Shields v. McClung

6 W. Va. 79, 1873 W. Va. LEXIS 17

• Court: West Virginia Supreme Court
• Decided: February 21, 1873
• Status: Published

Opinion

Haymond, President :

This is a Bill of Injunction to a judgment rendered at law, upon a paper writing purporting to be the bond of the Plaintiffs and Defendant, Hiram Scott. The judgment at law against which the bill is filed is a judgment by default. Process was duly served on the Defendants in the action at law, but they failed to appear and make defence. The original bill filed in the cause avers that the paper or pretended bond on which judgment was rendered is not, and never was tire bond of the Plaintiffs or either of them; that the consideration of the supposed bond, was a small lot of land near the town of Eranlc-ford, in Greenbrier county, sold for the purpose of making the same a graveyard, to be paid for by sundry persons living in and near the town; that the defendant Hiram Scott, contracted with the said commissioners for the purchase of the lot, executed the aforesaid writing, and presented it to the Plaintiffs, who signed it with the distinct understanding, and positive agreement that tbe same should not be binding upon them, until it had been signed by Richard H. Gillilan and T. A. Bell, and several other persons; that long before said bond was delivered to the obligees thereof, they had due notice of the said agreement, and that it was delivered to them as an escrow, with full notice that it was such, and that was not the deed of the Plaintiffs; that K. H. Gillilan and T. A. Bell, never did execute the supposed bond and that the same is void as to the Plaintiffs.

The Plaintiffs claim upon the facts- above stated, that although they could have filed their plea of non est fac-tum to the supposed bond in the action at law, and made complete and successful defence thereto — that still, their defence against said supposed bond is an equitable de-fence, of which they can avail themselves in a Court of Equity, as well as a Court of law; and not having availed themselves of their right and privilege of making their defence against the supposed bond, in the action at law, they have the right to be entertained in a Court of Equity, and upon the facts be relieved from the payment •of the judgment rendered upon the supposed bond. In support of this principle the Court is referred to the case of King vs. Smith and others in 2d vol. of Leigh’s lie-ports, page 157. The syllabus of that case reads thus; “P. agrees to join H. W., as his surety in a forthcoming bond, and executes and delivers the bond as an escrow, upon condition that K., shall also join in and execute the bond as co-security; and K., agrees to join as surety in the bond, and executes and delivers the same as an escrow, upon condition that O. "W., also shall join in and execute the bond as co-security; but O. W., never unites in •the bond. Held: that upon this state of facts, neither P., nor K., arc liable for any part of the debt in equity, .•any more than they would be liable for any part of it at law, where the facts would amount to proof of non estfac-trum.” In the above case there was execution awarded upon the forthcoming bond. King filed his bill of injunction, but he averred in his bill that the reason why he did not set up his defence against the forthcoming bond upon the motion for award of execution on the bond, was that he never had any notice of the motion— It does not appear from the statement of the case that King’s averment in this respect was denied by the opposite party. The prayer of his bill was that further proceedings at law upon the bond be enjoined. But, King’s excuse for not making his defence at law, was, that he did not have notice of the motion to award execution. Of course if he did not have notice of the motion for award of excution there Ayas good reason for his not appearing to the motion and making defence thereto and that reason seems to have been considered sufficient to entitle him to ask a Court of Equity to take jurisdiction, and relieve him against the bond, and execution thereon, as I infer from the report of the case. From the statement of this cáse as reported it rvould seem that the Court took jurisdiction not because the de-fence Avas an equitable one but because King not having had notice of the motion, had no opportunity of defending himself against said bond at laAV. Porterfield, the other surety, also exhibited his bill in the same Court; in Avhich referring to King’s bill, he stated that he had signed the bond, upon the express condition that King should join them as his co-surety, otherwise the bond should not be obligatory on him; and that finding from King’s bill, he had never so executed the bond as to make it his deed, if it AAras not obligatory on King it was not obligatory on Porterfield. So that Porterfield did not make defence to the motion because he had not then discovered the facts in relation to King signing the bond. Under these circumstances I don’t think this case establishes the principle maintained by Plaintiffs. In the case of Haden vs. Garden, to be found in 7th Leigh, page 157, it was decided, that “S., by fraud and deception practised on G., procures him tc execute a bond to H., upon Avhich H., brings suit against G., and recovers judgment against Mm by default; G., files a bill in equity to be relieved against tbe judgment on tbe ground of tbe fraud practised upon him, without assigning any reason for not having defended himself at law. Held: that as be might have defended himself at law on a plea of non estfaotwn, he is not relievable in equity.” It was further held in same case' that “though Courts of Equity and Courts of law have a concurrent jurisdiction in cases of fraud, yet if a suit be first brought in a Court of law, in which the question of fraud may be tried and determined, the party injured by the fraud must make his de-fence there; and if he neglect to do so, the Court of Equity has no jurisdiction to relieve him.” The principles decided by this case are in direct opposition to the principle contended for here by the Plaintiffs. In the case of Slack vs. Wood, commencing on page 40 of 9th Grattan, Judge Lee, who delivered the opinion of the Court, says: “ The grounds on which a Court of Equity will interfere to grant relief against a judgment at law, are confessedly somewhat narrow, and restricted. It is not sufficient that injustice has been done, but it must appear also that it was not occasioned by the inattention of the party complaining.” • In 6th Johnson, ch. R., in the case of Floyd vs. Jayne, 469; Chancellor Kent, in speaking of this subject, says: “it would be establishing a grievous precedent, and one of great public inconvenience, to interfere in any other casé than one of indispensable necessity, and wholly free from any kind of negligence.” “ This doctrine, (says Lee, Judge, in the case of Slack vs. Wood,) has been fully recognized in this Court;” and in support of the position he cites on page 43 of 9th Grattan, a large number of the Virginia decisions. In the case of Faulkner’s Adm’x vs. Harwood, 6th Randolph, 125, it was held “that a Court of Equity will not grant relief merely because injustice has been done: The party applying for a new trial, to entitle himself to it, must show that he has been guilty of no laches; that he has done everything that could reasonably be required of him to render his defence effectual at law.” In the case of Allen, Walton & Co., vs. Hamilton, in 9th vol. Grattan’s reports, page 257, Judge Al-¿cRyered the opinion of the Court, says: “The numerous decisions of Court cited in the argument, to which may be added the case of Slack vs. Wood, decided during this term, have established the rule that a party having a good legal defence, shall not, after a judgment at law, bring the case into equity upon the legal matter, without alleging and proving a good excuse for not using it at law; and moreover that a Court of Equity will not grant relief merely because injustice has been done.”

In the case of Meem vs. Rucker, to which I have before referred, on page 509. 10. Grattan’s Reports, Judge Lee in delivering the opinion of the Court, which was concurred in by all the other Judges, employs this language : “Row, that a party to whom a day and opportunity have been allowed to make his defence against a demand set up against him in a Court of law, but who has wholly failed to avail himself of them, will not be entertained in the Court of Chancery on a bill seeking relief against the judgment which was rendered against him in consequence of his default, upon grounds which might have been successfully taken in the Court of law, unless some reason founded in fraud, accident, surprise, or some adventitious ch’cumstance beyond the control of the party, be shown why the defence was not made in that Court, is a proposition which has been so repeatedly affirmed that it has became a principle and maxim of equity as well settled as any other whatever. It has been recognized and acted upon in very numerous cases in this court as well of ancient as of recent date. * * The rule has its foundation in wisdom and sound policy. It springs out of the positive necessity for prescribing some period at which litigation must cease. * * I think that private right and public interest alike require that it should be adhered to..” This language is clear and explicit, and when applied to ' this case determines beyond question tbat the Plaintiffs having a legal de-fence to the action at law, and having failed to avail themselves of the privilege of making it in that Court are not entitled to be entertained in a Court of Equity in order that they may make the defence therein, as a matter of right, and obtain relief against the judgment complained of. It may be said that the judgment is evidently unjust, and that the rule that excludes relief against it in equity is hard. To this there is a reply, which I think-must be satisfactory and conclusive. The reply was made by Lord Bedesdale in the case of Bateman vs. Willoe, 1 Sch. & Lef. page 204, and is in this language : “Bules are established, some by the Legislature, some by the Courts themselves, for the purpose of putting an end to litigation; and it is more important that an end should be put to litigation than that justice be done in every case.”

It is argued by the counsel for the Plaintiffs, earnestly, and with ability, that Courts of Equity grant relief to judgments at law upon void bonds, without requiring any excuse to be given for failing to make defence at law. The bond in question, however, was not void in its creation, but only voidable. I do not think Courts of Equity will, as a matter of course, grant relief against judgments on all void bonds. It is clear that equity will grant relief to judgments at law founded on a gaming debt, although the party failed to defend himself at law, and gives no good reason for such failure. This is decided in the case of Lucas vs. Waul et al., in 10 Smede’s & Marshalls Reports, page 157. See also Hil-liard on Injunctions, second edition, page 198. The jurisdiction of equity in such case is held and decided in the case of Woodson et al. vs. Barrett & Co., 2 Hen. & Munford, 80. In the case of Skipwith vs. Strother et al., 3 Randolph’s Reports 214, it is held that “A Court of Equity has jurisdiction to relieve against a judgment founded on a gaming debt, although the party failed to defend, himself at law, and gives no good reason for such failure.” But these decisions are “placed on ^ groun(j 0f original vice of the transaction.” “It -g that the bond being absolutely void in its creation, could be made valid by no subsequent transaction, immediately growing out of it,” and that the circulation of these gaining bonds is an evil no less to be discountenanced than the giving of them; and that no means are more likely to prevent the giving of them, than to put an effectual stop to their circulation.” See the opinion of Judge Tucker in the case cited in 3 Randolph, page 216. Thus it is clear that the jurisdiction exercised in such case by Courts of Equity is taken from public policy in discouragement of gaming, because of the vice of the transaction, and upon the principle that the bond “being absolutely void in its creation” cannot “be made valid ” by any “subsequent transaction, immediately growing out of it.” Equity jurisdiction in such case, is exercised for peculiar reasons, and is special, and an exception to the general rule governing Courts of Equity, as to granting relief to judgments at law. I have consulted .Hilliard on Injunctions, referred to by Plaintiffs’ counsel, on pages 177, 178 and 1.79, and I find that the rules there asserted and maintained are about the same as the rule so well and ably stated by Judge Lee in the case of Meem vs. Rucker. Having concluded that “the defence now sought to be made by the Plaintiff against the bond in question is one entirely appropriate to a Court of law,” and as the Plaintiff has had a day'in that Court in which he might have set up “his defence, but failed to do so,” “the next inquiry to be made is whether a good and sufficient reason has been shown in excuse of this failure.” And here it is but proper to remark that in considering the sufficiency of Plaintiffs’ bill all the allegations thereof are to be taken as true, there being no answer filed. Plaintiffs, by way of excuse for not making defence at law allege that plaintiff Brown is a resident of Kanawha county, tbat when the summons in the action at law was served upon him, .he immediately wrote to plaintiff Shields, and also another person, to employ an attorney designated in his letter to defend said action; that Shields, as requested, spoke to the attorney, but was informed by him that he was counsel of Plaintiff in the action at law, and in the conversation that ensued he remarked to Shields, that the action would not likely he called for trial at the next term, ■ meaning the April term, 1871; that Shields then went to another attorney and employed him to defend said action; that he agreed with said attorney the fee to be paid, and stated to him the nature of the defence to the action; that having been informed that the case could not possibly be tried at the April term, 1871, of the Court, he (Shields) made no further preparation about the defence, and he thought no more about the matter, until after the adjournment of the April term, 1871, of Court, when he was surprised to find that judgment had been rendered; that he immediately went to his attorney and learned from him that ho did not defend the action, and that he did not defend it because he did not understand that ho had been definitely retained in the case, but expected to see Shields again and conclude the contract and get the necessary information for the defence; that this was in conflict with Shields’ understanding, who thought the arrangement for the defence had been concluded, and that he had nothing further to do until notified by counsel; that Brown relied entirely upon Shields to employ counsel, and defend the action; that after writing the letters he knew nothing whatever about the matter, until he found an execution in the hands of the Sheriff against him for the debt.

Does this alleged excuse show’ “ some reason founded in fraud, accident, surprise, or some adventitious circumstance beyond the control of Plaintiffs, why the defense was not made in the Court of law ?” I think not. On the contrary giving the most liberal construction to the excuse as stated, tbe Plaiutiffs have been guilty of inexcusable laches and neglect about making defence at law. It must be noted that the general doctrine is, “that Courts of Equity reluctantly interfere to restrain proceedings had in Courts of law.” Hilliard on Injunctions, page 187, second edition. The party applying must show that he has a good defence, of which he had no knowledge until after judgment, or that he was prevented from using it by fraud or accident, or the act of the adverse party unmixed with negligence or fault on his part. Same author, 189. “The party applying for a new trial, to entitle himself to it must show that he was guilty of no laches.” Faulkner's Administrator vs. Harwood, 6 Randolph 125. “Equity will not relieve against a judgment at law, because the attorney who conducted the defence, through ignorance or design, managed the case unskilfully. Nor because the complainant was deprived of the benefit of a defence, pleaded by him in the suit at law, in consequence of another plea subsequently filed by his counsel. Hilliard on Injunctions, page 188. See also Stanard vs. Rogers, 4th Hen. & Mun. page 438. Brown wrote to Shields and another, after he was served with process, but after writing the letters he knew nothing whatever about the matter, until execution was out against him upon the judgment. He relied upon Shields to employ counsel and • defend the case. It may be safely asserted that Brown did not exercise reasonable dilligence in the matter. I would infer that he did not receive answers to his letters; still he was content to know nothing about it till after judgment. Shields spoke to the attorney to whom he was directed by Brown in accordance with Brown's request, but was informed by the attorney that he was counsel for Plaintiff in the action at law, and in the conversation the attorney remarked to him that the action would not likely be called at the next term. But he. did not tell him it would not be called, or that it would not be tried, or give him any assurance in that regard. He says he then went to another attorney and employed him to defend the action, that he agreed with the attorney upon the fee to he paid, and stated to him the nature of the defence. He does not say that he paid the attorney a fee, or that the attorney told or assured him that the case would not be tried at the April Court. He does say that having been informed that the case could not be possibly tried at the April Court he made no further preparation about the defence, and thought no more about it until after April Court, at which there was judgment; but for some cause he fails to disclose to the Court who informed him “that the case could not possibly be tried, &c.,” or when he was so informed. He does not allege that the information was derived from the Defendants, or from any one on whom he had a right to rely. Still on account of this information he made no further preparation about the defence, and he thought no more about it, until after judgment, and then he went to his attorney and learned from him that he did not understand that he had been definitely retained in the case, but expected to see him again and conclude the contract, and get information for defence. The attorney did not consider he was employed, or that he had sufficient information to make defence, but expected to see Shields, &c. Taking the statements of the bill on this subject together it seems that Shields made no definite contract of employment of counsel. That the counsel did not consider himself employed, but that he and Shields had talked about it. Shields should have made such definite and clear contract of employment with this counsel as without doubt would have entitled him to his services in making his defence and impressed the counsel with the knowledge that he was employed. But Shields made no preparation, failed to see the attorney, and have his plea prepared, which, if non est factum, could not well be prepared and filed in his absence, as such plea must be verified by an oath; and he failed to attend Court or to give the matter any attention. Shields and Brown bad both been summoned, and thus warned, if they had defence, to make it. Still they failed' to make defence or to exercise reasonable diligence in the matter. In a word, it seems clear that they have failed to show “ that they have been guilty of no laches; and that they did everything that could reasonably be required of them to render their defence effectual at law.” It may be said, that they did nothing that can be called diligence. I have carefully examined all the authorities cited in argument to which I have been able to have access, and have considered them in connection with the statements of the bill, and the authorities to which I have referred, and I can bring my mind to no conclusion, except, that the Plaintiffs do not show by their bill a good excuse for not making their defence to the action at law; and I think the injunction was improvidently awarded.

It is argued by Plaintiffs’ counsel that the notice to dissolve the injunction is too vague and uncertain, that it neither specifies the place or grounds of the motion— The notice is given by defendants, McClung and' Gordon, and service is accepted. In the notice it is stated that on “ the 15th day of July, 1871, we will move, before the Judge of the Circuit Court of Greenbrier county in chambers for a dissolution of an injunction granted you, &c.” The day is specified, but the place is not, except by the words “ before the Judge of the Circuit Court of Greenbrier county, in chambers.” Plilliard on Injunctions, page 100, says “Á motion to dissolve an injunction before answer, and without notice to the Complainant, is regular, if made on the ground that admitting the allegations of the bill to be true it contains no •equity.” This proposition with some limitation may bo true in this State, when the motion is made in Court, but, it is questionable, when the motion is made before the •Judge in vacation. The act of the Legislature passed February 24th, 1870, provides that a Judge of a Circuit •Court in which a case is pending, wherein an injunction is awarded may in vacation dissolve such injunction after reasonable notice to the adverse party. This act seems to be the only authority for dissolving an injunc-t-ion in vacation. Strictly speaking the notice may not be sufficiently specific as to place — I am not prepared to say that the notice -is not otherwise sufficient to dissolve for want of equity in the bill. Hilliard Inj., 100. If the Plaintiffs’ bill was sufficient on its face and they had not afterwards appeared before the Judge of the Court in term and moved to re-instate the injunction as hereinafter stated, I should feel inclined to favor reversing the order dissolving the injunction in vacation. But on the 19th day of October, 1871, the Plaintiffs filed their amended bill in the Circuit Court of Greenbrier county in term, and moved the Court to re-instate the injunction theretofore granted, and which had been dissolved in vacation, and the Court after considering the motion until the 19th day of December, 1871, overruled the motion. A Court of Equity is always open to re-instate an injunction where it is right and proper it should be done, and if Plaintiffs’ bill had been meritorious, it would have been proper for the Court to have re-instated the injunction upon Plaintiffs’ motion without the amended bill, but as the original bill, according to the view I have taken did not contain sufficient matter to give equity jurisdiction, I think the Court did right in refusing to re-instate the injunction, leaving the amended bill out of view; for if the Court had re-instated it, it would have been obliged to have dissolved it on motion. But it is argued that if the original bill did not contain suf- ■ ficient equity to give jurisdiction, the amended bill did, and that the Court erred in refusing to re-instate upon the allegations of the amended bill. The original and amended bills when taken together, allege upon the subject of the title of the land for which the bond was given, substantially, that the title to the land is in the heirs of Charles MeClung, deceased, that the defendants, Gordon and MeClung, have no title thereto; that no deed has been filed as an escrow for the same, but the bills further allege that in a suit in the late Circuit Court of Greenbrier county, of Smith and wife against the heirs of Charles MeClung, and others, MeClung and Gordon were appointed commissio'ners to sell the land by decree of the late Circuit Court of Greenbrier county, Virginia, and that the bond was given to MeClung and Gordon for the land they sold as commissioners. Of course if they as Commissioners sold the land under decree of Court the title to the land was not in them, but it was in the heirs of Charles MeClung and those heirs were parties to the suit; and it was competent for the Court upon the land being sold by the Commissioners to invest the purchaser with the title of the heirs of MeClung. It frequently occurs that the Court does not direct title to be made to the purchaser until the purchase money is paid. The Commissioners in selling the land were only acting as agents of the Court, and so in collecting the purchase money for the purposes of the suit. A Court of Equity will not grant an injunction to stay the ’collection of land sold by its commissioners in obedience to its decree, upon allegations that the title is not in the Commissioners. The bill further alleges “ that the authority of the Commissioners to collect the money, if they ever had any, ceased with the jurisdiction of the late Circuit Court of the State of Virginia; that they have no authority to act under the laws of the State of "West Virginia; that they have not been re-appointed under the laws of the latter State, and that without such re-appointment their acts are void,” — Plaintiffs in making these allegations are mistaken, as may be seen by the provisions of the 8th and 9th sections of article 11 of the late Constitution of this State. In the 8th section it is expressly provided that all civil and criminal suits and proceedings pending in the County or Circuit Courts of the State of Virginia held within the boundaries of this State, shall be docketed and thereafter proceeded in before the Circuit Court of the proper county — The 9th section provides that “the records, books, papers, seals, and other property, &c., of the former Circuit or County Courts, within the State of West Virginia, shall be transferred to and remain in the care and custody of the Circuit Courts of the respective counties; to which all process outstanding at the time this Constitution goes into operation shall be returned, and by which new process in suits then pending, or previously determined, in the said former Courts, may be issued in proper cases, &c.” Under these sections and the legislation on the subject causes in the Circuit and County Courts in the various counties in this State took the same position in the Circuit Courts of the counties as they did in the Circuit Courts and County'Courts of the same counties in Virginia, prior to and at the formation of this State. Special Commissioners appointed by a Court to make sale of property under' a decree, are not public officers, and it was not necessary that they should be re-appointed after the formation of this State before they were authorized to proceed to execute a decree in force at the formation of this State. I have no knowledge of its having been done in any instance. The Commissioners have been, and still are subject to the control and direction of the Circuit Court of Greenbrier county, in the cause in which they were appointed commissioners. By its order or decree in the cause, the Court can remove them or restrict their powers or do whatever is necessary and proper for the purposes of the suit. It is not essential that a deed should be made or filed as an escrow before the Commissioners can collect the bond. Courts of. Equity under whose decrees lands are sold by their Commissioners, direct who shall make deeds, and when they shall be made. Ordinarily, deeds in such cases are not made, and frequently not directed to be made until the purchase money is paid. And when the purchase money is paid the Courts will always on the application of the purchaser direct proper deeds to be made. Counsel in argument referred to what purports to be printed rules of the Circuit Court of Greenbrier county. They are not properly certified to be evidence, and no part of them is made part of the record, and it is not proper for the Court to consider them for any purpose. It is further argued that the injunction should not have been dissolved until process was served on all the Defendants. I,cannot agree with the counsel in this proposition. The Defendants to a bill of injunction may appear to it without being served, and move to dissolve. A suit is “pending” for many purposes before process is served. The act authorizing motions to dissolve injunctions is as follows, “Thé Judge of a Circuit Court in which a case is pending wherein an injunction is awarded, may, &c.” For the foregoing reasons the order of the Judge of the Circuit Court of Greenbrier county, made, in this cause on the 15th day of July, 1871, together with the order of the Circuit Court of that county, made in the cause on the 19th day of December, 1871, must be affirmed with costs to the Appellees in this Court and damages according to law, and the cause must be remanded to the Circuit Court of Greenbrier county for further proceedings in accordance with this opinion.

Judges Paull and Moore concur in the foregoing opinion.