"creditor" of a grantee corporation within the meaning of Pennsylvania Statutes which give equity jurisdiction between a corporation and its creditors. And in Merriman v. Moore, supra, it was held that the conveyance might create a personal liability on the part of the grantee even though there was none at all on the part of the grantor.
The only possible grounds for asserting the joint character of the liability is the fact that courts have frequently characterized the relation between the grantor and the grantee as that of surety and principal. But this description applies only so far as it governs the relations between the grantor and the grantee -- that is, the rights of indemnifcation, subrogation, etc. That it does not affect and does not describe the relationship between the mortgagee and his two debtors is seen in what was decided in Re Willock's Estate, supra, where it was held that the mortgagee may change the terms of the bond by agreement with the grantee, unknown to the original mortgagor, without releasing the latter's obligation -- a thing not possible if the original mortgagor were a surety for the grantee. Since the plaintiff's right in this case was several merely, it could not make a joint or joint-and-several right of it by mistakenly calling it such in the bill in equity. Nor did the mere joinder of the defendants constitute an election to sue on a joint contract which would now estop the mortgagee from claiming that obligations are what they really are; namely, several. This for two reasons: First, because the mortgagee denominated the rights both joint and several and was no more committed to the former view of them than the latter (certainly "joint-and-several" includes "several", and the defendant, H & K Corporation's argument based on the distinction between "joint or several" and "joint-and-several" is mere verbalism of the most attenuated kind.) Second, because under Equity Rule 26, 28 U.S.C.A. following section 723, the plaintiff was entitled to join separate causes of action against separate defendants in one suit, so that the mere fact that there was a joinder would not be evidence of an intention to elect.
Finally, "it is a well-settled rule that, in equity, the application of the doctrine of merger depends upon the intention of the parties and a variety of other circumstances. Equity will prevent or permit a merger, as well best subserve the purposes of justice, and the actual and just intention of the parties." 15 R.C.L. 783.
VII. The plaintiff's right to recover deficiency judgments against the first two defendants, H & K Corporation and the Body Company, was not lost by misjoinder of legal and equitable causes of action.
It is true that, in the federal courts as elsewhere, a purely legal cause of action cannot be joined with an equitable one in the same suit. It is also true, however, that Equity Rule 10 expressly authorizes the joinder of a claim for a deficiency with a foreclosure suit. This Rule extended the equity powers of the Court beyond the point at which they had been previously limited by the decision of the Supreme Court in Noonan v. Lee, 1862, 2 Black 499, 500, 17 L. Ed. 278, but it was in accordance with the broad principle that where a court of equity has obtained jurisdiction over some portion of a controversy, it may proceed to decide all the issues and award complete relief even where some of the rights of the parties are strictly legal and the final remedy granted is of a kind which might be conferred by a court of law. See Hartford Co. v. Southern Pacific Co., 273 U.S. 207, 217, 218, 47 S. Ct. 357, 359, 360, 71 L. Ed. 612, and Alexander v. Hillman, 296 U.S. 222, 56 S. Ct. 204, 80 L. Ed. 192.
Federal Equity Rule 26 provides that, "The plaintiff may join in one bill as many causes of action, cognizable in equity, as he may have against the defendant. * * * If there be more than one defendant the liability must be one asserted against all of the material defendants, or sufficient grounds must appear for uniting the causes of action in order to promote the convenient administration of justice. * * *" Thus, by Rule 10, the plaintiff had a cause of action cognizable in equity, which included the rights both to foreclose the mortgage and to have a deficiency judgment, against each of these three defendants. The same liability -- the liability to pay the bonds, -- was asserted against them all. The conditions of Rule 26 were present and the joinder was authorized.
The requirement that sufficient grounds must appear for uniting the causes of action in order to promote the convenient administration of justice does not, in my judgment, mean that the sufficient grounds must be shown extrinsically as in a petition or some proceeding to obtain the permission of the Court for the joinder. The sufficient grounds for joining these several causes of action in this case are perfectly obvious and appear clearly from the nature of the proceeding itself and the averments of the bill.
Neither Equity Rule 10, nor any federal decision under it, limits the power of the Court to enter a deficiency decree to one solely against the party who appears to be the record owner of the mortgage property at the time the suit is begun. To so limit it would be to defeat entirely the purpose of Rule 26, which was to remove a mass of technical objections arising from the plea of multifariousness and to arrive directly and speedily at a final disposition of controversies affecting different parties arising out of the same general state of facts. Lowry v. Hensal's Heirs, 281 Pa. 572, 127 A. 219, cited by the defendant, had to do solely with the original equity jurisdiction of the court; it involved no question of misjoinder nor did it arise under the Federal Equity Rules, and it is entirely beside the point.
A decree may be presented in accordance with the foregoing opinion.
© 1992-2004 VersusLaw Inc.