Johnson v. Swanke

107 N.W. 481, 128 Wis. 68
CourtWisconsin Supreme Court
DecidedApril 17, 1906
StatusPublished
Cited by26 cases

This text of 107 N.W. 481 (Johnson v. Swanke) is published on Counsel Stack Legal Research, covering Wisconsin Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Johnson v. Swanke, 107 N.W. 481, 128 Wis. 68 (Wis. 1906).

Opinion

Maushaxl, J.

The question for consideration on the appeal is this: Does the principle that equity only supplements legal remedies, making up for their infirmities, preclude one who has an adequate defense at law to an ostensibly valid,, but in fact void, obligation in writing against him from having the use of equity jurisdiction, at his initiative, to quiet the controversy and obtain a cancellation of the instrument?' In other words, must one so circumstanced await the pleasure of his adversary as to time and place of attack, and then vindicate his right by way of defense ?

Here, according to the facts stated, the note is void at the election of the plaintiffs and, it being nonnegotiable, the defense thereto can be in no way prejudiced by a transfer thereof to another without notice of its infirmity, there being no element of estoppel, which element is necessarily under the control of the plaintiff to create or prevent. Whenever and wherever the holder of the paper may see fit to invoke a judicial remedy to enforce it, plaintiffs can successfully de[71]*71fend by alleging and proving the facts set forth in the complaint.

As an original matter it would seem that one ought not to be precluded from seeking aid of equity to avoid the menace of a prosecution on a void note, when he would necessarily suffer embarrassment -and anxiety by having it outstanding against him till the holder might see fit to enable him to show its true character and obtain- a judicial decree in respect thereto by way of defense. Most men would so tire of such a situation as to be constrained to buy their peace, rather than to have it postponed till such time as their adversary might see fit to attack. Anciently it was quite common for equity to interfere in such cases where the adverse claim was founded on fraud, without there being any other special circumstances. The subject will be found extensively discussed in the notes to sec. 914 (3d ed.) of Pomeroy’s Equity, where it is said in effect that the American courts, contrary to the English system, have generally adhered to the negative of the suggested proposition; that without special circumstances equity jurisdiction cannot be invoked by way of attack to cancel an instrument to which there is an adequate defense at law. This is quoted from the opinion^of^ Ohbistiabt, J., in Wampler v. Wampler, 30 Grat. 454, as a fair^statement of the old and, in the judgment of the text-writer^the better doctrine:

“Courts of equity have an original, independent, and inherent jurisdiction to relieve against every species of fraud. Every transfer or conveyance of property, by what means soever it may be done, is in equity vitiated by fraud. Deeds, obligations, contracts, awards, judgments, or decrees may be the instruments to which parties resort to cover fraud, and through which they may obtain the most unrighteous advantages, but none of such devices or instruments will be permitted by a court of equity to obstruct the requirements of justice. If a case of fraud be established, a court of equity will [72]*72set aside all transactions founded upon it, by -whatever machinery they may have been effected, and notwithstanding any contrivance by which it may have been attempted to effect them. These principles have now become axioms of equity jurisprudence.”

He followed that, however, with a confession that the quotation was really contrary to the American doctrine; that there has been a practical surrender by courts in this country of a large part of the jurisdiction in equity as to matters referred to, formerly exercised. He stated the modern rule ■thus:

■ “The doctrine is settled that the exclusive jurisdiction to grant purely equitable remedies, .such as cancellation, will not be exercised, and that the concurrent jurisdiction to grant pecuniary recoveries does not exist, in any case where the legal remedy, either affirmative or defensive, which the defrauded party might obtain, would be adequate, certain, and complete.’!^

A reference to the authorities shows that the jurisdiction ■of equity in this country has been restricted as above indicated, in deference to the constitutional guaranty of the right of trial by jury. This court is in harmony therewith, as suggested by counsel for appellant, referring to Matteson v. Ellsworth, 28 Wis. 254, 256, and Glenwood Mfg. Co. v. Syme, 109 Wis. 355, 364, 85 N. W. 432.

.'The yielding up of jurisdiction to entertain a suit to cancel an instrument in a case where it canno.t be enforced because of grounds constituting a plain defense thereto at law, has not proceeded to any greater extent than the guaranteed right of trial by jury, liberally construed, seemed to demand. It is limited by the precedents to cases where there are no special ■circumstances rendering the legal remedy by way of defense inadequate^)' The following are but a few that might be referred to: Teft v. Stewart, 31 Mich. 367; Springport v. Teutonia Sav. Bank, 75 N. Y. 397; Allerton v. Belden, 49 N. Y. 373; Farmington v. Sandy River Nat. Bank, 85 Me. 46, [73]*7326 Atl. 965; Globe Mut. L. Ins. Co. v. Reals, 79 N. Y. 202; Venice v. Woodruff, 62 N. Y. 462; Erickson v. First Nat. Bank, 44 Neb. 622, 62 N. W. 1078; Johnson v. Andrews, 28 Ga. 17; Johnson v. Murphy, 60 Ala. 288; Huff v. Ripley, 58 Ga. 11; Black v. Miller, 173 Ill. 489, 50 N. E. 1009; Vannatta v. Lindley, 198 Ill. 40, 64 N. E. 735; Ada Co. v. Bullen B. Co. 5 Idaho, 188, 47 Pac. 818; Glastenbury v. McDonald’s Adm’r, 44 Vt. 450; Ins. Co. v. Bailey, 13 Wall. 616; Home Ins. Co. v. Stanchfield, 1 Dill. 426, Fed. Cas. No. 6,660; Atlantic D. Co. v. James, 94 U. S. 207, 214; Cable v. U. S. L. Ins. Co. 191 U. S. 288, 24 Sup. Ct. 74; Ætna L. Ins. Co. v. Smith, 73 Fed. 318.

In Ins. Co. v. Bailey the federal supreme court stated, tersely, what Mr. Pomeroy is pleased to call the American doctrine, thus:

“When a party, if his theory of the controversy is correct, has a good defense at law to a purely legal demand, he should be left to that means of defense, and he has no occasion to resort to a court of equity for relief unless he is prepared to allege and prove some special circumstances to show that he may suffer irreparable injury if he is denied that preventive remedy.”, < > > >

In Ada Co. v. Bullen B. Co., supra, the court phrased the rule thus:

“A court of equity will not interfere to decree the cancellation of a written instrument unless some special circumstance is shown to exist establishing the necessity of a resort to equity to prevent irreparable injury.”

With very little variation from that, the same doctrine will be foxmd declared in each of the cases cited. The Illinois -court, in Black v. Miller, stated the matter thus:

“Where a party alleging himself to be injured by the existence of a written instrument has a complete defense against it in an action at law, he cannot ask a .court of equity to require its surrender and a cancellation unless the remedy by defense relied on is inadequate to promote the ends of justice and afford complete relief.”

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Bluebook (online)
107 N.W. 481, 128 Wis. 68, Counsel Stack Legal Research, https://law.counselstack.com/opinion/johnson-v-swanke-wis-1906.