Wesley Church v. Moore

• Decision Date: 26 April 1849
• Citation: 10 Pa. 273
• Parties: WESLEY CHURCH <I>v.</I> MOORE et al.
• Court: Pennsylvania Supreme Court

10 Pa. 273

WESLEY CHURCH v. MOORE et al.

Supreme Court of Pennsylvania.

April 17, 1849.

April 26, 1849.

April 17.

APPEAL from the Common Pleas of Philadelphia — in equity.

Zantzinger, for the appellant.—The court has no jurisdiction unless conferred by the acts of Assembly. It is plainly not a case within the act of 1836. The act of 1840 confers jurisdiction in cases of actual fraud, accident, mistake, or account; none of these apply. Nor does the still further extended jurisdiction, under the act of 1845, include it. Beside, that was passed after the bill was filed; it has no retrospective operation: 4 S. & R. 401. But, should that act apply, here is no case of constructive fraud, within the definitions in the books: Stor. Eq. § 258. It is a case between principal and surety, and equity never interferes there: Ib. 323-8, 495-9. There is no case to be found where the court compelled a principal to repay a surety the debt paid by the former. The remedy is by assumpsit, and in such cases the court does not interfere, but leaves the party to his remedy at law. The other ground is discovery. But bills of that sort are not allowed by the acts of Assembly, but in two cases; one in aid of an action pending in the same court; the other in aid of the execution after judgment recovered. But no court in this commonwealth can entertain an original bill of discovery, seeking relief in the same court. It is not necessary; for had there been an action at law, all the discovery now obtained would have been obtained equally well by a bill in aid of that action. Courts of equity will not retain a bill if the discovery be the only ground of jurisdiction, and is sought unnecessarily. 2. When the money was borrowed the corporation did not exist. When subsequently created, the members of the association remained liable. A change of the liability to that of the corporation, could only be made with their assent and that of the debtor: 2 R. 359. The mere fact of an acknowledgment by the corporation would not be sufficient, for there was no previous legal liability: Chit. on Cont. 254. 3. Curtis, having accepted a formal indemnity from three members, he and his devisees must look to that; the parol promise was merged therein: Chit. on Cont. 597.

J. Clarke Hare, contrà.—The money in this case was borrowed and applied to the use of a voluntary association. The building erected with this money was then conveyed to the corporation into which the association was erected. If the corporation did not succeed to a legal liability, is there a doubt they did to an equitable, or at least the strongest moral liability, to repay the loan and to protect the borrower? They so considered it; and the payment of interest, with the recognition of the debt, affords ample evidence of their recognition of this obligation, and of an implied promise to fulfil it. It is supposed 2 R. 359 decides we have no remedy against the corporation. The case is misapprehended; it decides that we could not be turned over to that exclusively: not that we may not seek a remedy against it.

Under these circumstances, can there be a doubt that before payment we had a right in equity, to compel payment by the corporation in discharge of our liability? and can the fact that we have been compelled to pay oust the right to reimbursement?

The jurisdiction over corporations, by the act of 1836, is general, that is, all the jurisdiction which courts of chancery would exercise over corporations and others, is vested in our courts over corporations, 3 W. & S. 184, 193. In this case it might be supported by the act of 1845, for that affects the remedy and not the right: Bolton v. Johns, 3 Barr, 145; and on appeal the cause is heard de novo. But there is a further jurisdiction: courts of chancery have uniformly exercised control over cases of principal and surety, on the ground of accident, as presenting casualties not foreseen; fraud, as where the principal fails to perform his bounden obligation in good faith, and trust in reaching property peculiarly applicable to the relief of the surety. Pit. on Pr. & Sure. 132; Nels. 24; 1 Cox. 276; Mos. 318; 1 A. K. Marsh, 358; 3 Leig. 272; 2 Call. 125; 1 Dev. Eq. 137; 6 Paig. 521; 2 Am. Eq. Dig. Tit. P. and Surety. It is only where a legal obligation of a higher nature has been taken from the principal, that the equitable jurisdiction is ousted. The fact that these remedies cannot be perfectly afforded, is no reason why so much as can be done should be refused; and the familiar principle which authorizes sureties to file a bill for contribution, is strong evidence of the existence of a general jurisdiction.

There was no remedy at common law, for there was no privity in contract between these parties, nor was there any legal liability by the corporation to the creditor; hence, even a compulsory payment raises no legal liability to the person paying: 1 M. Gra. & Sc. 300. That there might be a remedy under legal forms, professing to administer equity, is immaterial; for nothing is more trite than the rule that an assumption of equitable relief by common-law courts never ousts the original jurisdiction of chancery: 5 Ves. 235; 7 Ib. 237-49; 17 John. 388. On this ground it is, that equity still gives contribution between sureties, where the debt is paid, though assumpsit may now be maintained: 4 Grat. 268; 12 Alab. 225; 5 J. J. Marsh, 270; 7 Ib. 559. Where the discovery sought goes to the foundation of the right of suit, it gives equity jurisdiction for the purposes of relief. A discovery was necessary here, to show that the liability of Curtis, on its face primary, was in reality secondary in its nature. This argument applies in all cases between principal and surety, where the relation of suretyship does not appear in the instrument creating the debt. A discovery was also necessary in this instance, to establish the substantial identity of the present corporation with the original association, and to show that the property held in trust for the latter had been conveyed to the former, and a discovery going to the foundation of the right of suit, will give equity jurisdiction: 4 Cow. 728. There is a limit to the powers of courts of law. The injury was not sustained here until after Curtis's death, and then no part of the estate of the executors was taken. Their damages would be nominal only: 1 Conn. 244; 12 N. H. 413; 4 Mass. 627; 1 M. & Sel. 355; 4 Ib. 53. Nor could there be any other parties to the action than his executors; for how could a devisee sue on an implied or express personal contract with his testator? In such cases, as the injury is done to the devisees, equity considers them the parties who may recover compensation: 1 Dev. Eq. 30; 8 Paige, 359; 9 Ib. 43; 6 Ib. 521. The doubt and uncertainty of the legal remedy alone will sustain the jurisdiction: 3 Pet. 215; 11 Conn. 112.

But the objection is too late after answer, unless there is a total want of it: 2 Paige, 509. The indemnity of Scott is no waiver or merger; it was a collateral security, and there can be no merger in an obligation other than of the original party: 4 W. & S. 542; 1 S. & R. 294; 11 Ib. 149; 14 John. 404; 6 T. R. 176; 3 M. & Gr. 258-66; Ib. 213.

April 26. GIBSON, C. J.

The proofs show that the money for which this bill is filed, was borrowed by Curtis at the instance of the congregation, and for its use; and that it was laid out by the building committee in the erection of its church. They further show that he mortgaged the property, which he devised to the complainants, as a security for the loan; and, that the congregation having kept down the interest while he lived, suffered it to be sold at the end of a few years, for the principal and unpaid interest, on a judgment obtained on the bond which accompanied the mortgage, and that being inadequate, the property devised to the complainants was sold to satisfy the debt.

It appears, also, that Curtis took, as counter-security, from some of the congregation's trustees, a mortgage of their individual property, which his executors, or the survivor of them, neglected or refused to put in suit; and one of the questions in the cause is, whether this counter-security was exclusive or cumulative. The law is, that a creditor may take as many securities as he can get, the presumption being, in the first instance, that they are cumulative; and here there is no evidence to rebut it.

Another question is, whether the corporation is bound to perform the promises of the association. Why not? At the time of the promise, the beneficial interest and dominion was in it as a cestui que trust; and the persons who were its trustees, merely as recipients of the legal title, were bound by its acts. Having become its own trustee by their conveyance to it as a corporation, it was bound to do whatever they were bound to do; and, having received the title to the whole property, legal as well as beneficial, it had it burthened with the equities which had before been attached to it. That the promise was originally made by a society irresponsible at law, would be an answer to an action at law, but certainly not to a bill in equity, after it had acquired a...