City of Yonkers v. Federal Sugar Refining Co.

177 A.D. 728, 164 N.Y.S. 516, 1917 N.Y. App. Div. LEXIS 5764

• Court: Appellate Division of the Supreme Court of the State of New York
• Decided: April 13, 1917
• Status: Published

Opinion

Putnam, J. :

Where the court stops a trade, or, as in this case, requires an immediate change of the fuel that it was using, plainly the difference of rental value would not measure the resulting loss. Here there is ample proof of the effect of hard coal in defendant’s furnaces. The steam pressure fell so that engines had at times to be shut down so as to let the steam rise to a working pressure. The full force of men had still to be kept, since more efforts became necessary to keep the sugar moving, as it tended to be clogged from the fall of temperature and reduction of steam power. At that season the weekly output was 7.000. 000 to 8,000,000 pounds. For the two weeks affected the estimated normal production was, therefore, taken as 15.000. 000 pounds; the actual amount produced was 7,734,422 pounds; deficiency in production, 7,265,578 pounds.

On this diminished output defendant’s testimony showed an increased cost and consequent loss of average profits of $17,765.79, making as the total business loss $34,578. At this time the average net profit in refining (.24452 cents per 100 pounds) if applied to 15,000,000 pounds, the normal two weeks’ output at that season, would be $36,678. Yet with an actual production of fifty-one and one-half per cent of its average (although no doubt attended with difficulty and interruption), the defendant recovers from this change of fuel $34,578.21 or ninety-four per cent of its maximum two weeks’ profits. As the referee pursued a proper method, and we have not before us all the detailed factors of this computation, and taking also into consideration that a loss of steam power would vitally disorganize the processes of a refinery, we cannot reject this aggregate computation, which, based on the nine working days involved, figures an average daily loss of over $3,800.

The findings of the trial referee as to the nuisance due to the defendant’s smoke, though not discussed on the appeals, necessarily fell with the reversal of the judgment. The court has determined that, on the facts shown, the city of Yonkers had not the legal standing to maintain this suit. Hence we cannot regard these findings, however they may have been supported, as establishing that defendant’s consumption of soft coal outlawed it from recovering the damage for stoppage of its plant, or the incidental damage suffered while under restraint. One may not recover for profits of an illegal business. (Kane v. Johnston, 9 Bosw. 154,. 157.) Unless, however, the business or traffic were clearly unlawful, the party who has obtained an injunctive restraint cannot urge the nature of the business to relieve him from damages. As Judge Rapallo said: “ Whether in fact the proceedings restrained were or were not rightfully conducted he was not in a position to try, or to compel the defendant to try, upon the reference as to damages.” (Andrews v. Glenville Woolen Co., 50 N. Y. 282, 287.)

The final outcome of this unfortunate litigation is a disclosure of serious injury by deposit of soot and soft coal products to many residents of the vicinage, but no legal damage to the public buildings, streets or parks of Yonkers. Plainly the city (which under section 1990 of the Code of Civil Procedure is answerable like a surety on an injunction bond) cannot, against this clear liability, attempt to offset the injury and discomfort to individuals whom it does not here represent.

An ancient doctrine of equity is to aid the diligent. Defendant received notice to appear and to say what it had to say against the issuance of this injunction. The notice was served in the period fixed by the justice. Yet defendant allowed the hearing to go by default. Defendant’s president did not receive the papers until eleven o’clock on the return day. Even then a message by telephone to the clerk of the court would no doubt have been heeded. Although it was obvious that an injunction had been granted, defendant still appears to have taken no preventive steps until the order was 'served on September fourth, a full week after service of the order to show cause. Beyond arranging to hold off its effect till hard coal came, nothing appears to have been done for another week, when opposing affidavits were prepared. The dissolution of the injunction so readily arranged on September seventeenth emphasizes the previous inaction. Here was an industrial plant employing 850 men brought near to a standstill. Diligence of the party enjoined is to be in proportion to the exigency. [Crounse v. Syracuse, C. & N. Y. R. R. Co., 32 .) It appears that besides failing to heed the order to show cause, or to act after its return, the defendant, owing to the absence of its regular counsel, let matters go until nearly twelve days after it must have had knowledge of this injunction. The allowance of damages is itself a matter of equity. (Russell v. Farley, 105 U. S. 433.) In such circumstances, I think defendant should not have the full damages as assessed for this entire period. I advise to reduce the business damage to ■$20,000.

We have also to look at the allowances to defendant’s counsel. In some jurisdictions they would be reduced. (Cook v. Chapman, 41 N. J. Eq. 152.) Here the fee of $2,750 is limited to the proceedings up to September seventeenth, and does not embrace the trial or the appeals. In view of the threatened tie-up of a corporation with a capital of $10,000,000, and a monthly payroll of $60,000 or $70,000, we are not prepared to pronounce this allowance of $2,750 as excessive.

When the suit started, the counsel who afterwards had the injunction dissolved was absent in New Hampshire. But a defendant, when it is called on to act with promptness, cannot safely wait or depend on the return of an absent adviser in such a crisis.

I advise that the order be modified so as to lessen the recovery for trade damages to $20,000, but with the other allowances and costs as already ordered; that as thus modified the order be affirmed, without costs of this appeal.

Jenks, P. J., Thomas and Stapleton, JJ., concurred. Carr, J., not voting.

Order modified by reducing the business damages to $20,000, with counsel fees and costs, and as so modified affirmed, without costs of this appeal.