Case ID: miss_14/html/0723-01.html
Source: Caselaw Access Project
Author: {"author": "Per Curiam.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Hackeliah H. Leggett vs. John Morris, Jr.
    Where a party wishes to obtain relief in equity against a judgment recovered against him in an action at law, to which he had a valid legal defence, though it was unknown to him at the time the judgment was rendered, it will not be sufficient to allege in his bill that the grounds of defence were not known to him at the time of the trial at law ; he must also aver that he could not have obtained such knowledge by the use of ordinary diligence.
    L. filed his bill to be relieved against a judgment at law recovered against him by M. ; he alleged that he was in partnership with C. in erecting a saw-mill; that a settlement and dissolution of the firm took place, and C. agreed to pay all the debts, the debt to M. being one of them ; that the note on which the judgment was recovered, was executed after the settlement, but antedated, and the signature of the firm of L. & C. attached without authority from L. It was also alleged that M. knew that C. had undertaken to pay all the debts of the firm, and did not object. In an amended bill, it was stated that L. had no knowledge of the material facts set forth in his original bill until after the judgment at law. M. filed a demurrer to the bill, and amended bill, which was sustained by the court below, and the bills dismissed. Held, that the bills did not make a sufficient showing for relief in a court of equity, and that the demurrer was properly sustained.
    Error, from the circuit court of Adams county; Hon. C. C. Cage, sitting in chancery.
    Hackeliah H. Leggett filed his bill on the chancery side of the circuit court of Adams county to the May term, 1843, alleging that at the November term, 1842, of said court, John Morris, who is not a resident of this state, recovered a judgment against him for the sum of $268 32 and $18 93 costs; that an execution had been issued on said judgment, and was then in the hands of the sheriff of said county, who would levy the same on the property of complainant unless restrained, «fcc.; that said judgment was founded on a promissory note purporting to be executed by complainant, and one Anson Cowles, by the style of “ Leggett & Cowles,” payable to John Morris ; that the note was never presented to complainant for payment until the spring of 1842, four years after its date. The bill further alleged, that in the fall or winter of 1836, complainant and Cowles agreed verbally to enter into a copartnership to erect a saw-mill at Vicksburg; that the agreement was informal in many particulars, but it was distinctly understood that each was to advance equally the necessary sums of money to carry on the work; that each should employ a master workman at his own cost to direct the erection of the mill; that complainant, in pursuance of the agreement, employed John W. Rice, a master workman, and he also spoke to John Morris to work on the mill. The bill further charges, that within three or four months after the verbal agreement was made, complainant had drawn up articles of partnership in pursuance of the general provisions thereof, and the said Cowles utterly refused to sign them ; that complainant had in the mean time advanced large sums of money for the purchase of necessary implements, lumber, &c., for carrying on the intended work ; that complainant foiind that Cowles was extravagant and dishonest, and utterly failed to advance any sums of money as he had promised ; that he became alarmed, and insisted on Cowles leaving the concern, or assuming the conduct of it himself and paying complainant the sums of money he had advanced ; that on the 14th day of February, 1837, a final settlement and dissolution of the firm took place, when Cowles agreed to take all the implements and other property which had been purchased; and it was distinctly understood that Cowles should pay all the workmen and all debts incurred in and about the mill; and ho exhibits with his bill the written agreement entered into when the firm was dissolved. That at the time of the settlement John W. Rice and William Smith refused to look to Cowles for payment of the debts due them, and complainant therefore paid them; but Morris was present during the settlement and made no objection to abiding by the agreement. The bill further charges, that at the time the agreement to enter into partnership was made, there was no authority given to Cowles or complainant to execute notes or bills in their joint names. It also charged, that about that time Cowles was engaged in building a dwelling-house, in which complainant had no concern, and that Morris worked on the dwelling-house. And complainant verily believed that most of the time Morris was at work it was for the individual benefit of Cowles; and that the work he did on the mill, if any at all, was worth very little. That shortly after the settlement between Cowles and complainant, Cowles called all the workmen together, except Rice and Smith, and had a settlement with them; that the note on which said judgment against complainant is founded, was written by Morris after the 14th day of February, 1837, the day of the final settlement between Cowles and complainant, and fraudulently antedated, to wit, on the 4th day of February, 1837, so as to bind complainant; that Morris and Cowles both well knew that the note was antedated and they colluded together to defraud complainant, and prayer for an injunction, &e. On the 6th day of June, 1843, complainant filed an amended bill, averring that the material facts alleged in his original bill, to wit, the antedating of the note and Morris’s knowledge of the agreement between Cowles and himself, came to his knowledge too late to be used on the trial at law. An injunction was granted as prayed for, &c. A transcript of the record and judgment against complainant is exhibited with the bill, from which it appears that the complainant was in court and defended the action at law. At the November term, 1843, the defendant denied all fraud and collusion as charged in the original bill, and demurred to both the original and amended bills, and assigned the following causes of demurrer, to wit: “1. Said complainant has admitted the copartnership between himself and Cowles, and the power of Cowles to bind him. 2. Complainant has shown that each was to employ a master workman, and that he employed the said defendant, Morris, at his own expense. 3. An agreement made at the dissolution of a partnership by one of the firm to pay the partnership debts, does not discharge the other partner, if the former fails to pay the same. 4. Because the antedating of the note will not vitiate the contract, and because such antedating, if true and fraudulent, would only be a ground. of new trial and not sufficient to compel defendant to answer complainant’s bill. 5. Because complainant has not prayed for a new trial, and prayed for defendant to answer. 6. Because complainant sets up the antedating of the note sued on at law for his equity in the bill, and at the same time defendant’s knowledge of a contract between complainant and Cowles, that complainant should be discharged from payment of the money due defendant, and that Cowles should pay the same. 7. Because said bill is contradictory in this, to wit, the liability of complainant is first admitted and afterwards denied. 8. Because the allegations in said bill are indirect and sophistical, based upon a hypothesis of hearsay belief. 9. Said bill is frivolous, because the allegations in said bill contain no reasons for a defence at law or equity; and, 10. Because said bill is, in other respects, indeterminate and insufficient.”
    Upon a final hearing, the court below sustained the demurrer and dismissed the bill, and the complainant has brought the case to this court by writ of error.
    
      Dubuisson and Galtney, for complainant in error.
    Fraud vitiates everything into which it enters ; and any act, however solemn, even though it be the judgment of a court of competent jurisdiction, may be set aside, if procured by fraud. Anderson Sf Orne v. Lewis Niles, 1 Free. Ch. R. 206.
    A demurrer being always upon matter apparent upon the face of a bill, admits the allegations of the bill, and cannot inquire into the question of fraud, which only can be done by answer, or by averment in a plea. Ibid. 197.
    As a general rule, there must be an answer to a charge of fraud. Mitf. Plead. 239-278.
    If fraud be charged in a bill, no matter what species of defence the respondent adopt, he must negative the allegation of fraud. Anderson $)' Orne v. Lewis S¡' Niles, 1 Free. Ch. R. 206.
    Again — same authority. If a bill contain an allegation of fraud, it is a general rule that the allegation of fraud must be denied by answer, whatever defence may be adopted to the other portions of the bill; because fraud gives jurisdiction, and lays a foundation for relief; hence a general demurrer to a bill containing such an allegation cannot be allowed.
    To make a stronger case: If the facts alleged in the bill are sufficient to raise a legal presumption of fraud, and the fraud be denied by answer, and the facts which conduce to prove the fraud be admitted, even then the facts must be held to outweigh the denial. Dick et al. v. Grissom et al. 1 Free. Ch. R. 487.
    But complainant’s bill presents a case clearly embraced within the general rule, and resting for its support upon a more solid foundation than a mere conclusion of law. For the facts, set out in the bill, are of themselves not only fraudulent, but highly criminal in their nature; and they are not denied. And whether we consider the fraud as contained directly and specifically in the facts themselves as charged, or as existing merely in conclusion of law from the facts, in either case it is fraud, which gives jurisdiction to a court of equity, and which, being unanswered and undenied, entitles complainant to the relief he seeks.
    The demurrer to complainant’s bill, therefore, must be set aside, and as the demurrer admits the equity of the bill, the injunction bught to be perpetuated.
    Bullock, for defendant in error.
    If it were true that the note was fraudulently antedated, which is by no means dedueible from the circumstances, that fact would have been a defence at law.
    “It is not sufficient that the defendant did not know of the grounds of defence at the time of the trial; it must appear that he could not have obtained such knowledge by the use of ordinary diligence.” Miller v. Gaskins, S. & M. Ch. Rep. 525. Complainant has “shown no reason why he could not, or did not possess himself, before the trial at law, of the information which he says he has since obtained.” This must be done, or equity will not relieve. S. & M. Ch. R. 525 ; 4 How. R. 26; 2 Caines R. 163; 18 T. R. 489.
    Complainant having admitted his liability and indebtedness to defendant, in his bill, by making an agreement with a third person to pay his debt for him, and having admitted that his supposed defence is a defence at law, equity could not extend any relief, unless he could show a mistake as to the original indebtedness, as well as his reasons for not having been diligent in procuring his testimony for a defence at law. Such a showing as has been made would not entitle him to a new trial at law. “ He has shown a degree of gross negligence, that must exclude him from being heard in a court of chancery.” S. & M. Ch. R. 111.
    Galtney, in reply.
    1. The court below erred in entertaining the demurrer; because a demurrer being always upon matter apparent upon the face of the bill, (Mitf. PI. 277,) cannot inquire into the question of fraud; which can only be done by answer, or by averment in a plea. And as a demurrer could only apply to the bill, in the present case, for want of equity upon its face, the demurrer was badly pleaded, and erroneously entertained by the court below; there being no such apparent want of equity in the bill to authorize the putting in of said demurrer.
    2. The court below erred in sustaining the demurrer. Because the bill charged fraud. As a general rule there must be an answer to the charge of fraud. Ross <Sf Ross v. Duncan et al. Freem. Gh. R. 603 ; Ch. Rules, 6, 6. If fraud be charged in a bill, no matter what species of defence the respondent adopt, he must negative the allegation of fraud. Anderson Orne v. Lewis Niles, lb. 206.
    3. The court below erred in dissolving the injunction in this case upon a bill charging fraud, without answer.
    An injunction is not dissolved when bill is not answered. James’s Adm’r. v. Jefferson, 4 Hen. & Mun. 483; Roberts v. Anderson, 2 Johns. Ch. R. 204.
   Per Curiam.

The complainant filed his bill to be relieved against a judgment at law, in which he states that he was in partnership with one Anson Cowles, in erecting a saw-mill; that a settlement and dissolution of the firm took place, and Cowles agreed to pay all the debts, the debt to the respondent being one of them — that the note on which this judgment was recovered, was executed after the settlement, but antedated, and the signature of Leggett & Cowles attached to it, without authority from complainant. It is also alleged that respondent knew that Cowles had undertaken to pay all the debts of the firm, and did not object. By an amended bill it is alleged that complainant did not come to the knowledge of the material facts until after the judgment at law. A demurrer was sustained to this bill, and it was dismissed.

The grounds relied on are, that Morris was bound to look to Cowles, who hád agreed to pay aíl the debts; and that the note was made by Cowles, in the name of the firm, without authority, and antedated.

The making and antedating of the note are the only questions which could have discharged the complainant, and they were properly triable at law. The complainant was in court, contesting the suit, but never even raised this question as a defence; ánd his excuse is, that he did not come to the knowledge of these facts until it was too late to use them on the trial. This showing is not sufficient. In the case of Miller v. Gaskins, S. & M. Ch. R. 524, Chancellor Buckner held a similar allegation to be insufficient. He said, “it is not sufficient that the defendant did not know of the grounds of defence at the time of trial; it must appear that he could not have obtained such knowledge by the use of ordinary diligence.” The complainant does not allege that he made any effort to ascertain the consideration of the note, or the time or manner of its execution. As it was made by his partner, it is surprising that some inquiry was not made as to its consideration.

The decree must be affirmed.