Case ID: va_72/html/0390-01.html
Source: Caselaw Access Project
Author: {"author": "*BURKS, J.,", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

*Thornton v. Thornton.
    November Term, 1878,
    Richmond.
    1* Injunctions to Actions at haw — Confession of Judgment. — Upon a bill to enjoin the proceeding in an action at law founded on mutual accounts between the parties, and asking for a settlement of the accounts, if the injunction is granted, quaere, if it should not be without requiring the plaintiff in equity to confess a judgment in the action at -law.
    2. Same — Terms of Confession. — If it was proper to require a confession of judgment, it should expressly provide that the judgment so confessed was thereafter to be dealt with as the chancery court might direct.
    3. Same — Setting; Aside Judgment. — Although theré is no such express provision in the order granting the injunction, the court, if of opinion that the bill should be dismissed for want of jurisdiction, should, in the order of dismissal, direct that the judgment at law be set aside.
    4. Accounting — Equity Jurisdiction — Agency. — In an agency where there is a fiduciary relation between the parties, a court of equity has jurisdiction to settle and adjust the accounts between them.
    In June, 1873, Joseph Thornton presented his bill in equity to the judge of the county court of Fairfax, in which he stated that W. H. Thornton had instituted a suit in assump-sit against him in said court to recover a balance of $2,410.11, as of January 1st, 1866, which he claims to be due upon a settlement of accounts between them; that some time in the year 1865 the said W. H. Thornton applied to plaintiff for employment, and plaintiff employed him to take care of his estate in Fairfax county as his agent and steward. _ He was employed to fell, saw, and get out timber on said estate, plaintiff furnishing him with the means; that in the course of this employment the said W. H. Thornton had from plaintiff large amounts of money *to disburse, and had authority, in some cases, to make sale of the product of the estate derived from cutting, sawing, and marketing lumber; that he has never rendered a satisfactory account _ of his stewardship, nor furnished plaintiff with proper vouchers of disbursement of the money placed in his hands to carry on the business aforesaid; that some time in the year 1869 or 1870 he rendered to the plaintiff the' meagre and unsatisfactory account herewith filed; but that no vouchers for disbursements accompanied the said statement, nor has he at any time exhibited a satisfactory account of his receipts from sales or otherwise; that he did not keep regular accounts of his transactions as agent, as he was required to do, but, on the contrary, plaintiff was purposely not informed of the condition of the business, and could not tell to what extent he had been involved by the conduct, contracts, and transactions of the said W. H. Thornton.
    Plaintiff is informed and believes that said W._ H. Thornton, during his employment, which lasted until 1869, clandestinely used and appropriated the property of plaintiff which was under his control, as his agent, for his own purposes and for his own profit, without giving an account of the same.
    Plaintiff is willing, if required by the court, to confess a judgment in the action at law, but submits he ought not to be required to do so, as the defendant ought not to have sued plaintiff in a court of law until his accounts had been submitted, examined, and approved, the balance ascertained and admitted to be correct, and this especially as plaintiff denies the justice of the claim in toto, and believes that upon a just settlement of the accounts between them the defendant will he brought largely in debt to him. And making W. H. Thornton a defendant, he prays that he may be enjoined from proceeding any further in *his action at law until permitted by the court; that the cause may be referred to a commissioner to settle and adjust the accounts between the parties, and for general relief.
    An injunction was awarded according to the prayer of the bill upon the plaintiff giving bond and security in the penalty of $200.
    The cause seems to have .been sent to the circuit court of Fairfax county; and at the November term, 1873, of that court an order was made that unless the plaintiff confessed a judgment in the action at law at that term of the court the injunction should stand dissolved and the bill dismissed. And this the plaintiff seems to have done.
    At the February term of the court the defendant demurred to the bill, and also answered. It is unnecessary to set out the answer. It is sufficient to say the defendant denies the material allegations of the bil'-avers that he kept his accounts in small books, as directed by the plaintiff, which he delivered regularly to the plaintiff with the vouchers, and that the plaintiff from these kept the accounts on his books. There were depositions taken by both parties.
    At the June term, 1874, the court entered the following decree: “On motion to dissolve the injunction, and the court hearing argument in opposition thereto, doth order that the. injunction granted the complainant on the 16th day of June, 1873, be and the same is hereby dissolved, and bill dismissed with costs.” And thereupon Joseph Thornton applied to this court for an appeal; which was allowed.
    Wattles, for the appellant.
    Smoot and Claughton, for the appel-lee.
    
      
      Injunctions to Actions at Law — Confessing of Judgment. — The questions discussed in the first two headnotes aré also reviewed in Dudley v. Miner, 93 Va. 408. The headnote in that case lays down the law as follows: “A defendant in an action at law who has a distinct equitable defence as well as a legal defence * * * should not be required as the price of coming into equity to enjoin the proceedings at law, to confess judgment at law. In such case it is not safe to require him to confess judgment and it is error to require it, and even in proper cases for such confession, it should not be required unconditionally, but the order requiring such confession should provide that the judgment is to be thereafter dealt with as the court of equity may direct.'’ See also Great Falls Manf. Co. v. Henry, 25 Gratt. 575; Warwick v. Norvell, 1 Rob. 308; Staples v. Turner, 29 Gratt. 330; Robinson v. Braden, 44 W. Va. 195; Knott v. Seamonds, 25 W. Va. 99; Miller v. Miller, 23 W. Va. 495.
    
    
      
       Accounting — Equity Jurisdiction — Agency. — On the ifuestion of the jurisdiction of courts of equity to settle accounts in cases of agency, see Simmons v. Simmons, 33 Gratt. 451, and note; Bank v. Jeffries, 21 W. Va. 508, citing principal case and Berkshire v. Evans, 4 Leigh 223; Coffman v. Sangston, 21 Gratt. 263; Zetelle v. Myers, 19 Gratt. 62; Huff v. Thrash, 75 Va. 546.
    
   *BURKS, J.,

delivered the opinion of the court.

An injunction was awarded the appellant, as complainant in the bill in the court below, to restrain the defendant (appellee here) from -further proceeding in an action at law instituted by the latter against the former to recover an alleged balance on account between the parties. The complainant after-wards confessed judgment unconditionally in the action for the amount claimed, und elan order of the judge in this cause requiring him to do so, or else submit to a dissolution of the injunction and a dismissal of his bill.

The defendant then answered the bill, depositions were taken by both parties, and on the 12th day of June, 1874, the case being ripe for hearing, the following brief decree, or order, was entered:

“On motion to dissolve the injunction, and the court hearing argument in opposition thereto, doth order that the injunction granted the complainant on the 16th day of June, 1873, be and the same is hereby dissolved, and bill dismissed with costs.”

In making this summary disposition of the cause the learned judge must have proceeded on the idea that the bill presented no case for equitable relief, and that the injunction was improvidently granted. This is to be inferred from the fact that the decree makes no reference to the depositions, and purports to be rendered on a motion simply to dissolve the injunction, after hearing argument in opposition thereto.

If it were conceded that the bill is without equity, still the decree would be plainly erroneous. Notwithstanding it is within the discretion of the chancery court to impose terms as a condition of granting an injunction, yet it was probably an erroneous exercise of that discretion to require the complainant to confess a judgment at law in the pending action, founded, *as it was, on mutual accounts between the parties, as shown by the exhibit filed with the bill. However that may be, if it was proper to require a confession of judgment at all, the order requiring it should have expressly provided that the judgment so confessed was thereafter to be dealt with as the chancery court might direct — Kerr on Injunctions, pp. 18-19; and although there was no such express provision in the order, the court, if of opinion that the bill should be dismissed for want of jurisdiction, should, in the order of dismissal, have directed that the judgment at law be set aside and the case reinstated in the law court as it was when the injunction was granted. Great Falls Man. Co. v. Henry’s adm’r. 25 Gratt. 575. Otherwise, there would be the grossest injustice. The complainant is admitted into equity on condition that he abandons all de-fence at law. He complies with the terms imposed. He is then turned out of the equity forum because he is entitled to no relief there, and thus, although he may have a good defence to the claim asserted against him, he is shut out of both forums, and is not allowed to be heard in either.

But we are of opinion that the bill presented a case for equitable relief, and it was error to dismiss it.

The defendant had been the agent of the complainant in the management of his estate in Fairfax county, and the agency extended through a period of four years. The bill shows a case of mutual unsettled accounts, growing out of this agency, which could not be conveniently and safely adjusted and settled in a court of law. The bill of particulars filed in the law suit disclosed mutual demands. Besides, the bill charges a failure on the part of the defendant to keep regular accounts and to render the same with proper vouchers, and further charges that the defendant, during his agency, used and appropriated the property *of the complainant, under his control as agent, for his own purposes and for his own profit, without giving account of the same. This is a proper case for equitable interposition. 1 Story’s Eq. §§ 462, 462a.

This is not a case of a single money-demand, which might and should be enforced in a court of law, nor, indeed, of mutual demands merely, of which equitv would take cognizance (2 Rob. Prac.. old ed., 4, and cases there cited), but it is a case involving a trust.

The bill in Makepeace v. Rogers, a case decided in 1865 by Vice-Chancellor Stuart, and on appeal affirmed in the court of appeal in chancery (11 Jurist. N. S. 215. 314), was very similar to the bill in this case. It was filed by a land-owner against the agent and manager of his estates for an account of all moneys received, and for all payments made by such agent, and for a decree for payment of any balance that might be certified to be due. There was a demurrer to the bill, and it was argued that in all cases where an account was required by an agent from his principal, or by a principal from his agent, where there were receipts upon one side and payments upon the other, the remedy was by action at law for money had and received, and that a plaintiff could not come into a court of equity unless he coulcl make out some special case. The Vice-Chancellor overruled the demurrer, and in his opinion said: “I conceive that wherever the relation between the person who seeks an account and the person against whom he seeks it partakes of a fiduciary character a trust is reposed by the plaintiff in the defendant, and that that trust is not the same as is represented to exist in the ordinary employment of an agent, such as a builder or other tradesman. The fiduciary character of the employment imposes upon the person employed the duty of keeping accounts and of *preserving vouchers; and, according to the old law, which I trust will continue to be the law of this court, a bill for an account in equity may be filed and sustained.”

In affirming this judgment of the Vice-Chancellor, L,ord 'Justice Turner said, there was no authority to show that a bill would not lie at any time by a principal against his agent for an account.

We are further of opinion that upon the pleadings and proofs in the cause a case was shown that made it proper to order an account between the parties. No doubt the learned judge of the circuit court would have retained the cause and made such an order if he had been of opinion, with us, that equity had jurisdiction to grant the relief prayed for in the bill.

The decree of the circuit court will therefore be reversed, and the cause remanded for further proceedings; and, in conformity with the precedent in Staples v. Turner, adm’r, & als., 29 Gratt. 330-336, the judgment'confessed at law will be permitted to stand, subject to the control of the chancery court, as security for any balance which, on accounts to be stated under an order of reference, may be found to be owing by the complainant to the defendant.

Decree reversed.