23 Cal. 596 | Cal. | 1863
delivered the opinion of the Court—Cope, C. J. concurring.
This is an appeal from an order granting an injunction, in an action in the nature of a suit in equity, for a decree setting off a certain demand owned by the plaintiffs, against a demand owned by Josephi, one of the defendants.
The record discloses these facts, that on the fifteenth day of September, 1857, one Fisher obtained a decree for the foreclosure of a mortgage ‘upon certain real and personal property in the District Court of Humboldt County, against one Ryan, J. R. Duff and several others; that the mortgaged property was duly sold under the decree; and after the application of the proceeds upon the amount of the mortgage debt found due by the decree, there was a defi
The complaint states, that on the twenty-third day of February, 1856, Fisher entered into a contract with the said Ryan and J. R. Duff, two of the defendants in the decree of foreclosure, for the conveyance of the mortgaged property, should he acquire the title to it; but that Ryan and J. R. Duff, for the purpose of defrauding their creditors, had the contract made in the name of W. R. Duff, instead of their own, the latter being privy to the fraud; that an action was brought thereon, in the name of W. R. Duff, against Eisher, the Knoxes and others, to compel a specific performance, and an account of the rents and profits, in which a final decree was rendered in favor of W. R. Duff against the defendants, for a specific performance of the contract, and for damages in the sum of $13,566.99; that the Knoxes appealed from this judgment'to this Court, and the plaintiffs in the present suit became their sureties on the appeal bond; that the judgment was affirmed on appeal, and W. R. Duff brought an action on the appeal bond, in which he recovered judgment against the plaintiffs in this action, on the twenty-third day of August, 1861, for $16,900, and they aver that Ryan and J. R. Duff procured all these actions, and proceedings to be had, in the name of W. R. Duff, who acted as a mere naked trustee for them, they being the real owners of the judgment against the plaintiffs. W. R. Duff assigned this judgment on the tenth day of March, 1862, to one Sharp, who, on the twelfth day of March, 1862, assigned it to the defendant Josephi. It is this judgment that the plaintiffs seek to have set off and satisfied, by having the amount thereof credited on the larger judgment held by them. The injunction is to restrain the defendants from enforcing this judgment against the plaintiffs.
The first point raised by the appellants is, that the decree assigned to the plaintiffs is not a money judgment, and therefore does not
But it is unnecessary for us to determine what is the character and quality of such a judgment, further than as it may apply to the present ease. We think it clear that the original debt is merged in such a judgment, at least so far as to make it a certain and liquidated demand, existing at the date when- the amount was ascertained, sufficient as a foundation of a right of action or set-off. The principle is well settled, that it is not necessary that the demand sought to be used as a set-off should be in the form of a judgment.
It appears from the record, that prior to the suit for a specific performance, Fisher had conveyed the mortgaged property which he had purchased, to the Knoxes, and they were therefore made parties to the action, it being alleged that the sale was fraudulent and void, and that the Knoxes were therefore bound by Fisher’s contract to convey. This issue was found in favor of the plaintiffs in that action; and the decree, therefore, was rendered against the Knoxes. The appellants contend that the assignment of the judgment by Fisher to the Knoxes was without consideration, and fraudulent, and that the decree in the action for a specific performance was an adjudication to that effect, binding upon the plaintiffs, and vitiating the judgment in their hands. It is a sufficient answer to this, to say that the assignment of this judgment by Fisher to the
The assignment is not conditional, as was the case in Gilman v. Van Slyck (7 Cow. 469). The Knoxes are the principals, as to the liability of the plaintiffs to William R. Duff, and it was their duty, as such principals, to secure and protect their sureties. The assignment of the balance due on the judgment for that purpose was proper and valid, and should be sustained accordingly. It is urged, that the Knoxes are attempting to save themselves from their liability upon the money judgment rendered in the action for specific performance, through the complainants, by means of their assignment. If such should prove to be the case, we do not see what difference it can make as to the rights of the parties in this action. If the Knoxes have a just demand, which is an equitable set-off to the judgment held against them by William R. Duff, what rule of equity is violated by allowing them, or their sureties for them, to maintain an action for that purpose ? If William R. Duff is not the real owner of the judgment against the Knoxes, but is the mere trustee for Ryan and J. R. Duff, who are the beneficial owners, he is not injured in any way by the set-off; and the latter are not injured, for the judgment is applied in payment of an equal amount justly due from them, which is the object sought to be accomplished by a set-off. Indeed, we are not sure that if the Knoxes had not assigned the judgment to the plaintiffs, but still held it, the latter could apply to a Court of Equity to compel a set-off, to relieve them from the payment of their liability. That, however, is a question not before us. It is sufficient for the purposes of the present case, to say, that the assignment was for a proper and valid purpose, and made upon a good and sufficient consideration.
It is also urged, that Josephi purchased the judgment against the
The appellants also contend that the complaint is defective, as it does not allege that the Knoxes are insolvent, or that they are not able to repay to the plaintiffs the amount they may be compelled to pay as sureties. It is the insolvency of Ryan and J. R. Duff, the persons who owe the debt claimed by the plaintiffs as a set-off, and not that of the Knoxes, that is the material question upon this point. Their insolvency is averred, and does not seem to be disputed. It is the fact that they are the real owners of the judgment against the plaintiffs; that they are insolvent, and therefore the only means of collecting the judgment due from them to the plaintiffs is by the
The next point of the appellants is, that the plaintiffs are estopped from showing that Ryan and J. R. Duff are the real owners of the money due on the judgment against them, by the judgment in the action for a specific performance brought by Win. R. Duff against Fisher and the Knoxes. An examination of the record in that case shows, that no question of that kind was raised by the pleadings, and no judicial determination of the point raised in this action was had in that. The plaintiffs in this action could not be barred from setting up this fact as the foundation of their right of action, unless it was clearly shown that the same matter was in issue in the former action and adjudicated by the Court therein. Ho such adjudicar tion being shown, the plaintiffs are not estopped by the decree in that case.
It appears, that after the assignment of the judgment in the foreclosure suit by the Knoxes to Goddard, the latter issued execution thereon and had it levied upon a mill in Humboldt County. Wm. R. Duff brought suit against him and the Sheriff to enjoin the sale, on the ground that he was the owner of the mill, and that the execution defendants, Ryan, J. R. Duff, and others, had no interest in it. Goddard answered, denying these averments of the complaint, and alleging that the execution defendants were the beneficial owners
But, it is insisted, that they are also estopped from showing the same facts by the judgment rendered against them on the appeal bond, because in that action they set up the same matters alleged in this suit, as a ground of set-off or counter claim. The record, however, shows that the Court in that action excluded all evidence tending to show that Ryan and J. R. Duff were the real owners of the amount due on the appeal bond, and the action of the Court below was sustained by this Court for the reasons before stated. (Duff v. Holds, 19 Cal. 646.) It was then held that these matters could not be adjudicated in that action. The record shows that they were not adjudicated, and it follows that the judgment therein cannot be pleaded or claimed as an estoppel in this action. Although a Court of Law declines to determine a question of set-off, yet it is not res judicata, so as to preclude an inquiry in a Court of Equity. (Hackett v. Connett, 2 Edw. Ch. 73.)
The next position is, that the rules of set-off are the same in equity as at law. It is true, that Courts of Law and Equity follow the same general doctrines on the subject of set-off; but where some equity intervenes, independent of the fact of mutual unconnected debts, Courts of Equity will take jurisdiction, and determine the matter upon the principles of natural equity. And when the law could not give a proper remedy, as in case of the insolvency of one of the parties, equity will afford relief. (Barb, on Set-Off, 190; Lindsay v. Jackson, 2 Paige, 581.) The demands in this case are judgments, and the aid of a Court of Equity is
Another position taken by the appellants is, that Fisher should have pleaded the balance due on the judgment of foreclosure, as a set-off against the damages in the action brought by Wm. R. Duff against him and the Knoxes for a specific performance; and not having done so, the plaintiffs claiming under him are estopped or barred from maintaining this action. If he had so pleaded it in that suit, it would probably have been held, that the Court could not entertain the defense or allow the set-off in that action, on the same grounds that it was ruled out in the subsequent action of Duff v. Holls (19 Cal. 646). But independent of that, it is clear that a party does not lose his right to bring a separate action for a demand which he might have pleaded as a set-off, but neglected to do. (Barb, on Set-Off, 21.)
It is also insisted that the action is barred by the Statute of Lim
The order granting the injunction is therefore affirmed.