Henry v. Travelers' Insurance

16 Colo. 179 | Colo. | 1891

Mr. Justice Elliott

delivered the opinion of the court.

We shall notice in limine some' of .the formal objections presented by counsel for defendants in error.

First. It is urged that we should dismiss the writ in this case for the reason that plaintiff in error has failed to file a printed brief as required by the rules of this court. The brief filed is merely type-written; it is very imperfect and unsatisfactory; it has been of very little assistance to us in the investigation of the questions involved in the record. If a motion to dismiss for non-compliance with the rules in respect to briefs had been insisted upon in apt time, it might have prevailed. Briefs need not be lengthy; but they should conform substantially to the rules of the court; and should be full and clear upon the points relied on for reversal.

Second. It is contended that the petition of intervention has not been properly made a part of the record. This objection is without foundation. The record shows that the cause came .on to be heard on the complaint, cross-complaint, the separate answers of the several parties and the petition of intervention of Theodore O. Henry. The record further shows that upon said hearing all objections and exceptions to the formality or regularity of the offer of said petition were expressly waived by all parties; that upon the denial of said Henry’s petition to intervene, exception was duly reserved by the petitioner to such ruling and judgment. The bill of exceptions containing the several matters aforesaid, including the petition of intervention, is signed and sealed by the presiding judge; and the same is regularly certified under the seal of the court.

Third. It is insisted that there is no final judgment in this case to which a writ of error will lie. This objection is not tenable. Upon the entry of the judgment or order denying Henry’s application to intervene, the cause was finally determined as to him; and, unless he be entitled to a writ of error from this court, he -is precluded from any review of such judgment. D. & N. O. R. R. Co. v. Jackson, 6 Colo. 310; Curtis v. Lathrop, 12 Colo. 169.

The petition of intervention having been presented in due form and in apt time, the question for our consideration is: Does the petition set forth a state of facts in relation to the parties and the subject-matter of the litigation entitling Henry to be made a party to the action as an intervenor? This question must be determined from a consideration of the matters set forth in the petition taken in connection with the other pleadings and proceedings in the action. In determining this question, whether upon application to file the petition, or upon motion to strike out the petition, or upon demurrer to the petition for insufficiency, the averments of the petition, so far as the same are well pleaded, must be taken as true. Mere uncertainty or ambiguity in the averments of the petition should not be held sufficient to defeat the right of intervention without giving the usual opportunity to amend.

The Code of Procedure of this state, section 22, provides: “ Any person shall be entitled to intervene in an action who has an interest in the matter in litigation, in the success of either of the parties to the action, or an interest against both.”

In Horn v. The Volcano Water Co., 13 Cal. 69, a lucid construction is given to this section by Mr. Justice Pield, as follows: “ The interest which entitles a person to intervene in a suit between other parties must be in the matter in litigation, and of such a direct and immediate character that the intervenor will either gain or lose by the direct legal operation and effect of the judgment.”

The petition in this case states that Henry is the owner of ten of the Ditch Company bonds, of the par value of $10,000, secured by the deed of trust sought to be foreclosed ; that he is the owner of a majority of the stock of the Ditch Company; and that he is unable to appear and defend in behalf of the Ditch Company by reason of the fraudulent conduct of the Insurance Company in acquiring the actual control of his Ditch stock, and thereby obtaining control of the Ditch Company, its officers and agents. That the Insurance Company, by fraud and collusion with the officers of the Ditch Company, controls its affairs, including the management of this cause, to which the petitioner seeks to be admitted as a party.

Undoubtedly, Davis, the trustee named in the deed of trust sought to be foreclosed, if acting in good faith and as an impartial representative of all the bondholders, might properly be admitted as a party to the action commenced by the Insurance Company, and allowed to control the litigation for the purpose of foreclosing the deed of trust, selling the property, and making application of the proceeds to the payment of the bonds thereby secured. Jones on E. E. Securities, sec. 136; Jones on Mortgages, sec. 1385; Campbell et al. v. Railroad Co., 1 Woods, 368. But the action was instituted for additional objects and purposes; besides, the good faith and impartiality of Davis as trustee are directly challenged by the sworn petition of intervention as presented. The complaint avers that the Insurance Company accepted and holds $190,000 of the bonds of the Ditch Company, par value, parcel of the $200,000 issue, not as owner, but as collateral to secure its former claims and liens against the Ditch Company; the petition- of intervention, on the contrary, alleges that all such claims and liens had in fact been paid and discharged by the Insurance Company’s acceptance of said bonds as its own property and not as collateral. A sharp issue upon this material question was thus presented for adjudication by the petition of intervention.

The Ditch Company, being a party to the action, might ordinarily be depended upon to defend against an attempt to obtain judgment against it and against its property to the amount of $90,000 in excess of all just demands, and on account of claims and liens which had already been paid and discharged. But the petition shows that the parties seeking to obtain such judgment had fraudulently obtained control of the Ditch Company, its officers, agents and attorneys, so that it would neither make nor undertake to make such defense. Under such circumstances, it is plain that the petitioner, Henry, being the owner and holder of $10,000 o.f the bonds sought to be foreclosed, and also being the owner of a majority of the stock of the Ditch Company, and so an equitable owner of the larger part of the property which plaintiff was thus seeking to subject to false and fraudulent claims, liens and judgments, had a direct .and immediate interest in the matter in litigation, and that he must be directly affected by thé legal operation of the judgment sought to be obtained in the action. Hence, under tbe code, as well as upon principles of equity and justice, he was entitled to intervene. Story’s Eq. Pl., sec. 72 et seq.; Galveston R. R. Co. v. Cowdrey, 11 Wall. 459; Grain v. Aldrich, 38 Cal. 514.

The averments of the petition in reference to a former suit pending in the United States circuit court are undoubtedly material and relevant to this action. It is'shown that both Henry and the Insurance Company are parties to such former suit; that the suit concerns the same subject-matter as this litigation; that an interlocutory decree has already been rendered in the circuit court declaring the existence of the contract between the Insurance Company and the Ditch Company, as alleged in the petition; that an accounting concerning the bonds held or owned by the Insurance Company has been ordered; and that such accounting is now being carried on. But we cannot undertake to determine definitely the effect of the suit pending in the federal court; for by the lapse of time the status of the matters thus pending may have greatly changed; and the petition of intervention may require alteration or amendment in respect thereto, and perhaps in respect to other matters also.

It is urged that Henry should not be allowed to delay the foreclosure of the U’ust-deed, and thus postpone the rights of other bondholders, in order to enable him to litigate his controversies with the Insurance Company. This objection has little force in view of the fact that the record shows that there are no other bondholders save Henry and the Insurance Company; and that they are the only real parties in interest so far as a recovery of the bonded indebtedness of $200,000 is sought in the action. Ho other bondholders, therefore, can be delayed or inconvenienced by the litigation of the matters presented in the petition. Besides, as we have seen, the owners of the Ditch stock, of which Henry held the greater share, are directly interested in having the property of the Ditch Company protected against the false and fraudulent liens as alleged in the petition ; and to secure such protection they must either litigate the same in the foreclosure suit or await the determination thereof in the federal court.

The district court should not have denied Henry’s application to intervene, but should have ruled the other parties to the action to answer the petition as they should be advised, and should have allowed the parties to the record to try the matters thus put in issue. The judgment of the district court in denying such application is accordingly reversed, and the cause is remanded for further proceedings in conformity with this opinion.

Reversed.

Mr. Justice Hayt, having determined this application in the court below, did not sit at the hearing in this court.