Surety Savings & Loan Ass'n v. National Automobile & Casualty Insurance

Defendant appeals from a judgment awarding plaintiff damages on an undertaking executed by defendant as a condition to issuance of a preliminary injunction restraining a foreclosure sale instituted by plaintiff.

Plaintiff made a construction loan to Signal Development Company evidenced by a promissory note secured by a deed of trust on the real property on which apartment houses were to be built. Signal defaulted in payments on its promissory note and plaintiff instituted proceedings to effect a foreclosure sale under its deed of trust, the sale being set for August 6, 1964. On the latter date Signal brought an action seeking to enjoin the sale; obtained a restraining order enjoining such; and on August 14, 1964, obtained a preliminary injunction restraining the sale until November 14, 1964. Issuance of the preliminary injunction was conditioned upon posting an undertaking in the sum of $30,000. Defendant, on behalf of Signal, posted the undertaking in which it agreed to pay plaintiff such damages as the latter might sustain by reason of the preliminary injunction, if the court finally decided Signal was not entitled thereto. Thereafter the injunction was continued in…