Welde v. Scotten

59 Md. 72, 1882 Md. LEXIS 71

Opinion

Irving, J.,

delivered the opinion of the Court.

This is an appeal from an order of the Circuit Court for Cecil County perpetually enjoining the appellant Welde, the judgment creditor, and George H. Logan, (the other appellant,) sheriff, having the execution in hand, from selling certain land claimed and possessed by the appellee, William Scotten, alienee of the judgment debtor.

The bill charges, that the complainant is seized, in fee, of certain real estate described in the deed, (filed as an exhibit,) from Hugh E. Scarborough, to complainant, dated the 25th day of March, 1880, which was duly executed and recorded; and, that in virtue of that deed, he is legally and equitably possessed of, and entitled to, every part of the described premises, and all rights and privileges belonging thereto; that Samuel L. Welde had obtained a judgment, on the 5th of June, 1880, in the Circuit Court for Harford County against the same Hugh E. Scarborough, and that designing to injure and defraud the complainant, he had issued a fieri facias on that judgment, and had it directed to George H. Logan, sheriff of Cecil County, and the same had been levied upon the lands which the complainant had purchased of Hugh E. Scarborough, the defendant in the judgment, and that the lands were advertised for sale, notwithstanding Welde and the sheriff both knew that the complainant is entitled to the lands; that Welde pretends there is some latent defect in the complainant’s title to him unknown, and sometimes falsely pretends that complainant did not pay a full and fair consideration for the lands, and is not a bona fide purchaser thereof, and that Scarborough still has some right or interest therein, the contrary of which complainant avers to he true. He then claims this to he a cloud on his title, which impairs its value, and does him irreparable injury; and prays for an injunction restraining the proposed sale under the execution.

The answer of the appellant, which is on oath, admits that he obtained judgment on the 5th day of June, 1880, as charged; and that fieri facias has issued thereon, and has been levied, as’alleged; hut avers, that the indebtedness or cause of action on which judgment was obtained, existed long prior to March, 1880, the action having been commenced thereon at the June term of Cecil County Court, 1819. It further avers that the complainant well knew of the defendant’s claim long before his purchase of Scarborough, and that it was for the purpose of delaying, hindering and defrauding his creditors, and others, that Scarborough was anxious to sell his real estate which Scotten (complainant) alleges he purchased; that Scarborough conceived the idea of selling for the purpose of defrauding the appellant of the fruits of the judgment he might obtain; and that the pretended sale to the com plainant was not bona fide and for valuable consideration; but was done for the purpose of covering up Scarborough’s property from the just claim of the respondent. It appears from the record and proof that the verdict and judgment recovered by appellant against Scarborough were for personal injuries for which an action of trespass was instituted as set out in the answer.

Preliminary to the inquiry whether the injunction complained of was justifiably granted, we should premise, that it is the settled, law of this State that the Statute of Elizabeth is sufficiently comprehensive in its terms to embrace, and does embrace, not only creditors technically so, but “all others who have cause of action or suit, or any penalty or forfeiture, and embraces actions of slander, trespass and other torts.” Gebhart vs. Merfield & Kemper, 51 Md., 325. The appellant Welde, therefore, has a judgment against Scarborough, for such a cause of action, as justifies his attacking any conveyance of Scarborough made pending the suit, in some form, as fraudulently made and executed against him, if he has cause to so suppose; and the real question for us to decide is, should he be prevented, by injunction, from putting himself into such position, that he may have the question of the bona fides of the appellee’s purchase tested in a Court of law, and before a jury, through, an action of ejectment. We are all of opinion that he ought not, and that it was error in the Circuit Court to hold otherwise.

Nothing is better settled in this State than that the granting or refusing an injunction, rests in the sound discretion of a Court of equity, and is not a matter of absolute right; nor will equity interpose by such an extraordinary remedy if the law will afford adequate relief. It must be conceded that there is much conflict of authority to be found in the decisions of the several States of the country, as to when a Court of equity ought to interfere, either by way of removing a cloud already existing, or of preventing a cloud being cast on the title, as it is alleged is sought to be done in this case. There can be no doubt that it is within the province of a Court of equity upon a proper case made, to interpose, by way of accomplishing precautionary justice, and preventing a wrong; and the power is often exercised.

Numerous cases are to be found, where Courts of equity have interfered by injunction, to.prevent a sale about to be made, lest it should unwarrantably cloud the complainant’s title; and without close examination they would seem to sustain interference here for the protection of the appellee ; but after the most careful examination of every case cited in argument, and also of those cited in the text books referred to, and after diligent search, we have been unable to find a single case exactly analogous to this where injunction has been granted. In none of the cases where the remedy has been allowed, as far as we have been able to find, has the applicant alleged, as he has done here, that the other party charged him with fraud in the procurement of his title, to his prejudice. We have, however, found sundry cases, where the object of the judgment creditor was to put himself in position. as purchaser under the execution, to test, at law, through ejectment, the validity of another’s title which he deemed fraudulent, in which the Courts refused to grant the writ, and left, the question to be litigated at law. In Bockes vs. Lansing, 74 N. Y., 441, the action was to remove a cloud upon plaintiff’s title: “ The plaintiff’s title is founded upon the assignment in trust from George Webster to David Russell, executed and recorded in September 1846, and the conveyance by Russell, the assignee, to Simeon Webster under whom the plaintiff claims. The defendant claims under a sale by a receiver appointed in proceedings against George Webster, founded on a judgment recovered against him in October, 1846. This receiver’s sale and the deeds from him on their face did not transfer any title as against the plaintiff, being proceedings against the plaintiff’s grantor subsequent to the conveyance from him under which the plaintiff claims.” The Court says, “those claiming under the receiver’s sale could not establish any title without first overthrowing the plaintiff’s title by extrinsic evidence that the assignment made by George Webster, was fraudulent and void. In such a case, an action of this description cannot he maintained. It is only where there is an instrument or proceeding which on its face purports to create or convey a title paramount to that of the party seeking relief, or an incumbrance thereon, that an action will lie to set aside such instrument or proceeding as a cloud upon the plaintiff’s title.” In this opinion seven of nine judges concurred, the others being absent. It may he, that in the last sentence we have quoted, the law is stated more broadly than we should adopt, or are called on to adopt in this case; hut to the principle, that the party alleging the fraud should be left to assert his claim in a forum where he can have a jury trial, we unhesitatingly assent. Freeman vs. Elmendorf and others, 3 Halsted’s Chancery Reports, 475, is singularly like this case, and precisely “in point.” In that case, Elmendorf recovered a judgment against Matthew Freeman, February, 1841, and issued a fieri facias which was levied on a farm and house and lots as the property of the judgment debtor. Robert Freeman, a son of the judgment debtor, for himself, and as guardian to his infant children, filed a bill in equity alleging, that several years anterior to the judgment rendered, the property had been conveyed to him by deed of bargain and sale, and that he had conveyed the same to his infant children, and asked injunction to restrain the sale under the fieri facias upon the judgment.

Preliminary injunction was granted upon the showing of the hill, as was done in the case now before us. An answer was filed denying the bona fides of the deeds under which the complainant claimed, and stating facts tending to show the same were fraudulently made; and denying the validity of the deeds as against the judgment for that reason. Upon a motion to dissolve, the Chancellor decided that the case was a proper one for a law Court, and that the judgment creditor should he permitted to proceed to sell under his execution, that the question of bona fides might be tried under an action of ejectment. The Court said that the complainants were “in possession, and if their deeds were good as against the judgment they will not he disturbed by the sheriff's making a deed to any one else.” The injunction was accordingly dissolved. An appeal was taken, and the order of the Chancellor, dissolving the injunction, was affirmed.

Chief Justice Green, speaking for the Court of Appeals said, the whole question was one of legal title and “if the sheriff is enjoined from selling under the execution, there is no mode in which the question of title could he tried at law.” 3 Halsted Ch. Rep., 657.

In Winch’s Appeal, 61 Pa. St., 426, we have a case of a married woman filing a hill alleging herself to he the owner in her own right of certain property, (not estate,) and that the defendant had sold the property under a judgment against her husband, and asking an injunction to stay the execution by the sheriff of a deed, in perfection of the sale. The defendant replied, charging the complainant’s title to be fraudulently procured against the husband’s creditors. Testimony was taken and injunction was granted. On appeal, the decree for injunction was reversed, and the hill was dismissed. The Court said that where the title of the wife was disputed as fraudulent, it was error to enjoin an execution and sale on the judgment, and thus withdraw from the jury the contested facts. The Court uses this language: “the jurisdiction given to a Court of equity for the prevention, or restraint of the commission of acts contrary to law, and prejudicial to the rights of individuals, was never intended to he used to obstruct the collection of debts. It is only where the creditor is undeniably proceeding against right and justice, to the use of process of law, to the injury of another, that equity intervenes to stay his hand. To adopt another rule would lead to a constant use of the powers of equity to hinder and stay the collection of honest claims, and prevent the creditor from reaching the marrow of a fraud.”

"We concur in the view taken in the cases which we have cited, and in further support of the principles so laid down we refer to 1 High on Injunctions, secs. 266, 267, 268; Moore vs. Cord, 14 Wisconsin, 213; Heywood vs. City of Buffalo, 14 N. Y., 539; Townsend vs. The Mayor, 77 N. Y., 542; Van Doren vs. The Mayor, &c. of N. Y., 9 Paige, 388; Drake vs. Jones, 27 Mo., 428. In the last cited case the Court, said to compel the execution creditor to wait with his execution, and become a party to a suit in equity, would “not only he transferring the order of trials, by litigating a title before instead of after a sale, hut would greatly increase useless litigation, and prematurely bring on trials in equity before a sale, instead of trying the title in ejectment after the sale.”

The cases of Lewis vs. Levy, 16 Md., 85, and Freeland, Hall & Co. vs. Reynolds, Ib., 421, cited in argument, are cases where personal property was involved, and are not precisely analogous, though they sustain the doctrine that equity will not interfere where the law affords a remedy.

We can find nothing in the cases in this State in conflict with the conclusion we here reach. The case of McCann vs. Taylor, 10 Md., 418, so strenuously relied on by the appellee’s counsel, as decisive of this case, when carefully examined, we found materially distinguishable from this, and does not sustain the appellee’s view. There the appeal was directly from the order granting an injunction on the averments of the hill, and this Court was confined to the case made by the hill, and could not consider the answer. It did not appear to this Court that any fraud was relied on to defeat the complainant’s title. That element, which is the controlling one in this case, was entirely wanting there to show the defendant’s right to a trial at law. In that respect McCann’s Case is situated, with reference to this case, precisely as Judge Agnew said Hunter’s Appeal, 4 Wright, 194, was to Winches’ Appeal, which we have already cited and quoted from. The same Judge decided both, and said in the last mentioned case, that Hunter’s Case afforded no countenance to the contrary of what was decided in Winches’ Appeal, because the ownership was not put in issue by plea or answer. We are all clearly of opinion that the appellee ought not to have been awarded injunction to stop the appellant Welde from selling as he desired, in order that the question of fraud in the appellee’s title, as charged, might he tested at law. Welde being the party who claims to have been defrauded by the conveyances under which the appellee takes title and possession, we think he is entitled to select the tribunal in which he will have his grievances inquired into and redressed, if he is entitled to redress; and although, it might he within the province of the Court of equity to interfere, if it appeared that he was fraudulently setting up this claim for the purpose of wantonly injuring the appellee as is charged in the hill, yet, inasmuch as there is not the slightest evidence in support of that allegation, and there is no reason to suppose he is doing otherwise than making an honest endeavor to secure his legal rights, we cannot sanction the arrest, of his proceedings in that direction, by injunction. We do not find it necessary to express any opinion upon the merits of the controversy respecting the validity or invalidity of the appellee’s deed. As we have already said that is a question which we think should be remitted to a jury. If the complainant did knowingly assist Scarborough to dispose of his property, to avoid the payment of such verdict and judgment as the appellant Welde might recover in his action for damages against Scarborough, then his title as against Welde cannot, and ought not, to he sustained; hut unless that charge can he established, he cannot he disturbed in his title or possession. If the appellant as purchaser under the execution had filed a hill to set aside the deed of Scotten, the Circuit Court, as a Court of equity, having concurrent jurisdiction in such case, with a Court of law, would have entertained the suit without requiring him to bring ejectment. But clearly the party alleged to he damnified by fraud, ought not at the election of the party charged with its commission, to he forced into a forum in which he does not desire his rights to he decided upon. It would he reversing the order of things. If appellant had already bought under the execution, and brought ejectment, and this hill had been filed to stay that proceeding, the Circuit Court would not have usurped jurisdiction and taken the case away from the said Court, unless the defendant could not defend at law, which is not the case. The case would not have been allowed to proceed at law. If in such case the appellant would he allowed to proceed at law with his ejectment, we see no solid reason for preventing his making such purchase to put himself into such position, that he may litigate his title at law. It may he, that when he has bought, he cannot maintain the charge of fraud, the onus of which will be on him. The Circuit Court, on the case made in the proof, did not think he had made out the fraud, and gave the injunction upon that view. As already stated we intimate no opinion upon that branch of the case, because we think the appellant entitled to a trial at law, and before a jury, as he desires, on that question. It is apparent, from what we have said, that we do not agree with the appellee’s counsel, that this is a question of jurisdiction not made in the Court below, and therefore, not cognizable here. It is true, there was no demurrer to the bill, but there was a motion to dissolve immediately on filing the answer, which motion was overruled and the injunction continued till final hearing. So far as it can be regarded as a pure question of jurisdiction, it was sufficiently presented by the pleading, to have been raised on the motion to dissolve ; but it is not, as we regard it, so much a question of jurisdiction as of the proper exercise of the equitable discretion in respect to granting an injunction. It is not an instance of the total ouster of jurisdiction, for it belongs to a class of cases of which equity does sometimes take hold and decide. The complainant had no present remedy at law. He could only wait to be sued and stand on his title and possession under it, until assailed for fraud, and then rebut the charges as best he could. His only remedy by action of his own, if he was entitled to any, was to ask for an injunction; which, under the circumstances, we do not think he was entitled to. We do not see that the fact that the appellant may long delay his suit, especially commends the appellee to the Court’s interference by injunction upon the appellant. Delay cannot injure him. His record title is indisputable on its face. It can only be overthrown by showing it was fraudulently procured. From the very nature of the testimony needed to establish such a charge, the longer the production of the proof is deferred, the harder it will be to establish. Delay to assert his claim is itself evidence of weakness, and inability to maintain it; whilst increasing security results to the appellee.

(Decided 13th July, 1882.)

The decree will be reversed, and the bill dismissed.

Decree reversed, and bill dismissed.