Spilman, Adams & Co. v. Gilpin

Keith, P., delivered the opinion of the court. This case was argued and submitted at the term of this court held at Staunton in September, 1895, and an opinion was rendered affirming the decree appealed from. Upon a petition to rehear, that decree was set aside, and the cause was again argued and submitted at the term of the court held in Staunton September, 1896. From the bill, which was filed on September 20, 1890, in the Circuit Court of Page county, it appears that the Valley Land and Improvement Co. sold to Spilman, Adams & Co. two lots of land in Page county, one for the sum of $575.00, and the other for the sum of $287.50 ; that for these lots deeds were executed, and at the same time a deed of trust was taken, in which T. A. Smoot was named as trustee, to secure the payment of the unpaid purchase money notes. These notes were afterwards transferred to A. G. Gilpin, and this suit was instituted to enforce the lien for their payment. On the 22d day of April, 1892, the case was heard upon the bill and exhibits filed, and leave was granted the defendants to file their answer in ninety days ; and at the January term, 1894, the cause was again heard upon the bill and exhibits, and, no answer having been filed, the bill was taken for confessed ; and thereupon the court entered a decree that Spilman, Adams & Co. do pay the complainant the sum of $575, with interest from September 25, 1890, and unless this sum shall be paid, together with costs of the suit, within thirty days from the date of the decree, that a commissioner be appointed to take possession of the lots men — 700 — tioned in the deed of trust, and sell the same, in accordance with the terms of the deed. The money was not paid. The lots were exposed to sale, and brought the sum of $23.75 in gross. At the April term, 1894, a report of the sale was made, and a paper called a bill of review, or a petition for a rehearing, with accompanying affidavits, was filed by Spilman, Adams & Co., asking that the decree of the January term, 1894, might be reheard and reversed. From this petition it appears that Spilman, Adams & Co. were induced to enter into a contract for the purchase of the lots from the Valley Land and Improvement Co. by fraudulent and false misrepresentations of material facts, and, without stating the averments of the petition in detail, it is sufficient to say that it shows a state of facts which, if presented at the proper time and in the proper manner, furnished a complete defence to the suit against them. As we have seen, however, no answer was filed to the original bill. The bill was taken for confessed as to Spilman, Adams & Co., and the petition undertakes to account for the failure to present their defence at the proper time. The petitioners aver that there were pending on the docket of the Circuit Court of Page county a number of suits instituted against others who had purchased lots at the same time and under like circumstances, and that when the pleadings were being made up, and steps were being taken to prepare the cases for trial, it was found that the same questions were involved, and that the same depositions would have to he taken in each case, involving a great deal of time, and expense ; that there were two cases against S. A. Walton, one brought to enforce the payment for stock subscription, and the other to enforce the payment of notes given for the purchase money of lots, and that it was agreed among counsel representing the plaintiffs and defendants that these two cases should be gotten ready and pressed to a final hearing, and that the decision — 701 — in those cases should settle all other cases of a like character, and that for this reason no effort was made by the petitioners to get ready for trial; that their defence consisted of affirmative matter, and that the burden of proof was upon them. At the January term, 1894, of the Circuit Court of Page county the cases against Walton were continued, and, when the case against petitioners was called, they asked for a continuance, First, because it was understood that all the cases were to be held in abeyance until the cases of a like-character against Walton had been heard; Secondly, that it was agreed that the depositions in the cases against Walton were to be read and used in all the cases in which they were applicable, and that the said depositions were not only applicable but necessary in the case of petitioners. Their application for a continuance was refused by the court, petitioners were forced into trial, and the decree complained of rendered against them. They aver that this action of the court surprised them, and “ threw them off their guard, so that they could not call to mind, in such manner as to present them to the court, in the proper form to be considered by the court, the facts as they really existed, which would have entitled them to a continuance, and which they have since been able to call up to their recollection and which they here and now produce in the form of affidavits.” The case was heard upon the papers formerly read, the petition for a rehearing, and the affidavits on behalf of the petitioners and those in adverse interest; and the court, being of opinion that the burden of proving the existence of such an agreement between counsel was upon the defendants, and that the weight of evidence was against their contention, refused to rehear the decree of the January term, dismissed the petition, and confirmed the report of sale. If the statements in the petition are true, the petitioners have been the victims of a fraud by which they were in — 702 — duced to enter into a contract to pay $862.50 for property which sold in this suit for $23.75. If they have had their day in court, if they have had the opportunity to make defence to the claim preferred against them, and have themselves, or hy their counsel, neglected at the proper time and in the proper manner to avail themselves of it, the hardship of the ease should not entitle them to relief, but they should be left to suffer the consequences of their negligence and inattention to their interests. Hard cases should not make bad law, but hard cases do and should make the courts vigilant to discover and pursue a mode by which, without doing violence to established law and forms of procedure, the wrong may be redressed. The decree of January, 1894, was not a final, but an interlocutory decree. The plaintiff came into court asking the enforcement of a specific lien. In order to afford complete relief in such cases, a court of chancery, having taken jurisdiction over the subject, not only enforces the lien, but to make an end to litigation gives a personal decree for the debt. The source of equity jurisdiction, however, is not the right to a personal decree, but the right to the enforcement of the lien. A decree is final which disposes of all questions presented for decision in a cause, and gives all the relief to which, under the pleadings and the proof, the parties are entitled. See Rawlings v. Rawlings, 75 Va., at p. 76; Ryan Adm’r v. McLoud, 32 Gratt. 367; and Cocke v. Gilpin, 1 Rob. 20. In this case not only does the decree of January 20,1894, fail to give all the relief to which the plaintiff was entitled, but it did not give that relief, the prayer for which alone gave the plaintiff a standing in a court of equity. The petition filed, therefore, by Spilman, Adams & Co., praying to have the decree of January 20 reheard is not a bill of review; it is a petition for a rehearing. It is settled that a bill of review lies to rehear a decree for after-discovered evidence; and with respect to after-discov — 703 — ered evidence there seems to be no difference between a bill of review and a petition for rehearing. A bill of review lies also for error apparent upon the face of the record, but the proofs, unless they are set out on the face of the decree, or admitted in the pleadings, cannot be considered upon a bill of review. See Thomson v. Brooke, 76 Va. 160. In this respect a court has far greater power in dealing with interlocutory decrees upon a petition to rehear than with final decrees upon a bill of review. It is difficult to define the precise limits of the duty of courts upon petitions to rehear. It may be safely stated, however, as being established by the authorities that where a case has not been heard upon the merits, but an interlocutory decree has been rendered upon the bill taken for confessed, and other circumstances tending to excuse the defendant’s default in making his defence at the proper time appear, the rehearing of the decree upon a petition filed for that purpose showing that the defendant had a meritorious defence, may, in the discretion of the court, be entertained. The discretion thus exercised is, of course, a judicial discretion, and one not to be exercised arbitrarily, either in granting or withholding the relief sought. In 2nd Daniel’s Chancery Practice, 1st Amer. Ed. at page 1230, it is said: “Where the case,has not been heard upon its merits, the court will exercise a discretionary power of vacating an enrollment, and of giving the party an opportunity of having the merits of his case discussed; thus, where a decree of dismissal was made by default, owing to the neglect of the plaintiff’s solicitor, in providing counsel to attend at the hearing. So in Benson v. Vernon, 3 Brown P. C. 626, where a bill has been taken for confessed, for want of an answer, and it was proved that the defendant was in an unsound state of mind, and had omitted from that circumstance, to put in an answer, the House of Lords ordered the enrollment of the decree to be vacated. The same principle was also acted upon by Lord Hardwicke, in Kemp v. — 704 — Squire, 1 Ves. Sr. 205, who said that the above cases proved it to be discretionary in the court (he did not mean it arbitrarily so) to exercise the power if it sees fit. In Pickett v. Loggon, 5 Ves. 702, however, the court refused to act upon this discretion, and it is to be observed that, in all those cases where it has been exercised, the merits of the cause bad not been discussed before the decree was announced; and that, where such has been the case, the court has refused to exercise the discretionary power before alluded to, unless there has been something in the nature of a surprise upon the party affected.” See also 2 Rob. (Old) Pr., at page 389, where it is said that “ the granting of a rehearing to an interlocutory decree is a matter of sound discretion.” During the term of the court all its proceedings are in its breast, and its judgments and decrees may be set aside upon motion. When the term is ended, final judgments have passed beyond the power of the court except to a very limited extent, regulated by statute, and final decrees also, except in so far as the power to control them is regulated by statute, or by the law governing bills of review, but in courts of law where proceedings are far less plastic than in courts of equity interlocutory orders may be controlled, and the record amended and made to speak the truth until a final judgment has been entered and the term ended at which it was entered. We have seen that the petition for rehearing presents a complete defence to the plaintiff’s demand, and that the decree complained of which establishes his demand is an interlocutory decree. It further appears from the averments of the petition, which being uncontradicted must be accepted as true, that when the case was called for hearing at the January term, 1894, the defendants asked for a continuance-on the ground that they had failed to take depositions and prepare the case for hearing, relying upon an agreement ^between counsel that depositions taken in another case705 should be read in this, the existence of which agreement opposing counsel denied. Upon the question of fact as to the existence of such an agreement, we do not doubt the Circuit Court correctly decided. Even if there had been such an agreement yet, not being in writing, it ought not to have been enforced by the court, but when it appeared to the court that counsel had acted in the belief that such a convention existed, and in reliance upon it, and when it appeared that the rights of innocent parties would be sacrificed if the court proceeded to an adjudication of the cause as it then stood, we are of opinion that the court should have continued the cause until the next term, or for such a reasonable time as would enable the parties properly to present their defence. That the motion was made must be accepted and treated as a fact. It is so averred, and it is not denied. The defendants in fact then did what it was their duty to do for the protection of their rights and interests. Their dereliction consists, at the utmost, in failing to spread upon the decree of January, 1894, the motion for a continuance, and the reason upon which it rested. We have then this state of facts: The defendant moved the court for a continuance upon the ground of the existence of a convention between their counsel and opposing counsel, that depositions taken in a similar case might be read in this, which, if read, would have established a complete defence to' the action; that, relying upon this convention made in the interest of economy, and for the promotion of speedy justice, they had failed to prepare their case; that a decree upon the bill taken for confessed had gone against them, interlocutory in its character, and that at a subsequent term these facts were all called to the attention of the court and none of them denied. Can it he doubted that the court could nunc pro tunc have amended its decree of January, 1894, so as to make it show, in accordance with the truth, that the motion had been made for a continuance for the — 706 — reasons stated, and can it be doubted that a decree so amended would disclose error which would entitle the petitioners to a reversal of it? In other words, if petitioners had gone before the court in April and said, by inadvertence the decree of January omits to state that we moved the court to continue our case for cause then shown, and we now ask that that decree may be so amended as to let the truth appear, can it be denied that there was a power resident in the court so to amend this decree, and that in the interest of justice such power should have been exercised? What we have said with respect to amending the decree is intended, of course, to illustrate the authority of the court over causes either at law or in chancery up to the time of the entry of a final judgment or decree. There was in fact no motion made to amend the decree, but if the court had the power to entertain and to grant such a motion, it would seem to be conclusive of its power to entertain the petition which was actually presented, and if the power existed, there can be no doubt that justice required that "it should be exercised. The question before the court was not as to the existence of the alleged agreement of counsel as a matter of fact, but whether counsel did in good faith rely upon its existence. In the case of Wager v. Stickler & others, 3 Paige 407, the default of the defendant was occasioned by the supposition on the part of his solicitor that he had made an agreement with the solicitor of the adverse party, by parol, to extend the time for answering. The defendant swore to a defence on the merits; and that he had also applied to the solicitor of the adverse party to waive the default, which was refused. Chancellor Walworth says that in such cases “if the verbal agreement is denied, or even if it is admitted and the objection is made that it was not in writing, so far as the question of regularity is concerned, the court must consider the agreement as not existing. If the court is satisfied, however, — 707 — that the party has acted on the supposition that such an agreement had been made, although he may have been mistaken in point of fact, it may be sufficient to excuse his default, and entitle him to relief upon equitable terms.” We think the doctrine of that case is applicable to this and persuasive as to the duty of the court in the case before us. For the foregoing reasons, we are of opinion that the decree of the Circuit Court should be reversed, and this court will enter such decree as the Circuit Court should have rendered.