Second Ward Bank v. Upmann , 12 Wis. 499 ( 1860 )

By the Court,

PAINE, J.

In this case a judgment was recovered in the county court of Milwaukee county, and an execution having been issued and returned nulla bona, supplemental proceedings were instituted before the judge of that court. The first question raised is, whether he had jurisdiction of those proceedings. Before the Code that court had no equitable jurisdiction. The Code did not profess to change the jurisdiction of courts, or to confer general equity jurisdiction on the county courts. And a subsequent law, sec. 46, chap. 117, R. S., 1858, provided that the county courts therein referred to, having civil jurisdiction, should not be held to have jiu’isdiction in cases which had theretofore been cognizable only in a court of equity, except so far as to enable them to hear and determine any equitable defense, &c. It is claimed that the proceedings supplemental to execution under the Code, are in substance the creditor’s bill of the old equity system, and that therefore the provisions before referred to exclude the jurisdiction of the county judge. This conclusion might seem correct at first view, but we think that upon careful examination it will appear incorrect. The argument by wbicb it is arrived at, overlooks distinction, which seems to us quite obvious, between equitable remedies as might be regarded as entirely of an ancillary character, and were merely in aid of a suit at law, and those suits which were wholly of an equitable character. It must be conceded that in the latter class of suits, the county courts mentioned in the section above referred to, would not have jurisdiction, except as a defense to a legal action. That statute not only expressly excludes it, but there was nothing in the adoption of the Code from which an intention could clearly be derived to confer such jurisdiction. But the same argument does not hold good with respect to those equitable remedies which were merely in aid of a suit or judgment at law, and which, or substitutes for which, the Code has expressly adopted as a part of the remedy in every civil action. The result of such an enactment is, that the legal remedy is enlarged and completed. Those defects are supplied, which under the old system made it necessary to resort to equity to aid the proceeding at law. The necessity for any separate suit is abolished, and all the powers necessary for the complete adjudication of the rights of the parties and the execution of the judgment, are provided for in that series of proceedings which, under the Code, constitutes the remedy in a civil action. 'While we concede, therefore, that the Code did not confer on those county courts jurisdiction in independent equitable suits, yet we do think that it necessarily had the effect to confer upon them power to administer the entire remedy in those civil suits of which they have jurisdiction, though some parts of that remedy obtain the same objects formerly obtained by a resort to equitable aid.

This may be illustrated by reference to the power of compelling a discovery. Under the old practice this was obtained by a resort to equitable aid, but the Code abolished bills for a discovery, and, in their stead, allowed every party to a civil action to be examined by the adverse party. Now can it be supposed that in a civil action of which the county court of Milwaukee has jurisdiction, it could not compel such an examination, merely because it once had to be obtained by a bill in equity ? On the contrary, it seems clear to ns that it would have the power. So of the power to make an injiinctional order in certain cases. The statute in respect to these powers has accomplished what grew up as a mere matter of practice in respect to new trials in actions at law. At one time it was necessary to resort to a court of equity to obtain a new trial. But the courts of law began to assume the power of granting new trials, and to exercise it with more and more liberality, until finally it became so fully established that a resort to equity was almost entirely superseded. Suppose this had not been done, but the practice had still remained to resort to a bill in equity to obtain a new trial. . If then, the Code had provided that whenever a trial had been had, the party might apply to the court on motion for a new, trial, could it be said that this could not be done in the county court? We think not, and that it is equally clear that the Code confers on those courts all the powers which it prescribes as a part of the remedy in a civil action. Such a result is entirely in harmony with its general scope and object, which was to establish a single, uniform system of practice, by which all courts might administer complete relief in such suits as they had jurisdiction of. That it was competent for the legislature to confer these powers on those courts there is no doubt. It is only a question of intent, and of this there would seem to be no room for doubt, except for the provision above referred to, in sec. 46, chap. 117, R. S. The statute which authorizes supplementary proceedings, says that the party shall be entitled to the order from the “ judge of the court, or a county judge or a court commissioner,” &c. The “judge of the court” clearly indicates the judge of the court where the judgment was rendered. And construing all the provisions of the statute upon the subject together, we think the proviso in section 46, chap. 117, was designed only to prevent those courts from having jurisdiction in independent equitable suits, and not to prevent them from exercising those powers which by the Code were made parts of the remedy in an action at law. It follows, therefore, that the judge of the county court had jurisdiction of these proceedings.

We think, also, that the affidavit on which the order for the examination of the judgment debtor was made, aS as the execution itself, showed a sufficient return to lay the foundation for supplementary proceedings. The return cer-tiñes that the officer “ could find no property whereof to make the amount,” &c. This includes both real and personal property, and is therefore not liable to the same objection as the return in the case of Bennington, 7 Wis., 646, which included only personal property, leaving the implication that the defendant might have real property on which to levy. True, it was returned by direction of the plaintiff's attorneys. But this direction was not given until after the sheriff had held the execution more than forty days, and then they directed him to return it only after diligent search, and these proceedings were not commenced until after he would have been bound to return it by law. There is nothing in this, indicating a want of that good faith in attempting to reach the debtor’s property by the ordinary legal process, which is required as a condition precedent to the party’s right to institute supplementary proceedings. True, it turns out that the judgment debtor had an interest in certain real estate, but the counsel claimed, evidently in good faith, that this interest could not be reached by execution; and whether it could or not, was the principal question discussed here. The facts material to that question are these : TJpmann was the owner of the property, and conveyed it as security for a loan of $3,000, to George A. Tiffany. The conveyance was by an absolute warranty deed, but Tiffany executed at the same time to Upmann a bond in the penal sum of $50,000 — reciting that the land had been conveyed as security for the loan, and conditioned to reconvey on the payment of the amount loaned, with interest, &c. The counsel for the plaintiff conceded that this, in equity, would be a mere mortgage, but claimed that it would be so only in equity, and that it not being a legal mortgage, the interest of Upmann could not be sold on execution. But we have no doubt that these instruments, executed by the parties, should be considered a mortgage both at law and in equity. No doctrine is more familiar, than that several instruments, executed together, as parts of one transaction, are to be considered together in determining what was the agreement. And it has accordingly been held in a great number of cases, which are extensively cited by the appellant’s counsel, that an absolute deed given and a defeasance taken back in a separate instrument, are just as much a mortgage as though the defeasance were in the deed itself. And the objection made here that the bond to reconvey is not technically a defeasance, inasmuch as it does not provide that on payment the deed should be void, has also been passed on, and it has been held that such a bond is a good and proper defeasance in law. Erskine vs. Townsend, 2 Mass., 497; Watkins vs. Gregory, 6 Blackf., 114; Harrison vs. Trustees, &c., 12 Mass., 456; Marden vs. Babcock et al, 2 Met., 103; Waters vs. Randall, 6 Met., 482. We are entirely satisfied with the reasoning of O. J. PARKER in the case first cited upon this point. In these and numerous other cases in all the courts of the country, such instruments are spoken of as mortgages — -not equitable mortgages merely, but mortgages — which, in the absence of any qualifying words, must be intended to mean legal mortgages. Indeed in many of the cases they were legal actions, as in the case in 6 Blackf.; Fridley vs. Hamilton, 17 S. & R.; Jaques vs. Weeks, 7 Watts, 267. In the latter case, the court says that an absolute deed with a separate defeasance “is to be considered in law in the nature of a mortgage.” In all these cases we see no suggestion that such instruments amount merely to an equitable mortgage, nor do the elementary writers upon the subject use any such qualification. On the contrary the distinction between a legal and an equitable mortgage is of a different character, and is thus stated in 1 Hill, on Mort., 451: “ In addition to the actual conditional conveyance of land, wlvkh constitutes a legal mortgage, courts of equity have recognized certain other liens arising from the implied agreement of |>arties or the justice of the case, but not depending upon any express transfer of title. These are usually termed equitable mortgages.” We can see no reason, either on principle or authority, why the rights of the parties in the land should be held to be any different, where the mortgage is executed in two instruments, from what they are where it is in one only. The intent and substance of the transaction is tire same, though there may be a slight difference as to the manner in which the grantor is to become repossessed of the property. The two instruments being executed together as parts of one agreement, are in law but one agreement, and although the character of the instruments might be changed by recording one and not the other, yet where both are recorded, as in this case, their character is fixed, and it is notice to everybody that it is but a mortgage. We must hold, therefore, that the grantee had only the rights of a mortgagee, and the grantor had all the rights of a mortgagor, and consequently that his interest might have been sold on execution.

And as it appears that the interest of Upmann in the property was probably ample to pay the debt, and his title being clear, inasmuch as the parol trust of which he testified was void, we think a receiver should not have been appointed, but that an order should have been made staying proceedings, that the plaintiff might sue out a new execution and sell the property thereon. 4 Sandf., 718; 4 Paige, 574; 11 How. Pr. R., 528. This would leave the debtor the time for redemption which the statute provides. This, we think, ought not to be cut off in a case like this, and though it might possibly be preserved by an appropriate order on a sale by a receiver, yet it will probably be less liable to mistake and uncertainty if the manner prescribed by statute for sales on execution is observed.

The order appealed from must be reversed, with costs, and the cause remanded