Opinion
No. 18447
Decided December 23, 1924.
Equity — Seeking with clean hands — Request to delay taking cognovit judgment — Mortgaging chattels in meantime — Relief denied where conduct inequitable.
ERROR to the Court of Appeals of Trumbull county.
On the 27th day of June, 1921, the defendant, the Kinsman National Bank of Kinsman, Ohio, obtained a judgment by confession against the plaintiff, John Jerko, in the court of common pleas of Trumbull county, Ohio, upon a promissory note in the amount of $3,553.50, payable to the order of M.S. Polley, with a warrant of attorney to confess judgment thereto annexed.
On June 15, 1922, the instant case was filed in the court of common pleas of Trumbull county, Ohio, being brought by John Jerko, the defendant in the first case, against the Kinsman National Bank, the plaintiff in the first case, to enjoin the collection of the judgment rendered by confession in the former case in favor of the bank, and to declare that judgment null and void.
The lower courts held the judgment obtained in the action upon the promissory note to be void, upon the ground that the warrant of attorney attached to the note did not authorize entry of judgment outside of the state of Pennsylvania, nor in favor of any one except the payee, and permanently enjoined the defendant from collecting or attempting to collect the judgment.
The case comes into this court upon motion to certify the record.
Mr. G.H. Birrell, for plaintiff in error.
Messrs. Fillius Fillius, for defendant in error.
Was the plaintiff entitled to secure an injunction against the enforcement of the judgment rendered by confession upon the promissory note?
The defendant in its answer, which was not denied, stated that it purchased the note in good faith for value prior to the date of maturity; that Jerko knew that the note was due and payable at the defendant bank prior to maturity, and knew the date, and agreed to pay the same within a few days after it became due; that upon June 13, 1921, he sent a messenger to the defendant bank, requesting it to refrain from taking judgment upon the note for a few days, and upon the next day executed a chattel mortgage upon all his property to one E.H. Stewart for a consideration of $8,000; that on June 20, 1921, he (Jerko) had notice that the judgment would be taken on the said note; that on June 27, 1921, judgment was taken and execution was issued, which was later returned unsatisfied; that on or about July 1, 1921, Jerko had personal knowledge that the said judgment had been taken, and conferred with his attorney regarding the same; and that upon June 15, 1922, after various proceedings in aid of execution were had, at which Jerko was present, he filed this action, and secured the permanent injunction granted in this case.
Under these circumstances was Jerko entitled to an injunction?
Plaintiff in error claims that having resorted to a court of equity defendant in error must be bound by equitable rules, and that he has not done equity herein, because he does not come into this court with clean hands.
With this proposition we are in agreement. The answer of the defendant in the original action was not denied, and is therefore admitted. This shows a fraudulent attempt upon the part of the plaintiff to secure time before judgment was taken by the bank, in which he conveyed away his property by chattel mortgage in more than double the amount of the note. It shows knowledge upon the part of the plaintiff, Jerko, that the judgment was to be taken and actual notice that the judgment had been taken four days after the entry of judgment. It shows that Jerko first tried to place his property beyond the reach of his creditor, and then put his creditor off repeatedly until it found property upon which to levy, at which time he applied to a court of equity for relief.
In this view of the question it is immaterial whether the judgment was merely irregular, as plaintiff in error contends, or absolutely void. In either case equity will not allow relief unless the plaintiff himself does equity.
Equity refuses to lend its aid in any manner to one seeking its active interposition who has been guilty of inequitable conduct in the matter with relation to which he seeks relief. 21 Corpus Juris, p. 182, and cases cited.
For the foregoing reasons the judgment will be reversed, and judgment will be rendered for the plaintiff in error.
Judgment reversed, and judgment for plaintiff in error.
MARSHALL, C.J., DAY, ALLEN, and CONN, JJ., concur.
I cannot concur in the above judgment of reversal for the reason that the judgment upon which this injunction proceeding was predicated was absolutely void for want of authority conferred by warrant of attorney to confess judgment, which a full statement of the facts would disclose, and which I understand is conceded.
The note in question was payable to M.S. Polley, was indorsed by him in blank, and also by Smith Holcomb in blank; the plaintiff nowhere appearing to be a payee.
The warrant of attorney is such in terms that no authority was thereby conferred which authorized or could authorize the confession of judgment in favor of any one in Ohio, or elsewhere than in the state of Pennsylvania, where it was executed, and, further, the authority, being merely "to enter and confess judgment, against us," cannot be construed to authorize the confession of a judgment in favor of such indorsee, or any one other than the payee. This was the conclusion of law of the Court of Appeals, based upon its finding of facts, and the judgment of that court should be affirmed. The defense that a judgment is void is always a complete defense against an attempt to enforce collection thereof.
JONES and ROBINSON, JJ., concur in the dissenting opinion.