1 P.2d 1019 | Cal. Ct. App. | 1931
The plaintiff, believing that the judgment in his favor was for an inadequate sum, appealed, presenting as the record on appeal the judgment-roll alone. From the findings of fact we learn that the plaintiff was the holder of a note executed by J.S. and Della Jones in the amount of $1385. A trust deed secured this note, the trust deed being, by its terms, subject to a prior mortgage, which secured an indebtedness of $2,500. The Joneses brought an action to have the note held by plaintiff canceled and to have the property relieved of the threat of the trust deed. While this action was pending the plaintiff directed that the property *436 covered by the trust deed be sold under its provisions, as the Joneses were delinquent in their payments. This move was countered by another suit on behalf of the Joneses, in which they secured a preliminary injunction prohibiting the sale under the trust deed, which was already advertised, the sale being suspended until the prior suit to cancel the note and trust deed could be decided. As a condition to the granting of this injunction the court required an undertaking in the sum of $1500. It is on this undertaking, executed by the defendant, that this action is based. In due time the action to set aside the note and trust deed was determined adversely to the Joneses, and a motion to dissolve the injunction, made by the plaintiff in this action, met with success. This suit to recover the damages suffered by the injunction followed.
Damages of two kinds were sought by the plaintiff. First, he asked for and obtained judgment for the attorney fees required to obtain the order dissolving the injunction. No question is before us touching this part of the judgment. In addition, he claimed some $1600, lost, he argued, because the property which secured his indebtedness depreciated in value while the prior encumbrance appreciated in amount, during the blight of the injunction, with the result that when sold the property failed, by the amount sought as damages, to realize for plaintiff the full debt due him. To this the trial court made answer by a finding that the plaintiff had not yet pursued the Joneses with a deficiency judgment. This, the defendant argues to us, is a good and sufficient answer. It urges, furthermore, that in executing the undertaking sued upon it contracted no liability whatever. We are of the opinion that a liability was created and that the plaintiff is entitled to a greater judgment.
[1] We have spoken of the issuance of a "preliminary injunction". This term we have employed in spite of the fact that the findings, which follow the pleadings in this regard, call it a "restraining order", and the undertaking terms it a "temporary restraining order". The nomenclature used does not determine its character (Neumann v. Moretti, (1905)
[3] The undertaking given was entitled in the injunction action and read, in part, in these words: "Whereas, the above-named plaintiffs . . . is about to apply for a temporary restraining order in said action, . . . Now, therefore, the Fidelity and Casualty Company of New York . . . in consideration of the premises and of the issuing of said temporary restraining order undertakes in the sum of fifteen hundred and no/100 ($1500.00) dollars and promises to the effect that in case said temporary restraining order shall issue, the said plaintiffswill pay to the said parties so enjoined such damages, not exceeding the sum of fifteen hundred and no/100 dollars as such parties may sustain by reason of said temporary restraining order if the said superior court finally decide that the said plaintiffs were not entitled thereto." The emphasis in the quotation is that placed by the defendant. The promise and undertaking is that the plaintiff will pay, the defendant points out, not that it will, and it, therefore, is under no legal obligation to pay. Its inspiration for this defense is San LuisObispo v. Ryal, (1917)
[4] Is it necessary that the plaintiff exhaust his remedies against the makers of the note before he can recover on the undertaking? This is the remaining question of importance in this action. There is no clear answer given in any case decided by an appellate court of this state so far as counsel's research and our search has revealed. We have reached the conclusion, however, that in so far as the delay caused by the injunction has reduced plaintiff's security below its power to satisfy, he has an immediate damage which the surety has undertaken to make good, and that the plaintiff *439 does not have to secure a deficiency judgment with execution returned unsatisfied before he can show that he has suffered damage and recover its amount.
[5] We have come to this conclusion, first because we are persuaded that injury to security which so affects it as to make it in whole or in part inadequate gives the creditor an immediate action for damages without first determining whether or not the debtor is insolvent. Oddly, the leading case is one where it appeared that the debtor was insolvent. This case is Van Pelt
v. McGraw, (1850)
An early case in this state can fairly be interpreted as supporting this principle. In Robinson v. Russell, (1864)
Directly to the point, counsel have cited no case and we have found none, holding that the surety is not to be held until all efforts to have the original debtor meet his obligations prove fruitless. There are, however, a number of cases holding the contrary: Kennedy's Administratrix v. Hammond Hall, (1852) 16 Mo. 341; Hunt v. Burton, (1856)
[6] There is no basis in the findings as they now appear by which the amount of damages can be determined. Following the language of the complaint, the findings declare that at the time of the injunction the property which secured the trust deed and mortgage "was worth and was of the reasonable value of $4200, or more". When the injunction was dissolved "said property was of the reasonable value and sold to the highest bidder . . . (for) the sum of $3200". If plaintiff suffered damage due to depreciation it would be measured by the difference between what he received and what he would have received at the sale which was enjoined. We do not have this latter, essential figure. [7] By "value" the first finding must be understood as meaning "market value" (Dean v. Hawes, (1916)
The judgment is reversed.
Houser, Acting P.J., and York, J., concurred.
A petition for a rehearing of this cause was denied by the District Court of Appeal on July 24, 1931. *442