168 P. 957 | Utah | 1917
Lead Opinion
“That the deed hereinbefore described, and the record thereof, be declared fraudulent and void by this court, and that said deed be required to be delivered up for cancellation.”
The plaintiff obtained judgment canceling the deed, but the district court also entered judgment against her and in favor of the Matthews-MeCulloeh Company, hereinafter called company. That company was given judgment against the plaintiff and granted a lien on the premises in question for moneys alleged to have been expended by the company for the alleged use and benefit of the plaintiff. Plaintiff’s appeal is upon the judgment roll, and is only from that part of the judgment against her.
Plaintiff’s counsel insists that the findings of the court in favor of said company and the conclusions of law and judgment based on said findings are erroneous, for the reason that they are not supported by the pleadings. The court’s findings that are complained of here are as follows:
“That in pursuance of said exchange of property the said Matthews-MeCulloeh Company paid out for the use and benefit of the plaintiff the following sums:
On February 16, 1916, as interest on the herein-before mentioned $2,500 mortgage on said premises. $ 20.85
On March 17,1916, as interest on the hereinbefore mentioned mortgage on the said premises. '50.00
At the time of said exchange, as interest on the hereinbefore mentioned mortgage on said premises . 127.75
At the time of said exchange, as taxes on aforesaid premises of said plaintiff. 50.16
On September 18, 1915, for fixing headgate in irrigation system on aforesaid premises of plaintiff . 10.00
Total $258.76”
“That the defendant Matthews-McCulloeh Company is entitled to have judgment against the plaintiff, Lovina W. Rosenthyne, for the aforesaid sum of $258.76, advanced by the said Matthews-McCulloeh Company for the use and benefit of said Lovina W. Rosenthyne as hereinbefore set forth; that said Matthews-McCulloeh Company are entitled to a lien upon the hereinbefore described premises of the said Lovina W. Rosenthyne, and the said hereinbefore described premises of the said Lovina W. Rosenthyne be, and they are hereby, impressed with a lien in favor of the Matthews-McCulloeh Company, for the aforesaid sum of $258.76, paid out and expended by the said Matthews-McCulloeh Company on the said premises for the use and benefit of the aforesaid Lovina W. Rosenthyne, as hereinbefore set forth.”
The court, in addition to entering judgment canceling the deed as before stated, also entered judgment establishing a lien on the premises in question in favor of said company for the reasons stated in the findings and conclusions of law. The only allegations in the answer of the company upon which the findings, conclusions of law, and judgment complained of could be based are the following:
“That by the terms of said trade the said eodefendants Frank D. Smith and his wife, Rose Smith, actually assumed the mortgage incumbrance of $2,500' aforesaid, and in addition paid $405.40 in cash to discharge the taxes, which were over one year past due, and also discharge the interest, which was in default for two quarters, and other obligations and debts outstanding against said property.”
In addition to what has been said it is only necessary to state the relationship of the parties and how that relationship' arose, as those matters are disclosed by the pleadings. It is there made to appear that the plaintiff was the owner of certain real estate in Ogden City, and that she executed a power of attorney to her husband with respect thereto. Her husband, through the defendant company, entered into an agreement with the defendants Frank D. Smith and Rose Smith, his wife, whereby said company, with the consent of the plaintiff’s hus
The court construed the power of attorney, and found that the husband of the plaintiff had exceeded his authority in exchanging the premises owned by the plaintiff for those owned by said Smith, and hence the deed of conveyance made by the husband by virtue of said power of attorney
"Wherefore these defendants, having answered plaintiff’s complaint, ask that plaintiff take nothing by this complaint, and that these defendants have their costs.”
“A judgment must accord with and be warranted by the pleadings of the party in whose favor it is rendered; if it is not supported by the pleadings, it is fatally defective.”
To the same effect are the rulings of this court in Fillmore City v. Roller Mill Co., 36 Utah, 339, 103 Pac. 967; Florence Mfg. Co. v. Express Co., 36 Utah, 346, 103 Pac. 966.
Counsel for the company, however, insist that the ruling of the district court, in so far as the plaintiff was required to repay the money expended for her use and benefit in making the exchange of the premises aforesaid, is right, and is based upon the fundamental principle that he who comes into a court of equity must do equity. Counsel contend, therefore, that the court was authorized to require the plaintiff to repay the company the amount it had expended for her benefit as a condition precedent to her right to have the deed canceled.
The difficulty with that contention, however, is that there is absolutely nothing in the pleadings showing that the company expended any money for the use and benefit of the plaintiff. It is quite true that ordinarily courts of equity, before rescinding deeds, contracts, or other instruments for
The following excerpt from R. C. L. Section 341, p. 558, is also relied on, namely:
“A defendant is not, as a general rule, entitled to affirmative relief, unless he files a cross-bill. This rule is subject to exception in a case where the plaintiff is equitably bound to do equity as a condition precedent to the obtaining of equitable relief. In shaping its decree in such a case, the court has the power to protect the equitable rights of both parties, and if it sees fit to give affirmative relief to the defendant by enforcing an equitable claim in his behalf, it will do so.”
Section 141, p. 392, same volume, is also cited.
The text quoted above is based on the following cases, namely: Walden v. Bodley, 14 Pet. (U. S.) 156, 10 L. Ed. 398, Hubbard v. Tod, 171 U. S. 474, 19 Sup. Ct. 14, 43 L. Ed. 246, and Owings’ Case, 1 Bland (Md.) 370, 17 Am. Dec. 311. An examination of the foregoing eases will disclose that the decisions are in perfect harmony with what is said hereinabove. In the ease cited from Maryland the question decided was whether affirmative relief could properly be granted to the defendant upon the bill of the plaintiff without the filing of a cross-bill by the defendant. The court, in passing on the question, after some discussion, in the course of the opinion, says:
"In such cases there can be no danger of surprise, or want of opportunity to adduce proof, because the indirect, inverted, or constructive decree is confined to that subject alone, which the parties themselves have by their pleadings spread before the court. Here the bill and answer disclose the whole matter in dispute, relative to the promise of the plaintiff, as fully as it could be done by a cross-bill. The defendant not only sets out and relies upon the promise of the plaintiff, but attempts to sustain the deed of the 15th of June, upon the ground of its being a mere fulfillment of that promise, thus representing the promise as the original contract. This allegation of the defendant has been put in issue as a material part of the subject in controversy, and, like every other part of the matter hi issue, it may, without the unnecessary circuity and expense of a cross-bill, be met by such a decree as justice requires, either in favor of or against the plaintiff. Harding v. Handy,*45 11 Wheat. 120 [6 L. Ed. 429]; Stuart v. Mechanics’ & Farmers’ Bank, 19 Johns. [N. Y.] 505.”
The case of Walden v. Bodley, supra, is to the same effect, and. language in effect like that quoted from the Maryland case is used in the opinion. The other case cited, namely, Hubbard v. Tod, is a proceeding in certiorari, and has no application to the principle now under discussion.
The case of Farmers’ Loan & T. Co. v. Denver, L. & G. R. R. Co., 126 Fed. 46, 60 C. C. A. 588, is, however, also relied on. It is sufficient to say that in that case the plaintiff commenced its action to foreclose a trust deed which was given on certain premises which, it was claimed, were covered by said trust deed and on a portion of which premises one Hutchison also held a trust deed to secure a certain indebtedness. The plaintiff, in its complaint, alleged that its trust deed was superior and paramount to the Hutchison trust deed, and prayed judgment that the court in which the action was commenced so find and declare. Mr. Justice Sanborn who writes the opinion, in his statement of facts, in referring to the issues, says:
“The defendant James B. Hutchison, who claimed under a trust deed upon these seven acres, dated February 1, 1894, hereafter termed the 'Hutchison mortgage/ made to secure a. note for $50,000 signed by the railroad company and the Jefferson Investment Company, payable to him, answered that his equity was superior to that of the trustee of the first mortgage.” (Italics ours.)
Upon those issues the trial court held that Hutchison had a superior equity to that of the plaintiff to a part of the $50,000 to secure which the Hutchison trust deed was given. ‘The plaintiff appealed, and, among other things, contended that the trial court erred in awarding Hutchison affirmative relief because he had not filed a cross-bill in the action. It needs no argument to show that the pleadings and issues in that case are vastly different from those in the ease at bar. There the plaintiff in its complaint alleged that its trust deed was superior to Hutchison’s, and prayed judgment to that effect. Upon the other hand, Hutchison, in his answer, claimed that his trust deed was superior, and the court found and decreed
It therefore is not decided in the cases referred to that relief may be granted in any case without proper pleadings, but what is there decided is that, where the facts upon which the affirmative relief in favor of the defendant is based sufficiently appear in the pleadings, no particular form of pleading is necessary, and the relief may be granted on the pleadings as they stand. This court has affirmed that doctrine in the case of Welsh, Driscoll & Buck v. Buck, 48 Utah, 653, 161 Pac. 455, where we held that, where the facts are sufficiently stated in the answer, and the evidence is sufficient to justify a finding in favor of the defendant, affirmative relief may be granted to him, although ordinarily the matters more properly should have been set forth in a counterclaim. That, however, is not the question in this case. Here the party to whom the relief is granted does not even claim in its pleadings that it paid out or expended any money for the benefit of the plaintiff. What it in effect alleges is that some one else did so. Judgment is, however, awarded to the company for the identical money that it alleged some one else paid for the use and benefit of the plaintiff. Can it truthfully be said that under any system
So far we have assumed the ease at bar to be one where the company, as a matter of right, may invoke the maxim that “he who seeks equity must do equity.” In this connection it must not be overlooked that the company is a stranger to the contract which was the subject-matter of plaintiff’s
“Moreover, this maxim of equity jurisprudence applies only when the relief sought by plaintiff and the right demanded by defendant belong to or grow out of the same transaction. It has no application where the demand of the defendant is based on a contract separate and distinct from that which forms the subject of the plaintiff’s action.”
The company was not even a necessary party to this action so far as concerns plaintiff’s right to have the deed made by her husband and the contract with defendants Frank D.
The findings and judgment are therefore not only not supported by the pleadings in the case, but they are directly contrary to the averments contained in the company’s own pleading. If, however, the company paid out the money, as found by the court, there is no good reason why the
The company, however, also assigns cross-errors in which it asserts that the district court erred in ruling that the power of attorney executed by the plaintiff in favor of her husband did not authorize the latter to trade or exchange her property for the property of the defendant Smith. As
“An appeal is taken by tiling with the clerk of the court in which the judgment or order appealed from is entered a notice stating the appeal from the same, or some specific part thereof.” (Italics ours.)
The plaintiff complied with the statute by specifically stating in the notice of appeal that she appealed only from that part of the judgment which was in favor of the company and against her. The company was thus notified that the plaintiff did not bring up the whole judgment for review, and if the company desired to have any other part of the judgment reviewed, it should have brought it up to this court by cross-appeal. While in this jurisdiction the respondent may for certain purposes, and within certain limitations, assign cross-errors, and thus review certain alleged errors without taking a cross-appeal, yet he may not, on such assignments, review matters not included in the appeal. The rule in that regard is stated in the headnote to the case of Big Cottonwood Tanner Ditch Co. v. Shurtliff, 49 Utah, 569, 165 Pac. 856, in the following words:
‘ ‘ To- modify an independent portion of the decree not touched by the appeal is not the office of mere cross-assignments, but the peculiar province of a cross-appeal."
To the same effect is McCornick & Co. v. National Copper Bank, 49 Utah, 296, 163 Pac. 1097.
In view, therefore, that the defendant’s cross-assignments all relate to that portion of the judgment not appealed from, we are powerless to consider them.
The only question remaining is: what disposition should be made of this appeal 1 This being an equity case, we have the power to finally dispose of the case as well as of the appeal. We may, however, also remand the case with directions. In view of what has been said, however, if we now end the case, we might give the appellant an advantage to which she is not entitled by permitting her to escape from the payment of the
Dissenting Opinion
(dissenting).
In each of the separate answers of Smith and wife, the defendant J. A. McCulloch, and the Matthews-McCulloeh Company, an allegation is contained that the defendant Smith had paid to defray and discharge taxes and interest, and other legal claims existing against plaintiff’s property, the sum of $405.40. No affirmative relief was asked in the prayer of any one of such answers.
As I have indicated above, plaintiff is seeking the aid of a court of equity in asking to have her property returned to her. To entitle her to that relief she must do equity. This appeal is upon the judgment roll, and we must assume that the findings are supported by the evidence adduced at the trial. In fact, no contention is or can be, made to the contrary. In my opinion, the chancellor hearing this case was not only justified in the findings made, but he would have been derelict in his duty had he made any other findings and decree, if the facts warranted such findings. Let us suppose
Plaintiff, in her complaint, seeks equitable relief, and the facts found entitle her to that relief whenever gbe restores to the defendant Matthews-MeCulloch Company property that it had in good faith expended for her benefit. All of the parties were before the court, and all of the facts were before the court.
"Under the circumstances a court of equity will not be bound by the mistaken prayer of plaintiff’s complaint, but will strike the balance and close the account.” Bader v. Johnson et al., 78 Wash. 350, 139 Pac. 33.
This is not a new doctrine in this court. As an illustration, if any one will examine the record of the case of Ives v. Grange et al., 42 Utah, 608, 134 Pac. 619, it will be seen that this court, after setting aside the findings of the lower court, regardless of any allegations contained in the pleadings or of the relief sought in the prayer, proceeded to determine the equities among the parties, and directed the method by which the district court should protect the interests of each.
The principle that, in my opinion, should govern this ease is stated in Farmers’ L. & T. Co. v. Denver, L. & G. Co., 126 Fed. 50, 60 C. C. A. 592, where, in discussing a like question, Judge Sanborn, speaking for the court, says:
“They say that this condition could not be imposed, and that the decree ought to be reversed, because Hutchison hied no cross-bill and prayed for no affirmative relief, while the decree directs that $21,049 and interest shall be paid to him out of the proceeds of the. sale of the land. It is true that the general rule is that a cross-bill is indispensable to the grant of affirmative relief to a defendant in equity. But there is an exception to this rule, as well settled and uniformly applied as the rule itself. It is that no cross-bill is requisite to the application of the maxiin that he who asks equity must do equity. It is that any relief, affirmative or otherwise, may be granted to a defendant which*54 the principle embodied in this maxim requires the court to impose upon the complainant as a condition of granting all or a part of the relief he seeks, regardless of the pleadings which present it” — citing numerous authorities.
It is claimed, in the review of that case in the majority opinion, that the facts there were different from the facts in the case at bar, and that the rule stated in the above quotation does not apply here. Suffice it to say that the noted jurist in that excerpt from his opinion was stating general principles of equitable procedure with especial reference to the maxim, “He who seeks equity must do equity,” regardless of the facts in the particular ease under consideration. Affirmative relief was granted in that case notwithstanding no cross-bill had been filed, and there was no prayer for 'affirmative relief. In my judgment, that is the principle and the procedure adopted-by the judge who heard this case. Plaintiff was asking equity at the hand of the court. In her efforts in that direction she dragged the defendant Matthews-McCulloeh Company into a court of equity and charged said defendant with having been a party to the recording of a false, fraudulent, and fictitious deed affecting her property. The court found no fraud on the part of the defendants, and only a mistaken judgment as to the legal effect of a written power of attorney executed by plaintiff herself, and that said defendant had in good faith expended certain moneys to redeem plaintiff’s property from delinquent taxes and to pay past-due interest on a mortgage she had given secured by the property in question. In the face of that state of facts, as appears by the finding of the lower court, this court now. holds that the chancellor had no power to enter the judgment he did, and that the cause must be remanded for further proceedings. Additional expense must necessarily be incurred, notwithstanding, from the facts as they appear in the record and the findings of the court, it is apparent that, when the case shall be redocketed in the district court and the amendments suggested allowed, the ultimate judgment must be the same as that rendered by the trial court. It must be remembered that it is not contended that any wrong or injustice has been done any of the parties by
It is insisted that the defendant Matthews-McCulloch Company, cannot invoke the maxim, “He who seeks equity must do equity, ’ ’ for the reason that that company is a stranger to the injury complained of by plaintiff. That company was made a party to this suit by the plaintiff. In her complaint she charges that the defendants Matthews-McCulloch, J. A. McCulloch, and Smith wrongfully and unlawfully caused a certain false, fraudulent, and fictitious deed to be recorded in the office of the county recorder of Weber county purporting to convey her premises to the defendant Smith, and against all of these defendants sought damages and general relief. In view of such allegations on the part of the plaintiff it would seem to be apparent that the relief sought by plaintiff and the judgment granted to such defendant “belongs to or grows out of the same transaction. ’ ’
Some criticism is made that the court should not have made the amount to be repaid Matthews-McCulloch Company a lien upon the plaintiff’s premises. But how is plaintiff injured by that part of the judgment? The court was clothed with authority, in the application of the equitable doctrine of “He who seeks equity must do equity,” to require plaintiff, as a condition precedent to granting her any relief, to repay to such defendant the moneys expended by it for her benefit. This the trial court did not do, but it restored to the plaintiff the title to her premises and subjected it in plaintiff’s hands to a lien as security for the amount that said defendant had expended for her interest and the protection of her property. Plaintiff surely cannot be injured by that part of the court’s decree in view of the court’s findings. She has been given the title to her property. She is under no personal obligation to repay the defendant, and can make such disposition as she may desire of the premises subject to that lien.
For the reasons herein stated I dissent from the conclusions reached by the majority of the court. In my opinion, the judgment of the lower court should be affirmed.
Concurrence Opinion
The effect of the prevailing opinion, as I construe it, is to abridge the scope of the equitable powers heretofore exercised in this class of cases by the district courts of this state. In view of the far-reaching effect of the opinion in that regard, as I view it, I shall make a few observations in addition to those advanced by Mr. Justice GIDEON giving reasons why I think that part of the judgment appealed from should be affirmed.
'The power of attorney under which the deed from Anthony Rosenthyne to the defendants Frank D. Smith and Rose Smith was executed, so far as material here, is as follows;
“Know all men by these presents that Lovina W. Rosen-thyne has made, constituted, and appointed, and by these presents does make, constitute, and appoint, Anthony Rosen-thyne her true and lawful attorney for her and in her name, place, and stead, and for her use and benefit, as to the following described tract of land only, * * * to bargain, contract, agree for, purchase, receive and take lands, tenements, hereditaments, and accept the seizing, and possession of all lands, and all deeds of other assurances, in the law therefor, and to lease, let, demise, bargain, sell, remise, release, convey, mortgage, and hypothecate lands, tenements, and heredita-ments upon such terms and conditions and under such covenants as he shall think fit, * * * and to make, do, and transact all and every kind of business of what nature or kind soever, and also for her and in her name, and as her act and deed, to sign, seal, execute, deliver, and acknowledge such deeds, covenants, indentures, * * * and such other instruments in writing of whatever kind and nature as may be necessary or proper in the premises, giving and granting unto her said attorney full power and authority to do and perform all and every act and thing whatsoever requisite and necessary to be done in and about the premises, as fully to all intents and purposes as she might do if personally present,- hereby ratifying and confirming all that her said attorney, Anthony Rosen-*57 thyne, shall lawfully do or cause to be done by virtue of these presents. ’ ’
The power of attorney was duly signed and executed by the plaintiff, and recorded in the office of the county recorder of Weber County, Utah.
Plaintiff brought suit in equity against the Matthews-Me-Culloeh Company, J. A. McCulloch, and the Smiths to have the deed executed by her husband under the power of attorney “delivered up and canceled.” The defendants answered, and, evidently relying on the validity of the transactions had under and in pursuance of the power of attorney, which they were justified in doing, did not set up a counterclaim, and did not ask for an affirmative judgment against the plaintiff.
The trial court found that, “pursuant to said power of attorney, said Anthony Rosenthyne * * * employed and authorized * * * Matthews-McCulloch Company to sell the aforesaid real estate,” and that “Matthews-McCulloch Company acting for the said Lovina W. Rosenthyne, exchanged the aforesaid real estate belonging to. the said Lovina W. Rosen-thyne” for real estate belonging to said F. D. Smith and Rose Smith, the “said Lovina W. Rosenthyne receiving in exchange therefor the following described premises: [Describing them by metes and bounds]. ’ ’ The court also found "that, in pursuance of said exchange, the said Frank D. Smith paid to said Matthews-McCulloch Company the sum of $405.40 in cash, which said sum of $405.40 is the difference in valuation” between the properties so exchanged, and that said sum was paid by said Frank D. Smith and Rose Smith as part consideration in exchange of the property to the said Matthews-McCulloch Company as agent of said plaintiff; that no part of said $405.40 has been paid to Frank D. Smith and Rose Smith.” The court also found that Matthews-McCulloch Company, who transacted the business for the respective parties to the transaction, expended in payment of taxes, for necessary improvements made on the property and in payment of interest due on a mortgage held by a third party against the property described in the power of attorney, the sum of $258.76.
The foregoing findings of fact made by the court, considered
Plaintiff having come into a court of equity to obtain relief to which she was neither legally nor equitably entitled, the trial court not only had the power, but it was its duty, to require her to do equity in the premises by paying into court for the defendants the amount of money expended by them in making the necessary improvements on the property, in the payment of taxes levied against it and in payment of interest
"It says, in effect, that the court will give the plaintiff the relief to which he is entitled only upon condition that he has given, or consents to give, the defendant such corresponding rights as he also may he entitled to in respect of the subject-matter of the suit.”
Again, in volume 6 (3d Ed.) section 688 (volume 2, Equitable Remedies), of the same work, the author, in discussing the subject of "Cancellation” of instruments, says:
"In order to obtain relief, the complainant must restore the other party to the condition in which he stood before the transaction. This requirement is based upon the maxim that he who seeks equity must do equity. ’ ’
In volume 7, section 219, Modern American Law, it is said:
‘ ‘ Whenever a suitor asks the aid of a court of equity, he. must be prepared, as a condition to obtaining relief, to admit and secure to the other party all the latter’s equitable claims involved in the subject-matter of the controversy. * * * A person suing to rescind or cancel a deed or contract because of fraud or mistake must return the consideration received and restore the other party to the situation in which he was before the transaction.”
In the ease at bar none of the defendants were guilty of any fraud relating to the transaction out of which this controversy
Plaintiff, under these wholesome rules or principles of equity was required, as a condition precedent to the granting of the relief prayed for in the complaint, to do or offer to do equity. And that, too, regardless of whether the defendants interposed a counterclaim asking for an affirmative judgment against her.
As an illustration let us suppose that a parcel of real estate is sold for delinquent taxes, and, after the time for redemption has expired, the purchaser receives a deed for the land fully executed by the proper public official and takes possession of the property. In addition to paying the general taxes assessed against the property, the grantee named in the tax deed pays special taxes or assessments levied against it for public improvements, such as paving, sidewalks, and streets on which the property abuts, and also pays out money for necessary improvements on the property. The party owning the property at the time it was sold for taxes brings a suit in equity, after large expenditures of money have been made for the purposes suggested, to have the tax deed "delivered up and canceled” on the ground of some alleged infirmity in the tax levy, sale, or tax deed by which he was divested of his property. The party in possession, relying on the validity of his tax deed, does not interpose a counterclaim asking for an affirmative judgment against the plaintiff for the money expended by him in the payment of general taxes, special assessments, and for necessary improvements made on the property, but, relying on his title, pleads an estoppel, setting forth in detail the different items of expenditure made by him in the payment of taxes, etc. The court in its decision finds that the
The trial court having adjudged the deed from Rosenthyne to the Smiths to be void, the judgment rendered respecting the $405.40 paid by the Smiths to Matthews-McCulloch Company and the $258.76 paid by Matthews-McCulloch for the benefit of plaintiff’s property is the only judgment that can be rendered under the circumstances and do complete justice to the defendants. In fact, the prevailing opinion, as I read it, in effect so holds.' And the plaintiff is not in any respect prejudiced by it, because it is no concern of hers whether Matthews-McCulloch Company or the Smiths were paid the $258.76 that was expended for the benefit of her property. While the Smiths or Matthews-McCulloch Company might have some legal basis for assailing the judgment in that regard, the plaintiff has none, because, as stated, she cannot possibly be prejudiced by it, and the error, if there was error, was merely technical, and not prejudicial as to her. Under the prevailing opinion, as I read it, neither plaintiff nor defendant can possibly be benefited by a reversal of the case. It is manifest from the record that, when the case is reversed, and further proceedings had in accordance with the directions of, and in harmony with the suggestions made in, the prevailing opinion, a judgment identical with the one appealed from will be entered. Therefore the only effect a reversal of the case can possibly have is to prolong the litigation at the expense of the defendants. Plaintiff succeeded in misleading the trial court, and thereby obtained a judgment in her favor on the main or principal issue in the case, to which she was neither legally nor equitably entitled, and she ought not to be
For the reasons stated in the opinion written by Mr. Justice GIDEON, and those herein set forth, I am clearly of the opinion that that part of the judgment appealed from should be affirmed.