Koontz v. Houghton

• Decision Date: 01 October 1923
• Docket Number: No. 342.,342.
• Citation: 194 N.W. 1018,224 Mich. 463
• Parties: KOONTZ et al. v. HOUGHTON, Circuit Judge.
• Court: Michigan Supreme Court

224 Mich. 463

194 N.W. 1018

KOONTZ et al.

v.HOUGHTON, Circuit Judge.

No. 342.

Supreme Court of Michigan.

Oct. 1, 1923.

Suit by John Zimmerman and another against Gilbert Koontz and another. Motion to transfer to law side of court was granted, and defendants apply for writ of mandamus, directed to Samuel G. Houghton, Circuit Judge, to compel setting aside of the order Writ denied.

Argued before WIEST, C. J., and FELLOWS, McDONALD, CLARK, BIRD, SHARPE, MOORE, and STEERE, JJ. John C. Shaffer, of Gladwin (Kinnane & Leibrand, of Bay City, of counsel), for plaintiffs.

J. L. McCormick, of Bay City, for defendant.

Bird, J., dissenting.

BIRD, J.

In February, 1921, plaintiffs sold an 80-acre farm in Gladwin county to John and Amelia Zimmerman for $12,000, taking in part payment a parcel of land in Bay county. Zimmerman and his wife moved on to the Gladwin county farm soon after the purchase and remained there during the summer and fall of 1921. In October, 1921, they filed their bill in the Bay circuit court, in chancery, claiming that plaintiffs in this suit were guilty of misrepresentation and fraud in the sale of the premises to them, and praying the following relief:

(a) That a decree be entered by this court, requiring the defendants to reconvey to said plaintiffs the land formerly owned by them, and described in paragraph 1 of this bill of complaint, upon the surrender of the land contract held by plaintiffs are vendees of the Gladwin county land described in paragraph two thereof; or

(b) That defendants be required to execute to plaintiffs a warranty deed of said land, described in paragraph 2, upon the payment to them by plaintiffs of the reasonable value of said land (Gladwin county land) on the 8th day of February, 1921, deducting, however, from the reasonable value of said land the value placed on plaintiff's land, viz. $5,500.

(c) That plaintiffs may have such other and further relief in the premises as equity may require, and as to this court shall seem meet.

The case was heard by defendant, and at the close of the proofs the defendant therein moved for a dismissal of plaintiff's bill. After some consideration and discussion, the chancellor announced that he thought there could be no rescission in the case, because the Zimmermans had remained on the premises for nearly a year and made no complaint, after being aware that they had been defrauded, and because they had not tendered the contract of the farm back to the plaintiffs, and had taken no preliminary steps upon which a rescission could be based. The chancellor in his return rather indicates that he thought the Zimmermans were entitled to some relief, but indicated that it was by way of damages on the law side of the court. Counsel for the Zimmermans then moved that the case be transferred to the law side of the court, under Compiled Laws 1915, § 12,351. This motion was granted, and the case was moved to the law side of the court. Plaintiff's counsel are here complaining of this order, and praying that defendant be ordered to set it aside. It is contended by counsel that the chancellor had no jurisdiction to make this order for various reasons.

The chancellor was of the opinion that, having held against the Zimmermans on the question of rescission, he could give them no other relief under section (b) of the prayer of thier bill, but that relief must come from the law side of the court. In this conclusion we think the chancellor was in error. His court had jurisdiction of the persons and subject-matter, and he was entitled to invoke the rule that:

‘When a court of equity has jurisdiction for one purpose, it may retain jurisdiction to settle all disputes relating to the subject-matter.’

A court of equity, which has obtained jurisdiction of a controversy on any ground, or for any purpose, will retain such jurisdiction for the purpose of administering complete relief and doing entire justice with respect to the subject-matter. 16 Cyc. 106. Some of the Michigan cases which support this rule are Whipple v. Farrar, 3 Mich. 436, 64 Am. Dec. 99;Steinbach v. Hill, 25 Mich. 78;Miller v. Stepper, 32 Mich. 194;Rickle v. Dow, 39 Mich. 91;Wallace Wallace, 63 Mich. 326, 29 N. W. 841;Chase v. Boughton, 93 Mich. 285, 54 N. W. 44;Drayton v. Chandler, 93 Mich. 383, 53 N. W. 558;George v. Wyandotte Electric Light Co., 105 Mich. 5, 62 N. W. 985;Snyder v. Snyder, 131 Mich. 658, 92 N. W. 353;Rhoades v. McNamara, 135 Mich. 644, 98 N. W. 392;Lane v. Michigan Traction Co., 135 Mich. 70, 97 N. W. 354;Grabill v. Barnhart Bros., 160 Mich. 81, 125 N. W. 16;C. H. Little Co. v. L. P. Hazen Co., 185 Mich. 316, 152 N. W. 95;Albright v. Stockhill, 208 Mich. 468, 175 N. W. 252.

Equity, having obtained jurisdiction of a court to restrain a railroad company from building a trestle, after denying the relief sought, may retain jurisdiction for the purpose of awarding damages. Lane v. Michigan Traction Co., supra. Where equity has jurisdiction of a suit to enjoin a continuing trespass, it should give such relief as will finally dispose of every question involved, and an award of damages is not objectionable as depriving defendant of the right of trial by jury. Rhoades v. McNamara, supra.

In Steinbach v. Hill, 25 Mich. 78, a bill was filed for the purpose of rescinding a land contract on the ground of fraud. The remedy of rescission was denied as in the case at bar, but the opinion indicates that damages would have been assessed, had the value of the property been up to the jurisdiction of the court. In Carroll v. Rice, Walk. Ch. 373, a bill was filed to set aside a conveyance on the ground of fraud, and on account of this the complainant sought to rescind. The court denied the specific remedy of rescission, but permitted him to recover his damages. The court said, in part:

‘If Carroll, on discovering these mortgages, intended to make them a ground for rescinding the sale, he should have filed his bill immediately. By a change in the times, the property had greatly decreased in value during the four years he held onto the bargain, and he should not now be allowed to throw the loss on Sargeant's representatives, who would not have been benefited by an increased value. Moreover, the property cannot be restored in the condition it was in when the mortgages were discovered, much less when it was purchased by Carroll. For these reasons, I think the sale should not be set aside. But relief may be given to complained in another way, under the general prayer of the bill. His damages, when ascertained, may, by a decree of the court, be directed to be endorsed as so much paid, on his bond for the purchase money in the hands of the administrator.’

The case of Albright v. Stockhill, supra, is very similar to the present one. This case sought to rescind the contract. The court denied rescission, but permitted an accounting and an equitable lien upon the lands involved. Because the court held no rescission could be had, it did not follow that no other relief could be given on the equity side of the court, if the relief was within the pleadings. Courts of law and equity have concurrent jurisdiction in actions of fraud.

With a single exception courts of equity have jurisdiction to relieve in cases of fraud. In so far as the law affords relief from fraud, the jurisdiction is concurrent. 16 Cyc. 82. Wyckoff v. Victor Sewing Machine Co., 43 Mich. 309, 5 N. W. 405;Wright v. Hake, 38 Mich. 525; Wheeler v. Clinton Canal Bank, Har. 449. If the chancellor was of the opinion that no rescission could be had, but that the Zimmermans were entitled to damages for the misrepresentation and fraud, he had authority to assess the damages. Hillier v. Carpenter, 206 Mich. 594, 173 N. W. 386.

In this case plaintiff recovered damages in an...