Court Opinion

ID: 6659499
Source: CourtListenerOpinion
Date Created: 2022-07-20 21:00:36.606094+00
Date Added: 2024-06-11T09:04:23.389200
License: Public Domain

Sedgwick, J.,
dissenting.
There is very little, if any, controversy as to the facts of the case, so far as they relate to the principal question presented upon this appeal. In 1902 the defendant, Cochran, who is an attorney at law, practicing- at the bar of Douglas county, in this state, and is also engaged in real estate transactions, was acting for one Johnson in the exchange of some of Mr. Johnson’.? property for other property. After the business was settled Mr. Johnson, it is claimed, executed and delivered to Mr. Cocliran his promissory note by which he agreed to pay Mr. Cochran between $40 and $50 for expenses and on account of services rendered by Mr. Cochran in the transaction mentioned. Afterwards, Mr. Cochran brought suit upon this note, and Mr. Johnson defended it, alleging that in the transaction mentioned Mr. Cochran had received a sum of money which really belonged to Mr., Johnson, and had withheld from Mr. Johnson the knowledge of the fact that he .had received the money, and had converted the money to his own use. This action was tried in justice court in Douglas county and there resulted in judgment in favor of Mr. Cochran, and was appealed by Mr. Johnson to the district court. That action has been twice in this court (Wells v. Cochran, 78 Neb. 612, 84 Neb. 278), and the suit against Mr. Moriarty as surety upon the appeal bond has also been in this court (Cochran v. Moriarty, 78 Neb. 669), and there have been many trials in the district court arising out of this controversy.
Immediately after the above mentioned judgment in *373the district court in favor of Mr. Cochran and against the estate of Johnson, the plaintiff, as executor, began an action at law upon the identical claim which he had set up as a defense in the action in which the judgment \s as ob- • tained. That action has run a devious course through all the courts and appears to be still pending.
The plaintiff believes that, if Cochran is not allowed to collect his judgment against Moriarty until plaintiff is able to try finally his counterclaim against Cochran, he will be able to recover a judgment and set it off against the judgment which Cochran holds against Moriarty, and that the latter judgment should be enjoined until his suit against Cochran is finally disposed of. The only reason that he gives in his petition for failing to assert his counterclaim in the action at law in which Cochran obtained his judgment is that “said Cochran, while plaintiff was engaged in another division of said district court, called up said case for hearing and obtained judgment against plaintiff for $69.45 and costs by default, whereupon plaintiff commenced a suit in the said district court” upon the same counterclaim. And so it appears that all'of this litigation has been occasioned because this plaintiff, who is an attorney, was trying another case when he should have been attending to his own. The law should and does,if properly applied, discourage and prevent such unnecessary litigation. The disgraceful results are not inherent in the law, but in the manner of administering it. Ordinarily the whole matter should have been satisfactorily settled upon the first hearing in the justice court. If, however, the justice of the peace, as sometimes happens, misunderstood the legal rights of the parties so that there was in fact no substantial trial of the matters in controversy, and it became necessary to appeal to the district court, an investigation of the facts in dispute in that court ought ordinarily to end such a controversy.
Affidavits which were filed by plaintiff upon a motion in the district court to set aside the default which he complains of were offered in evidence and received by the *374court upon tlie trial of the case at bar. They were received, however, over the objection of this defendant that they were incompetent and irrelevant under this issue, as they clearly were, and evidently were not considered by the trial court. They are now made the basis of the majority opinion. They show that plaintiff relied upon some verbal promises and representations of opposing coungel as to the time of trial of the cause then pending, and so failed to appear in court to make his defense. Even if the trial court erred in refusing to set aside the judgment complained of and allow the defense of the counterclaim to be heard, such error could only be corrected by a direct appeal to this court for that purpose. But no such issue is tendered in the petition for the injunction against the judgment. The mere fact that the defendant was also an attorney and engaged in the trial, of another case when his case was reached for trial is not sufficient to explain his neglect to defend. “A judgment at law obtained through the fraudulent conduct of the judgment creditor will not be enjoined where the defense could have been made at law.” Norwegian Plow Co. v. Bollman, 47 Neb. 186, 192. In the case at bar the plaintiff not only had'an opportunity to litigate his claim in the action in which the- judgment against him was obtained, but he actually did set it up as a counterclaim, a claim arising out of the same transaction as that on which he was being sued. Unless he was prevented by fraud, accident, or mistake from making his defense in the law action, he was not entitled to a new trial in that action, much less in a subsequent action in equity. Before the statutes providing for counterclaims and set-offs were introduced in this country, the courts of equity enjoined the collection of judgments in certain cases in which it was made to appear that equity required that set-offs and counterclaims should be allowed. Since these statutes allowing set-offs and counterclaims have been enacted, it ■has been held that courts of equity will under proper circumstances enjoin the collection of judgments in cases *375wlxere the statutory provision for set-off and counterclaim in law actions will not apply. It was natural therefore that some of the earlier decisions of inferior courts overlooked the distinction, and some of tlie earlier cases from the lower courts may he found that will upon first reading appear to justify the conclusion of the majority opinion.
The case does not involve an equitable set-off; it has to do with a statutory counterclaim. When a counterclaim is provided for by statute, the holder of it does not have to ask a court of equity for leave to use it. All that is required of him is to use it at the time and in the manner that the statute provides. This case has to do with a judgment. The question is: When will equity interfere with a judgment so as to allow a statutory counterclaim that might have been used to defeat the judgment? This is a plain question, and has been plainly answered by many courts. “A court of equity does not interfere with judgments at law, unless the complainant has an equitable defense of which he could not avail himself at law, or had a good defense at law which he was prevented from availing himself of by fraud or accident, unmixed with negligence of himself or his agents.” Knox County v. Harshman, 133 U. S. 152. In this case, as above stated, the plaintiff did not have “an equitable defense of which he could not avail himself at law,” and so he does not stand upon the first ground named by the United States court. He had a statutory counterclaim, “a good defense at law,” and the sole question here is: Was he prevented from availing himself of that defense “by fraud or accident, unmixed with negligence of himself or his agents”? This question is not much discussed in the majority opinion. The effect of insolvency as a ground for equitable set-off is dwelt upon, but as this is a statutory counterclaim, and not an equitable set-off, that discussion is not applicable. The cases cited for the most part involve elements of equitable set-off when the circumstances are such that the statute or common láw do not allow that defense, and have *376nothing to do with statutory or common laAv set-off or counterclaim. The discussion of equitable set-off in this case leads, so far as I can see, to confusion. The plaintiff had “a good defense at law,” in the action in Avhieli the judgment was obtained which he noAAr seeks to have equity interfere AArith. The insolvency of the plaintiff in that action would not prevent making the defense of counterclaim, and I do not see that the plaintiff in this action has shoAvn that he was prevented from making that defense “by fraud or accident, unmixed with negligence of himself or his agents.” That being so, the judgment of the district court is right.