#### *Spencer and White v. Wilson.

Argued, Saturday, .1 anuary 8th. 1814.

a. Equitable Relief — Case Involving Trust- Failure to Defend at Law.* — In a case involving trust and confidence, and in which, it appears reasonable to allow the complainant tile benefit of tile defendant’s oath, relief may be given in equity, although the party neglected to make the proper defence at law.

2. Agency — Sale of Land — Payments to Agent before Notice of Revocation.† — A. having constituted B. his general agent in a county, and also given him a particular agency to sell a tract of land, and receive. payment of part of the purchase money, is bound to allow credits for any other payments made to him before notice that his powers are revoked.

Samuel Spencer and Thomas White exhibited their bill in the County Court of Doudoun, charging that the complainant Spencer purchased of Patrick Cavan, agent of William Wilson, a tract of land known by the name of Scotland Mills, for twelve hundred pounds ; that a deed was to be made on the payment of 6001., and three bonds were given to secure the balance, in annual payments of 2001. each ; that he paid the 6001. to Cavan, and received from him the deed executed by Wilson ; that he discharged the first bond, and Thomas White (the other complainant) the second, by payments to the said Cavan ; yet a suit had been instituted, and judgment obtained, by the said Wilson, on the second bond, against the complainant Spencer and the said Thomas White his appearance bail. They, therefore, averring that no warning was given them, before the payments made to Cavan, that they were not to pay the money to him, called upon the defendant Wilson to answer “whether the said Cavan was not his agent in the sale of land ? whether he was himself personally concerned in the contract made for the same ? did he ever receive personally any money paid for the same ? did he ever countermand the payments of the several sums of money to Cavan his agent; or whether he did not authorise him to receive the whole, or part of the money ?” concluding with praying for an injunction to stay proceedings on the judgment.(1)

Wilson by his answer admitted the special agency of Cavan to sell the land for him, and to receive payment of all but the two last bonds, which he never sent to the said Cavan -Tor collection, as he did the first. He contended that any payments by the complainants to Cavan on account of those bonds, which never were in his possession, were imprudently made by them, and received by him without authority ; and that the respondent ought not to be a loser by their indiscretion.

In an amended answer he stated that, after a diligent search among the papers of the deceased Patrick Cavan, the bond which the respondent sent him for collection had been found ; that the only credit given thereon was 751.15s. Od. received by Cavan from Spencer, July 25th 1797 ; and it was presumable that all the other payments were meant to be applied to that bond alone.

The receipts of Cavan (exhibited with the bill) were for four other sums ; viz. 881. 13s. 0d., the 19th of March 1798 ; 251. 4s. 0d., the 13th of August 1798 ; 321. 9s. 0d., the 4th of September 1798 ; and 531. 14s. Od. the 3d of March 1799 ; amounting, (together with the *58sum of 751.15s. Od. first paid,) to 2651.15s. Od. ; so that the bond for 2001., due the 1st of May-1797, was considerably over paid : but the allegation in the bill, that the second bond for a like sum due the 1st of May 1798, was fully discharged, does not appear to have been supported by testimony. The proof by depositions was full and clear that Cavan was generally understood to be Wilson’s accredited agent in the *county,*and acted as such, for some time before and after the purchase of Scotland Mills by the complainants ; and it did not appear that his powers were revoked when the payments aforesaid were made to him.

The cause was removed to the Superior Court of Chancery for the Richmond District, on the ground of unreasonable delay in the County Court ;(a) and, being heard, the bill was dismissed with costs ; to which decree an appeal was allowed by order of this court, on a petition exhibited by the complainants.

The following written argument in support of the petition was presented by the late Mr. Botts.

It is not possible to conjecture a cause for the dismission of the bill in this case, unless it be that no good excuse is ’'shewn why the complainant did not defend himself at law. The want of a discovery was sufficient to give jurisdiction. If it was not, I submit whether the complainant should not be relieved.

1st. On principle ; — 2dly. On authority.

On Principle ; — It will be admitted that Wilson obtained his judgment against all conscience, and that the expence and vexation of a chancery suit would be too mild a punishment for his injustice.

The most that Spencer can be accused of is submitting to bad advice, or acting with negligence, so as to bring on the Courts of the County a second course of trouble.

The great objection to the relief is that it would encourage inattention in legal defences, and multiply suits. To deter well informed men from such wilful negligence, the disadvantages of yielding the swearing side to the adverse party, and encountering two law-suits, would seem sufficient. If they are not, the rule, which heretofore prevailed in our Chancery Courts, of relieving only on terms of the complainant’s paying the costs of both courts, may be added. In truth though, the diligence or negligence of the people cannot be influenced by rules of courts and the penalties that may grow out of them. Men who know these rules will guard against them : the ignorant people only suffer by them. Spencer may, in the present instance, be left to wonder why so heavy a forfeiture is inflicted, without ever knowing the policy of the rule under which he suffers. If he comes to understand that policy, he may not be again in a situation to benefit by it; for an ignorant man will not, in general, be brought into such a situation, to profit by such dear-bought experience, more than once in his life.

If human nature cannot be changed, the question is whether the great principles of justice shall be sacrificed to a shadow or punctilio? Shall the Courts of Equity become the passive means of inflicting pains and penalties so disproportionate to the of-fence, as to subject an illiterate man to pay all his fortune away, for the crime of trusting to the unassisted ^justice of a court of law, against the unconscientious suit of one falsely assuming to be a creditor?

There is a wide difference between the exercise of equitable jurisdiction after judgment, and the entertainment of the case before judgment. It is the same difference which exists between the previous licence to commit a crime, and the pardon of it after it has been committed. Had Spencer come to the Court of Equity before judgment, he might well have been sent to the Court of Daw, for then he might have relief there. But now he can have relief no where but in equity.

On Authority; — A great proportion of the cases on which the Courts of Equity relieve are to be traced to the negligence or mistake of the party aggrieved. The common cases of givingremedy on a lost bond, against the negligence of taking no vouchers for payments, and of procuring no evidence of contracts, are of this kind. The relief against the penalty of a bond, and loss of a mortgaged estate after default of payment, were instances of interference for parties who had been guilty of more than negligence ; for the evils were brought on them by their own voluntary contracts.

There are scarcely any of the numerous cases of relief against judgments, which occur in the Chancery Court in England, reported in the English books. I do not find more than three tending to throw light on this subject. The first was the case of Villain v. Hyde before Lord Hardwicke, stated in 2 Morgan 292. A discount against a judgment in an action on the case, where there was no manner of excuse for not setting it off at law, was claimed : at first, the chancellor had very great difficulty ; but he at length yielded to the strong justice of the case ; on an intimation of which, the adverse party admitted the discount. This was supported by two cases in 2 Vernon, 146.

The first case in this court that I can trace, in which the point occurred, was Barret v. Floyd, decided in 1790, and reported in 3 Call, 531. The court was unanimous. In the course of the opinion, the president said, “Numerous cases shew that Courts of Chancery have interfered after trials at *law. The case of a receipt evidencing the payment of money, for which, notwithstanding, a judgment has been entered, and that of a judgment against an executor on the plea of ne ungues executor, may be put as examples. It would be cruel that a man, for so small a mistake, should be liable for so large a sum: it would be contrary to moral justice.” Again, — “a receipt is a defence at law ; yet, it has often been admitted to be used in equity after a judgment at law.”

Ambler v. Wyld,(b) and Pickett v. Morris, (c) were both much stronger against the jurisdiction than this. In both of those cases, the remedies were most completely admissible in the defences at law, and in the course of the appeal which the com plainant had neglected to take. In the last *59*mentioned*case, Judge Roane stated the rule with its qualifications to this effect. “Whenever a case has been fully and fairly tried at law, the decision is binding on the parties, and are-examination in equity would be improper ; but the principle will not extend to a case where there has not been a fair trial, as well as a full discussion of the cause.”

But there is a distinct principle, on which it is relied that the court has jurisdiction.

It is the settled law of the Court of Chancery, “that the extention of the jurisdiction of Courts of Law in modern times to cases that formerly were subjects of equitable jurisdiction exclusively, has not destroyed the jurisdiction of the Courts of Equity.”(a)

Now, until the act admitting discounts, these payments could only have been proved and established in equity.

It is humbly submitted, whether it can comport with the mild precepts of equity to prescribe the grievance of a party, perhaps going to his utter ruin, to enrich an unjust adversary, because the former has been guilty of neglect, and the latter of a fraud in taking benefit of a legal advantage to exact double payment; To the counsel it seems, that if there is no court to administer redress, the judicial department fails in one of the most important purposes of its institution.

The country has groaned of late under this harsh and highy penal rule of the Chancery Court. (1) If the law is according *to that rule, the Court of Appeals must greatly lament it. Under this impression, it is humbly asked that, if the petition should be rejected, the ground of the rejection may be stated, to enable the legislature to possess the court of a branch of power so important to the best rights of the people of our country.

I will mention, that on the principles herein investigated must depend cases which are yet of more common occurrence than the one presented by the petition. I mean those in which the defendant at law, knowing that there is a balance due on the bond, or account, on which he is sued, in the confidence, so commonly entertained, that the creditor will give the just credits, fails to incur the expence to himself, and the delay on the plaintiff, of proving them before a jury. If Spencer fails, so must all the debtors who are thus lured into such an unfortunate confidence.

Wirt, for the appellants.

Nicholas, for the appellee.

Thursday, January 13th, 1814,

*

Equitable Relief — Case lnvoiving Trust — Failure to Defend at Law. — See monographic *note*on “Jurisdiction” appended to Phippen v. Durham, 8 Gratt. 457. The principal case was cited with approval in Oswald v. Tyler, 4 Rand. 37.

†

Agencies. — See monographic *note*on “Agencies” appended to Silliman v. Fredericksburg, etc., R. Co., 27 Gratt. 119.

(1)

 Note. No reason was assigned in this hill for not making delence at law; neither was it stated that the complainants were unable to prove that Cavan was the general agent for the defendant, by other testimony than the defendant’s oath. — Note in Original Edition.

See Duvals v. Ross, 2 Munf. 290.

(a)

 See Suppl’t to Rev. Code, ch. 41, sect. X, p. 45.

(b)

2 Wash. 36.

(c)

**3 Wash. 255.

(a)

 Kemp v. Pryor, 7 Vesey, jr. 249.

(1)

 Note. See Alderson v. Biggars and others, 4 H. & M. 470: Nicholson and Heth v. Hancock and others, Ibid. 491; De Lima v. Glassell's adm. Ibid. 369; Syme and others v. Montague, Ibid. 180; Terrell v. Dick, 1 Call. 546; Turpin adm. of James v. Thomas, 2 H. *&*M. 139; Kincaid v. Cunningham, 2 Munf. 1; the Auditor v. Nicholas. 2 Munf. 31; Fenwick v. M’Murdo and Fisher, 2 Munf. 244; Duvals v. Ross, 2 Munf. 290; and Price's executor v. Fuqua’s administrator 3 Munf.

JUDGE ROANE

pronounced the following opinion of this court.

The court is of opinion that, although the appellants might have submitted the question, involving the authority of Patrick Ca-van as agent for the appellee, to the jury in the trial at law ; and although it may be that such jury ought, in that case, to have affirmed his competency to have received the sums paid on account of the bond in question ; yet it not appearing that such defence was actually made at that trial; and this being a question involving trust and confidence, and *as such peculiarly appropriate to the jurisdiction of a Court of Equity ; and it not being proper to confine the appellants to the common law jurisdiction, in which they would have been deprived of the appellee’s testimony ; the bill was properly exhibited. And as it appears that the said Cavan was generally reputed and considered as the agent of the appellee ; and it being, moreover, admitted by the answer of the appellee, that he was specially authorised to sell the land, for which the bonds in the proceedings mentioned were given, and to receive the money due upon the first of said bonds ; (which circumstances were well calculated to inspire a confidence in the said agent’s competency in the present instance ;) and no measures whatever having been taken by the appellee prior to the payments proved to have been made on account of the bond in question, calculated to do away that confidence and presumption ; the court is further of opinion that the appellee ought to be bound by the payments aforesaid ; and that the decree aforesaid is erroneous.

Decree reversed, and cause remanded to the Court of Chancery, with directions to that court to re-instate and perpetuate the injunction, for such sums as may be proved to have been paid, pursuant to the principles of this decree.