Alexander v. Munroe , 54 Or. 500 ( 1909 )

Mr. Justice Eakin

delivered the opinion of the court.

1. Considering first the cross-bill of Snow and Huston, the most important question is whether, by reason of the fact that no execution issued within 10 years after the rendition of the decrees in favor of Jackson Munroe, Snow and Huston are without remedy against the property of Edith Munroe. After Snow and Huston ceased to represent Jackson Munroe, which at the latest was July 6, 1896, when they brought their suit against him and others, their authority, as his attorneys, to issue execution thereon, was at an end, and, not being parties to the decree, they had power to act only in the name, and by the authority of Jackson Munroe, who, by the satisfactions he had executed, had already put it beyond his power to direct or authorize execution to issue. Therefore, on July 6, 1896, the only remedy of Snow and Huston was in a court of equity.

2. The attempted settlement of the judgments by collusion, between Edith and Jackson Munroe, with full knowledge of the rights of Snow and Huston, which put it out of their power to keep the judgments alive, was a fraud upon them, and the commencement of the suit by them on July 6, 1896, to protect their rights, being within the life of the two decrees, was lis pendens, and kept alive their equitable lien. It is held in Davidson v. Burke, 143 Ill. 139 (32 N. E. 514: 36 Am. St. Rep. 367), that a judgment creditor having brought a creditor’s suit to uncover property fraudulently conveyed by the judgment debtor, although the creditor’s judgment was barred by the statute of limitations at the time of final decree, yet, when he exhibited his bill in chancery to impeach the conveyance, the Us pendens was an equitable levy and created an equitable lien on the lands, and it was wholly unimportant that the final decree, establishing the lien, was not rendered until long after the judgment at law had ceased to be a lien upon the property of the creditor. To the same effect is Cincinnati v. Hafer, 49 Ohio St. 60 (30 N. E. 197). Dempsey v. Bush, 18 Ohio St. 376, is quite in point. A creditor obtained judgment against a debtor and his sureties. The sureties paid the judgment to relieve their own property from the lien. A mortgagee of the property, under a mortgage taken after entry of the judgment, but before its payment, brought suit, after payment, to foreclose his mortgage, making the sureties in the judgment parties. They set up their rights under the judgment as equitable assignees of it, claiming priority over the mortgage, and it was held that their rights under the judgment were prior and superior to the mortgage, notwithstanding the judgment became dormant pending the litigation, as the sureties had no remedy by execution and had set up their equities in the foreclosure suit (in which the securities were marshaled) while their judgment was alive, and that their rights were preserved.

3. It is urged by counsel for Edith Munroe that she is not personally liable to Snow and Huston; but the original debt was her debt, and the assignment to Snow and Huston transferred to them a portion of that personal liability, which carries with it a like portion of the.security through the judgment, but only enforceable in Snow and Huston’s favor in equity.

4. It was the fraud and collusion of Edith Munroe with Jackson Munroe that put it beyond Snow and Huston’s power to enforce their equity in the judgment, and their suit, brought within the life of the judgment, to prevent its cancellation and subject the property to the payment cf their claim, and to establish and declare their interest therein, was in the nature of a proceeding to enforce their interest therein, and operates to suspend the running of the statute pending such proceeding. Pending that suit the present suit to marshal the securities was commenced and their rights set up herein, reciting the former suit and consolidating the same with the cross-bill in this suit. Their rights therefore depend upon a new decree to be rendered in this proceeding, which may reserve their rights as they existed on June 20, 1896, and they are not affected by the fact that execution had not issued on the decree of July 21, 1891, within 10 years from the rendition thereof: 3 Freeman, Ex. § 434.

5. The purpose of the suit commenced by Jackson against Edith Munroe et al., which resulted in the second decree was to avoid certain deeds and subject this real property to the payment of plaintiff’s claim, and it was adjudged and decreed thereby that plaintiff have and recover, from defendant Edith Munroe, $2,465.05, the same being the amount of a money decree, interest, and costs, entered on July 21, 1891, and adjudged and decreed said sum, now found due, to be a lien upon said property, and providing for process to enforce said decree after 10 days from date thereof. Counsel for Edith Munroe contends that the commencement of that suit did not interrupt or suspend the running of the statute of limitations as to the first decree. Without deciding that question, so far as it relates to the decree of July 21, 1891, the lien of the decree of July 19, 1894, will run from the time .it became final, and lapse of time from entry of the decree of July 21, 1891, cannot operate to cancel the latter. So far as this particular property is concerned, against which the second decree operates, it may be enforced by process issued thereon. The decree was entered by the circuit court on July 19, 1894, but defendant appealed therefrom and gave an undertaking for stay of proceeding pending the appeal, and the period of limitations did not begin to run against that decree until it became final. The decree of the circuit court did not become final until the appeal therefrom was dismissed in the supreme court, which was not earlier than June 20, 1896, and in that case the statute had not run against the second decree at the time Snow and Huston filed their cross-bill in this suit, December 30, 1904: 1 Freeman, Ex. § 28.

6. Counsel for Edith Munroe contends that a partial assignment of the judgment does not bind the debtor or curtail her right to deal with the judgment creditor in relation to the judgment. Although a partial assignment of the judgment cannot be made without her.consent to be enforceable at law, yet it operates as an equitable assignment thereof, and if the judgment debtor is aware of the transfer she cannot settle with the judgment creditor to the prejudice of the assignee: Little v. City of Portland, 26 Or. 235-242 (37 Pac. 911). It is held in P. C. C. R. R. Co. v. Volkert, 58 Ohio St. 363 (50 N. E. 924), that an assignment to an attorney of a half interest in the judgment obtained by him for his services in procuring it, conveys a property right in the judgment, and, although it is not enforceable at law, it is in equity, and it is not in the power of the judgment debtor, after knowledge thereof, to compromise the judgment with the creditor alone, and thus defeat the assignee. To the same effect are Friendly v. Lee, 20 Or. 202 (25 Pac. 396) ; Line v. McCall, 126 Mich. 497 (85 N. W. 1089) ; Weeks v. Circuit Judges, 73 Mich. 256 (41 N. W. 269) ; Phillips v. Edsall, 127 Ill. 535 (20 N. E. 801). And in Warren v. Bank of Columbus, 149 Ill. 9, 24 (38 N. E. 122: 25 L. R. A. 746), it is further held that an equitable assignment will not only reach the fund in the hands of the original depositary, but follow it or its proceeds in the hands of any one receiving it with notice. To the same effect is Dowell v. Cardwell, 4 Saw. 217 (Fed. Cas. No. 4,039).

7. We find from the preponderance of the evidence that Edith Munroe, at the time she made the settlement with Jackson Munroe and procured from him the cancellation of the two decrees, had notice that Jackson Munroe had assigned to Snow and Huston one-half of the recovery in the decree of July 21, 1891, together with an undivided half interest in the security therefor in the lands involved in the second suit. The record in the attachment action is not before us, but there is no element of estoppel involved or pleaded in connection with the bringing of the attachment action by Snow and Huston. The attachment might have been dissolved had the writ been attacked on the ground that Snow and Huston held security for the debt, but the attempt to attach constitutes no representation or conduct by Snow and Huston that misled or caused Edith Munroe to act to her injury in relation thereto. '

8. As to the claim of defendant E. B. Tongue, administrator, the first important question is whether the note and mortgage of date May 20, 1893, for $275, was barred by the statute of limitations at the time of the commencement of this proceeding. The answer and cross-bill of Tongue, by which the note and mortgage are set up in this suit, filed August-2, 1905, is the commencement of the suit, so far as these mortgages are concerned, and if the mortgage was not renewed it would have been barred by the statute of limitations if taken advantage of by Edith Munroe; but the defense of the statute of limitations, if not taken by demurrer or answer, is waived: Davis v. Davis, 20 Or. 78 (25 Pac. 140). The first answer of Edith Munroe in this suit, referring to these two mortgages, admits her liability thereon in the sum of $1,424, which, according to her testimony, includes the amount of the first mortgage, for which sum she agrees that said estate shall have decree in this suit and prays the court to determine the amount due from defendant to the estate of T. H. Tongue, deceased, which may be a lien on said property.

9. The trial of the suit was had before the judge on December 28, 1905, without any other answer on the part of Edith Munroe to the cross-bill of Tongue, at which trial Tongue identified and offered in evidence the notes and mortgages, to which defendant stated she had no objection, and they were received. At the close of the evidence on the part of Tongue, defendant Edith Munroe moved the court for a decree against the Tongue estate that no greater sum be entered in his favor than $1,425, with interest. The answer, setting up the defense of the statute of limitations, was not filed until after the completion of the trial and submission of the cause. There was a motion and affidavit, filed in the lower court by Tongue to strike out this answer; but we find no ruling on the motion in the record, although counsel for Tongue claim it was allowed and the answer stricken out. However, in view of the fact that the trial proceeded, at least until the close of Tongue’s case in chief, without raising that issue, and Edith Munroe’s liability being conceded, that defense must be deemed waived, and, if the motion to strike out the answer was not allowed, still, as it was filed after default and apparently without leave of the court, it will be disregarded here.

10. The only remaining question relating to the claim of the Tongue estate is as to the amount due upon the $1,000 mortgage. It is conceded that $500 of that mortgage was cash, loaned to Edith Munroe to pay Jackson Munroe upon the settlement, and Tongue contends that the remainder thereof was for his attorney fees in this litigation. Her counsel contends that there could not have been $500 attorney fees due Thomas H. Tongue at the time of the execution of the mortgage, insisting that the $275 mortgage was for attorney fees to the date thereof; but that mortgage was executed more than a year before the close of the second suit, and we do not find that any witness in the case testified that it was given for attorney fees. Edith Munroe does not mention the consideration for it and makes no claim that it was for attorney fees. On the contrary, she replies, when asked about the payment of attorney fees to Tongue, prior to the execution of the $1,000 mortgage: “I had already paid Mr. Tongue different sums, at different times. At different times, I do not remember dates.” She said she could not give any amounts or dates, and the statements of Thomas H. Tongue, deecased, were proved to the effect that the $1,000 mortgage included $500 attorney fees. This mortgage was executed on June 11, 1896, and Edith Munroe admits that for nine years she did not mention to Tongue that it was given for more than was due him. She says she was waiting until final settlement. Her letter of May 3, 1899, three years after the date of the note, in which she promises to raise the amount of interest due, makes no suggestion of error, and practically acknowledges liability for the mortgage. The note itself is prima facie evidence of the consideration, and the statements of Edith Munroe do not convince us that the consideration was less than its face value, and we find no error in the findings of the court in relation thereto.

Modified August 17; further rehearing denied October 5, 1909.

The decree is affirmed. Affirmed.