Case ID: mich_222/html/0186-01.html
Source: Caselaw Access Project
Author: {"author": "Sharpe, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

FEDERAL TELEPHONE & TELEGRAPH CO. v. ROBINSON.
    Injunction — Equity — Jurisdiction — Pleading — Sueficienoy— Lost Bonds — Ownership.
    In a suit by a corporation to enjoin defendant from disposing of certain trust bonds secured by a mortgage on its property, and praying that he be ordered to deliver them to plaintiff, allegations established by undisputed proof that said bonds, although executed, were never issued, that they were sent to the trust company for cancellation, that defendant found them and had them in his possession, that he had attempted to collect some of the interest coupons then due, and that plaintiff was apprehensive that defendant, unless -enjoined from doing so, would sell and dispose of said bonds to persons who might claim to be innocent purchasers for value, held, to justify a decree that the bonds be delivered to plaintiff; defendant claiming no interest in said bonds except as a finder bolding them for the proper owner.
    Appeal from Calhoun; North (Walter H.), J.
    Submitted January 2, 1923.
    (Docket No. 10.)
    Decided March 22, 1923.
    Bill by the Federal Telephone & Telegraph Company against Thomas F. Robinson to enjoin the disposal of certain bonds. From a decree for plaintiff, defendant appeals.
    Affirmed.
    
      Meehem, Onen & Mechem, for plaintiff.
    
      N. A. Cobb, for defendant.
   Sharpe, J.

The defendant, while assorting waste paper at the plant of the Michigan Carton Company in Battle Creek in January,- 1919, found therein 26 bonds of the Wellsville Telephone Company, a corp oration organized under the laws of the State of New York, of the face value of $500 each. These bonds were all dated January 1, 1902, and would mature in 20 years. All of the interest coupons were attached. They were a part of a $30,000 issue duly authorized by the company, secured by a mortgage on its property, in which the City Trust Company of Cleveland was named as trustee. Though duly executed, the bonds were never issued. In 1904 they were sent by the telephone company to the trust company for cancellation and discharge of the mortgage. This the trust company neglected to do and the bonds in some way became mixed in with its waste paper. At the request of the defendant, the Central National Bank of Battle Creek wrote the plaintiff, the successor of the Wellsville Company, asking the value of one of the bonds. Plaintiff’s treasurer in reply informed the bank of the facts above stated. Investigation developed the further fact that the trust company had failed and, after the final accounting had been had, its worthless papers and documents had been sold as waste paper.

Plaintiff, on July 23, 1919, filed its bill of complaint herein, alleging the facts stated and that defendant was attempting to dispose of some of the interest coupons, and prayed that defendant be enjoined from disposing of the bonds and be ordered to deliver them to plaintiff. A temporary injunction was issued. A copy of this and a copy of the summons issued were served on defendant on July 23, 1919. On July 28, 1919, defendant, accompanied by his counsel, Judge Palmer, went to the office of plaintiff’s attorneys and, after a conference, a stipulation was prepared and signed by Mr. Onen, representing the plaintiff, and the defendant personally, reciting the finding of the bonds by defendant and, providing that they should be deposited with the county clerk to abide the result of the suit and, if the owner was therein determined, they should be turned over to him and, if found to be of no value, the clerk should destroy them, and that no costs should be taxed against the defendant. No appearance was entered by the defendant. On November 10, 1919, an order pro confesso was duly entered and an affidavit of regularity filed. On February 27, 1920, plaintiff filed a petition asking that a commission issue to take testimony in the State of New York. A commission was issued and testimony taken. Thereafter, and on August 25, 1920, Mr. Hamilton entered his appearance as attorney for defendant and on the 28th filed an answer for him. On October 17, 1921, Mr. Cobb was substituted by stipulation. On November 17th a motion was made to set aside the default and for continuance over the term. No order setting aside the default was entered, but Mr. Cobb was permitted to take part in the trial and submitted a brief to the court. The defendant was cross-examined as an adverse witness by plaintiff’s counsel and also examined by his own counsel. The trial court entered a decree providing that the bonds, then in the hands of the clerk, be delivered to the plaintiff. No costs were allowed. From this decree defendant appeals.

On this appeal defendant’s counsel insists:

(1) That the stipulation was in effect an appear*ance on the part of the defendant, and,

(2) That the allegations in the bill are not sufficient to support the decree.

No claim is made that any injustice has been done to defendant in the decree made. He testified, “I do not claim to own these bonds, except as a finder of abandoned or lost property, and to hold them for the proper owner.” His counsel at the hearing stated to the court, “I am going to admit that there is no title and no defense from the standpoint of the defense of Mr. Robinson’s possession.” The undisputed proof shows that the bonds, never having been issued, have no value and the only purpose of their preservation is, by their production and cancellation, to procure a discharge of the mortgage executed to secure their payment. We are, therefore, only concerned in whether the court had jurisdiction to make the decree.

Without discussing whether the stipulation was in legal effect an appearance, it is sufficient to say that it was not so intended. When its terms were discussed by Mr. Onen, representing the plaintiff, and Judge Palmer, representing the defendant, Mr. Onen asked Judge Palmer “if he would appear in the case,” and he said: “No, there was no necessity of any appearance in the case. That he had advised Mr. Robinson that he had no defense.” The provision in the stipulation that no costs should be taxed against the defendant is also strongly suggestive that he did not intend to contest plaintiff’s claim.

The bill alleged the issue of the bonds, that they were sent to the trust company for cancellation, that defendant had found them and had them in his possession, that he had attempted to collect some of the interest coupons then due, and that plaintiff was apprehensive that defendant, unless enjoined from doing so, would sell and dispose of the bonds to persons who might claim to be innocent purchasers of them for value. It also alleged that plaintiff had conveyed a part of the property described in the trust mortgage securing payment of the bonds to the New York Telephone Company a'nd had covenanted that such property was free and clear of all incumbrances, etc. These allegations, established as they were by the undisputed proofs, justified the decree made.

It is affirmed, with costs to plaintiff.

Wiest, C. J., and Fellows, McDonald, Clark, Bird, Moore, and Steers, JJ., concurred.