Page images
PDF
EPUB

sale in the usual form was issued to the city for said sum of $1,324.90, with cost of sale; that all said taxes remained unpaid, except said general tax, which had been redeemed; that the city treasurer still held the sale certificate; that certificate No. 123 was the joint property of the defendants Fass and Niemann, who held and owned it; that certificates Nos. 28 and 57 had become the property of the plaintiff, who held and owned the same, and that there was due to the plaintiff thereon the sums therein named, respectively, with interest thereon at 25 per cent. per annum from January 27, 1879; that at the time the certificates were issued the lot was not worth to exceed $250, and was never worth to exceed $700; that after certificate No. 123 was issued to Niemann, he, for the benefit of himself and Fass, acquired the title, and became and still was the owner, in fee of the lot, and that Fass and Niemann owned the lot; that by reason of the lot being worth so much less than the certificate owned by Fass and Niemann, and also so much less than the certificates owned by the plaintiff, the latter could realize nothing, and would lose money by surrendering his certificates to the city treasurer in the usual way and pay the amount of certificate No. 123, and taking from the city a transfer to him of said sale certificate, and then enforce the collection thereof in the usual way; that although requested so to do Fass and Niemann had, before the commencement of this action, declined to make any adjustment, settlement, or compromise of the matter with the plaintiff, or join with him and surrender their several certificates to the city treasurer and take up said sale certificate, and then enforce the collection thereof in the usual way; that after the plaintiff had obtained his several certificates he was compelled, in order to protect the same, to redeem other subsequent general, city, and county taxes to the amount, in the aggregate, of $18.37; that the city holds no certificate of sale of the lot, or any part thereof, for taxes or assessments for any year previous to 1878; that the several tax sales mentioned were protected by the statutory bar given by section 3, c. 309, Laws 1880. The complaint then, in effect, prays judgment determining the amount due for principal and interest to the plaintiff on said certificates numbered 28 and 57, and to Fass and Niemann on said certificate No. 123; and that the lot, or so much as necessary, be sold by the sheriff, as upon foreclosure of a mortgage, and that the moneys arising from such sale, and properly applicable thereto, be applied in paying the costs of the action and sale, the redemption of subsequent taxes and tax liens by the plaintiff, and so much of the balance as necessary be applied in payment of the amount due on the three public works certificates, or in case of an insufficiency, then that the same be applied ratably thereon; that the sale be not made until a year after judgment, without consent of the parties; that the sheriff's deed be given to the purchaser upon the sale; that the parties to the action, and all persons claiming under them, be barred and foreclosed of all right, title, and equity of redemption in the deed; that the sale certificate be brought into court and canceled; and for general relief.

Jenkins, Winkler & Smith, and C. H. Van Alslein, for respondent, Frank M. Hoyt. Johnson, Rielbrock & Halsey, for appellants, Frank Fass and others.

CASSODAY, J. Each of the certificates issued by the board of public works were liens upon the lot, and drew interest at the rate of 25 per cent. per annum from the time when the lot was sold by the city treasurer on account of such certificate liens, and were transferrable by indorsement. Section 13, subc. 7, and § 14, subc. 8, c. 184, Laws 1874. The several contractors receiving such certificates could have no claim upon the city in any event for the work by them performed, "except from the collection of the special assessments made for the work contracted for." Section 21, subc. 5, c. 184, Laws 1874. Had the then lot-owner paid the certificate to the city treasurer he would have received the amounts so paid on such certificates, and held the same for the benefit of the owners of such certificates, and such owners re

spectively would have been entitled thereto on producing and surrendering such certificates to be canceled. Section 13, subc. 7, c. 184, Laws 1874. The lot-owner not having paid the certificates, and no bid having been made for the lot when offered for sale by the city, the same was properly struck off to the city, and thereupon a certificate of sale thereof was properly issued to the city in its corporate name, vesting in it the same rights at law as any other purchaser would have had; and thereupon the city treasurer was authorized to sell the certificate issued therefor for the amount of such sale and interest at 25 per cent. per annum, and to indorse and transfer such certificate to the purchaser. Section 9, subc. 18, c. 184, Laws 1874.

It is apparent from the whole theory of the charter that the certificate of sale for the amount of the board of public works' certificates so taken in the name of the city was held by it in trust for the owners of such certificates. Section 30, subc. 18, c. 184, Laws 1874. Such has been the construction put upon similar provisions in charters. Jenks v. Racine, 50 Wis. 321; S. C. 6 N. W. Rep. 818; Finney v. Oshkosh, 18 Wis. 209; Fletcher v. Oshkosh, Id. 233. The small item of $1.77, general city tax, included therein, has been paid, or the certificate redeemed to that extent, and, of course, that has no significance here. It follows from what has been said that the sale certificate of $1,324.90, less the item of general city tax mentioned, was held by the city in trust for the benefit of the several owners of the three certificates issued by the board of public works, and such owners were, of course, the cestui que trusts. Those certificates being transferable, as we have seen, the plaintiff properly became the owner of Nos. 28 and 57, and the defendants Fass and Niemann properly became the owners of No. 123. No other person or party, as it appears from the record, has any equitable interest in, or right to, the sale certificate so held in trust by the city. This is in effect confessed by the city and its treasurer by allowing the case to go by default. The substance of it all is that the plaintiff and Fass and Niemann, as the legal owners in severalty of the three certificates so issued by the board of public works, thereby became in equity co-owners in common of the sale certificate so held in trust by the city, together with the lien on the lot, and a right to a deed of the same thereby secured. The outstanding legal title to the fee of the lot was necessarily subordinate and subject to the lien of the sale certificate, and the right to a deed thereon, and consequently subordinate and subject to the equitable rights of the plaintiff and Fass and Niemann as co-owners in common in equity of such lien and right to a deed. Were it otherwise, and the legal title had been superior to such equitable rights, then it may be that such legal title, on being acquired by Fass and Niemann, or one of them, might at once have inured to the benefit of all such co-owners in common in equity, including the plaintiff, in pursuance of well-established rules of law. Phelan v. Boylan, 25 Wis. 679; Frentz v. Klotsch, 28 Wis. 312; Weaver v. Wible, 64 Amer. Dec. 636; Freem. Co-tenancy, § 154. IIere Fass and Niemann are in effect seeking to permanently enjoy the subordinate legal title, freed and discharged from the superior equitable lien which the law has fastened upon it, and at the same time wholly escape any liability by reason of that burden. The mere fact that Fass and Niemann, or one of them, subsequently acquired the legal title to the fee of the lot did not give to them, or either of them, any higher or better equity in such lien and right to a deed than was possessed by them prior to such acquisition. The only possible effect the acquisition of such legal title to the lot could have had upon the prior equitable rights and interests therein of Fass and Nieman would be to merge such equitable rights and interests into such legal title; but that could in no way cripple or reduce the plaintiff's prior equitable rights and interests.

Assuming that the prior equitable rights and interests of Fass and Niemanu were not, in equity, merged into their legal title of the lot, but kept alive, and the case stands precisely the same as it did prior to their acquisition of

such legal title. The theory of the defense that because the value of the lot is less than the nominal amount of certificate No. 123 owned by Fass and Niemann, they may therefore abandon their equitable claim, and retain the legal title to the lot in defiance of the plaintiff's equitable rights, unless he shall first pay the nominal amount of their certificate as the price of being allowed to resort to the lot, which is of much less value, is, to say the least, very inequitable, as it would in effect wholly destroy or render valueless the plaintiff's equitable rights and interests, by compelling him in advance to pay out more than he could possibly get back in attempting to save such rights. It is said, however, in effect, that the plaintiff must lose his equitable rights and interests, or else do so because the city charter furnishes no other remedy. The remedies furnished by the charter are of course statutory, and hence legal remedies. As shown, the plaintiff has no adequate or beneficial remedy by himself alone under the charter. By the refusal of Fass and Niemann to co-operate with him in pursuing the remedy given by the charter the plaintiff is left without any beneficial remedy at law. This suit is in equity. It may be difficult, if not impossible, to find any reported case just like it. In equity it would seem to be very much the same as though the original lotowner had given to the city in trust a mortgage on the lot to secure the payment of the three certificates issued by the board of public works, and then, Fass and Niemann having procured one of them, and thereafter the legal title to the lot, had then refused to join with the plaintiff in enforcing the lien of such mortgage, or to allow the plaintiff to enforce the same without first paying to them the full amount of their certificate, notwithstanding such amount was considerable more than the value of the lot.

Such an instrument would be quite similar to the trust deed involved in Marvin v. Titsworth, 10 Wis. 320. Such trust deeds are, in legal effect, mortgages, and, as such, should be enforced by a bill in equity, under which the necessary parties can be convened, and their rights ascertained and adjusted. Jones, Mortg. §§ 62, 1448, 1769, and authorities there cited. The same learned author states, what every lawyer will concede, that "a mortgage to two or more persons to secure debts due to them severally creates a tenancy in common, and not a joint tenancy. The interest of each is not necessarily a moiety, but is in proportion to his respective claim. Each may enforce his claim under the mortgage in a form adapted to the case.” Jones, Mortg. § 704, and cases there cited. Numerous cases might be cited in this court where equitable mortgages have been enforced by suit in equity. True, the sale certificate is not strictly a mortgage, but it is a lien upon the lot to secure the claims due the plaintiff and Fass and Niemann in severalty. There can be no question but that one having a lien upon property, real or personal, may maintain an ac-tion in equity to have the amount of such lien determined, and to enforce payment thereof by sale of the property or otherwise. Boorman v. Wisconsin R. E. Co., 36 Wis. 207. The case is new, but equity is flexible, adapting its salutary principles to cases as they arise, and is never wanting in the dispensation of justice. Where equitable rights and interests are jeopardized. and the letter of the law furnishes no adequate remedy, it is the business of equity to discover one. This is in harmony with the established maxims of the law: "Where there is a right there is a remedy;" "the law will always give a remedy;" "where the law gives a right it gives a remedy to recover;" "where a common remedy ceases the recourse must be had to an extraordinary one." Whart. Leg. Max. Nos. 383, 402, 764, 766. Here the plaintiff has a right, and is the co-owner of a superior equity. The remedy given by the charter has, by force of circumstances, ceased to be available. He has no adequate remedy, except by bill in equity like the one before us.

We think the complaint states a good cause of action, and hence that the demurrer thereto was properly overruled. The order of the county court is affirmed.

SUPREME COURT OF MICHIGAN.

ROTHSCHILD v. BURTON.

Filed September 29, 1885.

RES ADJUDICATA-JUDGMENT AGAINST GARNISHEE IN UNITED STATES COURT-SUIT IN STATE COURT.

March 7, 1884, B. was indebted on open account to C. & D., and on that day the firm assigned their claim to A. On March 3, 1884, E., a simple contract creditor of C. & D., commenced suit by attachment against them in the United States circuit court, and on June 17, 1884, recovered a judgment. On April 25, 1884, they garnished B., and on May 21st, B. filed a disclosure admitting his indebtedness on the day of service of the writ, but stating that previous thereto he was notified of the assignment of the debt to A. On the day of the disclosure an issue was framed between the parties and E. obtained a verdict. On June 14th, three days before judgment in the principal suit, an order was passed that A. appear and defend her rights under the assignment, but she did not appear, and July 5th judgment was rendered against B. as garnishee, for the amount of the debt, and it was ordered that when the money was collected it be paid into court, subject to its further order. A. sued B. in justice's court to recover the indebtedness assigned to him by C. & D., and B. pleaded in abatement the proceedings in the United States court, and on appeal to the circuit court pleaded in bar the judgment in the United States court, and the payment of the amount of the debt into that court. Held, that A. was bound by the proceedings of the United States court, and was not entitled to recover in the suit in the state court. SHERWOOD, J., dissenting. Error to Wayne.

Dickinson, Thurber & Hosmer, for plaintiff.

lant.

Griffin & Warner, for appel

SHERWOOD, J. On the seventh day of March, 1884, the defendant was indebted on an open account for goods sold and delivered to the firm of Rothschild & Sittig, composed of Raphael Rothschild and Charles Sittig, in the sum of $164.15. On that day Rothschild & Sittig assigned the account to the plaintiff. March 30, 1884, Leopold Erstein and Marx Erstein, simple contract creditors of Rothschild & Sittig, commenced a suit by attachment against them in the federal court, in Detroit, and on the seventeenth of June, 1884, recovered judgment in their suit for $386.62. Prior to the rendition of this judgment, and on the twenty-fifth day of April, 1884, they caused garnishee proceedings to be commenced against the defendant, Nathan Burton, who was served the same day with the writ of garnishment, and on the twenty-first day of May thereafter, defendant filed a disclosure admitting the indebtedness on the day of the service of the writ, but states that previous thereto he was notified of the assignment of such indebtedness to plaintiff by the assignors, and that if such assignment was valid, he did not, on the day the writ of garnishment was issued, owe to the firm of Rothschild & Sittig any sum of money whatever. On the same day, after the disclosure was filed, the attorneys for the plaintiffs in attachment filed in the United States circuit court a demand for a statutory issue in the cause, and an issue was therefore formed between the parties, whereunder said plaintiffs sought to recover the said indebtedness mentioned in the disclosure. The plaintiffs claim the said assignment is fraudulent as against their right to have the indebtedness applied to the payment of their judgment against Rothschild & Sittig. The Ersteins obtained their verdict on the eleventh, and their judgment in their principal suit on the seventeenth, day of June, 1884. On the fourteenth day of June the circuit court of the United States made an order in said suit that Amelia Rothschild, the plaintiff in this case, "do appear in said court and maintain her rights under the assignment to her in such manner and form as she may deem proper." She did not appear, and July 5th the statutory issue was in the federal court, and judgment renv.25N.w.,no.1-4

dered against the garnishee defendant for the sum of $165.14, and further directed that when the money was collected it should be paid into court, subject to the further order of the court.

The suit in this case was commenced in May, 1884, before a justice of the peace in Detroit, to recover the indebtedness assigned to her by Rothschild & Sittig. Before the justice the defendant set up in defense by plea in abatement the proceedings instituted against him in the garnishee suit, set forth down to the time of the commencement of this suit. The plaintiff filed a demurrer to the plea before the justice, which was sustained. The defendant then pleaded the general issue, and upon the trial the justice rendered judgment for the plaintiff. The case was then taken to the circuit court for the county of Wayne by appeal. The defendant then filed a plea puis darrein, setting up the entire proceedings to judgment had against him in the United States court, as hereinbefore set forth, and the payment of the money into court as required in said judgment, as a bar to the plaintiff's suit. A trial of the case was then had before a jury, who, under the instructions of court, returned a verdict for the plaintiff, and the case is before us on error. No additional facts to those above stated appeared upon the trial. This case presents very strikingly the rigor and hardship to which garnishees are not unfrequently subjected under the provisions of the present law. Here the garnishee is brought before courts in different jurisdictions because he owes an honest debt, and his creditor happens to be a debtor to those who are entire strangers to the garnishee, having no business relations whatever with him, and although he is able, ready, and anxious to pay his indebtedness without any neglect or delinquency on his part, he is compelled to appear in two courts and litigate two suits, made liable for costs in each case, or may be to an extent beyond that of the original indebtedness, and then held liable to pay the latter in each suit. The judgment in one jurisdiction not being appealable, however erroneous it may be, he has no means to escape therefrom.

It is not surprising that courts have felt it their duty to pronounce the garnishee proceeding a harsh one, and restrict it to cases within the letter of the law. This does not properly characterize its effect in certain cases, under certain of its provisions. An actual fraud upon the rights of the garnishee is not unfrequently the result of some of the provisions of the statutes, and it is to be hoped that this seriously oppressive feature may at an early day receive the remedial attention which alone can be given by the legislature of our state, that it may be so modified that a poor debtor, who is ready and willing to pay his debt when due, may be permitted so to do without being subjected to the vexation and expense of two or three lawsuits, and then be obliged to pay it a second time.

Counsel for plaintiff in this case claims that the section of the statute under which the defendant insists the federal court obtained jurisdiction (How. St. § 8056) of the plaintiff is unconstitutional; it does not apply, if at all, to money indebtedness, but to goods and chattels only within the control or custody of plaintiff; that in no event can the plaintiff's rights be determined in any other manner than by a court in which he may have his case tried by jury, and the statute referred to secures to him no such right; that such right, as well as the manner of proceeding, is left entirely in the discretion of the court; that as matter of fact the defendant never notified the plaintiff to appear in the garnishee proceedings in the federal court, or would have permitted her to have defended in his name, nor does the order made by that court grant her the privilege of so doing. He also claims that the affidavit in the garnished proceedings was insufficient to give the court jurisdiction in the It is true, as was well said by Chief Justice COOLEY in Bachelder v. Brown, 47 Mich. 366, S. C. 11 N. W. Rep. 200, "the general rule is that judgments bind only parties and their privies; but it is equally true that those are

case.

« PreviousContinue »