Horn v. Detroit Dry-Dock Company/Opinion of the Court

The garnishment proceedings on the part of Cuddy, administrator, against Sarah Horn, as the principal debtor, and the dry-dock company and Frederick Schulenberg, as garnishees, regularly taken and prosecuted under the statutes of Michigan, were designed to reach and subject to the payment of Cuddy's confessed judgment against Sarah Horn the claim and demand which she seeks to enfore in the present case; so that the garnishment proceeding involved directly the liability of the dry-dock company and of Frederick Schulenberg to the complainant for either $25,000 in stock, which she alleged Schulenberg was to return to her, or any other credits in their hands in her favor.

The proofs taken in the case clearly and fully establish the truth of the matters set up and alleged in the plea, including the complainant's foregoing receipt in full satisfaction of all claims against the dry-dock company and Frederick Schulenberg.

As a part of the documentary proof, there was produced a stipulation filed in the cause of Sarah Horn against Frederick Schulenberg in the United States circuit court for the eastern district of Michigan, which cause involved the same claim upon the part of the appellant against the appellee Schulenberg as is presented in the present case. The stipulation was as follows: 'It is hereby stipulated that the bill of exceptions settled and filed in this cause shall be withdrawn, and that the judgment entered herein in favor of defendant shall stand as the final determination of the issue, and that full satisfaction of the same for costs may be entered.' This, with other documentary and parol evidence, fully established the truth of the plea; and, the plea being thus sustained, the court thereupon dismissed the bill. It could not have done otherwise, under the well-settled rules of chancery pleading and practice.

In chancery proceedings a plea in bar may be set down for hearing by the complainant upon its sufficiency, or it may be replied to and put in issue. If the latter course is pursued, and the plea is sustained, then, according to the English chancery practice, which formerly prevailed in this court, the bill must be dismissed, without reference to the equity arising from any other facts stated in the bill. Hughes v. Blake, 6 Wheat. 453, 472; Rhode Island v. Massachusetts, 14 Pet. 210, 257. This practice has now been modified by equity rule 33 of this court, which is as follows: 'The plaintiff may set down the demurrer or plea to be argued, or he may take issue on the plea. If, upon an issue, the facts stated in the plea be determined for the defendant, they shall avail him as far as in law and equity they ought to avail him.' See Farley v. Kittson, 120 U.S. 303, 314, 315, 7 Sup. Ct. 534; Pearce v. Rice, 142 U.S. 28, 41, 42, 12 Sup. Ct. 130. But even under this rule, when the plea meets and satisfies all the claims of the bill, it ought, in law and equity, to avail the defendant, so far as to require a final decree in his favor.

In the taking of proof upon the issue raised by the replication to the plea, the appellant attempted to show that, in addition to the $3,000 paid by the appellees in settlement and compromise of all claims and demands against them, or either of them, upon the part of the appellant, as already stated, it was understood and agreed that Albert R. Schulenberg, her son-in-law, was to pay her $200 a month, and turn over to her $25,000 of the stock of the Detroit, Belle Isle & Windsor Ferry Company, whenever he should acquire the same from his father, Frederick Schulenberg, and that this part of the agreement had not been performed. This contention is not established by the testimony in the case. But suppose it was. It could not affect the result, or show that there was error in the dismissal of the bill, which followed from sustaining the plea, for no such question was ever raised or presented by the pleadings.

Again, it is urged by counsel for the appellant that her receipt of March 17, 1886, executed upon the making of the compromise, is open to explanation by parol proof for the purpose of showing what the real considertion was, under the rule recognized and applied in Association v. Wickham, 141 U.S. 564, 12 Sup. Ct. 84. While this may be true in respect to receipts generally, the fact is overlooked that the issue made by the replication was simply the existence of the receipt as set forth in the plea. The complainant, neither in her bill nor in her replication to the plea, raised any question as to the correctness of the receipt executed by her. Her replication, as already stated, simply put in issue the truth of the plea, and, that being established, the dismissal of the bill necessarily followed, under the authorities referred to. Her claim of a mistake in the receipt was wholly foreign to the issue which she, by the pleadings, had presented for the determination of the court. No such question as she now raises was properly presented in the court below, or is available here.

It is further urged on her behalf that mutual consent of the parties was necessary to the compromise contract, and that there was no such mutuality, inasmuch as she supposed that she was to receive $200 a month from Albert R. Schulenberg. But this is equally unavailable, if such a mistake were shown to exist, for the simple reason that it was not put in issue, in any shape, by the pleadings. While an accord and satisfaction may be set aside, if it is shown that the parties to the transaction were mutually mistaken in regard to the material facts, such mistake must be set up by proper pleading. It is not available where it is neither averred in the bill, nor referred to in a plea in bar and a general replication thereto, which merely puts in issue the truth of the plea.

There is no error in the judgment of the court below, and the same is accordingly affirmed.