Brown v. Easton , 30 N.J. Eq. 725 ( 1879 )

Dixon, J.

After the decision of this court, in N. Y. & Long Branch R. R. v. Dennis, 11 Vr. 340 (to the effect that an injunction bond, conditioned to pay damages if it should be determined that the complainants were not equitably entitled to the restraining order obtained, was forfeited by a decree dissolving the order and dismissing the bill), the defendants in that cause presented to the chancellor a petition for the rescinding of an order, granted on the opinion of the vice-chancellor (see Easton v. N. Y. 7 Long Branch R. R., 11 C. E. Gr. 359), by which it was directed that the bond should be delivered to the obligees (the appellants here) for prosecution. The petition alleged, as the reasons for such rescission, that the order was made on the assumption that the court of chancery had no jurisdiction over the sureties of the bond, the question of their liability belonging exclusively to the common law courts, and it was necessary that the obligees should be allowed the privilege of suing upon the bond in a court of law; whereas, it was alleged, the chancellor had j urisdiction over the liability of the obligors, and this court had decided that the petitioners were entitled to the exercise of the chancellor’s discretion as to whether such order should be made or not.

Upon this petition, the vice-chancellor held that, before making the order for delivery of the bond, he ought to have passed upon the preliminary question, whether any considerations existed rendering it inequitable for the obligees to seek reparation in a court of law for the injuries suffered in consequence of the injunction; and, because he had not considered that question, he absolutely and without terms rescinded his original order, and directed the return of the bond to the files of the court of chancery.

From this order the appeal is taken.

It is clear that, without the order for the delivery of the bond, the obligees would be unable to maintain any action on that instrument. Before granting his injunction, the chancellor had required, not that the bond should be delivered to the parties restrained, but that it should be filed with his clerk, in escrow, as it were, to be used by him for indemnifying those who might be damaged by his injunction. Whatever equitable claims to indemnity those persons may have had, they acquired no legal rights in this obligation until the chancellor, under his order, actually or constructively delivered it to them. It is equally clear, that the chancellor had the right to make such a delivery, for that was the very purpose of the escrow.

On the delivery, therefore, the right of the obligees became a legal one, and justified the suit at law, which they instituted for the enforcement of the obligation. But this right was not absolute; it was subject to such conditions as attached to the order by which it was authorized. One of these conditions was, that, for good cause and on reasonable terms, the order might be changed or discharged. Every judgment or decree is, for a time, at least, thus subject to rescission or modification, if it appears to be such as should not have been rendered; and where, as here, an order has been made without considering all the questions which the complaining party was entitled to have determined, the discretion of a court of equity should be liberally exercised in favor of .a review. Nothing has transpired in this cause so ■conclusive of the rights of parties as to make such review either unjust or impracticable.

On the other hand, the order for delivery being one which the court had power to make, it should stand until it becomes apparent that a full consideration of the matters involved would have led to a different result. It is not enough to show that the court erred in its method of reaching a conclusion; the conclusion itself must be shown to be wrong. And just here is the impropriety of the order now under review: When, in the original cause wherein the bond was given, it was adjudged that the injunction was inequitable, the obligees became entitled to have the bond put in force for their indemnity, unless some special equities justified a denial of their claim. Whether the chancellor ■could himself have enforced the obligation need not now be decided, for having, after hearing the parties, delivered the bond for prosecution at law, that step, being merely a choice of forums, ought not to be retraced, unless special equities are shown. But the fact that hitherto the court has declined to consider whether such equities exist, does not indicate that a full examination would bring them to light. Neither in the petition presented, nor in the. reasons given for the judgment below, are any grounds stated on which a rescission of the order for delivery can be justly based.

In my judgment, therefore, ' the order appealed from should be reversed, with costs, save that, to the extent of staying the suit at law until the respondents shall have reasonable opportunity for presenting equitable grounds for the rescission, on reasonable terms, of the order for delivery, it may stand.

Decree unanimously reversed.