Follansbee v. Scottish-American Mortgage Co.

7 Ill. App. 486, 1880 Ill. App. LEXIS 260
Appellate Court of Illinois·Decided November 8, 1880·Published·Cited by 6 cases

Opinion

Bailey, J.

This record brings before us two appeals, each perfected by the filing of an appeal bond — one from the order of the court below dismissing thejcross-bills, and the other from the order dismissing the original bill. The .first of these appeals can be sustained only upon the theory that the order dismissing the cross-bills is in the nature of a final order, from which an appeal to this court properly lies. As the case stands, however, we do not feel called upon to determine whether such order is final or merely interlocutory, since, if it is to be treated as an interlocutory order, the appeal from the order dismissing the original bill brings before us the entire record, and enables the appellants to assign for error the decisions of the court below in relation to the cross-bills.

The first error assigned, and the one which, in our opinion, involves the entire merits of the appeal, calls in question the decision of the court below sustaining the demurrers to the cross-bills.

It is a familiar principle of equity jurisprudence that, wherever it is necessary to bring all the rights of all the parties fully before the court, so that complete equity may be done, as well in favor of the defendants as of the complainant, resort must be had to a cross-bill. Where the defendants rely on their answer alone, they can only use the equity of their case for the purposes of defense; but if they wish to become the assailants, and seek affirmative relief, they must file their cross-bill, and in that way, and in that alone,, are they permitted to use their equity as a weapon of attack. Hence, it is a rule, subject to very few exceptions, that a defendant in chancery, to entitle himself to affirmative relief, must seek it by cross-bill, and that none can be given upon answer alone, except so far as a refusal of relief to the complainant amounts to it. These principles are so elementary as to require no citation of authorities.

It is insisted by the counsel for the appellee, that the appellants, by their cross-bill, failed to show themselves to be entitled to any relief beyond what they would obtain by a decree dismissing the original bill for want of equity. That is what they must be understood to mean when they say that the rights of appellants could have been fully protected by their answers. In considering this objection, let us first look at the case made by Mrs. Follansbee. By the original bill, the Mortgage Company, claiming to be a judgment creditor of Mr. Follansbee, sought to subject to the payment of its judgments, certain real estate which, before said judgments were recovered, had been conveyed to Mrs. Follansbee by her husband, the judgment debtor. The bill sought to reach this property on the allegation that the conveyance was fraudulent and void as to the creditors of Mr. Follansbee. The cross-bill denied the fraud, and alleged that the property was conveyed to Mrs. Follansbee by way of mortgage, to secure the paymen t of a bona fide indebtedness due to her from her husband, amounting to something over $200,000; that in a suit in chancery against her husband, instituted by her before the recovery of said judgments, an accounting had been had and the amount of said indebtedness ascertained, her title to said property as mortgagee established, and a decree entered for the foreclosure and sale of the mortgaged premises. It was further alleged that the Mortgage Company holds, as security for the payment of the promissory notes upon which said judgments were recovered, a deed of trust upon certain real estate in Chicago, otherwise unincumbered, worth much more than the amount of said notes.

Doubtless a decree dismissing the original bill for want of equity would have been a bar to any further attempt on the part of the complainant to attack Mrs. Follansbee’s title on the ground of fraud, and would, perhaps, have established, inferentially, the priority of her lien over that of the Mortgage Company. But the Company’s lien upon Follansbee’s equity of redemption would still have subsisted, unaffected by the decree. That lien would have remained susceptible of enforcement at law by sale on execution, and would have entitled the holder of it to redeem from the mortgage until barred by the Statute of Limitations, or otherwise foreclosed. Mrs. Foil an s-bee, as the holder of the paramount lien, had an equitable right to have this equity of redemption extinguished by foreclosure. This was a matter of affirmative relief which she could not have obtained by answer.

But it is insisted that the demurrer to the cross-bill was properly sustained, because this relief was not germane to the original bill. It is undoubtedly the rule that a cross-bill cannot bring into the case foreign matters, but must relate exclusively to the same subject:matter as the original bill. In the language of the text-books, it must be brought “ touching the matters in question in the original bill.” But it would be much too narrow an application of the rule to hold that it must be confined to the precise equitable rights sought to be litigated by the original bill. Indeed, in most cases, it is because the defendants have other equities touching the subject-matter of the litigation not disclosed by the original bill, that a cross-bill becomes necessary. Accordingly, it is held, that while the allegations of the cross-bill must relate to the subject-matter in controversy in the original bill, they are not restricted to the issues in the original cause. Nelson v. Dunn, 15 Ala. 501. Thus a cross-bill may be maintained for the purpose of obtaining an equitable set-off. Cartwright v. Clark, 4 Metc. 104; Derby v. Gage, 38 Ill. 27. Or to establish an agreement or conveyance which the original bill seeks to set aside. Carnochan v. Christie, 11 Wheat. 446. Or to compel the surrender or cancellation of a contract which the original bill seeks to specifically .enforce. Cross v. De Valle, 1 Wall. 5. In May v. Armstrong, 3 J. J. Marsh. 260, it is said: “ If a bill is for a certain purpose, the defendant in the bill cannot, by any cross-bill, bring into litigation in that suit all causes of action which he may have against the complainant, unless there exist some special circumstances, such as insolvency, non-residence, etc., which would render it necessary in order to avoid irreparable injury. Thus, if a bill be filed for specific execution of a contract for land, the defendant cannot, by way of cross-bill, bring into litigation a fraud practiced on him by the complainant in swapping horses, or a debt due by the complainant, unconnected with the contract concerning the land sought to be enforced. The cross-bill must relate exclusively to the subject-matter of the bill, and things connected therewith, and foreign matter cannot be introduced, unless under special circumstances.” Josey v. Rogers, 13 Ga. 478; Horn or v. Hanks, 22 Ark. 572. In Fletcher v. Wilson, 1 Smedes & Marsh. Ch. 376, the court, in illustrating the.rule that a party cannot, by cross-bill, introduce other and distinct subjects of litigation, say: “ A defendant cannot, by a cross-bill, bring into litigation with the complainant other property than that referred to in the original bill, about which they have some conflicting claims.”

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Follansbee v. Scottish-American Mortgage Co., 7 Ill. App. 486, 1880 Ill. App. LEXIS 260 (Ill. Ct. App. 1880).

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