Court Opinion

ID: 7946957
Source: CourtListenerOpinion
Date Created: 2022-09-08 23:21:39.490604+00
Date Added: 2024-06-11T16:33:58.119904
License: Public Domain

on rehearing.
Brooke, J.
A re-examination of this case convinces me that the court reached an erroneous conclusion in the opinion reported ante, 175 (134 N. W. 1013).
We there held: (1) That the allegations of fraud set up in the bill of complaint charging that the judgment against him as garnishee defendant was fraudulently obtained had been passed upon by the circuit court for the county of Saginaw and by this court adversely to complainant’s claim and were therefore res adjudicata; and (2) that the Gladwin circuit court was without jurisdiction to restrain the collection of the judgment.
It is true that in Caille Bros. Co. v. Saginaw Circuit Judge, 155 Mich. 480 (120 N. W. 6), the Saginaw circuit judge returned that he denied the motion to set aside the default judgment for three reasons:
" (a) The application was not made within six months after personal service, as required by Circuit Court Rule 12 (131 Mich, xxxv), and therefore came too late; (6) that relator could not impeach the judgment in the principal case by bontradicting the record collaterally on motion; (c) that certain correspondence, which passed between counsel for the plaintiff and the relator, did not *189mislead it into believing that no judgment would be rendered against it.”
In the opinion of the learned circuit judge in that case we find the following language:
“It does not seem possible that business men would fail to appear in a case in view of the two letters above quoted, relying on a promise of Mr. McKay, in the first letter, which was distinctly based upon another promise that was called a misunderstanding in the reply letter. * * * With reference to the third point, namely, that lot three (3), block thirty (30), was not the property of Fred B. Tyler, we are of the opinion that this question cannot be, and ought not to be, decided upon a motion. It is a collateral attack upon the judgment against Fred B. Tyler. In order to maintain the position, testimony outside the record it is conceded must be taken; and it therefore follows that, so far as the record of the judgment itself is concerned, it is regular, and, being regular, the default of the garnishee defendants was regularly entered. The opinion of the court is that if, as a matter of fact, the property attached as the property of Fred B. Tyler, and so returned by the sheriff of Saginaw county in his return to the writ of attachment, was not, in fact, his property, it would amount to a legal fraud, and is a subject for equity jurisdiction, and cannot be determined upon the motion of the garnishee defendants. It would be a proper equity proceeding for the garnishee defendants, if they were to suffer loss by reason of the judgment against them, to inform a court of equity of that fact, and of their relations, if any, to Fred B. Tyler, to allege the legal fraud and obtain an injunction staying all proceedings at law until the legal fraud was determined.”
It is therefore apparent* that the learned circuit judge, who denied the motion of the garnishee defendants to set aside the judgments against them, assumed to pass upon one phase of the fraud alleged in the affidavits, and distinctly declined to pass upon another phase thereof.
But, when that case reached this court upon an application for a mandamus to compel the circuit judge to settle findings of law and fact, we find that neither phase of the fraud alleged was passed upon by this court. Justice Grant, speaking for the court, said:
*190“There are two fatal objections to relator’s right to the writ: (1) Circuit Court Rule 12 (131 Mich, xxxv) provides that no default shall be set aside unless the application shall be made within six months after personal service. * * *
“ (2) If Stringer v. Dean, supra (61 Mich. 196), is applicable to this case, the defendant has not complied with the practice there laid down. It made no application to frame issues of fact or of law to be tried by the court. Relator now claims that there were several issues of fact involved in this motion for a new trial. If it desired to raise them and have specific findings thereon, the plaintiffs were entitled to have them defined, so that they might have an opportunity to prepare to meet them.”
It will be noted that no mention is made of any phase of the alleged fraud in this opinion except incidentally in setting out the third of the three reasons which moved the circuit judge to deny the motion.
It is said in our former opinion that “the judgments of the Saginaw court stand affirmed by this court.” This statement is strictly true, but a single and sufficient reason for the denial of the motion by the circuit court and the affirmance of that action by this court lies in the fact, that Circuit Court Rule 12 offered an insurmountable barrier to the granting of the motion. Suppose the trial judge had concluded, and so returned, that the allegations, of fraud set up in the motion had been fully sustained by the affidavits filed in support thereof, and suppose, further, that an examination of the record had convinced this court that he was correct in his conclusions, nevertheless the judgment denying the motion must have been the same. If the garnishee defendants could under no circumstances have had a judgment in their favor upon the facts alleged (and they could not because of the rule), it seems plain that the adverse opinion of the circuit judge upon those facts or any part of them should not be permitted to assume the form and dignity of an adjudication. In the case of Fifield v. Edwards, 39 Mich. 264, Justice Cooley said:
“ The fact that a suit has been instituted and evidence. *191produced is of no importance whatever, if, in fact, the evidence was directed to matters which were foreign to the issue. If, for example, the plaintiff in an action of assumpsit were to attempt to litigate a matter of trespass to lands, it would be immaterial how far he should go into the evidence, or at what stage of the proceedings the rulings should lie made rejecting his claim; the bar cannot attach, because in law, whatever may have been the testimony, there could have been no recovery. Nothing would seem to be plainer than that no man could be barred by a judgment against him who was not by the issue placed in such a position that establishing his demand would entitle him to a judgment in his favor.”
We are of opinion that there has never been an adjudication upon the merits of the various allegations of fraud contained first (in part) in the affidavits filed in support of the motion to set aside the default of the garnishee defendants, and now repeated and enlarged in the bill of complaint herein. It is to be noted that in the affidavits dated November 27, 1906, there was included an affidavit of merits and in the bill of complaint herein a distinct denial under oath on the part of this complainant of any indebtedness either joint or several to Fred B. Tyler.
Does the bill state a case for equitable relief? It charges that complainant was regularly served with process in the garnishee suit on February 9, 1906. A garnishee summons was also served on the complainant as a member of a copartnership firm known as the Caille Company, and also upon the corporation known as Caille Bros. Company, of which complainant was a stockholder and officer. A disclosure was filed by complainant on behalf of the Caille Company. The bill alleges that several conversations were had between complainants and defendant McKay, who was the attorney for the plaintiffs in the original and garnishee suit, and specifically states in paragraph 13:
“ That in these conversations said McKay stated to your orator that he should file a disclosure on behalf of the Caille Company, but, as to the other defendants, your orator should pay no attention to the garnishment pro*192ceedings, and assured your orator that as to them nothing further would be done.”
The bill also alleges that complainant was examined in the garnishee suit against the Caille Company on February 14, 1906, that he was not represented by counsel, and that his examination showed that there was no liability whatever on the part of the Caille Company or complainant to the principal defendant, and, further, that—
“Your orator was expressly told, while said examinations were being conducted by the attorneys for the plaintiff, that he need pay no further attention to the same, and that, if there was anything further wanted of him, they would let him know. Your orator charges that these statements and representations were made to him for the purpose of deceiving him, and leading him to believe that nothing further would come of the said garnishment case, and no injury be done to your orator.”
The default of complainant for not filing a disclosure was entered on February 28, 1906, and a judgment taken against him thereon on September 12,1906, for the amount of which judgment had theretofore been rendered against the principal defendant, $16,603.48. The bill further alleges that complainant had no notice or knowledge that his default had been entered until after the entry of such judgment in September; that up to this time the complainant had relied upon the promises of defendant McKay, attorney for the plaintiff, and had not consulted an attorney; that he now retained an attorney, and filed a motion asking that the judgment and default be set aside. We think that under the authorities a clear case for equitable relief is set out. 2 Pomeroy’s Equitable Remedies, §§ 637, 647, 649, 650; United States v. Throckmorton, 98 U. S. 61; Marine Ins. Co. v. Hodgson, 7 Cranch (U. S.), 332.
To sustain the action of the circuit judge in overruling the demurrer, it is not necessary to interfere with the judgment against Fred B. Tyler, or to pass upon the right of the garnishee defendant to question it. The juris*193diction of the court may be predicated upon its power and right to act upon the person who wrongfully obtains the judgment and enjoin its enforcement. Stilwell v. Carpenter, 59 N. Y. 414; Phillips v. Negley, 117 U. S. 665 (6 Sup. Ct. 901). In Ewing v. Lamphere, 147 Mich. 659, at page 662 (111 N. W. 187), at page 189 (118 Am. St. Rep. 563), this court said:
“Jurisdiction is invoked upon other grounds; and they are, first, that there is a necessity to protect the fund pending the proceedings in probate court; second, that a judgment fraudulently obtained be set aside, without which the fund could not well be reached.
“ That equity may assume jurisdiction in both classes of cases does not admit of doubt (see 1 High on Injunctions [4th Ed.], § 688), and, while equity will not lightly interfere to suspend the effect of judgments, it is no uncommon thing for it to do so, to prevent the collection of a judgment obtained, upon filing a bill to vacate the judgment on the ground of fraud in procuring it. See 1 High on Injunctions (4th Ed.), §§ 190 et seq., 207, 232, 233, 235. It is noticeable that section 207 indicates that a preliminary injunction issued in the case there cited. Gainty v. Russell, 40 Conn. 450. See, also, 1 High on Injunctions (4th Ed.), §§ 3, 4, 5a, 8 (and notes 40, 42, 43), 19. The jurisdiction to set aside judgments on the ground of fraud is equally well supported. See cases cited above. 1 Story on Equity Jurisprudence (13th Ed.), § 252; 12 Am. & Eng. Enc. Law (1st Ed.), pp. 139-142. Especially should this be true where the court which rendered the judgment is powerless to give relief. Grady v. Hughes, 64 Mich. 540 [31 N. W. 438]; Id. 80 Mich. 184 [44 N. W. 1050]; Corby v. Wayne Probate Judge, 96 Mich. 11 [55 N. W. 386]; Maney v. Casserly, 134 Mich. 258 [96 N. W. 478].
“It was clearly competent, therefore, for the complainants to bring this suit to set aside the orders of the probate court in the administration proceeding, upon the ground that they were obtained by fraud, although the court should, perhaps, defer a final determination of the question until the question of the fraudulent suppression of the will, upon which it depends, shall have been tried out in probate court, on the application to admit it to probate.”
It is clear that the Saginaw circuit court at law has no *194jurisdiction to interfere for the protection of complainant. The questions involved are peculiarly within the province of a court of equity The complainant resides in Gladwin county and his property in that county was levied upon under the execution. The Gladwin county circuit court in chancery therefore acquired jurisdiction of the parties as well as the subject-matter of the suit. Robinson v. Kunkleman, 117 Mich. 193 (75 N. W. 451); Mactavish v. Kent Circuit Judge, 122 Mich. 242 (80 N. W. 1086); 1 Comp. Laws, § 434; Chapin v. Montcalm Circuit Judge, 104 Mich. 232 (62 N. W. 351). See, also, Scripps v. Sweeney, 160 Mich. 148 (125 N. W. 72). Courts of law proceeding according to strict rules sometimes, perhaps not infrequently, reach results not in accordance with the principles of abstract justice. Courts of equity were designed to afford relief where none was possible under the inflexible practice on the law side. If the averments of fraud contained in this bill of complaint are susceptible of proof, which would convince the conscience of a chancellor, it would, in my opinion, be a reproach to justice to permit such an outrage to be perpetrated through the interposition of legal technicalities.
One pregnant fact stands out in all these proceedings. From the moment this complainant learned that a judgment by default had been taken against him, he has been active and earnest in his attempts to secure a hearing upon the merits of the controversy as it affects his interests. This right he has heretofore been denied with propriety. He is now, however, in a forum where his rights may be preserved and his wrongs (if he has suffered any) may be redressed.
The demurrers were properly overruled by the learned circuit judge. His orders are affirmed, with costs to the appellee.
Moore, C. J., and Steere, Blair, Ostrander, Stone, and Bird, JJ., concurred. Me Alva Y, J., concurred in the result.