Heater v. Lloyd

85 W. Va. 570
CourtWest Virginia Supreme Court
DecidedFebruary 17, 1920
StatusPublished
Cited by19 cases

This text of 85 W. Va. 570 (Heater v. Lloyd) is published on Counsel Stack Legal Research, covering West Virginia Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Heater v. Lloyd, 85 W. Va. 570 (W. Va. 1920).

Opinion

Lynch, Judge:

The bill in this suit.has for one of its two chief purposes the rescission of an executed agreement of sale, consummated June 18, 1919, whereby plaintiff transferred to defendant a certificate for the shares of stock owned by him in the Delta Coal Company, a corporation, and representing a one-third interest therein, in consideration of the transfer to him by defendant, at par value, or an aggregate valuation of $500, of a certificate calling for five shares of the capital stock of the People’s Bank of Burnsville, a state banking institution of which defendant is stockholder and director, the payment of a sum in cash, and the assumption by Lloyd of certain liabilities incurred by and chargeable to plaintiff as part of the unpaid purchase price of the coal company stock. The other object is to obtain an injunction to prohibit the assessment of the statutory personal liability against the bank stock, the certificate of which plaintiff has held as owner since the transfer, and the collection of the amount so assessed, the defendant bank in the meantime having become utterly insolvent, and defendant Bender the receiver of its assets for the purposes of [573]*573liquidation. The bill joins as defendants Lloyd, the insolvent bank and J. I. Bender, receiver.

The right to maintain the suit for either purpose against any of the defendants for the attainment of these ends is based upon the alleged fraudulent representations of Lloyd regarding the actual market value of the five shares of bank stock at the time of the assignment of the certificate, the date thereof preceding by one month only the official ascertainment of the insolvency of that institution and the appointment of Bender receiver of its assets. To the bill each of the defendants demurred and assigned as grounds of the challenge want of equitable jurisdiction to pronounce the decree prayed for; the availability of an adequate remedy at law for the deception, if any, practiced by Lloyd; and multifariousness of the bill. The demurrer thus interposed the court sustained on each ground assigned, dismissed the bill as to the bank and the receiver, gave leave to plaintiff to amend, and certified here for our opinion the. correctness of that ruling.

Yiewed in, the light of the purposes of the final clause of section 1, chapter 135, Code, and the decisions of this court relative to the right to certify questions finally determined and adjudicated in the trial court, as was done by the order dismissing and discharging the defendants bank and Bender from the suit, manifestly this court cannot consider, discuss or .decide anything affecting them otherwise than by writ of error or appeal. The effect of the provisions of that statute is to circumscribe, restrict and limit the right of this court to entertain and decide only questions immediately arising in the preliminary stages of a controversy, that is, mere interlocutory orders, not those fully and completely terminating the action or suit by final judgment or decree. To obtain relief from an erroneous judgment or decree the party aggrieved must resort to the usual writs provided by law for that purpose, and not to those provided for a special purpose. It is true this court has held in Gulland v. Gulland, 81 W. Va. 487, that a decree sustaining a demurrer to part of a bill and dismissing it as to such part may be certified to this court for review, and if found to be erroneous, the bill will be reinstated - in so far as it was dismissed. But the court in this case dismissed two of the [574]*574parties, and not part only of tbe bill, as in Gulband y. Gulland. Tbe sufficiency of a pleading dismissed in part and tbe propriety of tbe dismissal of one or more, but not all, of tbe parties are two totally different things. Tbe bill was found to be deficient upon demurrer, but no part of it was dismissed, and the questions raised respecting it properly are before this court for consideration upon tbe certificate.

Since tbe defendant Lloyd raised tbe same questions upon bis demurrer as did tbe parties dismissed, it is necessary for us to discuss and indirectly pass upon questions affecting tbe bank and receiver; but we cannot reinstate them as parties, if they were dismissed improperly, otherwise than on appeal. As to them tbe decree is final, and appealable, and to correct any error in that order plaintiff must resort to tbe usual procedure provided for that purpose.

With respect to tbe jurisdiction of equity to entertain a-suit for rescission we entertain no doubt. A reading together of tbe allegations of tbe bill and its prayer discloses plaintiff’s willingness and offer to accept either a total or partial rescission of tbe contract whereby he acquired through the fraudulent representations of defendant the ownership of the five shares of bank stock. Although one part of the prayer is that he recover from defendant the sum of $509, the value at which he accepted the stock in the exchange consummated by the contract, the preceding clause is ‘that the transaction aforesaid by which he purchased the said five shares of stock * * * may be rescinded, cancelled and annulledapparently referring to the entire transaction. That this was the intention is clear from the recitals of the bill. It states the offer made, and now repeated to rescind the whole transaction by repaying to Lloyd tbe cash payment heretofore referred to, by relieving him from the obligations assumed as aforesaid, jmd by surrendering to him the said shares of bank stock, upon return of the coal stock delivered to Lloyd, and the repayment by him of $500, the valuation at which the bank stock entered into the consideration. Upon Lloyd’s refusal to rescind in toto, because he theretofore had sold to another the shares of coal stock so purchased, plaintiff offered, and in his bill consents, to accept in lieu thereof an equal amount of other stock of the same coal company, since [575]*575acquired by Lloyd from another source, or to rescind in so far as Lloyd is now able to do so by returning the five shares of bank stock upon the repayment of the $500 paid by plaintiff for it. These offers defendant declined and still refuses to accept by way of adjusting the matters in dispute.

Treating the bill as one for rescission in toto, or to such an extent as defendant is able to make restitution, -including the return of the $500 for the bank stock, there can be no doubt of the jurisdiction of equity to grant the relief asked, even though plaintiff may have an action at law to recover the money actually paid for the stock. Plaintiff seeks for something more than a mere money judgment. He desires to be relieved of the burden incident to the possession and consequential liability due to ownership' of the shares of stock which defendant fraudulently induced him to accept. The remedy which the law may afford is necessarily incomplete and inadequate because of the lack of power to effect a rescission by a direct adjudication thereof and thereby unburden him of these liabilities. Bruner & McCoach v. Miller, 59 W. Va. 36. As Said in that case at page 45: “From the peculiar nature of the jurisdiction for the purpose of rescission, this court has always recognized the right of a party who is the victim of a fraud or mistake to come into equity for relief, notwithstanding the existence of concurrent jurisdiction in the law courts.” And in Morrisey v. Williams, 74 W. Va. 636, relief very similar to that sought here was granted. See also 2 Black on Rescission and Cancellation, § 646; Bosley v. National Machine Co., 123 N. Y. 550.

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Bluebook (online)
85 W. Va. 570, Counsel Stack Legal Research, https://law.counselstack.com/opinion/heater-v-lloyd-wva-1920.