Detroit & Milwaukee Railroad v. Griggs

Manning J.: It is insisted that the relief sought by the present bill should have been made a defense in the case of Griggs v. The Detroit and Milwaukee Railway Company, and others, reported in 10 Mich. 117. The Penny and Wilder mortgages had not then been paid by complainant. Had they been paid at that time by complainant, the objection would be conclusive. Complainant insisted in its answer to that suit, that it was entitled to have the amount of these mortgages deducted from its mortgage to Firby, without having first paid them. That was the defense made in that suit. The Court decided otherwise, and a decree was entered for the full amount due on its mortgage to Firby. The present bill, after setting forth the proceedings had in the former suit, states the subsequent payment by complainant of the mortgages, and asks to have the amount so paid deducted from the decree in the former suit. [51] The relief sought is in the nature of an equitable set off. To a correct understanding of the present controversy, it is only necessary to state, that the Firby mortgage assigned to Griggs, was one given by the Detroit and Pontiac Railroad Company, now the Detroit and Milwaukee Railroad Company, to secure the purchase money of the mortgaged premises, on the conveyance thereof by Firby to the railroad company by a warranty deed, with a covenant against incumbrances. Griggs’s rights are Firby’s rights, no more, no less. He stands in Firby’s shoes. And he insists the present bill can not be maintained, because it was complainant’s duty, after having put in its answer in the former suit, to have filed a hill against the holders of the Penny and Wilder mortgages, making Griggs a party, in the nature of an original and cross bill, to have the first mortgage moneys due and payable on the Firby mortgage, applied in payment of the Penny and Wilder mortgages. Such a bill, we think, might have been maintained. We see no reason why it should not. But could not the same thing have been accomplished by Griggs, had he amended his bill, stating these outstanding mortgages, and making the holders thereof parties, and asking to have them paid from what was due on the Firby mortgage ? We think it might. If correct in this, the company was no more in fault in not filing a bill to accomplish the object, than Griggs was in not amending his bill to effect the same thing. If either was under a greater obligation than the other, it was Griggs. It was for him, as the representative of Firby, to remove the alleged stumbling block that stood in the way to the payment of the Firby mortgage. If he is delayed in reaping the fruits of his suit by the present bill, is not the fault his own — one that he, as well as the company, might have obviated had the proper steps been taken by either pending the first suit? It was Firby’s duty to pay these mortgages, not the company’s. He failing or omitting to do it, the company [52] had a right to pay them, and set off the amount against what it was owing on its own mortgage. The question of payment was not before us in the former suit. The question, as already stated, was whether the company could set off these prior mortgages without paying them. We decided it could not. It has siuce paid them, and thereby acquired a right that did not exist pending the first suit. And having the right now, it may file a bill to enforce it as it has done in the present case. Complainant might sue Firby on his covenant against incumbrances; but it is not confined to that remedy. It may file a bill to indemnify itself out of the purchase money it is still owing; more especially when the covenantor, as the bill alleges, is insolvent, and the remedy at law would be inadequate. The decree of the Circuit Court is reversed, with costs, and the demurrer of defendant is overruled, with leave to be given in the Circuit Court to defendant to answer, on paying the costs in that Court of ■overruling the demurrer. Martin Ch. J. .and Christiancy J. concurred. Campbell J. did not sit in the case.