Court Opinion

ID: 8193684
Source: CourtListenerOpinion
Date Created: 2022-09-09 23:16:50.230724+00
Date Added: 2024-06-11T16:40:41.488489
License: Public Domain

Crownhart, J.
(dissenting). The plaintiffs had a farm in Northern Wisconsin.. They went to Chicago and fell in with a den of rogues, who through fraud and deceit stripped them of their land. In course of time they learned of the. facts and brought an action in the circuit court for Oconto county to vacate the deed to the defendants and have judgment for the rents of the farm.during the time that the defendants had unlawfully possessed the farm.
The trial, court gave the plaintiffs the relief they asked. The majority opinion of this court sustains the trial court with one exception.
The complaint of the plaintiffs alleged that the rental value of the farm was $500 per year, and demanded judgment for $2,500 “for the rents of said farm while it has been thus occupied.”
The answers of the defendants malte no claim for taxes or interest paid.
The trial court found that the rents amounted to $1,550, and gave the plaintiffs judgment for that amount.
The defendants assigned as error that the court did not make any finding as to the payments which the defendants had made by way of taxes on the farm and interest on a mortgage existing on the farm, and failed to give them credit for such payments. The trial court said in its opinion:
“I think the testimony shows the most astounding situations invented and perpetrated by Rybczinski that has ever come to my notice either as a lawyer or since I have been upon the circuit bench. Rybczinski, with ,his men, stopped at nothing to accomplish their purpose. They were keen, *186astute, versed in the methods of manipulating titles and inventing characters who would make conveyances without consideration and were all willing parties to the conspiracy which ultimately deprived the plaintiffs of their property.”
The court was fully justified in this statement by the evidence.
This was a case of wilful and sinister fraud perpetrated by the defendants Rybczinski and Janowiak upon the plaintiffs, and the question comes to' this court as to whether or not any allowance should be made to said defendants for the money that they paid for taxes and interest on the mortgage, to protect the property which they unlawfully held. These defendants did not pay this money to subserve the property for the plaintiffs, but they paid it in the belief that their criminality would not be discovered and that they would benefit to the extent of the payments. This court in its majority opinion holds that the defendants are entitled to amelioration in the judgment to the extent of the payments so made for taxes and interest. From so much of the opinion as allows the defendants recovery for taxes and interest I respectfully dissent.
The plaintiffs were forced into a court of equity by the actual and wilful frauds of the defendants. As the trial judge well said:
“It must be remembered that the plaintiffs are very poor; that the farm in question was the only .property they had, and that from the very nature of the case it required untold efforts, perseverance, and work to uncover and ferret out the different ramifications of fraud which Rybczinski had concocted and executed.”
To regain title to their land plaintiffs contracted with their attorney to give one half of the recovery. This contract had the approval of the trial court as it has of this court.
The plaintiffs asked for no- accounting in their complaint, but simply that they recover the fair rental value of the *187premises unlawfully withheld. That is what the trial court gave them.
The defendants seek affirmative relief in the nature of a counterclaim for taxes and interest paid by them. The majority opinion and the authorities cited are based on the equitable maxim “He who seeks equity must do equity.”
But there is another rúle of equity that applies here with full force, and that is, “He who hath committed iniquity shall not have equity.” ■ And yet another, “He who comes into equity must come with clean hands.” The defendants “hath committed iniquity” — gross and wilful iniquity— against these poor plaintiffs. Their hands are not clean; they are foul with crime. They are entitled to no relief, either in law or equity.
The defendants could not in a direct action, either in law or equity, have any standing in court. It is only by this indirect appeal that the court would listen to them for a moment.
“Fraud vitiates all things into which it enters” is a maxim of the law. The defendants were guilty of actual and wilful fraud. It seems like a bit of sophistry h> allow the defendants to slip in the back door, to this court when they would be repelled from the front door — the door open to all honest suitors. The distinction was too subtle, too refined, to appeal to the conscience of the trial court. I think the distinction is too ingenious, the reasons too metaphysical, to appeal to the conscience of this court. Wilful fraud is iniquitous — it is criminal. It deserves nothing by way of reward at the hands of the court; it is denounced by every jurist. It is hated by all decent people. It should not be dignified by any decree or made respectable in any forum of justice.
I can see no justice in compelling the plaintiffs to turn over to defendants one cent to which neither law nor equity entitles them. I fear the court sanctifies fraud instead of *188castigating it. It encourages when it should discourage. It gives hope when it should instill fear. The criminal cheat may secure property through fraud, pay out money to protect his ill-gotten gains in the hope that he may not be detected, and then rely on a court of equity for relief when he is caught.
If this were a case of constructive fraud only, I could readily assent to the majority opinion, but I decline to come to the aid of the perpetrators of wilful fraud in order to relieve them from the effects of their actions while carrying out a part of their fraudulent transactions.
Even by the decision of the trial court the plaintiffs are not made whole. Far from it. One half of their property goes for attorneys’ fees, and they have to pay many expenses of trial because of the fraud perpetrated upon them. Now, by x'eversal of the trial court on this one point, the judgment of this court carries costs against the plaintiffs although they were sustained on all other errors assigned. Thus the plaintiffs will have but the shadow of victory in the action instead of the substance.
The case of Hawley v. Tesch, 88 Wis. 213, 59 N. W. 670, may readily be distinguished from the case at bar. In the Hawley Case an accounting was demanded and had in an -estate involving a very large sum and hundreds of transactions running over a term of years. The trial court allowed the taxes paid as an offset, but disallowed very valuable improvements made on the real estate involved. This court on appeal sustained the trial court as to the allowance of taxes, without citation of authority, on the theory that the fraudulent grantee’s duties in that case were those of a trustee, and failure to pay the taxes would have been an additional wrong. There the court, under all the circumstances, was satisfied that the judgment of the trial court was just.
As I have pointed out, the case at bar presents no such situation. It involves a single farm owned by poor people, *189who were enmeshed by a band of organized crooks in such a way that to extricate themselves they had to surrender one half of their estate to their lawyers, and besides had to pay large sums for expense of the trial. No accounting was involved. After their recovery they will have little, if anything, left. The trial court correctly considered the equities.
The true principle, as I conceive it, for a court of equity to adopt is the one stated in Leqve v. Stoppel, 64 Minn. 74, 66 N. W. 208. It is there said:
“To meet the requirements of justice in all these classes of cases, a more elastic rule should obtain than the mere presence or absence of actual fraud, in its broadest legal sense. And an examination of the adjudged cases shows that the courts have never been inclined to tie themselves down to any such hard-and-fast rule. . . .
“The best American authorities have frequently announced a similar flexible rule, which left Jhem at liberty to do equity in each particular case according as the facts appeared.”
The weight of authority I think is against the position taken by the majority opinion in this case. See the following cases cited in respondents’ brief: 27 Corp. Jur. p. 673, § 464, and cases cited; Leqve v. Stoppel, 64 Minn. 74, 86, 66 N. W. 208; Lynch v. Burt, 132 Fed. 417, 432; Stephon v. Topic, 147 Minn. 263, 180 N. W. 221; Allen v. Berry, 50 Mo. 90, 91; Thompson v. Bickford, 19 Minn. 17, 21; Strike v. McDonald & Son, 2 Har. & G. (Md.) 228; Lynch’s Adm’r v. Murray, 86 Vt. 1, 83 Atl. 746; McGovern v. Milwaukee M. Co. 141 Wis. 309, 313, 124 N. W. 269; Davis v. Leopold, 87 N. Y. 620; Seivers v. Dickover, 101 Ind. 494, 498.