Washburn Land Co. v. White River Lumber Co.

Siebecker, J. The main controversies on this appeal involve the inquiries: (1) Has the defendant stated a case for — 117 — equitable relief against tbe judgment awarded in plaintiff’s favor quieting tbe title in tbe lands in question? and (2) If sucb a case is stated, is it pleadable as a countérclaim in this action ? It is earnestly contended by tbe plaintiff tbat upon tbe facts stated in tbe answer tbe defendant is not entitled to equitable relief to restrain tbe enforcement of tbe judgment adjudging that tbe plaintiff is tbe absolute owner of tbe premises under tbe tax deed issued by Bayfield county on May 19, 1891. This contention is made upon tbe grounds tbat sucb equitable relief is not available in this case because under tbe Code procedure tbat judgment is in substance and effect a decree in equity and distinguishable from judgments at law. It is claimed tbat sucb distinction is preserved under- tbe Code in civil actions in tbe courts of record in this state; tbat tbe remedy by bill of review, which was employed to obtain sucb equitable relief against tbe enforcement of sucb a judgment, having been abolished by tbe Code, tbe defendant is precluded from invoking tbe jurisdiction of equity to obtain sucb relief, and tbat it is restricted to tbe modes of relief provided in tbe Code for relief from judgments. Much reliance is placed in argument on tbe principle applied in Crowns v. Forest L. Co. 102 Wis. 97, 78 N. W. 433, and other cases bolding in effect tbat tbe Code of Procedure was intended as a substitute for tbe old forms of action and modes of procedure and tbat tbe former procedure by bill of review for relief from judgments no longer exists. It is contended that under tbe Code procedure relief from judgments is restricted to tbe grounds of inadvertence, surprise, mistake, and excusable neglect, and tbat relief upon these grounds can only be obtained within the limited time and in tbe manner provided by tbe Code, except that tbe enforcement of a judgment may be restrained in a direct proceeding when it is shown tbat facts have been discovered, after tbe expiration of sucb time, which show tbat a judgment is infected by fraud and its enforcement would be unjust and unconscionable. This contention is based on tbe — 118 — claim that the adjudications of this court establish that judgments in civil actions under the Code are distinguishable and are to be classified as decrees in equity and judgments at law. The drowns Case and other cases do not support this contention. They are in harmony with the express declaration of • the Code provisions declaring there is but one form of action: “The distinction between actions at law and suits in equity, and the forms of all such actions and suits, have been abolished, and there is in this state but one form of- actionSec. 2600, Stats. Legal and equitable causes of action are governed by the one sys'tem of practice and pleading prescribed in the Code, which is to be employed in all civil actions “for the enforcement or protection of a right, the redress or prevention of a wrong,” whether they arise at law or in equity. A court in enforcing rights and redressing wrongs can award but one final judgment in the actions to determine the rights of the parties, whether they arise at law or in equity, or both. True, the Code provides for relief against judgments by the court awarding' them and how such relief must be obtained during the term at which they were rendered or within the time limited and in the manner provided by sec. 2832, Stats. But such remedy has not been held to deprive a party of the equitable relief by a direct action to restrain a party from enforcing an unjust and unconscionable judgment, when the statutory remedy is not available. The fact that the Code does not recognize the procedure of the ancient ' form by bill of review does not in itself bar a party from obtaining the equitable remedy that was enforced by such a bill. Although the Code abolished forms of procedure that had been employed at law and in equity to enforce rights and redress wrongs, the reform did not abolish the recognized and established remedial rights at law and in equity. “The circuit courts of this state have, under the constitution, succeeded to all the jurisdiction formerly exerciéed by courts of law and courts of chancery as well; and though old — 119 — forms of enforcing judicial remedies have been abolished, that does not mean, necessarily, that the remedies have been abolished. The forms have ceased to exist, but substituted therefor and in place of all we have one form of remedy, denominated a ‘civil action.’ ” Harrigan v. Gilchrist, 121 Wis. 127, 231, 99 N. W. 909. The provisions of the Code do not operate to destroy the jurisdiction in equity to grant relief theretofore recognized for the enforcement of rights and the redress of wrongs. The remedial rights established at law and in equity subsist, but are to be enforced in the manner contemplated by the Code. The abolition of the ancient bill of review in equity, therefore, has not abrogated any of the remedial rights, but they are enforceable by procedural methods in harmony with the Code, which is applicable alike to all civil actions, whether the rights involved are governed by the rules at law or in equity. The power of courts to afford relief pursuant to the Code for the enforcement of rights and the redress of wrongs is well expressed in Balch v. Beach, 119 Wis. 77, 86, 95 N. W. 132: “Above all and over all is the supreme principle to which the vigilant, clean-handed, but wronged party may resort when all legal remedies fail, and even precedents for an equitable remedy also, fitting the situation with exactness as to facts, — that equity suffers no wrong to go without a remedy, the wrong being of sufficient gravity to be appreciated by the conscience of the chancellor, and application being made to its jurisdiction seasonably and with clean hands.” It is considered that the remedial rights of equitable relief against an unjust and unconscionable judgment by way of restraining the party who seeks to enforce it may be invoked under the Code procedure in all appropriate eases against judgments in all civil actions. Johnson v. Coleman, 23 Wis. 452; Orient Ins. Co. v. Sloan, 70 Wis. 611, 36 N. W. 388; Laun v. Kipp, 155 Wis. 347, 145 N. W. 183. The claim that such relief is not available in the instant case because — 120 — the judgment determined only equitable rights of the parties cannot- be sustained. The adjudications of tliis court furnish ample authority for the exercise of this equitable jurisdiction in proper ' cases. This doctrine was clearly announced and applied in the early case of Stowell v. Eldred, 26 Wis. 504, as follows: . • . “The rule seems to be quite well settled, that chancery will relieve against a judgment at law on the ground of its being contrary to equity, when the defendant in the judgment was ignorant of the fact in question pending the suit, or it could not have been received as a defense, or when he was prevented from availing himself of the defense by fraud or accident or the acts of the opposite party unmixed with negligence or fault on his part.” We cannot presume to add anything to the clearness and fulness of this statement of the doctrine or render any aid by. attempting to amplify it by discussion. The federal supreme court states it thus in Marine Ins. Co. v. Hodgson, 7 Cranch (11 U. S.) 332: “Without attempting to draw any precise line to which courts of equity will advance, and which they cannot pass, in restraining parties from availing themselves of judgments obtained at law, it may safely be said that .any fact which clearly proves it to be against conscience to execute a judgment, and of which the injured party cottld not have availed himself in a court of law; or of which he might have availed himself at law, but was prevented by fraud or accident unmixed with any fault or negligence in himself or his agents, will justify an application to a court of chancery.” The following cases in this court deal with'this form of relief: Johnson v. Huber, 106 Wis. 282, 82 N. W. 137; Balch v. Beach, 119 Wis. 77, 95 N. W. 132; Boring v. Ott, 138 Wis. 260, 119 N. W. 865; Laun v. Kipp, 155 Wis. 347, 145 N. W. 183; Zohrlaut v. Mengelberg, 158 Wis. 392, 148 N. W. 314, 149 N. W. 280. See, also, Oro Fino & Morning Star M. Co. v. Cullen, 1 Idaho, 113. These cases all hold in effect that the former judgment is not disturbed and that — 121 — no retrial of any issues- litigated in the action and determined in the judgment is permitted. The courts act upon the party by forbidding him to enforce the judgment and thus prevent' him from reaping the fruits of an unjust and unconscionable judgment. Crowns Case, supra; Balch Case, supra; Zohrlaut Case, supra. It is asserted that this equitable relief can be invoked only in cases of fraud and that the defendant here has no such cause of action and hence no standing in court. The judicial statements on the subject quite explicitly declare that this equitable jurisdiction can be invoked upon the grounds of accident and mistake. A study of the adjudications beginning with the 3 tow ell Case [Stowell v. Eldred, 26 Wis. 504] discloses this result. The rule is stated thus in Ereeman on Judgments, sec. 486-: “While the courts of equity in England and in the several states of this Union have uniformly refused their aid in all cases where their action would involve either the usurpation of appellate jurisdiction or the granting of a second opportunity of presenting a cause upon its merits, they have, on the other hand, uniformly extended their beneficent principles and their varied and efiicient means of relief over a large and well-defined class of cases, to the end that no man should retain an unconseientious advantage procured by him in a court of law or of equity through his own fraud or through some excusable mistake or unavoidable accident on the part of his adversary. ... To entitle a party, to relief from a judgment or decree, it must be made evident that he had a defense upon the merits, and that such defense has been lost to him, without such loss being ‘attributable to his owil omission, neglect, or default.’ ” Davis v. Tileston, 6 How. (47 U. S.) 114, 119; Wingate v. Haywood, 40 N. H. 437; Nat. S. Co. v. State Bank, 120 Fed. 593. It is urged that the facts stated in the counterclaim do not constitute a cause of action for equitable relief upon the grounds of a mistake or unavoidable accident. We must give the allegations a liberal interpretation. It appears from the facts alleged that the officers, agents, and servants — 122 — of the defendant used due diligence to find tbe tax receipt in question at tbe time the former action to quiet title to this land was pending for trial, and that they made repeated efforts by exhaustive search to ascertain its existence for the purpose of offering it as evidence on the trial, but utterly failed to find it, and that it was accidentally discovered in March, 1915, among papers that had been discarded as useless and which were of a nature wholly different from this tax receipt. It also appears- that this receipt was so misplaced while the former owner of the defendant company, who is now deceased, had control thereof, and that the present owners of the defendant and their officers, agents, and servants had no part in or knowledge or suggestion of such misplacement of the paper. These facts and circumstances present a case of accidental loss of this receipt. The facts show that defendant was in all probability defeated in the action to quiet title because it had not discovered the receipt in season to present it as evidence, in that case. Under this state of facts it is apparent that the defendant undesignedly sustained a legal loss, unmixed with any negligence or fault on its part, and is entitled to the equitable relief prayed for, if the allegations.of the counterclaim are sustained by evidence. Is the defendant’s cause of action pleadable as a counterclaim? , Sec. 2656, Stats., provides that a counterclaim must be “a cause of action arising out of the contract or transaction set forth in the complaint as the foundation of plaintiff’s claim or connected with the subject of the aetion.” It is manifest that the alleged counterclaim is connected with the plaintiff’s rights established by the judgment in the former action,-and if maintained will defeat the plaintiff’s right to a recovery upon its cause of action founded on the rights determined in such judgment. It is difficult to perceive of a ease wherein the cause of action of defendant’s counterclaim can be more directly connected with the subject of the plaint — 123 — iff’s cause of action than the one presented here. The defendant’s cause of action goes to defeat the very judgment on which plaintiff bases its rights to a recovery and constitutes the basis for affirmative relief to defeat the relief plaintiff demands. Stowell v. Eldred, 39 Wis. 614; Chicago & N. W. R. Co. v. McKeigue, 126 Wis. 574, 105 N. W. 1030; Emerson v. Nash, 124 Wis. 369, 102 N. W. 921; McArthur v. Moffet, 143 Wis. 564, 128 N. W. 445. The counterclaim states facts sufficient to constitute a cause of action and is properly pleaded as a counterclaim. By the Court. — The order appealed from is affirmed.