Giesy v. Gregory
Giesy v. Gregory
Opinion of the Court
delivered the opinion of the Court:
This is a proceeding in equity instituted for the purpose of enforcing the payment of a balance due upon an indebtedness secured by a deed of trust, but which a sale of the property covered by the deed had failed to satisfy in full.
As appears from the record, the appellant, „S. Herbert Giesy, was, on July 6, 1893, the owner of a certain piece of real estate in the city of Georgetown, subject to an incumbrance thereon of $5,000. By a deed dated on the day mentioned he sold the property to the appellee, Frank I. Gregory, who is alleged to have assumed the payment of the incumbrance of $5,000, and also to have given his note for $2,000 for the amount of the purchase money and a certain sum of money lent to him by the appellant, and to have secured the same by a second deed of trust upon the premises. On July 19, 1893, the appellee, Gregory, transferred the property to George E. Truman, who is alleged to have assumed the payment of both incumbrances as part of the purchase money. On July 20, 1893, Truman conveyed to Raymond K. Oooke, who is alleged likewise to have assumed the payment of both incumbrances as part of the purchase money. On December 7, 1893, Raymond K. Oooke transferred the property to John H. Gregory, a brother of the appellee, who also, like his two immediate predecessors in the title, assumed the payment of the two incumbrances specified as part of the purchase money.
The note for $2,000 became due and was not paid; and the trustees named in the second deed of trust, which had been given to secure it, sold under the trust, and, as it would seem, with the understanding that the full legal title should be conveyed, that the first incumbrance should be discharged, and the taxes and other charges should be paid out of the purchase money. The sale realized only the sum of $500
The note for $2,000 had become due on January 6,1895; and it was not until the day on which the period of three years thereafter would have expired, January 5, 1898, that the appellant, as complainant, instituted the present proceedings by the filing of a bill in equity against all the other persons hereinbefore named as defendants, in which he sought that, upon the facts as herein stated, a decree should be rendered against each and all of them to require them to pay the amount of the deficiency aforesaid, with interest.
The defendants, Truman, Cooke, and John H. Gregory, filed two joint and several pleas to the bill, one of the Statute of Limitations, and the other to the effect that the several conveyances from Frank I. Gregory to Truman, from Truman to Cooke, and from Cooke to John H. Gregory, were each and all without valuable consideration, that Frank I. Gregory until the sale under the deed of trust always remained the real owner of the property, and that he had ho just right to recover against them or any of them on account of their alleged covenant to assume the payment of the aforesaid incumbrances. Upon these pleas issue was joined by the complainant; but what further action was had in regard to them, the record before us does not disclose. Nor are these defendants before this court on the present appeal. Their pleas, therefore, are outside of our present consideration.
The defendant, Frank'I. Gregory, severed from his co-defendants in his defense, and demurred to the bill of complaint, on the ground that, as against him, the complainant
From this statement it sufficiently appears that the cause is before us only as to one of the defendants, although he may be regarded as the principal defendant in the suit. The other defendants have not appealed; their cause is not here; from the record it would appear to be yet pending and undisposed of in the court below. The defense which they make is, therefore, not proper to be considered by us on this appeal; and it cannot be regarded as in any manner affecting the merits of the controversy which is presented for our consideration. As to the parties who are here on appeal, the cause stands on the bill of complaint and the demurrer thereto, for the pleas of the defendant do not seem to have been at all considered by the court below. They must be regarded as though they had been withdrawn or stricken from the record, and the facts stated in them, if facts they are, can not be taken into account.
It is very clear that, if the appellee had been sued alone on the facts stated in the bill of complaint, the suit could not have been maintained. The remedy was adequate and complete at common law. It is also very clear, under the decisión of the Supreme Court of the United States in the case of Keller v. Ashford, 133 U. S. 610, that, if the other defendants had been sued to the exclusion of the appellee, Frank I. Gregory, the jurisdiction of the court of equity
We do not think that it was the meaning of the Supreme Court in the case of Keller v. Ashford to hold that a case cognizable at common law could be united with one cognizable in equity, so as to enable the court of equity to maintain jurisdiction of both. That court has repeatedly, and in later as well as in earlier decisions, affirmed the contrary doctrine. Scott v. Neely, 140 U. S. 106; Cates v. Allen, 149 U. S. 452; Scott v. Armstrong, 146 U. S. 499, 512; Bennett v. Butterworth, 11 How. 669; Thompson v. Railroad Companies, 6 Wall. 134. And the Supreme Court has also said that “where a cause of action cognizable at law is entertained in equity on the ground of some equitable relief sought by the bill, which it turns out can not, for defect of proof or other reason, be granted, the court is without jurisdiction to proceed further and should dismiss the bill without prejudice.” Dowell v. Mitchell, 105 U. S. 430. Such also was the ruling of this court in the case of Palmer v. Fleming, 1 App. D. C. 528.
We do not see how the application of these authorities can be avoided in the present case. There is here clearly the joinder of a legal claim against one person with an equitable claim against certain other persons, which, although connected with each other, are independent in law, and might have been enforced by separate and independent proceedings; and the joinder of a legal claim against one person with an equitable claim against other persons in one and the same suit in equity is certainly more objectionable than the joinder of two such claims in one suit in equity against one and the same person.
But the bill may be amended, and leave should have been granted to the complainant to amend it.
The vice of the bill of complaint, as at present formulated, is that it combines the contract by which the appellee in
In the case of Crowell v. St. Barnabas Hospital, 12 C. E. Green, 650, 656, the Court of Errors of New Jersey, by Mr. Justice Depue, said:
“He (the mortgagee) is allowed by a mere rule of procedure, to go directly as a creditor against the person ultimately liable, in order to save the mortgagor, as the intermediate party, from being harrassed for the payment of the debt, and then driven to seek relief over against the person who has indemnified him, and upon whom the liability will ultimately fall. The equity on which his relief depends is the right of the mortgagor against his vendee, to which he is permitted to succeed by substituting himself in the place of the mortgagor.”
This language the Supreme Court of the United States cites and approves in the case of Keller v. Ashford, as showing the ground upon which the mortgagee is entitled to proceed in such cases.
The contract between the mortgagor and his grantee, to which in equity the mortgagee is entitled to substitute himself, is in the nature of a second security additional to the mortgage. It is the enforcement of this second security
By so amending his bill of complaint as to make it conform to this theory of the law, which we believe to be the proper deduction from the decision in the case of Keller v. Ashford, the appellant may entitle himself to a standing in equity as against the appellee. It seems that he did not have the opportunity in the court below to amend the bill, apparently upon the assumption that it was impossible to
It is our conclusion that there was no error in the action of the Supreme Court of the District in sustaining the appellee’s demurrer to the appellant’s bill; but that the appellant should have had leave to amend. The decree appealed from will, therefore, be modified to that extent; and the cause will be remanded to the Supreme Court of the District with directions to vacate so much of said decree as dismisses the bill of complaint as to the appellee Frank I. Gregory, and to allow the complainant a reasonable time within which to amend the said bill; and for further proceedings in accordance with law and in conformity with this opinion.
The appellant, however, is to be charged with the costs of this appeal; and if he does not amend his bill, within such time as may be prescribed, the decree of dismissal against him may be renewed. And it is so ordered.
Reference
- Full Case Name
- GIESY v. GREGORY
- Status
- Published
- Syllabus
- Equity ; Mortgages ; Assumption or Mortgage Debt. 1. A suit in equity is not maintainable by a mortgagee against his mortgagor for a balance due upon the indebtedness secured by thermortgage, which indebtedness a sale of the mortgaged property has failed to satisfy in full, as the mortgagee has an adequate and complete remedy at law. 2. If a mortgagor before the maturity of the mortgage debt transfers the mortgaged property to a grantee who assumes payment of the incumbrance and who in turn transfers the property to another, who also assumes payment of the incumbrance, and on a foreclosure sale the property brings less than the amount of the debt secured, the mortgagee, besides his remedy at law against the mortgagor for the deficiency, may maintain a bill in equity against the grantees for the deficiency; but he can not pursue both his legal and his equitable claim in one suit. 3. A bill in equity under such circumstances, by the mortgagee against all the parties, the mortgagor and the grantees, and seeking a recovery of the amount of the deficiency against each and all of them, is demurrable, when the defendants sever in their defenses, the mortgagor demurring upon the ground that the complainant has an adequate remedy at law. 4. But the complainant in such a case will be allowed to amend his bill, as under such circumstances, in order to avoid a multiplicity of suits, he may substitute himself for his mortgagor, to whom the grantees are liable on their obligation to pay the debt, and enforce in equity the security given by them, directly for himself, but in such event there can be no personal decree against the mortgagor until after the exhaustion of the security given by the grantees in their assumption of the incumbrance.