Stayton v. Graham

Opinion, Mr. Justice Sterrett : A brief outline of the facts is necessary to a proper understanding of the questions involved in this case. In February, 1876, Dr. Graham and wife executed a mortgage for $7,000 in favor of the legal plaintiff, E. R. Stayton, who assigned the same to W. W. Martin, who subsequently assigned the same to George S. Bryan, whose executor now appears as beneficial plaintiff. Shortly afterwards, part of the mortgaged premises was levied on and sold by the sheriff, on an execution against Dr. Graham, one of the mortgagors. The mortgage having matured in 1879, a scire facias thereon was issued against the mortgagors, in which the use plaintiff claimed, as per affidavit filed, $7,000, with interest and attorney’s commissions. Service of the writ and rule for affidavit of defence was accepted for the defendants by an attorney. In March, 1879, an affidavit of defence, alleging usury to the amount of $1,050, and interest thereon, was filed by W. H. H. Riddle and Alexander Mitchell, terre-tenants of part of the mortgaged premises, sold by the sheriff as aforesaid subject to the mortgage, and leave was granted them by the court to defend pro interesse suis. No affidavit was filed by Dr. Graham or his wife. On the contrary, an affidavit made by Graham was filed as a counter-affidavit for plaintiff to supplemental affidavit — 9 — filed by Riddle, one of the terre-tenants. In that affidavit, Dr. Graham, after denying the allegations of the terre-tenant, averred that he, “ said affiant, is not asking a reduction of plaintiffs mortgage on account of usurious interest, or on any other account, and that there is no reason why W. H. H. Riddle and Alexander Mitchell, or any other person interested in the sale of affiant’s property, upon the date referred to in the affidavits of defence on file, as purchasers, should he benefited by reduction of the amount of said mortgage to the extent claimed, or to any extent; that the agreement with the wife of affiant was abandoned, because W. H. H. Riddle refused to have payments made to the mortgagor,” etc. On August 16, 1880, Dr. Graham and wife appeared, and voluntarily confessed judgment on the scire facias sur mortgage for the balance then uncollected of the $7,000 and interest, to wit, $1,676, on which judgment, property, other than that purchased by Riddle and Mitchell, was levied on and sold. About six months thereafter, Riddle, one of the terre-tenants, filed a bill against Graham, the mortgagor, and Bryan, the use plaintiff, alleging, inter alia, that, before he purchased part of the mortgaged premises at the sheriff’s sale, Graham had agreed with him to defend against $1,050 of the principal of the mortgage held by Bryan, as usurious, if he (Riddle) would buy the property ; that, in violation of the agreement, Graham refused to defend against the usury,.and fraudulently conspired with Bryan, and confessed judgment on the scire facias for a sum which included all the usury, etc., and prayed that the judgment confessed by Graham and wife he vacated, and in the meantime proceedings be stayed; that he (Riddle) be permitted to defend against the scire facias, to the amount of the usury; and that Bryan be restrained from having any other or greater judgment than that already entered at No. 108 June Term 1879, which did not include the usury. In his answer to the bill, Dr. Graham denied that he had agreed with Riddle to defend against usury as alleged in the bill; denied that Riddle was authorized to appear as attorney for him and his wife in the scire facias; alleged that Riddle had requested him to sign an affidavit of defence thereto, but he refused to do so, saying he had no defence to make to the — 10 — Bryan mortgage, and that the affidavit of defence filed by Biddle and Mitchell was without his consent; denied any collusion with Bryan as to the confession of judgment; averred that the amount thereof was the just balance due and owing on the mortgage; styled the plaintiff’s bill of complaint unjust and unmeritorious, and prayed the court not to interfere with the collection of the judgment, which he of his own free will and accord had confessed; and, further, prayed the court to decree that said judgment remain valid and undisturbed, and that Bryan be permitted to collect the same from the mortgaged premises remaining unsold; that Riddle and others who intervened by leave of court be restrained from further interfering and defending against the scire facias, and that plaintiff’s bill be dismissed. Bryan, the use plaintiff, also answered the bill fully, denying any collusion with Graham, or that he had ever requested him to confess the judgment; also denying that the terre-tenants had any right to set up the defence of usury, etc. The master, in his report, recommended the dismissal of the bill, and it was accordingly dismissed by the court at plaintiff’s costs, without prejudice to his rights at law. No appeal from that decree was ever taken, and hence all matters involved therein must be regarded as res judicata. The issue raised by the terre-tenants, who were erroneously permitted to intervene in the scire facias and defend pro interesse suis, was twice tried in the court below, and judgment therein for defendants was reversed by this court, for reasons which appear in the opinion reported in Stayton v. Riddle, 114 Pa. 464. That was substantially a final decision of every question then presented by the record, and all that remained to be done was to take a verdict in favor of the use plaintiff, for the amount claimed by him and distinctly admitted by the defendant Graham, who, for reasons set forth in his answer in the equity proceeding, had hitherto refused to interpose any defence. The record having been remitted in November, 1886, the cause appears to have been continued from time to time until March, 1889, when the death of George S. Bryan, the use plaintiff, was suggested, and his executor substituted. Other counsel then appeared for plaintiff, and the cause was set for trial May 6, 1889. Then, for the first time, new light appears — 11 — to have dawned on Dr. Graham, and he united with the terre-tenants in a petition to open the judgment which, of his own “free will and accord,” he and his wife nearly nine years before had confessed in favor of the plaintiff for a sum which he afterwards alleged, under oath, “ was a just balance due and owing on the mortgage.” This and other averments contained in his answer to the bill in equity, and in his counter-affidavit above referred to, are in striking contrast with the averments in his affidavit of May 6,1889, attached to his petition to open the judgment. For reasons given by the learned judge in his opinion, no rule to show cause was granted; but, after argument of counsel, in which the facts above referred to were called to the attention of the court, the prayer of the petitioners was granted, and the judgment opened. The cause was then tried, and a verdict rendered in favor of the plaintiff for the amount claimed by him, subject to the opinion of the court on the questions of law raised by plaintiff’s and defendants’ points. Judgment was afterwards entered on the reserved questions in favor of defendants, and the case is now before us on plaintiff’s appeal from the order opening the judgment, and the ruling of the court on the questions of law reserved. The first specification of error is based on the exception taken to the order opening the judgment. The subjects of complaint in the remaining specifications are, the entry of judgment for defendants non obstante veredicto, and in not holding that the defendant Graham, by his conduct in refusing to make defence to the scire facias, within a reasonable time, etc., was estopped from doing so at this late day. It is unnecessary to consider them separately. As already intimated, the right of the terre-tenants to intervene and defend pro interesse suis was definitively settled, adversely to them, in Stayton v. Riddle, 114 Pa. 464, and hence they alone had no right to be heard again. In view of the facts, outlined above, the conduct of Dr. Graham from the inception of the suit in 1879, to the presentation of his petition to open the judgment in 1889, was not such as to commend either the petitioner or his application to the favorable consideration of a chancellor. The position assumed by him, in his affidavit appended to the petition, is utterly inconsistent — 12 — with his former acts and declarations. If there is any virtue in the doctrine of estoppel, it ought to be applied in a case like this, in which the only party originally entitled to equitable relief not only persistently refused to avail himself of it at the proper time, but has manifested, throughout, a disposition to trifle with the administration of justice, and mislead others to their prejudice. It cannot be doubted that the conduct of Dr. Graham, in refusing to file an affidavit of defence, and in defending against the bill in equity, declaring in his answer thereto that he had “ voluntaiily and of his own free will” confessed the judgment for the “just balance due and owing on the mortgage,” etc., was sufficient to induce, and did induce, the beneficial plaintiff to believe that his only controversy was with the terre-tenants of the mortgaged premises. Besting, as he doubtless did, in that belief, the plaintiff proceeded at very considerable expense, and, after years of litigation, successfully resisted the defence interposed by the terre-tenants, and placed himself in a position where his personal representative was about to realize the amount of his claim, which the mortgagor, Dr. Graham, years before, had in substance sworn was the balance justly “ due and owing on the mortgage.” The doctrine of estoppel is applied to prevent statements of intended abandonment of existing rights from operating as a fraud upon a party who has been led to rely on them, and thereby change his conduct and alter his condition: Insurance Co. v. Mowry, 96 U. S. 547; Brink v. Insurance Co., 80 N. Y. 108, 112. The defence of usury is no exception to the rule. Waiver or estoppel may be urged against that, as well as against other matters of defence not involving legal or moral turpitude : Herman on Estoppel, § 1012. If Dr. Graham had interposed the defence of usury when, in the orderly course of judicial proceedings, he should have done so, the matter would have been promptly adjudicated, and litigation ended; but, with as full knowledge of all the facts as he ever had, he elected to do otherwise, and he should be bound thereby: Bigelow on Estop., 673. The cases relied on by the learned judge of the Common Pleas were doubtless properly decided on their own facts, but we think they are distinguishable from the present case, in the — 13 — manifest disposition that is here exhibited by the mortgagor to trifle with the due and orderly administration of justice. Public policy forbids that such conduct should be encouraged. It follows from what has been said that the petition to open the judgment should have been dismissed ; but, inasmuch as a verdict was taken subject to the opinion of the court on questions of law reserved, this protracted litigation may now be ended, by reversing the judgment and entering judgment on the verdict; and that will be done. Judgment reversed; and judgment is now entered in favor of the plaintiff and against the defendants for $1,912, the amount found by the jury, with interest from November 4,1889, the date of the verdict.