Mount Vernon Bank v. Stone

Greene, C. J., delivered the opinion of the Court. The bill in this case alleges the appointment of the *131 defendant as agent of the plaintiffs, and states the business which he was to transact in that capacity. It alleges the purchase of books by the defendant, in which to record the business of his agency, and that such books were paid for by the defendant with the monies of the plaintiffs, and that the books are the property of the plaintiffs. The bill then alleges that the defendant has refused to deliver or exhibit to the plaintiffs the said books of account, and that the defendant has used the money and other property and credit of the plaintiffs while acting as such agent, .by loaning the same and otherwise, and received therefor divers sums of money for whieh he has not fully accounted to the plaintiffs. The bill then charges as follows, viz: “ That the said Stone fraudulently conceals said books of account from the plaintiffs, and hath removed the same from the office and place of business of said agency, founded as aforesaid by the plaintiffs ; and that said Stone has received large sums of money belonging to the plaintiffs, and frauduletly retained portions of the same, and appropriated the same to his own use and benefit; and that the said Stone in the accounts he has rendered to the plaintiffs from time to time hath made false and fraudulent representations of his conduct and proceedings, to wit: among others, that he hath represented that he hath received smaller sums of money for interest than he did in fact receive as such agent, and by means of such false and fraudulent representations hath deceived the officers and agents of the plaintiffs, and hath obtained from them a certain release and discharge of a portion of said ac-6ount and surrender of the bond executed by said Stone for the faithful discharge of the duties of said agency.” *132 The bill, among other things prays, that the defendant may be decreed to surrender and cancel the release and discharge by him held from the. plaintiffs, and to return the bond executed by him and his sureties for the faithful discharge of his duties in his said agency. After a careful examination of the evidence in relation to the charges of fraud, we feel bound to say that the plaintiffs in our judgment have failed to prove them, and the only question which remains to be considered in the cause is, whether the bill ought to be dismissed, or sent to a master for an account, with liberty to the plaintiffs to prove any error or mistake in the settlement which has heretofore been made, and in the receipt or release- given and executed by them, and also to prove any matters of claim not embraced by said settlement. This would be the ordinary course of the Court on a bill by the principal against his factor for an account. The difficulty in pursuing this course in the present case arises from the charges of fraud contained in the bill. We think these charges constitute the principal ground of relief set forth in the bill, and we cannot permit the plaintiff's, after having failed to prove the fraud, to fall back on the allegation that the defendant has not accounted, and has not produced and delivered his books of account, and to treat the case as if no allegation of fraud was made. The rule in relation to this subject is stated by the Court in the case of Price v. Berrington, (7 Eng. L. & Eq. R. 260.) “When the bill sets up a case of actual fraud, and makes that the ground of the prayer for relief, the plaintiff is not entitled to a decree by establishing some one or more of the facts quite independent of fraud, but which might of themselves create a case under a totally distinct head of Equity from that which would *133 be applicable to the case of fraud originally stated.” And the same principle is recognized in Ferraby v. Hobson, (22 Eng. Ch. R. 255,) and in Glascott v. Lang, (Ibid. 310.) We think the rule is founded in the highest justice. A plaintiff ought not to be permitted, considering that a Court of Chancery is always open to allegations of fraud, to speculate upon the chances of relief upon that ground, and failing in that to fall back upon a different ground. Bill dismissed with costs, without prejudice, except as to the charges of fraud.