Brown v. Calumet River Railway Co.

Moran, J.

Brown was the owner, and by the condemnation of Brown’s ownership and right of possession and paying the sum assessed as the value thereof into the hands of the county treasurer, complainant acquired and exercised the right of entry upon and enjoyment of the land condemned. It is difficult to perceive on what basis of equity complainant shall be entitled to hold and enjoy the rights it obtained by the judgment of condemnation, and still be entitled to prevent the party whose interests and rights it acquired by the judgment, from having the possession and enjoyment of that which was awarded to him as the price and compensation for those interests. There is no pretense that Brown made any representations that were false, or concealed from complainant any fact that he was bound to disclose.

It is said that the equity is founded on complainant’s mistake in not discovering that Dale held a mortgage on the land, and failing to make him a party to the condemnation proceedings. Conceding that the mistake was not to be ascribed to lack of diligence on complainant’s part, and that it was such a mistake as equity would relieve against, what is the remedy which equity affords when its aid is invoked under that head of jurisdiction, where the alleged mistake is not mutual, and it is not accompanied or induced by inequitable conduct of the defendant? . Is it not rescission, setting aside, placing the parties back where they were before the mistake occurred ?

Pomeroy in his work on Equity Jurisdiction, Sec. 838, says: “ All the possible modes in which the- remedial jurisdiction occasioned by mistake, can be exercised, are the following: 1. Negatively, as a ground of defense, either in actions at law or in suits in equity, to defeat an enforcement of and recovery upon either legal or equitable rights of action. 2. Affirmatively, as a ground for rescinding a transaction and restoring the mistaken party to his original position by means of an appropriate legal action, and a recovery therein of money or property. 3. Affirmatively, as a ground for the equitable relief of rescinding a transaction, or canceling an agreement or other written instrument. 4. Affirmatively, as a ground for the equitable relief of reforming or re-executing a written instrument.” Manifestly, if by a mistake a judgment has been entered which does not protect the rights of complainant, and to correct which it is entitled to equitable relief, it must be of the nature specified in the third division above quoted.

The effect of the decree in this case is to give the complainant a benefit or an affirmative right because of his- mistake, instead of granting him mere relief from it. He has a practical reformation of the judgment into which the mistake entered, instead of a rescission or setting aside thereof. This is in violation of the rules governing this kind of equitable relief.

“ Reformation,” says Bispham, Sec. 469, “ is a much more delicate remedy than rescission. Hence, in order to justify a decree for reformation in cases of pure mistake, it is necessary that the mistake should have been mutual. Where the mistake has been on one side only, the utmost that the party desiring relief can obtain, is rescission, not reformation.” See also, Sec. 191, and cases cited in note.

Accordingly we find that when the mistake of one of the parties is made the basis of interference by equity with a judgment at law, the usual and almost invariable relief granted, is to set aside the judgment so that there may be a new trial on the merits. Pomeroy’s Eq. Jur., Sec. 871-839.

The basis of this rule, that a complainant who seeks relief from the consequences of his own mistake may have rescission only, lies in the fundamental maxim that he who seeks equity must do equity. The facts as shown in this record present a proper occasion for the application of this maxim. It appears that appellee Brown was dissatisfied with the award of damages for his land, and sought to set aside the verdict because it was too small, and that Crawford, the attorney for the mortgagee, when applied to by the solicitor for complainant, stated that the verdict was less than the value of the land, and offered to enter the appearance of the mortgagee, provided complainant would agree to set aside the verdict and let a new trial be had, but to that complainant would not agree. It would not do equity when expressly requested, but on the contrary seeks to retain the advantage of what it regards as a favorable verdict, and comes into equity for a correction of its mistake by imposing on its adversary the burden resulting therefrom.

The decree is sought to be defended- on the ground that the mortgagee is an owner, whether a party to the suit or not, and that the award is a fund standing as an equivalent for the land taken. True, the mortgagee is an owner, and may subject the fund to the payment of the mortgage debt, and has a right to proceed in equity to foreclose against it, whereas, in this case, the award is for the whole value of the land; but that is a right to be asserted by the mortgagee, as was done in Platt v. Bright, 31 N. J. Eq. 82, cited and relied on by appellee. Perhaps if Dale was seeking to foreclose his mortgage, and to reach this fund as against Brown, it could be said that the complainant would have an equity to have this fund applied in payment of the mortgage as far as it would go, before resort should be had to the land taken; but Dale is not seeking to foreclose, and is not asserting any right to the fund, and we do not perceive that complainant occupies such position as to the fund or the mortgage, as to entitle it to come into equity to change by decree the relations that exist between Brown and his mortgagee, and with which they appear to be contented. Appellee having become a purchaser of part of the mortgaged premises, may, possibly, whenever a foreclosure is sought, assert its equity to enforce a sale of the land covered by the mortgage, in the inverse order of alienation. It certainly has no equity to tie up the money of appellant by a decree which allows him no interest thereon, while it continues to enjoy the possession of the land, which was obtained from appellant by operation of the judgment. Appellee was estopped by its condemnation petition and the judgment, from denying appellant’s title or right to the compensation. P., P. & J. R. R. v. Laurie, 63 Ill. 264; S. P. Comm’rs v. Todd, 112 Ill. 380.

Appellant made a demand upon the county treasurer for the payment of the condemnation money to him, after the judgment had been affirmed, and he was then entitled to receive it. The decree of the Circuit Court must be reversed and the case remanded to the court with directions to dismiss the original bill, and to render a decree against said Davis and the complainant, for the payment to appellant of said sum of §17,500, with interest thereon at the rate of six per cent from the 6th of October, 1888.

Reversed and remanded with directions.