Merchants & Farmers Bank v. Dent

• Decision Date: 14 October 1912
• Docket Number: 15,765
• Citation: 102 Miss. 455,59 So. 805
• Parties: MERCHANTS & FARMERS BANK v. R. K. DENT ET AL
• Court: Mississippi Supreme Court

59 So. 805

102 Miss. 455

MERCHANTS & FARMERS BANK v. R. K. DENT ET AL

No. 15,765

Supreme Court of Mississippi

October 14, 1912

APPEAL from the chancery court of Newton county, HON. SAM WHITMAN Chancellor.

Suit by R. K. Dent and wife against the Merchants and Farmers Bank and others. From a judgment overruling a demurrer to the bill, defendant appeals.

The facts are fully stated in the opinion of the court.

Judgment affirmed and remanded.

Ellis B. Cooper, for appellant.

At the outset let it be understood that the appellants do not contend that the alteration charged in the bill does not avoid the deed of trust. This is elementary. Appellants contend most earnestly that under the case made by this bill notwithstanding its allegations of fraud, that they have certain equitable rights in the matter which appellees do not recognize and which the appellees must concede before equity will lend its aid. In short the contention is that the maxim "'He who seeks equity must do equity,' is a general principle applicable to all classes of cases whenever necessary to promote justice, and requires that any person seeking the aid of equity shall have accorded, shall offer to accord, or will be compelled to accord to the other party all of the equitable rights to which the other party is entitled in respect to the subject-matter."

Pomeroy in volume 1, Eq. Jur. (3 Ed.), sec. 385, says of this maxim or principle: "This maxim expresses the governing principles that every action of a court of equity in determining rights and awarding remedies, must be in accordance with good faith. The meaning is that whatever be the nature of the controversy between two definite parties and whatever be the nature of the remedy demanded, the court will not confer its equitable relief upon the party seeking its interposition and aid, unless he has acknowledged and conceded, or will admit and provide for, all the equitable rights, claims and demands justly belonging to the adversary party and growing out of or necessarily involved in the subject-matter of the controversy. It says in effect, that the court will give plaintiff the relief to which he is entitled, only upon condition that he has given, or consents to give, the defendant such corresponding rights as he also may be entitled to in respect of the subject-matter of the suit. The meaning of the principle was more definitely expressed by an eminent judge in the following terms: 'The court of equity refuses its aid to give to the plaintiff what the law would give him, if the courts of common law had jurisdiction to enforce it, without imposing upon him conditions which the court considers he ought to comply with, although the subject of the condition should be one which the court would not otherwise enforce.'"

In section 388 of the last quoted work is the following: "This principle (doing equity) is not confined to any particular kind of equitable remedies but pervades the entire equity jurisprudence, so far as as it is concerned with the administration of equitable remedies."

In 6 Cyc. 329, par. 7, under subject of Cancellation of Instruments, we find: "In nearly all jurisdictions a bill is demurrable in which the complainant does not offer to return any consideration which it shows that he received, or otherwise place defendant in statu quo, or sufficiently excuse himself from that duty."

In Howard (Miss.), 569, we find: "Whether it be a rule in use as to usurious contracts only, or not, it has its origin in principles of equity, I cannot perceive why it should prevail in one class of cases only."

Mississippi's reports are not barren of applications of this principle. We find the debtor seeking relief from usurious contracts required to pay principal and lawful interest. 6 Howard, 569.

In Duncan v. Moore, 7 So. 221, 67 Miss. 136, we find a husband seeking the cancellation of a deed of trust on his homestead and the basis of this demand was that his wife, who was living, had not signed. The court required equity of him before it would lend its aid to cancel an absolutely void instrument.

In Deans v. Robinson, 1 So. 159, 64 Miss. 195, we find a debtor seeking relief from a deed of trust which the court held null and void and affected with an incurable infirmity required to do equity. This deed was void for the reason that the grantee therein was a merchant who conducted a merchantile business without paying the tax required by statute, the law punishing one who so conducted a business by declaring all of his contracts void.

Other instances are found in Powell v. Plant, 23 So. 399; Salter v. Embrey, 18 So. 373; Stewart v. Brooks, 62 Miss. 492; Newman v. Taylor, 69 Miss. 670, 13 So. 831; Durr Company v. Mitchell, 52 So. 583; Bowdre v. Carter, 64 Miss. 291, 1 So. 162; American Mortgage Co. v. Jefferson, 69 Miss. 770, 12 So. 464, and many others.

Now in what manner can the case at bar be differentiated from the cases cited? There is only one point of difference and that point of difference is that there has been a fraudulent alteration in the deed of trust, a part of the instrument sought to be cancelled.

The vital issue, therefore, is, Does the presence of fraud attached to the alteration when taken and considered with the other facts disclosed by the bill of complaint wholly defeat the application of the maxim, "He who seeks equity must do equity?"

In answering that question I submit with all candor that the presence of such an element in a case simliar to the one at bar has no such effect. The only limitation to be found in cases of fraud is that equity will not compel the complainant, the one seeking equity, to accord to the other party, his adversary, any equity which was acquired through fraud and through fraud alone. Why such a limitation? Because equity will not permit an advantage to be gained through fraud. The equities which appellants have in the instant case are not acquired through fraud. The right to the indebtedness of appellees did not accrue to the appellant bank through the perpetration of fraud. No fraud besmirches that indebetedness and the bill discolses that. Any equitable right appellant has to subject the property in the deed of trust, other than the lot alleged to have been inserted after the execution and delivery, was not acquired through fraud. No equitable right, as distinguished from a legal right, possessed by appellants has been acquired through fraud and counsel for appellees cannot indicate a single equity acquired through fraud. If any fraud crept into this transaction it crept in after it had been consummated. It may be argued that it would be revolutionary to give life to the void deed of trust and require appellees to offer the property which they admit was properly in the deed of trust as according appellants equity. On analysis, however, as much is not done in the requiring of that as was done in the case Deans v. Robinson, supra, where the court put life into a deed of trust in question which was admitedly void ab initio. In the last case cited, there was never a valid indebtedness and there was never a valid deed of trust. In the case at bar, there are valid liens and valid evidences of debt. If not valid now, they were valid when first made. If the operation of the principle of doing equity is applicable in the Deans case, a fortiori is it applicable in the instant case. Yet appellees in asking aid of the court of equity not only do not offer to do equity of any description but they ask the court to inflict upon appellees the complete forfeiture of both the lien under the deed of trust and the indebtedness which it secures. They ask the court to do that which is inequitable.

J. R. Byrd, for appellee.

It is an elementary principle of law that the chancery court will not entertain a demurrer to a bill in chancery where a fraud is charged unless the defendant first files an answer denying the fraud charged. Especially is this true where wilful and corrupt fraud is charged and the bill sworn to, as in the cause at bar. This has been especially held by this court in the case of Hentz v. Delta Bank 76 Miss....