Bibend v. Kreutz

Cope, J. delivered the opinion of the Court—Field, C. J. concurring. TMs is an action to set aside a judgment by default, on the ground of surprise. The judgment was rendered in an action for money [114]had and received, and the facts disclosed by the record show conclusively that no cause of action existed. It is admitted that the suit was improperly brought, but it is contended that the judgment is strictly just, and ought to be allowed to stand. This view, though acted upon by the Court below, is manifestly erroneous, and we find in the facts of the case nothing to justify or support it. The Yreka Water Company executed to several parties, among whom was the plaintiff, a mortgage in trust to secure the payment of certain indebtedness, a portion of which was owing to defendant Kreutz, whose name, however, does not appear in the mortgage. The complaint in the original suit charged an assignment and surrender of this mortgage, and a receipt by the persons to whom it was executed of the amount secured by it. This was sufficient prima facie to recover upon; but the facts now before us present the case in a very different light, and it is evident that gross injustice has been done. The mortgage has neither been assigned nor surrendered, but is still in the hands of the trustees, and may at any time be enforced for the payment of the debts. The evidence on this point is clear and explicit, and in determining the case the Court below was misled by certain transactions with a corporation known as the Shasta River Water Company. This corporation was organized to take the place of the Yreka Water Company, and an agreement was entered into entitling the holders of the indebtedness secured by the mortgage to exchange it for stock of the corporation. A portion of the indebtedness was exchanged in pursuance of this agreement, and the Court appears to have regardgd the agreement itself as superseding the mortgage. It is clear, however, that nothing of the kind was intended, and that Kreutz, whose debt has not been exchanged, is entirely unaffected by the agreement.

Objection is taken to the mode in which the plaintiff seeks redress, but we are of opinion that the remedy in equity was properly resorted to. The statutory remedy by motion, except in cases where there has been no service of summons, is only available during the term at which the judgment is rendered, and in many cases a denial of the most obvious justice would result from holding this remedy exclusive. The assistance of equity cannot be invoked so long as the remedy by motion exists; but when the time within [115]