1. Equity will not grant relief where the allegations of the
complainant show that he has no title nor interest in the subject
matter of the dispute.
2. Nor, in an action where all are liable (as
ex. gr.
an action of trespass against tortfeasors), enforce a secret
agreement made by the plaintiff with certain of the defendants that
if they will desist from resistance to his suit, he will, if he
recovers judgment, not levy execution on their property, litigants
being bound to act fairly to each other, and such an agreement
operating as a fraud.
3. Although the assignee of a judgment takes it subject to all
defenses that existed against it in the hands of the assignor, yet
such an agreement as that above mentioned constitutes no defense as
against an assignee in good faith and without knowledge of the
secret agreement, the verdict and judgment having been regularly
entered against all the defendants.
Page 73 U. S. 328
4. Equal contribution among tortfeasors is not inequitable,
although the law will not support an action to enforce contribution
where the payments have been unequal.
Hence, where a marshal has received three-fourths of the amount
of a judgment from three of four defendants, tortfeasors, he does
nothing inequitable in collecting, under agreement with them that
he shall do so, the residue from a fourth.
Unna sued four different parties, of whom Selz and Leopold were
one, for a tortious levy which they had made on his property,
assuming it to be the property of one of their debtors. When the
suit was about to be tried a second time -- the jury having once
been unable to settle upon a verdict -- Unna agreed with Selz and
Leopold (as they alleged) that if they would desist and abstain
from
all participation in the preparation and conduct of the
defense thereof, he would protect and save them harmless from
all loss and damage, under whatever judgment he might recover, and
would so control and direct the collection thereof that no part of
the same should be paid by or collected from
them under
any execution issued thereon. In pursuance of the agreement, Selz
and Leopold and their counsel did withdraw from the defense of the
suit. Judgment having gone in favor of Unna and against all four
parties -- and all four standing on the record as convict alike --
Unna after a certain time assigned the judgment to two persons whom
this Court regarded, upon the evidence, as purchasers in good
faith, and without knowledge of the secret agreement; his
assignment covenanting "that he had neither made, done or suffered
any act or thing by which the said judgment is in any manner
impaired or lessened in value." The assignees having issued
execution, proceeded to levy on property of some of the three
defendants. The whole three then agreed to pay him three-fourths of
the judgment, it being understood that for the remaining fourth the
assignees should look to Selz and Leopold. For that fourth
assignees accordingly resorted to them, levying upon and selling
certain real estate as the
Page 73 U. S. 329
property of Leopold. Thereupon Selz and Leopold filed bills in
equity against Unna and the three other defendants and the
assignees, setting up the agreement with Unna; alleging that the
three other defendants had paid the whole amount of the judgment,
which was therefore satisfied; that the assignees were but covers
for these other defendants who had had the assignment made in order
to obtain contribution from them, Selz and Leopold. It was alleged
as well that the real estate levied on, though once Leopold's, was
not so now, it having been sold by his assignees for creditors some
time ago. The prayer was for an injunction against the marshal's
making any deed for
Leopold's interest in the real estate,
and from
further proceedings to collect the judgment, and
that it should be declared satisfied of record, as it was alleged
to be in fact.
The answers denied the equities of the bill generally, and
especially all knowledge of "the fraudulent agreement;" denied that
the judgment had been paid, on the contrary asserted that it was
unpaid; and asserted also that the assignment was
bona
fide . The court below dismissed the bills. Appeal
accordingly.
Page 73 U. S. 331
MR. JUSTICE CLIFFORD delivered the opinion of the Court.
Material facts are that David Sternberg and Edward Isidor, doing
business at Chicago under the firm name and style of Sternberg
& Isidor, became largely indebted, and being unable to make
payments as promptly as certain of their creditors desired, they
confessed judgments in their favor. Judgments were thus obtained by
Morris Selz and Abraham Cohen, doing business under the name and
style of Selz & Cohen; by Henry A. Kohn and Joseph Kohn, under
the name and style of H. A. Kohn & Brother; by William M. Ross
and John H. Ross, under the name and style of William M. Ross &
Company; and by Leonard B. Shearer, William W. Strong, and John S.
Paine doing business under the name and style of Shearer, Paine
& Strong.
Executions were issued on these several judgments, and they were
placed in the hands of the sheriff of the county, with directions
to levy the same on certain goods and chattels, as the property of
the judgment debtors.
Doubts being entertained by the sheriff as to the ownership
Page 73 U. S. 332
of the property, the judgment creditors gave him a bond to save
him harmless, and the complainant, Henry Leopold, became the surety
of Selz & Cohen in that bond. Indemnified against loss, the
sheriff, by the direction of John M. Huntington, attorney of Selz
& Cohen, seized and sold the goods and chattels, as the
property of the junior member of the firm of Sternberg &
Isidor, the judgment debtors.
The property sold was subsequently claimed by Levi J. Unna, and
he brought trespass in the circuit court against those who signed
the bond of indemnity, and the attorney who gave the directions to
make the sale.
Defendants appeared at the October term of the court, 1858, and
went to trial, but the jury being unable to agree, they were
discharged, and the case was continued. Before the next trial the
plaintiff agreed with the complainants in this suit, that if they
would make no further defense in that action, he, the plaintiff,
would save them harmless from all loss or damage, and that no part
of the judgment he might recover in the suit should be collected of
them or be levied on their property. Complainants admit that they
accepted the proposition, and that their attorney withdrew from the
defense, and it appears that the plaintiff, on the fifth day of
March, 1859, recovered judgment in the suit against all the
defendants in the sum of six thousand three hundred and seven
dollars and eighty-nine cents, and costs of suit.
Four of the defendants, to-wit, William Ross, John H. Ross,
Leonard B. Shearer, and William W. Strong, sued out a writ of error
to this Court. Pending the writ of error, Daniel L. Shearer and
William Clark purchased the judgment for the sum of six thousand
five hundred and forty-six dollars and twenty-eight cents, and took
an assignment of the same from the judgment creditor. Covenants of
the assignor were in substance and effect that the judgment was
wholly unsatisfied, and that he had done no act to impair, in any
way or manner, its force and effect, and he added the unusual
stipulation that he intended to make the representations so full
and explicit, that if false they would bring him
Page 73 U. S. 333
within certain provisions of the Crimes' Acts passed by the
state legislature.
By the advice of counsel, the writ of error was not prosecuted,
and for that reason was dismissed under the rules of this Court.
Danger from the writ of error being removed, the assignees of the
judgment caused execution to be issued on the same, and placed the
execution in the hands of the marshal for the purpose of having the
money collected. Pursuant to the commands of the writ, the marshal
proceeded to levy the same on the property of Kohn & Brother,
when they proposed a compromise as a means of saving their property
from sacrifice. Substance of the proposition was that they would
pay one-fourth of the amount, and that Ross & Company, and
Shearer, Strong & Paine should each pay one-fourth; and that
the marshal should levy the remaining one-fourth on certain real
estate formerly belonging to Henry Leopold, who was the surety of
Selz & Cohen. They accepted the proposition, and the payments
were made as proposed.
Levy was accordingly made by the marshal on that real estate to
satisfy the balance of the execution which belonged to Selz &
Cohen, or their surety to pay, but before the sale was completed
the complainants filed their bill of complaint.
In the bill they set up the suit in trespass, the agreement made
by them with the plaintiff, their withdrawal from the defense, the
recovery of the judgment by the plaintiff, and the assignment of
the judgment, and charge that Ross & Co. and Shearer and Strong
paid the whole amount of the judgment, and that the assignment was
not
bona fide, but that it was made with intent to enforce
contribution against the complainants. Prayer of the bill of
complaint was that the other judgment defendants, and the plaintiff
in the trespass suit, and the assignees of the judgment, might be
made parties, and that they might be enjoined from completing the
sale of the real estate, and from all proceedings to collect the
judgment.
Answers were filed by William Clark, William M. Ross, John H.
Ross, and William Strong, denying the entire equity
Page 73 U. S. 334
of the bill of complaint, whereupon the complainants moved the
court for an injunction to stay the sale, which was denied by the
court, and the marshal sold the premises to Henry A. Kohn, and gave
him the proper certificate of sale. Subsequently the complainants
filed a supplemental bill, in which they alleged that these
respondents had agreed that the lot in question should be sold,
that Henry A. Kohn should bid it off for the purpose of compelling
the complainants to pay their proportion of the judgment, and
prayed that the purchaser might be enjoined from receiving any deed
of the lot, or from interfering in any manner with the premises.
Statement of the original bill of complaint was, that the premises
formerly belonged to the complainant, Henry Leopold, and his
co-partner in business, and that the owners thereof became
embarrassed, and made an assignment of all their property and
effects for the benefit of their creditors, and that the assignee
sold and conveyed the premises to a third person for the sum of
three thousand dollars.
Suppose the allegations of the bill of complaint are true, then
it is clear that the decision of the circuit court was correct, as
the complainants have no title or interest in the land sold by the
marshal, and described in the certificate which he gave to the
purchaser. They, under such a state of the case, have no such
standing in the pleadings as will enable them to ask the
interposition of a court of equity to enjoin the respondents or any
other parties, as their own allegations show that they have no
title in the premises.
Interposition of a court of equity cannot be successfully
invoked in a case like the present unless the party asking relief
is able to show that he has a legal or equitable right or title in
the subject matter of the controversy. But the want of title in the
complainants was not the ground assumed by the circuit court, and
inasmuch as the marshal sold the land as the property of Leopold,
we are inclined to examine some of the other issues between the
parties as disclosed in the pleadings.
Principal charge in the bill of complaint is, that the
assignment of the judgment was procured as the means to compel
Page 73 U. S. 335
the complainants to pay their proper proportion of the amount
therein recovered. Proofs in the suit do not establish that
proposition, but if they did it would not benefit the complainants
in this case, because the judgment had been recovered against the
complainants as well as the respondents, and the former, as well as
the latter, were liable for the whole amount recovered. Pending the
suit in which the judgment was recovered, it is true the plaintiff
had agreed that, if these complainants would make no further
defense to his action of trespass, his judgment, in case he
prevailed, should be levied on the property of the other
defendants, and the record shows that they accepted that secret
proposition, and gave their associates no aid in conducting the
defense at the second trial. But they were not discharged from
their joint liability, and the verdict and judgment were against
them as well as against the other parties. Conceded intention of
the plaintiff was to collect his whole claim, but he was willing to
agree secretly with the complainants to collect the whole amount of
the other parties to facilitate his recovery in the suit. Theory of
the suit was, that the defendants were joint trespassers, and if
such was the fact the plaintiff must have known that he could not
release one without discharging all the rest, who were jointly
liable for the same wrongful act. [
Footnote 1]
Present complainants were defendants in that judgment, and
became liable with the other defendants to pay the whole amount.
Prior to the rendition of the judgment any agreement between the
plaintiff in the suit and these complainants, such as is now
alleged in the bill of complaint, would, if construed to be a
discharge, have been a good defense for all the other joint
wrongdoers. Such a secret agreement entered into between a
plaintiff and a part of the defendants in a suit is inequitable as
tending to promote injustice both as between the plaintiff and the
other defendants and as between
Page 73 U. S. 336
those who were jointly liable for an error committed in an
attempt to enforce their legal rights.
Parties are not only bound to act fairly in their dealings with
each other, but they are not to expect the aid of a court of equity
to enforce an agreement made with the intent that it shall operate
as a fraud upon the private rights and interests of third persons.
[
Footnote 2]
Better opinion from the evidence is that the purchase of the
judgment by the assignees was made in good faith, and that they had
no knowledge of the secret agreement between the judgment creditor
and the complainants. Grant that the fact is so, still the
complainants contend that the assignees of the judgment acquired no
greater rights by the assignment than the assignor possessed at the
time the assignment was made. General rule undoubtedly is that the
assignee of a judgment takes it subject to all defenses which
existed against it in the hands of the assignors at the time the
instrument of assignment was executed. [
Footnote 3]
When the assignees took the judgment in this case the
complainants were legally liable, with the other defendants, and
they were without any defense against the same, other than what
arises from the agreement made by them in the trespass suit.
Inequitable as that agreement was, it constituted no legal obstacle
to the purchase of the judgment, and cannot be made the foundation
for relief in this case. Payment of one-fourth of the judgment, as
between the defendants in that suit, belonged to the complainants,
and they having failed to pay their just proportion of the same,
cannot complain that the assignees of the judgment have seen fit to
levy that proportion of the same upon their property. Equal
contribution to discharge a joint liability is not inequitable,
even as between wrongdoers, although the law will not, in general,
support an action to enforce it where the payments have been
unequal. [
Footnote 4] Where the
liability is
Page 73 U. S. 337
joint equal contribution is just, and it would afford the
complainants no ground of relief if it appeared that the
arrangement with the marshal was such as is alleged in the bill of
complaint. Having collected three-fourths of the amount of the
other defendants, it was quite right that he should, if possible,
levy the balance so as to effect equal justice between the
parties.
Decree affirmed with costs.
[
Footnote 1]
Dufresne v. Hutchinson, 3 Taunton 117;
Ruble v.
Turner, 2 Henning & Munford 38;
Strang v. Holmes,
7 Cowen 224; 2 Greenleaf on Evidence § 30.
[
Footnote 2]
1 Story's Equity Jurisprudence § 333.
[
Footnote 3]
Himes v. Barnitz, 8 Watts 39;
Chamberlin v.
Day, 3 Cowen 353.
[
Footnote 4]
Merryweather v. Nixan, 8 Term 186;
Bailey v.
Bussing, 28 Conn. 455.
