Wright v. Hake

• Decision Date: 03 April 1878
• Citation: 38 Mich. 525
• Court: Michigan Supreme Court
• Parties: Charles W. Wright et al. v. William Hake et al

38 Mich. 525

Charles W. Wright et al. v. William Hake et al

Supreme Court of Michigan

April 3, 1878

Submitted January 30, 1878

Appeal from the Superior Court of Grand Rapids.

Injunction to restrain suit on replevin bond. Defendants appeal.

Decree adjudged the complainants discharged from their obligation affirmed with costs.

Taggart & Wolcott and Hoyt Post for complainants. A judgment in replevin obtained by collusion between plaintiff and defendant is not conclusive on the sureties to the plaintiff's bond, Freeman on Judgments, 180; Parkhurst v. Sumner, 23 Vt. 538; Rathbone v Warren, 10 Johns. 587; Clark v. Niblo, 6 Wend 243 a; Churches v. Barker, 18 N. Y., 466; Lothrop v. Southworth, 5 Mich. 448; and the sureties' remedy is in equity, Mack v. Doty, Har. Ch 366; Story's Eq. Jur., §§ 700-702.

D. E. Corbitt and Norris & Uhl for defendants cited the following cases as bearing generally on the questions in this case, Hershler v. Reynolds, 22 Iowa 152; Hale v. Fitch, 8 Penn. St., 495; Boynton v. Phelps, 52 Ill. 215; Sherry v. Foresman, 6 Blackf. (Ind.), 56; Williams v. Vail, 9 Mich. 162; O'Neal v. Wade, 3 Ind. 410; the stipulations of parties have no force if attorneys have appeared for them, Commissioners v. Younger, 29 Cal. 147; Mott v. Foster, 45 Cal. 72; McConnell v. Brown, 40 Ind. 384; Berghoff v. Heckwolf, 26 Mo. 511; Daniels v. Patterson, 3 Comst. 50.

OPINION

Cooley, J.

The bill of complaint in this cause was filed by Charles W. Wright, Charles H. Southwick, William G. Gustine, Darwin P. Cody and Charles E. Olney against William Hake and William T. Merritt, setting forth the following state of facts:

That on the 24th day of November, 1874, the defendant Hake had in his possession certain personal property, which was taken from him by a writ of replevin at the suit of defendant Merritt; that the complainants became sureties for Merritt in the replevin suit; that Hake defended the suit, and the same was tried April 2, 1875, and verdict rendered therein for the plaintiff; that afterwards the verdict was set aside and a new trial ordered; that still later and on or about the thirteenth day of February, 1876, Hake and Merritt entered into an agreement in writing, by the terms whereof Merritt agreed to abandon his suit and allow Hake to take judgment therein, in consideration of the sum of one hundred dollars, which was duly paid; that this was done fraudulently to cheat the complainants; that no arrangement was made between Hake and Merritt for the return of the property replevied, but the same was left in the hands and under the control of Merritt, who was and is irresponsible and insolvent; that in pursuance of said agreement Merritt did withdraw and abandon his defense, which coming to the knowledge of complainants, they endeavored to defend, but unsuccessfully, and Hake elected to take judgment for the value of the property, and did take judgment for $ 1200 and costs taxed at $ 38.75; that complainants had no notice or knowledge of said agreement for the abandonment of said suit, and did not know of its existence, until the fact was brought out in the evidence on the trial; that Hake has taken out execution on his judgment, which has been returned unsatisfied, and that since its return he has brought suit on the replevin bond, which was assigned by the sheriff to him for the purpose. And the bill prays that the suit on said bond be perpetually enjoined.

The answer of Hake gave the following version of the facts: that on or about the first day of November, 1874, Studley Palmer sold to him, Hake, a chattel mortgage which had been given by Merritt to Palmer upon the goods mentioned in the bill of complaint for the sum of $ 1600; that Merritt made default in the payment of the mortgage, and Hake took possession of the goods; that a few days thereafter Merritt replevied the goods, claiming that a part of the consideration given for the mortgage was intoxicating liquors, and that the mortgage was therefore void; that afterwards, in January, 1876, Merritt called on Hake, and stated that when the goods were transferred to him by Palmer, it was done for the purpose of keeping them away from Palmer's creditors, and that he, Merritt, had no interest in the goods except in a quantity of about the value of one hundred dollars; that any other interest in the replevin suit belonged to Palmer, who had procured the sureties to sign the bond and given them security for so doing, and that if Hake would pay him one hundred dollars he would say nothing more about the suit; that defendant did pay him the one hundred dollars, and afterwards when the case was called for trial the counsel for Merritt stated that he had not his witnesses ready, as he had no interest in the suit, and he asked to have the trial postponed for two weeks, which was done by the court; that on the adjourned day when the cause was called the counsel for Merritt came in and stated he was ready for trial, whereupon the trial proceeded with the result stated in the bill. The answer denied all fraud, and claimed the benefit of a demurrer.

On the issue made by the answer the case went to a hearing. The agreement between Merritt and Hake was proved, and it was embodied in the paper given in the margin. ^[*] It was shown that Merritt was irresponsible when the agreement was made, and that Hake was aware of the fact. It also appeared that knowledge of the arrangement between Hake and Merritt was not brought to the knowledge of the sureties, and that it came out on the second trial of the replevin suit, while the counsel for the plaintiff in the absence of his client, was examining Hake as a witness, and endeavoring to make out a case. It is evident from Hake's testimony that knowledge of the writing was purposely concealed from the sureties. The case of complainant seems therefore to be made out on the facts, and it only remains to see whether it constitutes a case for relief, and if so, whether a defense is established.

It was proved that the sureties in the replevin bond took a chattel mortgage given by Merritt and Palmer on the goods replevied to secure them against liability, but it also appeared that the goods were left in the hands of the mortgagors, and that the security never become available to the complainants. Defendants, therefore, have no equities growing out of the giving of that mortgage. It also appeared that the agreement between Hake and Merritt was not made use of by Hake in any manner on the trial of the replevin suit, and it is therefore urged by defendants that complainants were not injured thereby, especially as counsel for Merritt actually appeared and went on with the case. It is true this fact is shown, but the evidence is abundant that the counsel was abandoned by his client because of the agreement with Hake, and that he was left powerless to prosecute the suit to effect. The sureties made some little effort to obtain a continuance of the case, but Merritt refused to assist, and his bad faith in the transaction is manifest. And it is equally manifest that had...