Case ID: ill_1/html/0190-01.html
Source: Caselaw Access Project
Author: {"author": "\n      Justice Smith.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Adolphus P. Hubbard, Appellant, v. Jonathan Hobson, Appellee.
    APPEAL FROM GALLATIN.
    As a general rule, a court of equity will not interfere to relieve a defendant who has neglected to make his defense at law. But if he did not know of his defense until after the judgment, a court of equity will relieve.
    It is erroneous to enter up a decree against the security in the injunction bond for the amount of the judgment at law and the costs in that suit, and interest on the judgment, and six per cent, damages, and the costs of the suit in equity.
   Opinion of the Court by

Justice Smith.

Hubbard filed liis bill in the court below for relief against a judgment at law obtained by Hobson in the Gallatin circuit court, on a record of a judgment against Hubbard in the Warren circuit court, in the state of Kentucky. The court below, on a hearing, dissolved the injunction, and dismissed the complainant’s bill, and also decreed that Hobson should recover the amount of the judgment at law, with interest and costs, and six per cent, damages from Hubbard and his security. To reverse this decree the present appeal is prosecuted.

The counsel for the appellant, on the argument, assumed four grounds on which they contended that a reversal ought to be had:

1. That Hubbard being only a co-security with Hobson, in the note which Hobson had been compelled to pay, no more than a moiety could be recovered from Hubbard.

2. That by the conveyance to Hobson, by Gatewood, of 200 acres of land, to which Hubbard had an equitable interest for a moiety, the claim had been liquidated as far as Hubbard could be liable to Hobson as a co-security.

8. That Hobson had, previously to the rendering of the judgment in the Gallatin circuit court, received full satisfaction for his claim against Hubbard, even if Hubbard should be considered as the principal in the note which Hobson had been compelled to pay by the acceptance of 200 acres of land from Gatewood in discharge of his claim against Hubbard and Gatewood.

4. That in dismissing the bill, and subsequently rendering a decree against the complainant and his security in the injunction bond, the court exceeded its powers.

To this it was replied that the answer of the defendant in eqxxity, was conclusive, and that the complainant not having availed himself of the matters set forth in his bill by way of defense in the ti'ial at law, was now precluded from offering them in equity, and that that court would not interpose to relieve him.

From a very deliberate and minute examination of this case, three propositions arising out of the third and fourth points made by the appellant’s counsel, naturally present themselves as the only important grounds for consideration ; the first and second points being deemed untenable and unsupported by the facts embraced in the case ; first, has the claim of the appellee been released or discharged by his acceptance of property from Gatewood in satisfaction, or has he indemnified himself oxxt of the avails of the property of Gatewood which may have come to bis possession ?

Second, ought the appellant, if Hobson accepted property in discharge, or indemnified himself out of the property of Gatewood, to have made this a defense to the action at law, and can he now, not having done so, assert it in eqxxity ?

Third, is the form of the entry and character of the judgment warranted.

In order to arrive at a correct conclusion as it regards the first pi’oposition, I have examined the allegations of the bill, and the denials in the answer, with great care, nor has the evidence of the several parties wlxich has been adduced, been less diligently or caxxtiously observed. I confess there is much obscxxi'ity and want of precision in many parts of the testimony, but from the best analysis I have been enabled to make of it, I have been led to consider it as establishing pretty clearly that Hobson accepted from Gatewood the surrender of two hundred acres of land lying on the Nashville road, in Kentucky, for the purpose of either enabling him to create a fund out of which he might indemnify himself for the liability he had incurred by joining in the note given by GateWood, Hxibbard, and himself, to Hays, or as a satisfaction for the responsibility he had incurred in that transaction. That he subsequently came into possession of the land, and conveyed it to one Shackelford,‘for what consideration does not appear, but its value is established at the time of such sale, to have been of a greater amount than Hobson’s claim, and that he allowed Gatewood seven hundred dollars for it, the exact amount of the note he had joined in as a co-security, and had received the land on account of that transaction.

It also appears that Hobson admitted to one of the witnesses that the claim in question had been settled out of the property and effects of Gatewood, and that when charged with having received the two hundred acres of land in satisfaction of that claim, he did not deny it. It is true, the appellee in his answer, denies most positively that the claim had been paid out of the effects of Gatewood, or that he had ever received any tract of land to secure or discharge him from his liability created by his securityship, and one of the appellant’s witnesses stands manifestly impeached, if his testimony were not clearly supported in most of its material parts, by three other witnesses. The rule of evidence in equity is too well settled, and the reason of it too well founded, to lead to the least embarrassment in this state of the case, in deciding, that' notwithstanding the positive denial of the appellee, and even admitting the witness alluded to should be considered as impeached and his testimony consequently rejected, that the testimony of three of the other witnesses, so far as it regards the point under consideration, must prevail. This being the state of the evidence, it must be conceded that the first point is affirmatively established, and that the appellant has made out a case requiring the interposition of this court, unless, indeed, he is precluded by his own acts of negligence or folly ; which leads us to the consideration of the second point. It is no doubt a well settled general principle in courts of equity, that they will not relieve, where the party might have availed himself of the same matter in defense in the suit at law, but to this general rule it is conceived there are some exceptions.

It is not understood that if the matter offered as ground for relief in equity might have been admitted in a trial at law as a defense, that therefore a court of equity will not interpose its jurisdiction and power, but that the party must also have been in a situation to have made such defense, and that through negligence, inattention, or some other cause which he might have controlled, he has omitted to do so.

By the establishment of the general principle, it surely was not intended to preclude a party from interposing a defense in equity, of the knowledge of which he only became possessed, since the determination of the suit at law, or the truth of which, he had only found himself capable of establishing since such determination. Believing that this exposition of the rule requires only to be stated to be admitted, I proceed to inquire whether the appellant comes within the rule as it is interpreted. In the bill, he alleges that he only came to the knowledge of the transfer of the land by Gate-wood to Hobson, since the judgment in the suit at law, and that not until after such judgment was rendered, did he become possessed of the means of establishing the fact. It does not appear that this statement is in any way discredited or denied. Can it then be said that here is not a case precisely within the just interpretation of the rule, and that the facts, as they are presented, do not furnish just cause for allowing to the appellant the right of offering, as a ground for relief, that which, true it is, would have been matter of legal defense in the suit at law, but of the existence of which and the means of establishing, he only became possessed at a period when, in such suit, it was wholly unavailing and could not be heard ?

It is then clear that he was in a state of moral incapacity to make such defense in the court below, and the reasoning that he ought to have done so and can not therefore now be relieved, is too unsound to need further illustration, and if it be at all necessary to refer to authorities in support of the correctness of the construction I have given to the rule, among the numerous ones which may be found, reference may be had to two of very modern date—Holt’s executors v. Graham, 2 Bibb, 192, and Cunningham v. Cadwell, Hardin, 123. It is apparent that the appellant could not have made the matter now presented the basis of the relief he asks, or a subject of defense in the court below, and that he has therefore in no way deprived himself of the right of asserting it in equity. The remaining question regards the form of entry and character of the decree.

It appears from the record that the court below dissolved the injunction, dismissed the bill, and then rendered a decree in the same cause against the appellant here and his security in the injunction bond, who was no party to the suit, for the amount of the judgment and costs in the suit at law, with interest thereon, and six per cent, damages, and the costs of the suit in equity. The entry of this decree, after the court had adjudicated the cause and dismissed the bill, is thought to be an anomaly in the history of judicial proceedings, and has doubtless arisen from a natural misconception of the provisions of the statute under which the entry is supposed to be authorized, and is, very probably, an error in the clerk. From an examination of the 17th section of the act of 22d of March, 1819, regulating the practice of the courts of chancery in this state, which is the statute referred to, and the uniform rule of proceedings in courts of equity, it is not perceived, where the complainant’s bill is dismissed as not affording sufficient ground for the interposition of the court, that he can be amerced in any other way than being adjudged to pay the costs of the suit, for, (as it is technically said,) his false clamor. What the precise form of the proceedings ought to have been after the dismissal of the bill, under the statute, is, perhaps, not so easily settled. It is provided in the statute quoted, that on the dissolution of the injunction, the complainant shall pay six per cent., exclusive of legal interest, besides costs, and that judgment shall be given against the sureties in the injunction bond, as well as the complainant, and that the clerk shall issue an execution for the same when he issues an execution on said judgment; meaning, doubtless, the judgment at law. Now, if this admits of any interpretation, it must clearly sanction the idea of two separate judgments, or why provide for two separate executions? If one judgment would embrace the whole, it could not be necessary to have separate executions. If the court is authorized to enter a judgment on the bond, in a summary manner, against the obligors in that bond without notice, which I am rather inclined to doubt, it should at least form a separate proceeding from the order or decree in the suit in equity; as it now stands, there are two distinct orders or decrees in the same cause of directly opposite characters; one dismissing the complainant from- the presence of the court, and which is supposed to have terminated all proceedings in the cause, and put him beyond the power of the court; and the other rendering on the other hand a large decree in the same suit against him, in favor of the defendant who has never prayed for i|. Whether a judgment is authorized to be entered up without notice, or whether the clerk is authorized to issue an execution, without even entering the common form of a judgment, as has been sometimes practised in this state on replevin bonds, it is not necessary now to determine ; but that the form and character of the decree is incorrect, and that two decrees or orders, so opposite in their nature and consequences, can not be made in the same case, nor justified in practice, or warranted by the forms of law, I can not doubt. Again, if this decree is to stand, in what situation does it leave the complainant ?

Eddy, for appellant.

McLean, for appellee.

Upon a review of the whole case, I feel constrained to say, that the claim of Hobson has been extinguished by the receipt and disposition of the property of Gatewood, if the whole current of the testimony in the cause is to be credited. That the attempt to compel the appellant to pay it again, is, to say the least, against the clearest principles of moral justice, and the soundest rules of equity; and that putting out of view the evidently erroneous entry of the decree of the circuit court, the judgment of that court ought to be reversed, and a perpetual injunction awarded, enjoining the plaintiff in the action at law from proceeding’ on that judgment, and that the appellant recover his costs,

The judgment at law stands open, unsatisfied and in full force and effect against him.

In equity, the court have made a decree against him for the identical amount of this judgment with the interest on that judgment, the six per cent, damages and costs of suit. Is this monstrous absurdity and injustice of subjecting him to satisfy these two judgments to be countenanced for a moment ? Undoubtedly not. The erroneous entry of the decree is then, from this view alone, too manifest to require further exposition. The decision in this court, in the case of Duncan v. Morrison, is, as it relates to this irregularity, directly in point, and has settled the question.

Decree reversed. 
      
       Laws of 1819, p. 173.
     
      
      
         Any fact which clearly proves it to be against conscience to execute a judgment, and of which the injured party could not avail himself at law, or of which he could have availed himself at law, but was prevented by fraud or accident, unmixed with any fault or negligence in himself or his agents, will justify an application to a court of chancery. 7 Cranch, 332, 336.
     
      
       Ante, p. 151.
     
      
       See note to the case of Moore et al. v. Bagley, ante, p. 94.