Detroit and Milwaukee Railroad Company v. Griggs

• Decision Date: 10 November 1863
• Citation: 12 Mich. 45
• Court: Michigan Supreme Court
• Parties: The Detroit and Milwaukee Railroad Company v. Stephen Griggs and others

12 Mich. 45

The Detroit and Milwaukee Railroad Company v. Stephen Griggs and others

Supreme Court of Michigan

November 10, 1863

Heard October 27, 1863; October 28, 1863. [Syllabus Material] [Syllabus Material] [Syllabus Material]

Appeal in chancery from Wayne Circuit.

The complaints, by leave of the court, filed their bill of complaint, setting forth:

That on May 23, 1854, the Detroit & Pontiac Railroad Company purchased lots even, twelve and thirteen, according to the recorded plat of the Lambert Beaubien farm, of Thomas Firby for $ 17,000, and received therefor a deed with covenants against incumbrances and of title; that they paid Firby $ 1,000 down, and gave him a mortgage for $ 16,000, the balance of the purchase price, with interest at ten per cent; that the company then supposed the premises purchased were unincumbered, and relied upon Firby's representations that they were so; that subsequently the Detroit & Pontiac Railroad Company was, by due authority of law, consolidated with the Oakland & Ottawa Railroad Company, under the name of the Detroit & Milwaukee Railway Company, whereby said last company became entitled, among other things, to the said premises.

That Firby assigned said bond and mortgage to Caleb and Albert Ives, by an instrument absolute on its face, but really intended as collateral security for a sum of money he was then owing them, and afterwards, subject to their rights, assigned the same to Stephen Griggs, also as security, for a debt owing to him.

That on August 9, 1859, said Griggs filed his bill in said court against the Detroit & Milwaukee Railway Company, Thomas Firby, Caleb and Albert Ives, John M. Forbes, John W. Brooks, Charles J. Brydges, Thomas Reynolds, Henry C. R. Beecher, John Owen, James v. Campbell, George F. Porter, Jared C. Warner, Frederick C. Gebhard, Erastus Corning and Matilda Firby (all of whom are also made parties to this bill), in which bill, after setting forth the facts above recited, it was stated that, on March 24, 1858, said Caleb and Albert Ives filed their bill in said court against said railway company, and Brooks, Forbes and Griggs, to foreclose said mortgage, and decree was entered thereon February 8, 1859, by which it was adjudged that there was due and unpaid on the bond and mortgage $ 10,454.64, of which $ 6,808.01 was to be paid to C. & A. Ives, and $ 3,200.33 to said Griggs, with interest from January 10, 1859; and said decree also contained the usual order for the sale of the mortgaged premises; said bill also alleged that the railway company had made mortgages on said premises to Brydges, Reynolds and Beecher as trustees, and that they, after such decree, had in some way paid said C. & A. Ives for their interest in said bond and mortgage, and taken an assignment thereof, and that they did not now intend to proceed under the decree, and they denied the right of Griggs to do so; and it prayed that said decree might be declared in full force and effect, and be executed, or that a decree of foreclosure should be granted in the usual form; and it also prayed that Griggs might be subrogated to the rights of C. & A. Ives in a collateral mortgage executed to them by Firby to secure the same debt.

That answers were filed by a portion of the defendants to said Griggs's bill; the answer of the Detroit & Milwaukee Railway Company, Brydges, Reynolds, Beecher, Owen, Campbell and Porter, admitting the facts set forth in the bill, save that it stated that the transfer of the Iveses' interest was to Brydges and Reynolds alone; and setting up as a defense that, when the Detroit and Pontiac Railroad Company purchased the premises of Firby, lot thirteen was subject to a mortgage executed to one Penny, for $ 2,500 and interest, which was foreclosed, and the premises sold to Brydges and Reynolds for $ 1,750 or thereabouts; and that lots eleven and twelve were, as appeared of record, subject to a mortgage for $ 4,000 and interest, executed to one Wilder; that Firby was insolvent; and the answer claimed that the amount of these two mortgages should be deducted from the amount due on the railroad company's mortgage to Firby.

That decree was made on said Griggs's bill, March 18, 1862, for a sale of the premises to satisfy the amount due on the railroad company's mortgage to Firby, not deducting therefrom the amount of the Penny and Wilder mortgages; and this decree was afterwards affirmed by the Supreme Court. [See 10 Mich. 117.]

The present bill further sets forth, that the present complainants, the Detroit and Milwaukee Railroad Company, have become the successors and entitled to all the rights of the said Detroit and Milwaukee Railway Company; that after decree in the Griggs suit, Brydges and Reynolds demanded of the railroad company possession of lot thirteen as purchasers thereof under the Penny mortgage, and that the company was compelled to and did, on June 28, 1862, purchase the same, and receive a conveyance from said Brydges and Reynolds, for $ 1,961.80; that George Jerome, who had become owner of the Wilder mortgage, also demanded payment of that, and on June 28, 1862, the company paid him $ 3,000, and took a discharge thereof.

And the bill therefore prays, that the decree in the Griggs suit should be reviewed and reversed, or that its execution should be enjoined, and a new decree entered, by which the amounts so paid by the company to release the premises from the Penny and Wilder mortgages should be allowed, and deducted from the amount due on the railway company's mortgage to Firby.

To this bill, Griggs demurred generally, and the court below sustained the demurrer.

Decree reversed, with costs, and the demurrer of defendant overruled.

D. C. Holbrook, for defendant Griggs:

The law of equity is, that where a party has it in his power to make a defense, it must be made; nothing but the want of knowledge of the defense, or new evidence, will allow any bill to be filed to review a decision.

In this case there is stated in the bill such facts as the law declares full notice and knowledge of the defense. The bill in this case admits that before Griggs filed his bill, the complainant, as an actual fact, had knowledge of those incumbrances outstanding. These matters would defeat a bill of review.

The only bill mentioned in the books allowed after a decree to affect its merits, is a bill of review; and a bill of review can only be filed to correct errors apparent in the pleadings and decree, or for new facts or evidence not known, and which could not by diligence be discovered before the decree was entered.

The following references show that this bill can not be sustained: Adams Eq., 397, note 2; Story Eq. Pl., §§ 412, 413, 414, 415; Welford Eq. Pl., 239; Cooper Eq., 91, 92; Mitford, 6 Amer. ed., note 2, pp. 101, 102; 16 Ves. 348; 6 Madd. 127; 5 Whart. 26; 7 W. & S., 454.

If the payment of those mortgages constituted any defense to reduce the amount due Firby, then it was the duty of the railroad company to have paid them, and set the fact up in its answer. The law authorized the company to pay these mortgages as well before as after the decree. And now the company asks to be relieved from its own neglect, and that the court shall set aside and change its records and adjudications, as the pecuniary convenience of the company may fluctuate: 15 Ohio 317; Story Eq. Pl., § 414; 1 Dana 303; 2 Dana 276; 1 Met. Ky., 226; Saxton, 413.

Gray & O'Flynn and H. H. Emmons, for complainant, cited the following authorities:

1. That the proper remedy has been adopted: Story Eq. Pl., §§ 404, 415, 416, 388, 428; 2 Barb. Ch. Pr., 93, 94; 17 Ves. 178; 5 Mason 313; 1 Head 484; 4 J. J. Marsh., 500; Story Eq. Juris., 887; 2 Hill Ch., 152; 15 Mass. 207; 15 Barb. 515; 4 Johns. 191; 1 Cow. 42; 4 Duer. 148; 3 Comst. 216; 18 How. 421.

2. That the purchasing of the outstanding title and payment of the mortgage, without waiting for actual eviction, entitle the complainant to have the amount deducted from the bond and mortgage given by Firby: 13 Johns. 105; 2 Wend. 405; 7 Johns 358; 4 Mass. 627; 16 Johns. 254; Ibid., 122; 17 Wend. 188; 20 Pick. 474;...