Bassett v. Henry , 34 Mo. App. 548 ( 1889 )

Gill, J.

After having gone over the entire record of this cause, and read with care the very elaborate statements, arguments and briefs of the eminent counsel on both sides, we feel the material facts may be narrowed to about these: Bassett and Henry, lawyers, agreed to successfully defend Mt. Pleasant township against certain bonds, for a conditional joint fee of seven thousand dollars; that if successful in one suit the township would then pay the seven thousand dollars, but if the bonds were subsequently held valid that these attorneys would return the said seven thousand dollars to the township.

In the first case determined (Harshman case) the judgment was for the township, and the seven thousand dollars was thereupon paid to Bassett with a renewed obligation on his part, that, in case the bonds were ultimately held good, he would return said sum to the township. Bassett, refusing to pay any part of this sum to Henry, was sued by Henry, and the judgment now sought to be enjoined was the result. In that suit, among other defenses, Bassett interposed his possible liability to return the money to the township, but the defense was not permitted. 75 Mo. 89.

After the rendition of Henry’s judgment against Bassett, wherein Bassett -was held to a division of the fee with Henry, the bonds were held valid, and Bassett was compelled to pay and did pay back to the township the fee received.

Now, under this state of facts, did the trial court, sitting to administer equity, properly enjoin the collection of the Henry judgment %

I. It is stated as a general principle, in the administration of equity in such cases, “that any facts, which prove it to be against conscience to execute such judgment, and of which the injured party could not; have availed himself in a court of law, or of which he might have availed himself at law, but was prevented by fraud or accident, unmixed with any fault or negligence in himself or agents, will authorize a court of equity to interfere by injunction, to restrain the adverse party from availing himself of such judgment.” 2 Story’s Eq., sec. 887. Such interference will not be had, however, on account of error or mistake in judgment of the court of law, “but only upon the ground that the party had some defense against the claim, which has occurred, or first came to his knowledge, since the trial in the court of law, whereby it would be a virtual fraud, in the party recovering at law, now to insist upon enforcing his judgment.” 2 Story Eq., sec. 1572; Marine Ins. Co. v. Hodgson, 7 Cranch, 336; Emerson v. Udall, 13 Verm. 483.

The courts have, on frequent occasions, recognized the duty of courts of equitable cognizance to relieve a judgment debtor from the enforcement of a judgment, when to enforce the same would be against equity and good conscience, and the defense was one that the judgment debtor had never been able to interpose in the action at law. “A court of equity has jurisdiction to entertain a bill to set aside, or annul, a judgment at law, where a proper state of facts is shown, and where, at law, the defence was inadmissible,” quoted from Lamb v. Anderson, 1 Chand. (Wis.) 224, see also Devoll v. Scales, 49 Me. 300.

In Collier v. Easton, 2 Mo. 147, in the opinion of the court the existence of the same doctrine is admitted when it is said “that after the trial at law the party cannot have the aid of a court of equity, unless he can impeach the justice of the verdict by facts, or grounds, of which he could not have availed himself,” etc., in the trial at law. See also Matson v. Field, 10 Mo. 102-3; Reed's Adm'r v. Hansard, 37 Mo. 202.

To permit the judgment of Henry v. Bassett to be enforced, under the circumstances here presented, would, it seems to us, be most unconscionable and unjust. It is not a case of mere cross-demands, but it is a case where the judgment debtor, Bassett, was charged and forced to account for that which he has since the rendition of the judgment been compelled to return — to give back to the township — and that, too, in pursuance of Henry's own understanding and solemn agreement. The identical matter in the possession of Bassett, when the judgment at law was entered, and on account of which Henry obtained said judgment, has been, by the express agreement of Henry, returned to Mt. Pleasant township, and shall Henry’s representatives be permitted to collect this judgment, in face of the fact that Bassett has done with the seven thousand dollars, just as stipulated and agreed should be done, to-wit, returned the same to the township in the event, which happened, of the unsuccessful termination of the bond suits? Here is presented a very strong case of equitable payment. It is not unfair to place Henry in the position of being present at Bassett’s settlement with the township, and consenting, then and there, to the payment made; for, although not present in person, he had, in the inception of the business, solemly agreed and pledged himself, under his hand and seal, that, in case the litigated cases should be ultimately decided adverse to the township, he and Bassett would repay and return the said fee to the township — Bassett then, in returning the said seven thousand dollars was only conforming to the directions of Henry’s sealed agreement. Bassett was not, and could not be, allowed this as a defense in Henry’s suit; for, as the court held, the contingency might never have happened, and a mere contingent liability was not permitted to be set up in that action. 75 Mo. 89. But at the institution of this injunction suit, brought by Bassett to protect himself from Henry’s judgment, that contingency had ripened into a fixed liability, and Bassett was forced to return the seven thousand dollars which he did with the-implied consent, too, of Henry. Neither is the plaintiff here denied the assertion of his equitable rights by any plea of res adjudicóla.

This action in equity to stay proceedings on this judgment at law does not draw into question such judgment, or in any way claim a right to revise it. It sets up an equity independent of the judgment, admits the validity of the judgment, but suggests reasons why the party who has obtained it ought not to be allowed to enforce the same, because of equities matured since the said judgment was obtained. Parker v. Judges, 12 Wheat. 563.

It is well settled that the judgment of a court of law cannot be disturbed in a court of equity on account of any defense which was tried, or might have been tried, in such action. 13 Verm. 483, and other cases, supra. But the matters here alleged and proved by the plaintiff, whereby relief is sought, are matters occuring since the trial and judgment in the suit at law of Henry v. Bassett. We do not regard the case of White, Adm’r, v. Healy, 54 Mo. 592, as in conflict with the ruling hereinbefore indicated. That was an action at law for money had and received, and defendant sought to interpose a set-off on account of having paid some notes of the deceased after his death, on which said notes tlie defendant was security. The set-off was denied, because under the statute of set-off (R. S., sec. 3869) no set-off is allowed in suits brought by administrators, unless the right thereto existed in the defendant at the death of deceased. We have, in the case at bar, a very different state of facts, and invoking, too, the chancery powers of the court, and bound by the rule of no statute. This suit is not one at law for the recovery of money, where defendant seeks to set-off an independent demand, but this is rather an application to a court of equity for that relief which a court of law is powerless to grant. It is not a case of set-off but rather one where relief is sought from an unconscionable enforcement of a judgment, which, in equity and good conscience, has been satisfied.

II. It is further contended by defendant’s counsel, because of the fact that plaintiff Bassett extinguished the liability of himself and Henry to the township, by turning in, as payment, bonds of said township, which Bassett had theretofore purchased at a large discount, and that he had never accounted to Henry for any portion of profits on such venture that there is no equity shown in plaintiff ’ s case. We think this position is not well taken. These bonds, so used by Bassett in adjusting the joint liability of Henry and Bassett, were purchased somewhere from 1877 to 1879, and after, it would seem, Henry had brought his suit for his portion of the seven thousand dollars. The attitude of Henry was then, and always has been, that Bassett owed him in money the one-half of this fee and he sought, and acquired a judgment therefor, against Bassett. Henry’s position was, and ever has been, that the co-partnership was a limited one, involving the one transaction, that Bassett on getting the fee should pay over to him the one-half thereof ; and he, Henry, sought the aid of the courts to require Bassett to respond, and the judgment in Henry’s favor was the result of that effort. Now will Henry be allowed the double relief, first a judgment for the recovery of the money claimed and sued for, and recovered by the action begun in 1877, and, in addition, the right to have Bassett account for profits that Bassett may have made on bonds subsequently purchased? Henry here would be assuming the anomalous attitude of a creditor suing his debtor at law and recovering a money judgment, and at the same time seeking to charge the debtor for account of profits made. By the institution and prosecution of the suit for his portion of the seven thousand dollars, Henry chose his own remedy, his own forum, and he cannot be allowed now, after getting his judgment in that suit, to come into another court for an accounting.

There is nothing of extortion, or inequity, shown by the record in this case, in the matter of Bassett’s settlement with Mt. Pleasant Township. It is not the case of a payment for a nominal sum of money by one joint obligor of the joint liability, and then calling on his co-obligor for unconscionable contribution, but the testimony shows that the bonds, so used by Bassett in said settlement, were then valid, binding obligations, and such as the township were legally bound to pay. Nor is there any proof showing that such bonds were then worthless than par, the price fixed upon by Bassett and accepted, in settlement, by the township.

Upon' a careful review of the whole case, we think the judgment of the circuit court was for the right party, and should be affirmed.

Smith, P. J., concurs; Ellison, J., dissents.