Steggles v. National Discount Corp.

39 N.W.2d 237, 326 Mich. 44, 15 A.L.R. 2d 208, 1949 Mich. LEXIS 265
CourtMichigan Supreme Court
DecidedOctober 10, 1949
DocketDocket No. 6, Calendar No. 44,401.
StatusPublished
Cited by33 cases

This text of 39 N.W.2d 237 (Steggles v. National Discount Corp.) is published on Counsel Stack Legal Research, covering Michigan Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Steggles v. National Discount Corp., 39 N.W.2d 237, 326 Mich. 44, 15 A.L.R. 2d 208, 1949 Mich. LEXIS 265 (Mich. 1949).

Opinion

Btjtzel, J.

Plaintiff, Joseph Edgar Steggles, brought suit in equity against the National Discount Corporation, a finance company, and United Used Cars, Inc., a dealer in used cars, as defendants, all of Detroit. The defendants will be referred to herein respectively as the finance company and the dealer. In his bill of complaint, the plaintiff alleged that *47 on November 5, 1948, lie purchased from the dealer a 1947 Ford sedan, and paid therefor $825 in cash in addition to the transfer of a 1942 Pontiac sedan to the dealer; that when he asked for the title to the 1947 Ford sedan, the dealer told him to return in 5 days; that when he returned he examined the title, copied the serial numbers for insurance purposes, and on the following day, he received the certificate of title, signed the application for a new title running to himself, and returned the certificate of title to the dealer to be forwarded to the Secretary of State. He further alleged that the dealer represented that there were no liens against the car; that on November 19, 1948, by trickery on the part of the finance company, he was induced to bring the car to the office of the dealer, where an agent of the finance company, who, at that time representing himself to be in the employ of the State, stated that there was a mortgage of $1,290 on the car, but if he would return on the evening of November 22, 1948, the certificate of title would be ready for him; that he went back on said day, but was told again to return at a later date, but when he went to get his car, he found that the finance company had seized it to satisfy a mortgage on it; that he demanded the return of the car or else his money and the car he had traded in but was informed that the finance company also held a mortgage on the 1942 Pontiac sedan he had traded in.

The finance company in a sworn answer denied any fraudulent conduct in seizing the car. It showed that previous to the purchase of the car by plaintiff the dealer had given the finance company a wholesale or floor-plan mortgage on its cars, and specifically on the 1947 Ford car in question. That after the transfer of the 1942 Pontiac to the dealer it also was mortgaged to the finance company. All the mortgages were properly recorded. It further *48 claimed that it retained, in its possession, .the certificates of title of the mortgaged cars as additional security. However, whether through its mistake or carelessness, it enabled the dealer to perpetrate a fraud, as the dealer, according to plaintiff, had possession of the certificate of title and delivered it to plaintiff who gave it back to the dealer, after signing the application for transfer of. the title to be forwarded to the secretary of State.

In his prayer for relief plaintiff asked for repossession of the car by mandatory injunction, and damages for loss of use thereof during the period it has been held by the finance company. Plaintiff also seeks damages from defendant dealer as well as the finance company for the loss of use of the car due to the alleged fraud of the dealer, and the bill of complaint contains the usual clause for general relief. On the filing of the bill of complaint, the trial judge ordered the defendants to show cause why a mandatory injunction should not be issued. On the hearing of the order to show cause, without any testimony being taken, the trial judge granted the mandatory injunction ordering the return of the car, however, expressly enjoining plaintiff from either disposing of or mortgaging the car during the pendency of the suit. The finance company then filed a motion for a rehearing and also for the dismissal of the cause on the ground that plaintiff had an adequate remedy at law. Both motions were denied and the finance company has appealed.

Plaintiff in the brief filed in his behalf asks that the appeal be dismissed on the ground that it was taken-from an interlocutory order without first obtaining leave of this Court. No motion to dismiss was made.- The objection comes too late. Toledo Pipe Organ Co. v. Paradise Theatre Co., 318 Mich 342.

*49 Defendant finance company, as sole appellant, raises 2 questions on this appeal. It contends first that the bill of complaint should be dismissed as ■plaintiff has a complete and adequate remedy at law, and second, that the court should not have issued the mandatory injunction without a hearing on the merits.

Appellant claims that plaintiff could obtain full relief, if entitled thereto, in an action of replevin, and that equity has no jurisdiction if plaintiff has an adequate remedy at law. However, the test of equitable jurisdiction is not whether there is an alternative remedy at law, but whether the remedy at law is as adequate, complete and certain as the relief in equity. Powers v. Fisher, 279 Mich 442. In the instant case plaintiff alleges that appellant obtained possession of the car by fraud and trickery, as well as through the defendant dealer’s fraud which the finance company enabled the dealer to perpetrate. Defendant dealer in its answer admitted that plaintiff had paid in full for the car; that delivery had been made; and that it had stated there were no liens against the car, and that it had shown plaintiff the certificate of title. There was constructive fraud on the part of the finance company in refraining from having the lien set forth on the certificate of title, and allowing the dealer, either through design or carelessness, to secure possession of the certificate of title and perpetrate the fraud. Had a replevin suit been brought against the finance company, and resulted adversely to plaintiff, a separate suit would have been necessary against the dealer to recover for the fraud. This would have resulted in a multiplicity of suits. All these questions are avoided by bringing the suit in equity where all the questions may be presented and determined and appropriate relief decreed. Equity has jurisdiction in cases of *50 fraud where the remedy at law would be doubtful, incomplete or otherwise inadequate, Haylor v. Grigg-Hanna Lumber & Box Co., 287 Mich 127, and also to prevent a multiplicity of suits, Multiplex Concrete Machinery Co. v. Saxer, 310 Mich 243.

In many respects this case is controlled by the very recent case of Baas v. Contract Purchase Corp., 318 Mich 348, on which plaintiff largely relies. The finance company, however, calls attention to the fact that in the Baas Case the mandatory injunction was issued after a complete hearing on the merits. Mandatory injunctions are seldom granted prior to the hearing of the case and then only in the most exceptional cases, when required to preserve the status quo. McCombs v. Merryhew, 40 Mich 721; Arnold v. Bright, 41 Mich 207; Tawas & Bay County Railroad Co. v. Iosco Circuit Judge, 44 Mich 479; Hall v. Wayne Circuit Judge, 111 Mich 395. It is largely a matter of discretion of the trial court. The general rule is that whenever courts have found a mandatory injunction essential to the preservation of the statiis quo

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Bluebook (online)
39 N.W.2d 237, 326 Mich. 44, 15 A.L.R. 2d 208, 1949 Mich. LEXIS 265, Counsel Stack Legal Research, https://law.counselstack.com/opinion/steggles-v-national-discount-corp-mich-1949.