Court Opinion

ID: 8267274
Source: CourtListenerOpinion
Date Created: 2022-10-16 19:11:10.713744+00
Date Added: 2024-06-11T16:43:24.241275
License: Public Domain

Van Dyke, J.
This is a proceeding, instituted by the complainants in the Court of Chancery, to compel a contribution on the part of the defendants, based on a special agreement signed by all the parties, in which it is alleged the defendants bound themselves to indemnify the complainants against loss, which loss it is said has occurred. It seems to be admitted that the Court of Chancery is the proper tribunal in which to seek relief, if the complainants are entitled to it anywhere. The signing and sealing of the agreement is admitted by the defendants; but they set up and insist that the execution of the paper was a conditional execution, which condition was never performed or complied with, and that the instrument was never in fact delivered to the complainants by the defendants, or with their consent, as a binding agreement between them.
The bill of complaint was amended, and so was the answer; and although there were several grave questions started in the pleadings, they were not pursued either in the evidence or in the arguments of counsel, and the *494entire controversy is narrowed down to the simple questions, whether the agreement was in fact executed absolutely or conditionally, and whether the said agreement was in fact ever lawfully delivered by the defendants, or with their consent, to the complainants or either of them. After the evidence was closed, and the matters argued before the Chancellor, he was so much in doubt as to where the truth and justice of the case lay, that he ordered a feigned issue to be made between the parties, and the disputed facts before mentioned to be submitted to a jury before the Circuit Court of the county of Burlington. The trial was had, and the jury found the issues thus made in favor of the defendants. The Chancellor, although applied to for that purpose, refused to set the verdict aside or to grant a new trial or a rehearing of the case, but made his decree in favor of the defendants, in conformity with the finding of the jury. From this decree an appeal has been taken, and the matters are now before this court for consideration and review. If the case had been heard and decided by the Chancellor on the pleadings and proofs before him in the ordinary way, without the intervention of a jury, and if it were now before us for review in the same condition, I should feel less embarrassment as to my duty in regard to it. That grave errors occurred before the jury, and in connection with the reference to them, such'as this court should not sanction, and such as a court of law should set a verdict aside upon, I do not doubt. But whether this court may properly disregard these errors, and treat the verdict of the jury and all the matters connected therewith as a mere nullity, as though they had never occurred, and proceed to affirm, reverse, or alter the decree of the Chancellor as we may think just and equitable, without any regard to the verdict of the jury, when we are satisfied that such errors have occurred, is an important question, lying at th.e threshold of this inquiry, and one which should receive the, careful answer of this court. If wc are bound to ex*495amine the verdict of the jury, and the proceedings on which it is based, and if found to be clearly wrong, to revise the decree founded upon them for that reason, then we need not trouble ourselves with the merits of the case; hut if, on the other hand, we may and ought to disregard the verdict of the jury, and all the proceedings on which it is based, however erroneous, absurd, or monstrous they may have been, then we may properly dismiss from consideration all that part of the inquiry, and pass at once to what we may consider the merits of the case upon the pleading and evidence as they are before us.
The difficulty of solving the important questions of fact were so great in the Chancellor’s mind that he sought the aid of a court and jury in the premises. Ho obtained that aid. He received the verdict of the jury with the rulings and decisions of the court upon the trial. He adopted that verdict and these rulings as lawful and right, and based his decree upon them. Although the case was three times' elaborately argued before him, the only opinion which he delivered confines itself to a justification of his reference of the case to a jury,-and to a justification of the trial with all its incidents, vindicating at length his reference of the case and the issue found, as well as the decision of the court and the finding of the jury from all the complaints made against them, hut enters into no argument whatever, or reference to the pleading or proofs, to sustain the decree which he made independently of the verdict of the jury. I do not object to these things, but refer to them to show that the Chancellor’s decree was based greatly, if not wholly, on the trial and verdict. If, then, we find the decree of dismissal in this ease, which we are asked to affirm, resting almost, if not quite, exclusively on the trial and verdict, and if we find the proceedings which included this trial and verdict filled with grave and serious errors, how can we affirm that decree with these errors patent upon the proceedings without seeming to affirm these errors ?
*496I do not deny the right of the Chancellor to make up a feigned issue, and seek the aid of a jury in his efforts to solve it, nor do I think that he has exercised that right improperly in this case. I admit his right to determine the principles on which the trial is to he conducted, the evidence to be used, the rules of law or equity to be applied, and that he may adopt or wholly reject the verdict when rendered; but if iu doing this he commits any grave and serious errors, or if the court or jury, either by or without such directions, commit any such errors, which clearly affect the rights, and as clearly destroy the interests of a party; and if the Chancellor, either before or after the verdict, makes or adopts these errors as his own, and bases his final decree upon them, without any repudiation of them whatever, it is certainly, I think, not only our right, but our duty, on appeal to us to correct such errors, if injustice has been done thereby; nor is the large discretionary powers of the Chancellor any answer to this proposition. His discretion is considered to be large; but in the exercise of his discretion, however great, he has no legal right whatever to do wrong: nor can I admit that he can commit any error, in the exercise of his discretion or otherwise, which this court has not the power to correct. Courts of law, it is said, have the discretion to make blunders and commit mistakes which cannot be corrected on a writ of error; but even the discretion of law courts cannot shield their errors from review on a motion’ for a new trial when the whole case is open for examination. So here we have the whole case under review — all the pleadings, all the evidence, all the orders and decisions, verdict and final decree — and if in any one of them, or in any part of them, we~can find an error that has wrought injustice or deprived the party of a clear and undoubted right, which results in his injury, it is not only our right, but our imperative duty to make the correction.
As before remarked, the Chancellor, in his final decree, *497the reasons for which are to be found in his written opinion, puts it, as I understand it, entirely on the verdict of the jury, which verdict, and the proceedings on which it was based, he defends and justifies in all their length and breadth, and places it on no other grounds. And yet that verdict and these pleadings are, in my opinion, so erroneous that I could not consent to let them stand as the lawT of the land, even if it were possible, in a legal way, to do justice between the parties by an entire disregard of the trial and all its incidents. But this I apprehend we cannot do; and hence I feel a greater necessity of reversing this decree on the ground of its being based on an erroneous verdict, to the end that that verdict may be set aside and a new trial had upon correct principles, or the cause heard in some other way, according to the well known principles of equity proceedings.
The Chancellor ordered the pleadings in this ease to be read in evidence by either party before the jury, and this is complained of because the order, in this respect, was without discrimination or qualification. I do not think the order of itself is objectionable, and if it had been properly carried out at the trial, I should not feel at liberty to disturb the verdict on account of the form of the order; hut these pleadings were so treated and used at the trial as to do great injustice to the complainants. We cannot suppose that the jury had any knowledge or correct notion of the force and effect of either a bill or an answer. The bill was not sworn to by any one, while the answer seemed to be proved by some half a dozen persons. The result of this state of things would naturally be, if not explained, that the jury wrould give full credit to the answer, and none whatever to the bill. And in point of fact, although the bill was read to the jury, the judge wholly failed to instruct them that it contained anything whatever to which they might or should give any heed, while he did in fact instruct them that the answer was to be received and treated as evidence, *498whether it was responsive to the bill or not. This was a most serious error, for, under such a charge, the jury would have been fully justified, if not required, to find the verdict as they did, without looking at any other evidence, and perhaps in defiance of it. Now we all know that a bill is just as much evidence, and quite as potent in a case as the answer. All the material matters in the bill that are not denied in the answer, if there be one, are to be taken as true, while nothing in the answer which is denied by a replication is to be taken as true, except what is really in answer to some statement or charge in the bill. Yet- of this rule, so necessary and so absolute in chancery proceedings, the jury were not only left in profound ignorance of, but, so far as they were instructed •, at all, they were charged to give full force to the answer in all its parts, while they were left at full liberty to treat the bill as of no force at all. The judge was doubtless aware of the rule referred to, but through inadvertence did not give it to the jury in such way as to enable them to make a proper use of it; but, on the contrary, the charge was such as to enable, if not to require the jury to use the pleadings in a manner clearly opposite to that which the law requires. This is an error well calculated to do mischief, and one which this court ought not to affirm.
The complainants object to the verdict on the ground ofjthe rejection of competent evidence at the trial. They offered as a witness John Black, who is himself one of the complainants in the suit. He was objected to on the ground that he was not a competent witness, and the objection was sustained. If John Black was a competent witness, then the rejection of his evidence was not only a grave error, but is one which we cannot possibly correct but by reversing this decree. If his evidence is competent, we are bound to consider it as material and important. He might have proved, for aught we know, that all the parties who signed the agreement, in a body, agreed *499to waive the necessity of'having the names of all the stockholders to the paper, and agreed to make It absolute in its then condition, and that in fact they, in their proper persons, delivered It without condition to the complainants. But however important his testimony might have been, it was not before the jury nor before the Chancellor, nor is it before us, nor can we take any notice of it; and if wo affirm this decree in its present condition, we must for ever deprive the complainants of the benefit of tins evidence. The only way in which the wrong, if it be one, can bo corrected is by reversing the decree setting aside the verdict of the jury, and opening the case anew to sncli evidence as may bo competent.
If the evidence of John Black was properly rejected, it must have been because it was incompetent; and if it was incompetent at the time it was offered, it might have been because it was offered in an action, a proceeding not of an equitable nature. It could not have been rejected on the ground that there wras nothing in the defendants’ answer to disprove that was responsive to the bill. The defendants will hardly insist on this, nor could it-have been rejected for the reason that the evidence between the parties bad been closed; for the reference of the case to the jury completely reopened the controversy to the introduction of all legal testimony, without regard to the question, whether the witness had, or might have been examined before the master or not; and this applied as well to the parties themselves as to any others, if their evidence was competent in itself.
"Whether, then, the testimony of John Black was properly or improperly rejected depends upon the question, whether the action or proceeding in which It was offered was one of an equitable nature. I am forced to look upon it in this light, and cannot see it in any other. The suit is in the Court of Chancery, and is of an equitable nature. The proceedings up to the time of the reference were all of an equitable nature, and all those proceedings *500were transferred, by the Chancellor’s order, to the Circuit Court and jury, to be proceeded in by them under his express directions. This reference to a court of law and a jury was not at the request of either party, but at the instance of the Chancellor himself, who sought the aid, not so much of a court of law on important legal questions, as the aid of a jury in t'he solution of important and perplexing facts. If he had needed the aid of the law-judges, he could have obtained it without the intervention of a jury; and when he received it, if he adopted it, it would have been the opinion of the Chancellor, and not of the Supreme Court; but the aid of a jury he could not obtain except through the intervention of a court, but neither the court nor the jury come to any final conclusion in the matter, but'the court simply reports back to the Chancellor the proceedings which have been had before him, the same substantially as if the reference had been to a master, and the proceedings in the one case, as well as in the other, when'report thereof is made to the Chancellor, may either be regarded or disregarded by him, as he thinks fit; because the proceedings are his own, substantially in his own court, and under his entire control; the only thing that is peculiar about it being that, as he has no power to bring a jury into his own court, he is forced, when' he needs their aid, to seek it through the only channel in which their verdict can be obtained; but still the proceeding is wholly his own, and although the issue is said to be formed in the Supreme Court, yet in point of fact that court has nothing at all to do with the matter. The form of certifying papers may be gone through with, but there is no postea returned to that court for its action ; for there is no action that it can possibly take, nor is there any notice which it can take of the proceedings had in the circuit. The postea is returned to the Court of Chancery, where the action properly belongs, and where it must finally be disposed of, and the worst that can be said of the proceeding out*501side of the Court of Chancery proper is, the Chancellor stepping aside as it were, to seek advice in the solution of a doubt, which advice, when obtained, he is in no way bound by, but is wholly at liberty to accept or reject it at pleasure ; the proceeding all the while being a chancery proceeding well known to that court, and must be of necessity of an equitable nature.
It is said that this proceeding before the Circuit Court is a proceeding at law, because there is a technical legal issue framed between the parties. It is true there is the form of an issue, but it is such a form as was never found in a court of law when made up by the parties. This issue is termed a feigned, issue, that is an unreal one, and although it may not be dignified with the title of a pious fraud, it may very well bo termed an equitable humbug. It was never framed by the parties, nor with their consent, but was imposed upon them by the Chancellor, not improperly I think, for the pure purpose of aiding him in reaching a just and proper conclusion. All the issue which the parties ever made was by their pleadings in the Court of Chancery. This was an issue in a proceeding of an equitable nature. From this issue they have never voluntarily departed, nor asked leave to depart. And it is the same that was transferred, by a kind of legal jargon, to the Circuit Court. The suit was commenced in the Court of Chancery; it was never out of that court, and it would seem absurd to suppose it could have been in two different courts at the same time. The reference of the matter to the jury, through the only form in which he could procure their aid, no more removed the cause from the Court of Chancery than if it had been referred to commissioners, or even to a master, to ascertain some particular fact. The one course is just as much a proceeding in chancery and as well known to its practice as the other.
The conclusion, then, to which I find myself forced is, that the proceeding before the Circuit Court was one of *502an equitable nature, caused and created by an order of the Chancellor, which he had a perfect right to make. That this order opened anew the investigation to all evidence that could have been legal at any stage of the cause; that the evidence of John Black was legal evidence at the time it was offered for the purposes contemplated by the statute; that the rejection of it was wrong, and assuming it to be material and important, did great injury to the complainants; and that that wrong can only be remedied by a reversal of this decree: for if we proceed to settle the case now upon its supposed merits, we will be found to do so without this evidence.
It is said that this evidence of John Black might have been taken before the master previous to the closing of the testimony, but this does not so appear. The law which made this evidence legal went into operation on the 4th of July, 1855. The replication was filed in September, 1854. There appears to have been a rule to close testimony, but when it expired does not appear. But all the evidence was taken prior to the 13th of March, 1855, except' two unimportant witnesses, who were examined more than a year afterwards, and after the cause seems to have been argued before the Chancellor; and then the evidence was objected to on the ground that the rule to close testimony had expired. But the right to the evidence does not depend on the question ; but any witness who was competent in the cause, at any stage of it, was competent before the jury.
I think, therefore, that this decree should be reversed, the verdict of the jury set asido, and a new trial ordered, if denied by the Chancellor, and the case opened to the reception of legal evidence until legally closed, and that the Chancellor make such new decree in the case as to him shall seem just and equitable.
I have not gone into an examination of the merits of the case; I do not think we are in a condition to do so; they are not fully before us. A proceeding has taken *503place in which the complainants have been, as I think, greatly wronged. The decree adopts those wrongs, and to have them corrected, I think that decree should be reversed, not on the merits of the case, hut that the merits may be better and more fully examined into and the parties more fully and more fairly heard, to the end that exact and equal justice in a case of so much importance may, if possible, be done.
The decree of the Chancellor was affirmed by the following vote:
For affirmance — -Judges Combs, Haines, Risley, "Whelpley, Oornelison, Ogden, Swain, "Wood.
For reversal — Vredenbkrgk, Van Dyke, Kennedy.