accrue. But this objection we think does not apply in this case. The- present proceedings are not based upon the bond, as is claimed by the orators. It is true the bond provides that the damages may be ascertained by reference to a master, if the chancellor so direct, but this provision in the bond is not necessary to confer upon the chancellor the power to ascertain the damages in that way. The statute confers the power in a certain class of cases. The rules in chancery, which were made in pursuance of the requirements of the statute, authorize this mode of proceeding in all other cases. In the absence of all statutory provisions or rules on the subject, we apprehend the court of chancery possesses full power to make such a reference, and thus to ascertain the damages that maybe occasioned by any injunction, issued by such court, when such damages are by the order of the court, to be paid by the party praying for the injunction. The court of chancery may, in their discretion, proceed to ascertain the damages by any other method that they may think best adapted to the accomplishment of such object. This we think is in accordance with the practice in this state, and in England. It was formerly the practice in England, and perhaps is at the present time, to order the party on whose application an injunction is granted, when the court require the damages to he paid, if any are sustained, to order such party to pay a sum of money into court, out of which the damages will be paid if in the course of the subsequent proceedings the orator shall be adjudged liable therefor, but in such case before payment can be made out of such fund,
If the party takes the injunction he takes it subject to such condition, and if a bond is given it stands practically as a security for a compliance with the order. The obligation of the party is not based upon the bond alone, but upon the order of the chancellor. And when the liability of the party to pay damages is fixed, and the amount ascertained, the court will decree its payment by the party, and enforce that decree, as it enforces all other decrees under our statute. If the money is not paid, resort may be had to the bond. The proceedings in the chancery suit are of course only against the parties to it, and affect the sureties in the bond only as they fix the liability of the principal, and thus determine the amount to be recovered on the bond. This seems to be the only object to be attained by a reference to a master, either under the rule, the bond, or the general powers of the court. If the court have power to make the payment of damages a condition on w'hich the injunction issues, and to require a bond to secure its performance, it must of necessity have the power to determine the damages, and decree payment, as between the parties to the suit, and the party who takes the injunction, takes it subject thereto, whether the authority is found in the general power of the court, or in its established rules. The insertion of a stipulation in the bond on the subject, gives no additional power to the court as between the parties to the suit. Its effect upon the sureties may be to estop them from questioning the result, when the bond is resorted to. The case of The Livingston & Ohio R. R. Co. v. Applegate et al., 8 Dana 289, to which we have been referred by the counsel for the orators, is a case where the chancellor granted the injunction without making any order for the payment of damages, or
In the case of Garcie v. Sheldon, 3 Barbour 232, the court seem to have taken a different view of the law of the subject, from that taken by this court. There the court held, that the court of chancery has no jurisdiction over the question of damages, either as to ascertaining its amount, or enforcing payment, as between the parties to the suit, except such as is conferred by the terms of the bond itself, and that unless the bond provides for a reference the court has no power to order one.
.We think the jurisdiction of the court of chancery over the subject is found in its power to make the payment of damages the condition upon which the injunction is taken by the party, with the necessary power resulting therefrom, to enforce its order by proceeding to ascertain the damages and decree their payment by the party.
There is a wide distinction between a proceeding to enforce the order of the court upon the party to the suit, over whom it has jurisdiction, and who has availed himself of the process of the court under such order, and a proceeding in the same court to enforce the bond both against the principal and the sureties. Of the sureties the court could have no jurisdiction. To enforce the bond as such, proceedings must be instituted at law, upon the bond itself. The case of Merrifield v. Jones, 2 Curtis S. C., was an application to the court to enforce the payment of the damages
The case of Bean v. Heath, 12 Howard 168, was an action on an injunction bond, given upon the issuing of an injunction by the circuit court of the United States in Louisiana. The court ordered the bond to be taken conditioned “to answer all damages which the defendant might sustain in consequence of said injunction.” The condition of the bond taken was to pay all such damages as the party might recover in the suit, referring to a proceeding peculiar to the state laws of Louisiana. The court held that the bond could not be enforced, as its condition was different from that required by the order, and different from that warranted by the law governing the United States courts, even though it might have been warranted by the state laws of Louisiana. The judge in giving the opinion says, a court proceeding according to the rules of equity cannot give a judgment against the obligors in an injunction bond when it dissolves the injunction. It merely orders the dissolution, leaving the obligee to proceed at law against the sureties. No question was before the court in either of those cases like the one now before us, and no principle recognized at variance with the view we have taken.
Again it is urged that the agreement entered into by the parties that the chancellor might make a decree pro forma in favor of the orators precludes the defendants’ claim for damages, on the ground that from that time forward the injunction and the order appointing a receiver were continued under an agreement to that effect, and that such injury as resulted therefrom was caused by the agreement of the parties, and does not come within the condition of the bond or order.
The only effect of an agreement of this character is to waive a hearing before the chancellor, and allow a pro forma decree to be entered in favor of one party without a trial. Its sole object would seem to be to enable the parties to take the case to the supreme court by appeal, without incurring the expense and
A pro forma decree, made for the sole purpose of being appealed from and the case thereby brought to a speedy hearing, we think cannot be regarded as such a departure from the.regu'lar proceedings in a cause as to affect the rights or liabilities of any person connected with the suit, either as principals or sureties.
It is further claimed that the decree of the chancellor was erroneous, for the reason that he decreed the payment by the orators of a much larger sum as damages than the penalty of the bond. If this proceeding was for the purpose of enforcing the bond as such, and the only obligation resting on the parties was that created by the bond, this objection would be unanswerable. But the order of the chancellor, and not the bond is the true basis of the liability of the orators, and of this proceeding. And the extent of their liability is to be determined by the character and extent of the order. What then was the order of the chancellor in this respect, on the condition of which the injunction was granted ? There was no written order, and there is nothing in the case that shows definitely the extent of such order. We only know that such an order was made, from the fact that a bond was taken to secure a compliance with it. That it was not intended as a mere formal compliance with the rule of chancery, is shown by the fact that a bond for five hundred dollars would have been sufficient to answer that purpose.
Personally I should have arrived at a different conclusion, believing it to have been the duty of the chancellor, if he thought the case required an order, to make one that should cover all the damages the defendants might sustain, and believing such to have been his intention, I think the fair presumption is, that he in fact did what it was his duty and intention to do, and that no contrary inference should be drawn from the fact that he fixed the penalty of the bond at a less sum. It was necessary that some definite sum should be inserted as the ^penalty of the bond. The extent of the damages could not then be known ; it was all conjecture, and although the chancellor undoubtedly intended to fix upon a sufficient sum, I cannot feel that in so doing he intended to limit the operation and effect of the order that the orators should pay the damages, and to fix the maximum of their liability. It seems to me that the condition of the bond, which is that the orators shall pay such damages as the defendants may sustain by reason of said injunction, furnishes a much better criterion by which to judge of the extent of the order, than the penalty.
This view is in strict accordance with the equity of the ease, The orators having obtained the injunction on condition that they would pay the damages, there seems to me to be no just
The decree of the chancellor, being erroneous in this respect, must be reversed.
I am requested by Judge Poland to say that his view of this question is the same as my own.
The right of the defendants Knapp and Briggs, as trustees, to the rent reserved in the lease to the Troy & Boston Company during the period that the possession of the Western Vermont Railroad was withheld from the said company under the injunction of the chancellor, is not questioned, nor their right to seven per cent, interest thereon as computed by the masters. But it is urged on the part of the orators that they have no right to claim it in this proceeding as damages resulting from the injunction, for the reason that their claim upon the Troy & Boston Company for such rent, and the liability of the Troy & Boston Company to pay the same to them, were in no manner prejudiced or affected by such proceeding.
If the proceeding had been instituted, the injunction obtained, and the possession of the road taken from the company by a third party strictly speaking; a party who had no connection with the said trustees as such, and no interest in the lease or the rents reserved therein ; it might then be said that such an interference would not affect the right of the said trustees to demand and collect the rent, or the liability of the company to pay it, but that the company must pay the stipulated rent according to the terms of the lease, and look to the party whos had thus encroached upon their rights for their remedy. But we think the orators in this bill stand in no such relation to the defendants. The trustees held the road for the sole benefit of the bondholders. The equitable interest of the Western Vermont Railroad Company under the mortgage had been foreclosed, and the entire equitable interest in the road had become vested in the bondholders, and the entire legal estate was vested in Knapp and Briggs, who held it solely as trustees and for the benefit of such bondholders. When Knapp and Briggs executed the lease
When these same bondholders, or a large part of them, in behalf of themselves and as many others as should choose to join with them, bring their bill, claiming that the trustees had no authority to execute such lease, and that the Troy & Boston Railroad Company acquired no right to the possession of the road under it, and obtained thereon an injunction divesting said company of the possession, can it be said these were the acts of strangers ? and that the liability of the company to pay rent for .the use of the property so taken from them, for the benefit of the same bondholders, is not affected thereby ? We think not most clearly. The effect of such proceedings upon the liability of the Troy & Boston Company, so far as this question is concerned, must be the same as though they had been dispossessed by the direct act or procurement of Knapp and Briggs themselves.. Such being the case the company were released from all obligation to pay the rent, and Knapp and Briggs as trustees have sustained damage to the amount thereof by reason of the injunction, and that amount, as found by the masters, with the seven per cent, interest thereon must be allowed to them, (whole amount sixty-three thousand ninety-seven dollars and sixty-two cents.)
The second item in the trustees’ claim is for the amount paid counsel for resisting the granting of 'the injunction. This sum was paid for services that were rendered prior to the granting of the injunction, and cannot in any sense be said to result from the injunction itself. The result would have been the same if the injunction had been denied. The damages that are caused by the injunction must necessarily follow it, and cannot precede it. The damages that are caused solely by the application for the injunction, cannot be taken into the account in determining the amount of damages that are caused by it.
This item we think should be disallowed.
Item No. 1 in the list of claims presented by the Troy & Boston Railroad Company consist of the amount paid by the company for counsel fees in resisting the granting of the injunction, and
Item No. 2 we think was properly disallowed by the masters.
Item No. 3 was allowed in part. This the orators insist was erroneous. First, for the reason, that no damage to the defendants could be occasioned by the injunction after the appointment of a receiver ; that when the chancellor appointed a receiver and put the road into his possession, such possession is as a matter of law, the possession of the party that in the course of the proceeding shall finally be adjudged entitled to it, and as the Troy & Boston Railroad Company have been adjudged in this case entitled to the possession of the road, the possession of the receiver is to be regarded as their possession, and they are, in law, to be treated as in the possession of the road from the beginning, and operating the road for their own benefit.
If this objection be well taken, it goes to the foundation of the whole claim for damages on the part of all the defendants. The granting of the injunction and the appointment of the receiver were so nearly at the same4ime as to be practically simultaneous, no appreciable injury could have intervened, and if the Troy & Boston Railroad Company have not been dispossessed, their liability to pay the rent has not been affected, or the right of the trustees .to demand and collect it impaired, consequently there can be no claim for damages on the part of either.
As a general principle, it is undoubtedly true that when a receiver is appointed he is appointed for the benefit of all parties interested, and his possession will be treated as the possession of
But we apprehend this rule has never been carried to the extent of holding that a court of chancery will, by a resort to a fiction, treat a party as in the actual possession of that which by their own injunction they have taken from him and placed in the possession of another, and that too for the sole purpose of compelling him to submit to a great and manifest injustice, especially in a case like the present where the injunction issued under an order that the orators should pay the damages resulting from it, and execute a bond with sureties in the sum of thirty thousand dollars to secure its performance, and when the injunction itself rendered the appointment of a receiver indispensable to avoid ruin to the interests of all parties. The appointment was immediately made, and if the doctrine contended for is correct, the chancellor thereby, almost in the same breath that the orders were made, entirely defeated and destroyed the effect and beneficial purposes contemplated to result from them. The authorities cited by the counsel for the orators do not carry the doctrine to the extent here claimed, and nothing but an array of authority that is irresistible would induce us to adopt a principle that we regard as so utterly at variance with the principles of equity and justice.
This view disposes of the other branch of this objection, viz : that the defendants cannot claim damages resulting from the acts of the receiver. The defendants, the Troy & Boston Company, claim damages caused by the injunction. The appointment of a receiver may have lessened and probably did lessen the damages, and it is not claimed that it, or any act of the receiver increased them.
Secondly, it is claimed that the masters erred in. allowing this
Thirdly. It is claimed that this item was found and allowed by the masters on inadmissible evidence. The masters admitted evidence of the income of the road during a period immediately preceding the issuing of the injunction, and also for a period immediately succeeding its dissolution, for the purpose of showing what it would have been worth tp the Troy & Boston Company during the continuance of the injunction, if they had been permitted to retain it. The admission of this evidence we think was correct. The road having been taken from the claimant, proof of its income before and after would strongly tend to show what it would have been in the same hands during the intervening period. Proof of this character is not secondaryit is circum
The opinion of witnesses acquainted with the business of the road and the expense of operating it as to the value of its use to the Troy & Boston Company during the period it was in the receiver’s hands, was also received under objection. As a general rule the opinion of a witness is not admissible, but to this rule there are many exceptions. The value of property as a general rule can be proved only by the opinion of witnesses ; so too of the value of the use of property. Its value and the value of its use often depends much upon its location, and the circumstances under which it is or may be used. The use of property may be of much greater value to one person than to another, owing to the skill or facilities for its use possessed by the one that the other has not. To determine the value of the use of a piece of property to a particular person under the circumstances of a given case, often requires the exercise of much skill and judgment that can be acquired only by experience and familiarity with the subject matter, such as ordinary triers may not and probably would not possess. In such a case the opinion of witnesses, competent to form such opinion, would be absolutely necessary to lead the triers to a just result, Royce, J., in Clifford v. Richardson, 18 Vt. 620, says, “ It often happens that the triers are not qualified from experience in the ordinary affairs of life, duly to appreciate all the material facts when proved. Under these circumstances the opinion of witnesses must of necessity be received. It is true that except in eases involving an estimate of the value of property, or of its use, the instances of admitting such evidence on the latter ground are said to be limited to matters of professional science, art or skill. But this restriction has not usually been applied in- a rigid and narrow sense and he then quotes from Starkie the following: “In general when the inference is one of skill and judgment, the opinion of experienced persons is admissible ; for by such means only can the jury be enabled to form a correct conclusion. This evidence,.we think,
It is further urged that the masters, in determining the amount to be allowed under claim No. 3, have taken into consideration the claims specified as No. 2, 4 and 9, although they disallowed those items, and that so far as the amount allowed under No. 3 has been increased thereby, it is erroneous. If the report of the masters sustains this position there is certainly force in it. But we think such is not the fair inference to be drawn from the report. The masters say they disallowed No. 2 for reasons that we think are satisfactory. But they say that in fixing the damages under claim No. 3, they took into consideration the fact that the use of the road is much less expensive in warm than in cold weather, and that the road was taken from the Troy & Boston Company at the time when it was becoming most profitable to them. When the fact is established that it is more profitable operating this road in warm weather than in cold, it is evident that the masters could not properly determine the damages sustained by the company for the period specified, without looking at the relative proportions of the cold and warm weather during that period, as the damage would necessarily be less if they were kept out of the possession of the road two winters and one summer, than it would be if they were kept out two summers and one winter. And all the masters did in connection with this subject was to look at it in this light, and in so doing they were clearly right. No. 9 was disallowed absolutely by the masters for the reasons stated in reference to No. 2. No. 4 was also disallowed, but the masters say that in determining the damages in relation to No. 3, they had reference to the difference in the rent reserved in the lease for the first year, and that for the subsequent years. As the road was taken from the Troy & Boston Company during the first year of the lease, and the masters were ascertaining the damages over the amount of the rent, they must necessarily have acted with reference to the rent reserved during the whole period.
Again it is said that if the Troy & Boston Company have sustained damage, it was the result of their own fault in not enter
No. 5 is a claim for the loss sustained on the sale of cars purchased to be used on the Western Vermont Railroad, and sold after the injunction. After the injunction the Troy & Boston Company had no use for this property, and must either sell it or keep it on hand subject to depreciation, loss of interest and storage, to await the delay and uncertainty of the termination of the controversy. To sell the property was undoubtedly the best course. And this case does not come within the rule, applicable to cases where there has been a sale ofproperty and a refusal on the part of the vendee to take and pay for it, which requires notice of a re-sale in order to make the vendee liable for the difference. Here the orators had no interest in the cars and were under no obligation to take them at any price, and they are not now sought to be made chargeable for any violation of contract or neglect of any duty relating to such property. The Troy & Boston Company have sustained damage from the purchase and sale of this property, and as there is no pretense that the company was guilty of any improper conduct or neglect in the purchase or sale of this property, and its sale was rendered necessary in consequence of the injunction, it would seem that the orators should he responsible for such damages as fairly result from it. And the fact that the company stated the sum in their specification less than the masters found it to be, furnishes no reason for our changing it; that fact, doubtless, had its due
No. 6. This claim, We think, should be disallowed.- The loss of the station house by fire is a loss that might as well have occurred in the hands of the Troy & Boston Company as in that of the receiver, and is an injury that property oí this description is always subject to in the hands of any party, and in the absence of anything to fix neglect upon the receiver or his agent, or in fact on any person, this injury cannot be said to result from the injunction.
No. 7 is for the cost and expense of taking the inventory at the time the personal property was surrendered to the receiver, and also for the same when it was returned by the receiver. The Troy & Boston Company took the personal property under the lease, and claimed that it was transferred to them by the lease, and covered by the order of the court putting the road into the hands of the receiver, they accordingly left the property on the road, taking an inventory of it, and it was taken by the receiver, and used upon the road. After the injunction was dissolved and the road restored to the Troy & Boston Company, the receiver, under the order of the chancellor also returned the personal property on to the road from whence he took it. Independently of any question as to the title of this property, there can be no question that it was necessary on each of said transfers that an inventory and valuation of the property should be made to secure the rights of all parties and avoid controversy. This necessity was caused by the injunction. The property was in the possession of the Troy & Boston Company. It did not belong to them. Whether it belonged to the trustees, and was covered by their lease, or to other parties, was a question ; as they understood it they had the right to it under the lease, and surrendered it under the order, but in either event as they in good faith gave it up and did no more than to take a necessary precaution to protect themselves and the owner, we think they should be allowed for the expense and cost of so doing, both when they gave it up, and took it back. And this too without ■reference to the question as to who shall ultimately be adjudged
No. 8 is a claim for the depreciation of the value of such personal property from the time it was given up until it was returned by the receiver. This claim we think should be disallowed. There is nothing in the report that shows the cause of such depreciation. It may have been from mere lapse of time. It may have been the same in the hands of the Troy & Boston Company. There is certainly nothing in the report to show that it was the necessary result of the injunction. The report does show that it was kept in repair by the receiver, and no fault in respect to it is charged upon him.
No. 10. Expense of removing wood from the line of the Western Vermont Road, that the Troy & Boston Company had placed there to be used upon the Troy & Boston Road. The masters had found that the company sustained damage in this respect to the amount of four hundred dollars, in consequence of the injunction ; that the company had to expend this sum to get the wood on to their road so as to avail themselves of it, for the purpose for which it was purchased, more than it would have cost them, if they had retained possession of the Western Vermont Road. Upon the facts reported and the finding of the masters thereon we think this sum should be allowed.
No. 14 stands upon much the same grounds as No. 10, and we think should be allowed at the sum reported by the masters for the same reason. These sums, in fact, constitute a part of the estimated net income of the road, and might have been considered in that connection.
Nos. 11 and 12 were disallowed by the masters for want of sufficient proof.
No. 13. Of this claim the masters have allowed the sum of five thousand two hundred and sixty-eight dollars as caused by the injunction from the wear and decay of the iron, ties and bridges during the period it was in the hands of the receiver, and over the repairs made by him. It is apparent from the language of the report, that the masters found this depreciation or want of repair to be of such a character that the Troy & Boston Company would be compelled to remedy the difficulty by bringing the
This we think is the fair construction to be put upon the report. Upon no other ground could the masters have found that the Troy & Boston Company had thereby sustained damages to this amount, by reason of the injunction.
This sum we think should be allowed as found by the masters.
No. 15 was disallowed by the masters for want of proof.
No. 16 is disposed of by allowing it to the trustees.
No. 17 is for loss sustained by the company in consequence of the purchase of an engine for the use of the Western Vermont Eailroad, but which after the injunction they had no use for, until after the injunction was dissolved. The masters have found that the company sustained damage from this cause to the amount of three hundred and ninety-five dollars and thirty-three cents.
From the facts reported we think the masters were justified in so finding, and that the same ought to be allowed.
The result is that the trustees Knapp and Briggs are allowed damages, sustained in consequence of the injunction, to the amount of #63,097 86.
On Item No. 3,..........................$9,137 50
“ “ No. 5,........................... 327 97
“ “ No. 7,........................... 224 97
“ “ No. 10,.......................... 430 00
“ “ No. 13,......................... 5,763 10
“ “ No. 14,........................... 1,075 00
“ “ No. 17,........................... 424 98
$17,383 52
These several items include interest to the first of April, 1860.
The above allowances are subject to the result of the settlement of the accounts of the receiver, and may be affected thereby.
The decree of the chancellor is reversed and the case remanded with direction that the chancellor proceed to ascertain the amount in the hands of the receiver, if any thing, that is properly applicable to the extinguishment of the defendants’ claims, and to have the application made, and then by decree to carry into effect the principles and conclusions herein before enunciated.
The view taken of the case naturally suggests several questions as to the manner in which the sum for which the orators are adjudged liable shall be apportioned between the claimants, and also as to the disposition that shall be made of any amount that maybe decreed to the trustees, as between those bondholders that have instituted, aided or favored this suit, and those that have sustained the trustees in the course which they took in the matter, &c. These questions have been alluded to, but were not fully discussed in the argument, and it is not necessary to pass upon them here. They will be duly considered by the chancellor in his final decree.
