James v. M'Kernon

Spencer, J. (after stating the substance of the pleadings.) In abstracting the proceedings, I have not considered it necessary to state the evidence in the case, but have contented myself with presenting the nature of the bill, its object and prayer, and the defence set up to it, by the appellant’s answer. In my opinion the decree cannot be supported, if the evidence in the cause was over so strong to prove fraud on the part of the appellant j and for this plain reason, that the court cannot afford relief not sought for by the bill, and entertain the question of fraud which is not so much as suggested by the complainant. It is an invariable and universal rule of the court of chancery to found its decrees on some matter put in issue between the parties by the bill and answer; and the rules and practice of that court require, that in framing the bill, the matter of it be plainly and succinctly alleged, with all necessary circumstances, as time, place, manner, and other incidents; and if any material facts are denied by the answer, and the complainant proceeds to substantiate the facts charged in the bill, he can put no interrogatory to witnesses that does not arise from some fact charged in the bill. It makes no difference whether the defendant has, by way of avoidance, set up a distinct and independent fact, or merely denied and thwarted the matters alleged in the bill. If the existence and verity of the fact, thus set up by a de — 560 — fendant, be controverted, the defendant must prove ^; and the complainant may examine witnesses to disprove it; but where the fact set up by a defendant is made out, either by proof or the admission of the adversary, and destroys the complainant’s title to relief, it is not admissible for the complainant, after the fact is made out, to impeach it on a ground not taken in his bill, and on a ground not arising from the issue between the par ties. To apply these principles to the case before the court, we must call to mind that the bill stated only two grounds for relief: A discovery, and the amount of the personal estate of Mr. Connolly; that in arriving at the amount, the appellant should not make use of Haley’s judgment, beyond the sum actually paid for procuring an assignment of it; it having, as was alleged, been purchased for the benefit of Mr. Connolly's heirs, and paid for by money belonging to the estate. The defence set up by the appellant was the agreement of the 24th of September, 1799, under which he insisted that he was accountable only for one half of the amount or value of what he had received, belonging to the estate of Mr. Connolly, and that he had paid, by the directions, or at the request of the administrator, out of the moneys collected, more than the half to which the complainants and the other heirs of Mr. Connolly were entitled. The replication put all these facts, and no others, in issue. The complainants below, had a right to show every thing they could as to the amount collected by the appellant, and for whose use Haley’s judgment was purchased, and out of what funds. The appellant was bound to prove the execution of the agreement, and to show that there was no balance in his hands, to which the complainants were entitled. The execution of the instrument of the 24th ©f September, 1799, was put in issue, but the fact whether it was fairly or fraudulently obtained, was not put in issue. It then follows, from — 561 — what lias been said, that the court of chancery could give no relief as to any matter dehors the agreement, impeaching it, because the agreement was no furthcr in issue than as regards its execution and import, for it is a settled and well established principle, that the relief must be agreeable to the case made by the bill, and not different from it. (Mitf. 34. 2 Atk. 141. 3 Atk. 182. 2 Ves. 225. The chancellor seemed to admit the existence of the ■ rule as I have stated it, when he says, “ that he cannot proceed on the ground of hardship, as it is not a bill t<? be relieved against the hardship of the bargain as a spe? eific ground.” And when he proceeds to consider the evidence of fraud in the case, he professes to do so, not for the purpose of avoiding the contract, but for the purpose of treating it as if it had never existed. This distinction appears to me not only novel, but unsound ; for it may be asked, how an agreement, solemnly-entered into, and under which important rights are acquired, can be considered as never existing, unless there are extrinsic facts showing that it has been executed under circumstances which legally vitiate it. A contract must be considered void, before it can be treated as a nullity. Considering it as if it never had existed, is a consequence of its being avoided. It is not, therefore, either legal or logical to refuse interfering with the principal, to leave that undisturbed, and yet to assail a mere consequence. The amount of the chancellor's opinion Is, that he cannot avoid the instrument directly ; undoubtedly for the reason that the bill does not complain of the agreement as fraudulent or unfair j but though he cannot get at the agreement, in this direct way, yet he can produce that effect by listening to evidence altogether irrelevant, tending to show fraud or surprise, and by treating the agreement as if it had never existed. It did, exist; and it cannot be considered as not existing, until a proceeding has intervened which shall destroy its pjs.~ — 562 — istence. The court of chancery, therefore, has commit* te<^ a manifest mistake, in-taking notice of testimony irregularly and illegally taken, and in granting relief altogether different from the case made by the bill. The proceedings in chancery, if precedents and the invariajjle practice of the court be adhered to, are admirably • calculated to elicit truth, whilst they guard against surprise. The great objection in this case, to entertaining the question of fraud, is, that the appellant and his counsel must have been totally unprepared to meet that question, in the shape it presented itself. They complain of this surprisfe as a s.erious injury to them, and they do so upon solid grounds j for no man acquainted with the proceedings in a court of equity, could foresee that witnesses were to be examined upon subjects not at all in issue; and that fraud would be made the basis of a decree, when it i§ not even alleged in the bill. To suffer a decree, pronounced under such a state of plead* ings to stand, would be, in my apprehension, against fundamental principles of law, and the clearest dictates of justice. • When the appellant s,et up the argument, if the other party had forgotten it, or if through a slip, it had been omitted in the bill, the course was plain; the complainants should have amended their bill, and then stated the facts on which they meant to impeach it ,* then the appellant must have answered to those facts. It would then have been competent to have supported the allegations by proof; and had the proof been sufficient, the deed might have been -avoided ; but the appellant would then have proceeded with his eyes open, and defended himself in the best manner he could ¡ but as the cash now stands, he has been taken by surprise, and condemned without a chance to defend himself. The view I have taken- of the subject entitles the appellant to a reversal of the decree;-and I should not take notice of the evidence, but that justice seems to re* — 563 — quire it; and it may also possibly prevent further litigati.on, to give an opinion on it; I shall not analyze the testimony; a careful examination of It has satisfied my mind, that there is no ground to say that the appellant has either committed a fraud, or drawn the respondent’s intestate into a hard bargain, by overreaching him. There is no foundation for saying," that the appellant concealed any fact relative to Mr. Connolly3s property i and it appears fully to me, that the risks which the appellant assumed, in collecting the scattered property, at his own charges, in exposing his person to dangers of no ordinary kind, and his giving up a profitable business for the express purpose of devoting his whole attention to the affairs of that estate, entitled him to an extraordinary reward. The parties havej for aught appearing to the contrary, with their eyes open, fairly fixed that compensation, and, in my judgment^ they are bound by their act; for though it is true, contrary to the expectation of all, that the debts due from the intestate have nearly swallowed up all his personal estate, this after fact, equally unknown to all, ought not to affect an agreement otherwise fair; but above all, the agreement having been executed, there is no possibility of yielding compensation to the appellant for his extraordinary services, if it be set aside ; for it is impossible «o ascertain the extent of the appellant’s losses, in consequence of the agreement. The decree must be set aside; and although there is no probability of any balance being due the respondent, the court of chancery must he directed to proceed in the cause ; regarding the agreement set up by the appellant as entitling him to one half of the property or debts received by him of the estate of Michael Connolly. Kent, Ch. J. Two principal questions have been raised and argued in this cause; one, a question of law, and the other, a question of fact. The first is, whether the allegation <?£ fraud, in pro — 564 — curing the agreement, was properly in issue, and before the court of chancery : The second is, whether the evidence warrants the decree, admitting the allegation of fraud to have been properly before the court. • I shall confine myself to the first, and my opinion upon it will render it unnecessary for me to touch or examine the second point. The good sense of pleading and the language of the books both require, that every material allegation of this kind should be put in issue by the pleadings, so that the •parties may be duly apprized of the essential inquiry, and may be enabled to collect testimony, and frame interrogatories, in order to meet the question. Without the observance of this rule, the use of pleading becomes lost, and parties may be taken, at the hearing, by surprise. If a defendant, by his plea, or answer, offered new matter, the complainant formerly used to reply specially, and the pleadings might go on, as at law, to a rebutter; but. special replications are now out of use; and the plaintiff is to be relieved according to the form of the bill. But if the complainant conceives, from any matter offered by the plea or answer, that his bill is not properly adapted, to his case, he may obtain leave to amend his bill, and suit it to the defence, or he may file a supplemental bill. (Mitf. 19. 255.) In the present case, the complainants, upon the coming in of the answer which set up this agreement, might have replied specially, charging the agreement to have "been procured by• fraud; or (according to the more modern course) they, might have applied for leave to amend their bill, and then have alleged fraud in procuring the agreement. Had this course been pursued, the question of fraud would have fairly been in issue y and it might have been decided either upon depositions, or by a feigned issue,- according to the nature of the proofs, and the sound discretion of the court below. — 565 — As the pleadings stand, I am of opinion, that the fact of fraud orno fraud in procuring that agreement, was not put in issue ; and that the depositions, so far as they related to the point, ought not to have been read at the hearing. (Clarke v. Turton, 11 Ves. 240.) The general rule is, that no interrogatories can be put that do not arise from some fact charged in the issue. (Gilbert’s Forum Romanum, 218.) In Jonhan v. Child, (1 Bro. C. C. 94.) Lord Thurlow would not listen to any evidence that went to prove a deed fraudulent, because there was no allegation of fraud in the bill. It is not a sufficient answer to the objection in this case, that it must be deemed to have been waived, because not raised upon the hearing. The counsel might well have presumed, that the testimony which looked to that point would not have been taken into consideration. I am of opinion, therefore, that so much of the decree (is sets aside the agreement, be reversed; and that the residue of the decree, directing an account to be taken, be affirmed. Such being the unanimous opinion of the court, it wat, thereupon, ordered, adjudged, and decreed, that the decree of the court of chancery be reversed, and that the cause be remitted to that court, to the end, that an account may be taken between the parties; and that in taking such account, the agreement of the 24th of September, 1799, set forth in the answer of the appellant, beeonsidered as valid and in full force. iudument of reversa!-. V '-J