Huxtable v. Berg

• Decision Date: 20 October 1917
• Docket Number: 14162.
• Citation: 168 P. 187,98 Wash. 616
• Court: Washington Supreme Court
• Parties: HUXTABLE et al. v. BERG et al.

168 P. 187

98 Wash. 616

HUXTABLE et al. v. BERG et al.

No. 14162.

Supreme Court of Washington

October 20, 1917

Department 1. Appeal from Superior Court, Yakima County; Edward C Mills, Judge.

Action by W. I. Huxtable and Charlotte Huxtable and others against Carl Berg, judgment creditor, and W. P. Murphy, as sheriff to restrain the execution sale of an irrigation canal and appurtenant water rights, legal title to which was in the Yakima Valley Canal Company, with cross-complaint by defendant Berg against the Canal Company, its trustees, and Chester A. Congdon, trustee, under the Canal Company's deed or mortgage to secure its bonds. Judgment restraining the execution sale, with directions to trustees of Canal Company to levy and collect an assessment to pay the judgment and interest upon the bonds and restraining the foreclosure of the mortgage by the trustee in the mortgage, and the plaintiffs the Canal Company and the mortgage trustee appeal. Reversed in part and affirmed in part.

See also, 83 Wash. 451, 145 P. 619, L. R. A. 1915D, 292.

Williamson & Luhman, of North Yakima, A. L. Agatin, of Duluth, Minn., and Rigg & Venables, of North Yakima, for appellants.

Thos. H. Wilson, of North Yakima, and Bogle, Graves, Merritt & Bogle, of Seattle, for respondent.

MAIN J.

The purpose of this action was to restrain the sale under execution of an irrigation canal, the right of way therefor, its connected structures, and the appurtenant water rights, the legal title to all of which was in the Yakima Valley Canal Company, a corporation organized under the general incorporation laws of this state. The plaintiffs were certain stockholders in the corporation, and brought the action on behalf of themselves and all other stockholders, claiming that, by virtue of the articles of incorporation and the certificates of stock, the stockholders were, in fact, the owners of the physical property of the corporation upon which the execution had been levied. The defendants named in the complaint were a judgment creditor--who will hereafter be referred to as Berg--and the sheriff of Yakima county. To the complaint Berg responded by an answer and cross-complaint. In the cross-complaint, the Yakima Valley Canal Company, the corporation, the trustees thereof, and one Chester A. Congdon, who was trustee under a deed or mortgage made by the canal company for the purpose of securing its bonds, were made parties defendant. In this cross-complaint, Berg sought to compel the trustees of the corporation to levy an assessment to pay his judgment, and to restrain Congdon from foreclosing his trust deed, or mortgage, claiming that the trustee had entered into a conspiracy with the other stockholders to foreclose the mortgage and thus defeat the judgment. The adverse parties named in the cross-complaint, together with the plaintiffs in the original action, moved to strike that complaint on the theory that it was not germane to the original action. This motion was denied, and, after the issues were framed, both upon the original complaint and upon the cross-complaint, the cause was tried to the court without a jury, and resulted in a judgment restraining the sale of the property upon the execution, and directing the trustees of the corporation to levy and collect an assessment to pay the Berg judgment and also the balance of the interest due upon the bonds which were secured by the mortgage. It was further provided that, in the event that the assessment was not promptly levied and collected, the court would appoint an officer for that purpose. The foreclosure of the mortgage by the trustee named therein was restrained.

The briefs recite that an appeal was taken by the corporation, its stockholders and officers, and by the mortgage trustee, and also by Berg, from that part of the judgment which restrained the sale of the property under execution. The record, however, contains no notice of appeal by Berg.

The first question is whether the trial court erred in denying the motion to strike the cross-complaint. The briefs upon this question contain elaborate arguments and numerous citations of authorities. It seems, however, that it is unnecessary to review the authorities from other jurisdictions, because the statutes of many states from which the cases are cited differ materially from the statutes of this state, and the courts of some of the states have adopted a less liberal rule with reference to the bringing in of additional parties and the litigation of issues upon a cross-complaint than has this court. Section 196, Rem. Code, provides that, when a complete determination of a controversy cannot be had without the presence of other parties, 'the court shall cause them to be brought in.' Section 406, Rem. Code, provides that judgment may be given for or against one or more of several plaintiffs, and for or against one or more of several defendants; 'and it may, when the justice of the case requires it, determine the ultimate rights of the parties on each side, as between themselves.' In Maher & Co. v. Farnandis, 70 Wash. 250, 126 P. 542, the plaintiff, a second subcontractor, brought an action to foreclose a lien. The defendants in the action were the original contractor and the first subcontractor. The first subcontractor answered the complaint, and filed a cross-complaint against the principal contractor, claiming that the latter was indebted to him for a balance due. The principal contractor moved to strike the cross-complaint because it was improper in such an action, and because he was entitled to try the issue presented thereby to a jury. This motion was denied, and the trial to the court resulted, on the cross-complaint, in a judgment in favor of Carter, the first subcontractor, and against the principal contractor. Upon appeal two principal contentions were made against the Carter judgment: (a) That the court erred in not striking the cross-complaint; and (b) that, if the issue raised thereby was triable in that action, it was an issue of law, and he was entitled to a jury trial. Upon the question, it was there said:

'We think the better view is that, where the original bill presents questions of equitable cognizance, the defendant may have legal relief against the plaintiff, and that the several defendants may cross-plead with each other and have all rights between them germane to the subject of the bill determined (citing authorities). This rule avoids a multiplicity of suits, is in aid of orderly procedure, and is in harmony with the statute. The Code (Rem. & Bal. § 406), provides that, when 'the justice of the case requires it,' the court may determine 'the ultimate rights of the parties on each side as between themselves.''

In that case, it will be observed that the issue raised by the cross-complaint was one of law, while the original action was an equitable one. It was, nevertheless, held that the issue of law between the defendants could be presented by the cross-complaint and tried in the original action. In the case now before us, the issue presented by the original complaint was equitable. The relief asked for by the cross-complaint was equitable, and the relief asked by the mortgage trustee was equitable. By the original complaint, it was sought to restrain the property from being sold under an execution on the Berg judgment. Berg, by his cross-complaint, sought to collect the judgment in a manner other than that by the levy of an execution. The purpose, on one side, was to prevent the collection of the judgment, and, on the other, to collect it. We think that the issue raised by the cross-complaint was sufficiently germane to the subject-matter of the original action to be properly triable therein. As stated, all the parties were asking for equitable relief. They were all before the court, and their respective contentions fully heard. No prejudice has resulted by reason of the trial of issues of the cross-complaint in this action. If the motion to strike the cross-complaint should be sustained, it would only result in sending the parties out of court through one door, in order that they might return through another. It is the policy of the law to encourage the litigation in one action, so far as practicable, of all controversies relating to the same subject-matter, and thus avoid multiplicity of litigation. Upon this question we conclude that it was not error on the part of the trial court to refuse to strike the cross-complaint.

The next question is whether the court erred in directing the trustees to make and collect an assessment from the stockholders for the purpose of paying the Berg judgment. The facts germane to this question may be stated as follows: Th...