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gation, and upon the ability of the defendant to do so. The discretion is to be exercised in view of the conditions and circumstances of the case. The bill failed to allege that the complainant was enabled to support herself and pay the expenses of the suit and there was no other evidence of that fact. The bill alleged that the defendant was a saloon keeper, owning three pieces of real estate in Chicago, and that his net income was $600 per month. The answer admitted that the appellee was in the saloon business and owned several pieces of real estate, but denied that he had the income alleged, and in the cross bill he alleged that the appellant was possessed of a separate and private income of about
$250 per month. All these pleadings were verified, and in
the absence of any further showing
the court did not err in denying the motion.
The judgment of the Appellate Court is affirmed.
Mr. Chief Justice Carter dissents. Petition for rehearing denied, December 6, 1917.
The reported case (ARADO v. ARADO, ante, 28) holds that public policy precludes the application of the maxim that "he who comes into equity must come with clean hands," to a person seeking to set aside a marriage within the prohibited degrees of consanguinity. For a full discussion of that maxim, see the note following LANGLEY V. DEVLIN, post, 44.
W. J. LANGLEY et al., Appts.,
A. J. DEVLIN et al., Respts.,
A. W. VOWELL et al.
Washington Supreme Court (Dept. No. 1) - March 2, 1917.
(95 Wash. 171, 163 Pac. 395.)
meaning of maxim as to clean hands.
1. The maxim, "He who comes into equity must come with clean hands," and "He who seeks equity must do equity," mean no more than that he who has defrauded his adversary to his injury in the subject-matter of the action will not be heard to assert a right in equity. [See note on this question beginning on page 44.]
(95 Wash. 171, 163 Pac. 395.)
of the cause in disregard of the merits, if it is uncertain whether the attempt took other form than mere persuasion, and the testimony is forthcoming before the court is called upon to pass judgment upon the merits. [See 9 R. C. L. 204.]
Action arising from bad cause maxim.
the transaction, in defrauding another co-owner who is not complaining, does not, under the maxim that "he who comes into equity must come with clean hands," deprive them of the right to sue those who defrauded them to recover damages for the fraud. [See 10 R. C. L. 389–391.] -equal equities legal rights.
8. If the equities are equal the rights of the parties should be measured by the rules of law.
[See 10 R. C. L. 385, 386.] Limitation of actions when established.
9. The defense of the Statute of Limitations should never be resorted to to defeat positive equities unless the bar is established by testimony having the earmarks of truth in sufficient degree to appeal to a court of conscience.
[See 17 R. C. L. 735, 736.]
APPEAL by plaintiffs from a judgment of the Superior Court for Spokane County (Huneke, J.) dismissing an action brought to recover their proportionate share of a one-tenth interest in certain coal-mining property, which respondents had retained, alleged to have been fraudulently concealed from plaintiffs and others interested in the property. Reversed. The facts are stated in the opinion of the court. Messrs. Cannon & Ferris, for appellants:
The orders requiring plaintiffs to amend their complaint and bring into the action additional parties were er
State ex rel. Langley v. Superior Ct. 73 Wash. 110, 131 Pac. 482.
If it had been established as a fact that any of defendants had an interest in the stock in question, the only effect this could have would be to reduce the amount of plaintiffs' recovery to that extent.
Frick v. Washington Water Power Co. 76 Wash. 12, 135 Pac. 470.
Where the witness gives his evidence it must speak for itself, and the rule that the suppression of evidence raised a presumption against the party has no application.
Harrison v. Harrison, 124 Iowa, 525, 100 N. W. 344; Bott v. Wood, 56 Miss. 136.
The conduct of the Langleys in their relations with respondents, from the date of the sale in 1905 until O'Neill told them of the fraud in 1911, is inconsistent with the fact that they had knowledge of the fraud.
Moore, Facts, § 1139; Johnson v. 4 A.L.R.-3.
The Anne, Fed. Cas. No. 7,370; Bourda v. Jones, 110 Wis. 52, 85 N. W. 671; Day v. Brown, 18 Grant, Ch. (U. C.) 681; 14 Enc. Ev. 119, note 49; 6 Enc. Ev. 10; Landis v. Wintermute, 40 Wash. 673, 82 Pac. 1000.
The doctrine of laches does not apply.
Hotchkin v. McNaught-Collins Improv. Co. 67 Wash. 206, 121 Pac. 455; Williams v. Neely, 69 L.R.A. 232, 67 C. C. A. 171, 134 Fed. 1; Kreielsheimer v. Gill, 85 Wash. 175, 147 Pac. 871.
The doctrine of "clean hands," contended for by respondents, does not apply.
Clemens v. Clemens, 28 Wis. 637, 9 Am. Rep. 520; Blakesley v. Johnson, 13 Wis. 531; Harvey v. Varney, 98 Mass. 118; Rozell v. Vansyckle, 11 Wash. 79, 39 Pac. 270; Harper v. Harper, 85 Ky. 160, 7 Am. St. Rep. 583, 3 S. W. 5; 1 Story, Eq. Jur. § 300; 2 Pom. Eq. Jur. § 942; Melbye v. Melbye, 15 Wash. 648, 47 Pac. 16; Bateman v. Fargason, 2 Flipp. 660, 4 Fed. 32; Bispham, Principles of Equity, 6th ed. p. 62; McDonald v. Lund, 13 Wash. 412, 43 Pac. 348; Huntzicker v. Crocker, 135 Wis. 38, 115 N. W. 340, 15 Ann. Cas. 444; Hardy v. Stonebraker, 31 Wis. 640, 7
Mor. Min. Rep. 10; Employing Printers' Club v. Dr. Blosser Co. 122 Ga. 509, 69 L.R.A. 90, 106 Am. St. Rep. 137, 50 S. E. 353, 2 Ann. Cas. 694; Pitzele v. Cohn, 217 Ill. 30, 75 N. E. 392; Chicago v. Union Stock Yards & Transit Co. 164 Ill. 224, 35 L.R.A. 281, 45 N. E. 430; Luebke v. Salzwedel, 157 Wis. 601, 147 N. W. 831; Bonsack Mach. Co. v. Smith, 70 Fed. 383; Lewis's Appeal, 67 Pa. 166; Upchurch v. Anderson, Tenn. —, 52 S. W. 917; Davidson v. Carter, 55 Iowa, 117, 7 N. W. 466; Donnelly v. Rees, 141 Cal. 56, 74 Pac. 433; Wright v. Stewart, 130 Fed. 905, 77 C. C. A. 499, 147 Fed. 321; Bellamy v. Bellamy, 6 Fla. 62.
Messrs. Post, Avery, & Higgins, Robertson & Miller, and John P. Gray, for respondents:
The plaintiffs not only are unworthy of belief, but they have come into court with unclean hands, and because of their attempt to impose upon the court they are entitled to no relief under any circumstances.
Fowler v. Fowler, 204 Ill. 82, 68 N. E. 414; Crosby v. Buchanan, 23 Wall. 420, 23 L. ed. 138; Crocker v. Boyd, 88 Wash. 685, 153 Pac. 1076; Hubenthal v. Creighton, 81 Wash. 688, 143 Pac. 98; Hartman v. Belden, 38 Wash. 655, 80 Pac. 806.
If the testimony of plaintiffs was not contradicted by any witness, they would have failed to establish by evidence clear, cogent, and convincing, those facts legally necessary to relieve them from their laches, or to remove the bar of the Statute of Limitations.
Kline v. Galland, 53 Wash. 504, 102 Pac. 440; Twin-Lick Oil Co. v. Marbury, 91 U. S. 587, 23 L. ed. 328, 3 Mor. Min. Rep. 688; Patterson v. Hewitt, 195 U. S. 309, 49 L. ed. 214, 25 Sup. Ct. Rep. 35; Johnston v. Standard Min. Co. 148 U. S. 360, 370, 37 L. ed. 480, 485, 13 Sup. Ct. Rep. 585, 17 Mor. Min. Rep. 554; Wood v. Carpenter, 101 U. S. 135, 25 L. ed. 807; Cunningham v. Independence Consol. Min. Co. 58 Wash. 380, 108 Pac. 956; Ferrell v. Lord, 43 Wash. 667, 86 Pac. 1060; Stewart v. Yesler Estate, 46 Wash. 256, 89 Pac. 705.
Through fraud and misrepresentation plaintiffs sought to get and did get more of the "partnership" funds than they were entitled to. Under settled legal and equitable principles, no court, not even a court of law, will give heed to the wail of appellants.
Williams v. Kendrick, 105 Va. 791, 54 S. E. 865; Bagwell v. Johnson, 116
Ga. 464, 42 S. E. 732; Lawton v. Estes, 167 Mass. 181, 57 Am. St. Rep. 450, 45 N. E. 90; Stirtan v. Blethen, 79 Wash.. 10, 51 L.R.A. (N.S.) 623, 139 Pac. 618; Smith v. David B. Crockett Co. 85 Conn. 282, 39 L.R.A. (N.S.) 1148, 82 Atl. 569; Dent v. Ferguson, 132 U. S. 50, 65, 66, 33 L. ed. 242, 247, 248, 10 Sup. Ct. Rep. 13; Wheeler v. Sage, 1 Wall. 518, 17 L. ed. 646; Primeau v. Granfield, 114 C. C. A. 549, 193 Fed. 911; Farrington v. Stucky, 91 C. C. A. 311, 165 Fed. 331; Clark v. Buffalo Hump Min. Co. 58 C. C. A. 607, 122 Fed. 243, 22 Mor. Min. Rep. 672; Continental Wall Paper v. Lewis Voight & Sons Co. 19 L.R.A. (N.S.) 143, 78 C. C. A. 567, 148 Fed. 939; Reed v. Johnson, 237 Wash. 42, 57 L.R.A. 404, 67 Pac. 381; Bolt v. Rogers, 3 Paige, 154; Crosby v. Buchanan, 23 Wall. 420, 23 L. ed. 138; Kitchen v. Rayburn, 19 Wall. 254, 22 L. ed. 64; Oscanyan v. Winchester Arms Repeating Co. 103 U. S. 261, 26 L. ed. 539; Cumberland Teleph. & Teleg. Co. v. Evansville, 127 Fed. 187; Luhrig Coal Co. v. Jones & A. Co. 72 C. C. A. 311, 141 Fed. 617; McConnell v. Camors-McConnell Co. 152 Fed. 321; Levy v. Kansas City, 22 L.R.A. (N.S.) 862, 93 C. C. A. 523, 168 Fed. 524; Hazelton v. Sheckells, 202 U. S. 71, 78, 50 L. ed. 939, 941, 26 Sup. Ct. Rep. 567, 6 Ann. Cas. 217; Continental Wall Paper v. Louis Voight & Sons Co. 212 U. S. 227, 262, 53 L. ed. 486, 505, 29 Sup. Ct. Rep. 280.
He who seeks equity must do equity. 2 Pom. Eq. Jur. § 910; Allen v. Wall, 7 Wash. 316, 35 Pac. 65; Davis v. Ford, 15 Wash. 118, 45 Pac. 739, 46 Pac. 393; Hanna v. Haynes, 42 Wash. 289, 84 Pac. 861; Deppen v. German-American Title Co. 24 Ky. L. Rep. 1110, 70 S. W. 868.
All persons are to be made parties who are either legally or equitably interested in the subject-matter and result of a suit, if they are within the jurisdiction and it is in a general sense practicable so to do.
2 Story, Eq. Jur. § 1526; Chadbourne v. Coe, 2 C. C. A. 327, 10 U. S. App. 78, 51 Fed. 479; Sioux City Terminal R. & Warehouse Co. v. Trust Co. of N. A. 27 C. C. A. 73, 49 U. S. App. 523, 82 Fed. 124; Bell v. Donohoe, 8 Sawy. 435, 17 Fed. 710; Goodman v. Niblack, 102 U. S. 556, 26 L. ed. 229; Moore v. Gilmore, 16 Wash. 123, 58 Am. St. Rep. 20, 47 Pac. 239; State ex rel. Adjustment Co. v. Superior Ct. 67 Wash. 355, 121 Pac. 847.
(95 Wash. 171, 163 Pac. 395.)
Chadwick, J., delivered the opinion of the court:
Appellants brought this action to recover their proportionate share of a one-tenth interest in certain coal mining property which respondents Page and Devlin had retained, and, as it is alleged, fraudulently concealed from plaintiffs and others interested in the property, when they passed the title to the Corbin Coal & Coke Company, the present owner. It is not denied that there was originally a mutuality of interest in the property, but defendants contend that they took an option upon the several interests of their co-owners at a price that was satisfactory to them, and thereafter sold the property in due course of business to Mr. Corbin.
Appellants insist that the property was sold under the option plan, upon the false representation made by respondents to the other parties that Mr. Corbin was interested in the property; that he would pay no more than $125,000 for the property, being $25,000 to each of the appellants and respondents, and $25,000 for the other interests; that Mr. Corbin would not deal with any of the several partners other than respondent Page; that, at the time, it was actually understood between Page and Devlin and one Roberts, an employee of Mr. Corbin, who had the matter in charge, that Mr. Corbin would take the property at a price in money and a retained interest, aggregating a value greatly in excess of the sum represented as the extreme price he would pay. The money paid to the several partners by Page and Devlin was the money paid by Mr. Corbin to them. Corbin Coal & Coke Company was organized, and one-tenth of the stock was issued to Page and Devlin.
The case was made up on the issues of fraud and the Statute of Limitations. After a trial on the merits, the court below found with the appellants, and made findings and conclusions upon the issue of fraudulent concealment. A motion for a new trial was made and al
lowed by the court upon the theory that others interested would not be bound by any judgment that might be entered. A new trial was ordered with directions to bring in new parties. Disclaimers were obtained from all of the other parties, save one or two who had been witnesses upon the trial. Appellants then began an original proceeding in this court, praying for a writ of certiorari, seeking to compel the entry of a judgment in accordance with the finding of the court. This court held against their contention. State ex rel. Langley v. Superior Ct. 73 Wash. 110, 131 Pac. 482. It was afterwards held that the testimony taken upon the so-called new trial should be supplemental only to the testimony that had already been taken (Langley v. Devlin, 87 Wash. 592, 151 Pac. 1134), so that the trial really proceeded as if the order granting a new trial had been to reopen the case for additional testimony. When the case again came on for hearing, the question whether appellants knew of the retention of the stock more than three years before the action was begun became the paramount issue. The statute is: "An action for relief upon the ground of fraud, the cause of action in such case not to be deemed to have accrued until the discovery by the aggrieved party of the facts constituting the fraud." Rem. Code 1915, § 159, subd. 4.
At the conclusion of the trial, the court adhered to its finding that there had been a fraudulent concealment of the fact that the respondent partners had retained a one-tenth interest in fraud of the rights of the appellants, but found, as a fact, that appellants had knowledge of the fraud more than three years before the action was begun. Judgment of dismissal was accordingly entered in favor of respondents.
The case comes to us upon the whole record. For present purposes, the statement of the facts in the case of Galbraith v. Devlin, 85 Wash. 482, 148 Pac. 589, is sufficient. We are satisfied the finding of the
trial judge in this case (essentially the same facts were found by another trial judge in the Galbraith Case), that respondents were guilty of a fraud upon those who had mutual interests in the property, is sustained by a preponderance of the testimony. The only issue, then, is whether appellants were barred by the Statute of Limitations.
Appellants contend that they did not know that respondents had retained a stock interest until about December 20, 1911. The action was begun January 8, 1912. They admit that they knew that Page and Devlin were interested in the property, but insist that Page and Devlin, by conduct and actual representation, fostered the understanding that Mr. Corbin was hard up at the time the sale was made, and that they, having confidence in the property, had put $47,000 back into the property and had become interested as purchasers of the stock. One fact is prominent, that Page and Devlin said nothing to either of the appellants that would suggest an ownership other than as might have been acquired by purchase, or which could be construed as even an indirect disclosure of the fact that they had retained one tenth of the property, although, up to the time this action was begun, the parties met frequently and were on good terms, and at least one of the appellants was interested in other investments with them.
Appellants testify that their first knowledge of the fact came from one J. J. O'Neill, theretofore a friend of all parties, but who admits that, in revenge against Page and Devlin, who he claims had beaten him out of $7,500 in another deal, and to "get even" with them, he went to W. J. Langley and told him that Page and Devlin had defrauded the other partners by secretly retaining a one-tenth interest in the property, and that they had a cause of action against them; that the action should be begun at once, as the company would have a meeting soon and the stock might be put beyond
the reach of a judgment. O'Neill, now denies that he furnished original information, or told appellants what they did not know, but the fact remains that, immediately after he had suggested a lawsuit, appellants went to a lawyer in Los Angeles, in or in the vicinity of which city the parties all lived, and submitted the facts to him. The attorney told them he thought they had a case, and advised them to go to Spokane to begin their suit. Spokane was the home of the corporation. O'Neill gave W. J. Langley a letter of introduction to Mr. Cannon, then and now a practising lawyer in Spokane. After a consultation, Mr. Cannon inquired directly of Mr. Corbin or the officers in charge of the company, and finding the fact to be that Devlin and Page had retained a one-tenth interest, began suit without further delay.
After the motion for a new trial had been granted and pending the second hearing, O'Neill fell out with appellants because, as he contends, they had not given him, or because they refused to sign an agreement to give him, twenty shares of the stock they hoped to recover. In the meantime, and before the writing of a letter to W. J. Langley, charging him with refusing to abide his contract, Page and Devlin paid O'Neill the $7,500 which they had theretofore repudiated. Moved, apparently, by the double motive of a new love for Page and Devlin and a newly hatched hatred for appellants, O'Neill seems to have given way to his admitted disposition to "get even" with appellants, and became a partisan and a witness for the respondents. The court below rejected his oral testimony, but did give credence to the letter which he had written to W. J. Langley, wherein he complained that he, Langley, was not playing fair, in that he had not delivered, or agreed in writing to deliver, twenty shares of the stock to be recovered as before mentioned, in which letter he said: "Now that you have won, you think all danger is over for any of the methods to come