Stein v. Benedict ( 1892 )

Pinney, J.

1. It is well settled that one circuit court of this state will not restrain the collection or enforcement of a judgment rendered in another circuit court of the state, for legal or equitable relief; and the-rule is the same whether the second action be brought by a party or a stranger to the first. The proper course is to apply by petition for relief in the first suit. The power of the court in which the first judgment or decree has been rendered, to grant relief in cases like this, is undoubted. This has long since passed beyond the field of discussion, and must be regarded as settled beyond dispute. Platto v. Deuster, 22 Wis. 482; Endter v. Lennon, 46 Wis. 299; Orient Ins. Co. v. Sloan, 70 Wis. 611; Cardinal v. Eau Claire L. Co. 75 Wis. 404. Many other cases to the same effect are cited in the brief of respondents’ counsel. When a proper proceeding is instituted on the foot of a, former judgment, for relief against it, and “a complete determination of the controversy cannot be had without the presence of other parties, or any persons not parties to the action have such interest in the subject matter of the controversy as requires them to be made parties for their due protection, the court shall order them to be brought in.” R. S. see. 2610. And equities between defendants, if properly connected with the relief sought, may be put in issue as to them, and tried and determined, as well as between the plaintiff and the defendants. R. S. sec. 2883; Northwestern M. L. Ins. Co. v. Park Hotel Co. 37 Wis. 125; Hunter v. Bosworth, 43 Wis. 583; Hopkins v. Gilman, 47 Wis. 581. The petition, which is in the nature of a supplemental or cross complaint, for the purpose of obtaining relief, may be amended accordingly. The ease of Felch v. Lee, 15 Wis. 265, is relied on as authorizing the maintenance of a second or original suit for relief in such cases; but it is sufficient to say that the point so frequently ruled since then was not made or considered in that case, and it cannot be considered as an authority on the question. In the case of Parish v. Marvin, 15 Wis. 247, which is in principle The same as this, the objection was raised and sustained. Now that the circuit courts exercise legal and equitable jurisdiction in the same action, and may grant any relief which could formerly be obtained either at law or in equity, there is no necessity whatever for instituting a second action, when to do so would only tend to a multiplicity of suits, which the law abhors.

The defendants demurred ore tenus to the complaint, jointly and severally, and the defendant Bellack had his separate formal demurrer on file, insisting that the court had no jurisdiction of the action, as well as that there was a misjoinder of causes of action. It is very certain, we think, that according to the frame of the complaint, which purports to state, in form at least, but one cause of action, Bellack was an indispensable party defendant, without whose presence the plaintiff could not obtain the relief which in his assignment of errors he alleges the court erroneously denied him, namely, an accounting between himself and Benedict and Bellack, and an injunction restraining him from being oppressed as a surety for Benedict and Bellack. The objection to the jurisdiction of the court was sufficient to defeat the action, if made by a party whose presence was indispensable, and without which the action, in its present frame, could not proceed any further. The fact that Bellack demurred ere tenue at the trial cannot be held as a waiver of his formal demurrer; certainly not, if the demurrer presented any question which could not be raised by a demurrer ore tenus. Without considering whether the objection to the jurisdiction of the court may not be raised on such demurrer, or the court may not of its own motion act on the objection when not raised by a formal demurrer, under the statute (sec. 2654), it must be held that it was here properly presented, so that the court might act on it and dismiss the complaint, upon which it was plain no relief, according to the settled decisions of this court, ought to be granted.

2. The proposition insisted on by the appellant, that the indebtedness upon which the judgment was rendered against himself and Benedict was one upon which he was liable solely as the surety of Benedict and Bellack, and that they were primarily liable thereon, is fundamental to any affirmative relief; and, unless it can be maintained, it is obvious, we think, that there is no equity in the complaint, and that it was properly dismissed. While this contention of the plaintiff was not directly contested by the respondents’ counsel, in examining the complaint we have arrived at the conclusion that its allegations are entirely insufficient to show that the debt, which in form was the debt of the plaintiff and Benedict, in equity was that of Benedict and Bellack primarily, and the plaintiff was liable only as their surety. The complaint shows that by agreement the outstanding accounts due or owing to the firm of Benedict & Co. were passed over to and were to be collected and got in by Benedict and Bellack, and the proceeds were to be applied to the payment of the outstanding debts of the firm, and the surplus remaining was to be divided between the plaintiff and Benedict, and that as a part of the transaction Benedict and Bellack agreed to and did assume to pay, and at all times save harmless the plaintiff “ from, all debts, demands, dues, accounts, claims, actions, or causes of action, whatsoever,.then due or owing or existing, or which might thereafter accrue by reason of anything then existing, against the firm of Benedict & Co., and from and against all damage, loss, cost, or expense by reason of the said matters,” whereby it is contended that Benedict and Bellack became principal debtors, and the plaintiff was simply their surety as to such obligations; the defendant Philip Stein having been released therefrom. The firm of Benedict & Co. was dissolved November 30, 1881, and all-its merchandise, furniture and fixtures, business, and good will had been transferred to Benedict and Bellack', and the plaintiff and Benedict had an accounting in regard to their partnership dealings, and fully settled the same, except as to said outstanding accounts due to the firm, and the Dakota real estate. The complaint shows that the note and mortgage for $10,000 upon the Dakota lands was the personal debt and obligation of Henry Koch, and that it existed in that form until the 6th of December, 1887, about a week after the partnership was dissolved, when the plaintiff and Benedict executed in lieu thereof their joint note to Marie Stein for $7,000, the amount then due on the former note, and secured it by a mortgage on said real estate, in lieu of the former one executed by Koch. Although the complaint alleges that this indebtedness had become an obligation of the firm, this is a mere conclusion of law, and is repelled and refuted by the particular allegations of the complaint, showing the form and character of the indebtedness; and the only ground upon which it can be contended that Benedict and Bellack became primarily liable for this indebtedness is by reason of the provisions of the agreement annexed to the complaint. When it was executed, the firm of Benedict & Co., as the complaint shows, held the Dakota lands, subject to the notes and mortgage held by Marie Stein, and that the notes were the personal obligations of Koch. Their interest in the land was simply an equity of redemption. They were in no just or proper sense liable for the indebtedness; and the complaint wholly fails to state facts showing that they ever assumed it or became liable therefor, until after the dissolution of the partnership and the execution of the agreement of Bellack and Benedict, of November 30, 1887. So that the complaint does not state facts sufficient to show that the relation of principal and surety existed, either in law or equity, between the plaintiff and Benedict and Bellack. General averments in a pleading are of no avail, when inconsistent with facts specially averred in the same pleading. Smith v. C. & N. W. R. Co. 18 Wis. 22.

3. If, as alleged in substance in the complaint, before the action was commenced against the plaintiff and Benedict on their joint note, the latter had purchased it and paid for it with his own money, and had it assigned to a third party to hold to his use, the plaintiff should have set these facts up by way of defense, if available as such. No reason or excuse is given for his failure to do so; and in the absence of allegations showing that his failure was the result of fraud, accident, or mistake, unmixed with negligence .on his part, he cannot be heard in equity in respect thereto. The complaint does not state facts sufficient to entitle the plaintiff to any relief founded on a pretermitted defense; and this is equally true as to all other equities available as defensive matter against the demands on which that judgment was founded, and attempted to be asserted by the complaint. Pom. Eq. Jur. §§ 1361, 1362; Stowell v. Eldred, 26 Wis. 507; Barber v. Rukeyser, 39 Wis. 595; Hendricksen v. Hinckley, 17 How. 443, 445; Embry v. Palmer, 107 U. S. 3, 10; Knox Co. v. Harshman, 133 U. S. 152.

4. The claim for an accounting, as between the plaintiff and Benedict, seems to have been made as an incident to the general purpose of the action to obtain relief and protection against the judgment against plaintiff and Benedict, and with a view to having applied to its payment any sum due from Benedict and Bellack for collections made upon the notes and accounts of the late firm of Benedict & Co., if the allegations should fail that the indebtedness upon which the judgment was rendered had been equitably paid by Benedict, and the assignment of the debt to the plaintiffs in the judgment was held solely to his use, as stated in the complaint. As a complaint merely for an accounting in equity between the plaintiff and Benedict and Bellack, or either, of them, it is wholly insufficient. There was no necessity for resort to equity for discovery or the production of books or papers, for mo action for that purpose can now be maintained. It is not alleged that the defendants Benedict and Bellack denied their liability to account, or that the plaintiff had ever asked them to account, or that they had refused to account to or with him. The substance of the allegations on this point is that they had refused to let him examine the books in which the account of these transactions had been kept, and had dealt unfairly in the matter, but there is no specific allegation of wrongdoing. The complaint is wholly destitute of allegations showing a right to resort to equity for an accounting, or that an action at law, in which the parties might have a tidal by jury, would not afford the plaintiff an adequate remedy; for it is to be remembered that the partnership affairs had been fully settled and adjusted, except as to the Dakota lands and the notes, accounts, etc., due to the late firm; and, as to the latter, Benedict and Bellach took them, with other firm assets, and were to collect and apply the proceeds and pay over the balance. The rights of the parties in this respect had been fixed by the agreement of November 30, 1887. Whatever right the plaintiff had, as a former member of the firm of Benedict & Co., to an accounting with and against Benedict, was, we think, merged in the agreement of November 30th, which was under seal, and in which Bellack had become in fact a surety for Benedict; and it took the place of all prior obligations on the part of Benedict. So that, in respect to the matters embraced in it, the remedy of the plaintiff for any delinquency of Benedict and Bellack was by an action at law for damages.

In order to sustain a suit in equity for an accounting, some special and substantial ground of equity jurisdiction must be alleged, and it must appear that the remedy at law is inadequate. The mere fact that there are cross accounts is insufficient to give equity jurisdiction. Story, Eq. Jur. §§ 458, 459; Pom. Eq. Jur. §§ 178, 1420, 1421, and cases cited. The mere relation of principal and agent is not of itself sufficient to found the jurisdiction. It is entirely plain that an action against Benedict or Benedict and Bellack upon their covenant' and guaranty of November 30, 1887, would afford the plaintiff an adequate remedy in respect to the proceeds of the notes and accounts. Jewell v. Ketchum, 63 Wis. 628; Edwards v. Remington, 51 Wis. 336. Upon a demurrer ore tenus to a complaint which is clearly intended as a complaint in equity, the defendant may avail himself of the objection that the plaintiff has an adequate remedy at law. Trustees v. Kilbourn, 74 Wis. 452, and cases cited; Avery v. Ryan, 74 Wis. 599; Denner v. C., M. & St. P. R. Co. 57 Wis. 218. It- appears that Benedict is amply responsible. If, as between him and the plaintiff, the latter was in fact a surety for the debt on which the judgment was founded, and the former a principal debtor, this would not give the plaintiff any right to restrain the creditor from collecting his debt as against him as surety. This the creditor had a right to do, and the plaintiff had a complete remedy by paying the debt and maintaining an action at law against a defendant entirely solvent for his reimbursement.

Upon a careful consideration of the complaint, we are satisfied that it does not contain facts sufficient to entitle the plaintiff to any equitable relief. For these reasons we think that the judgment of the circuit court should be affirmed.

By the Gourt.— The judgment of the circuit court is affirmed.