3 Del. Ch. 496 | New York Court of Chancery | 1871
This bill is filed to restrain the further prosecution of two,suits at law brought by the defendant, Dillon, against the complainant, Plunkett, one being an action of assumpsit on the common counts, to recover abalance, alleged tobe due from Plunkett to Dillon upon settlement of sundry transactions, the other being an action for damages resulting from the entry and lien of a judgment for $3000, still unsatisfied on the record, which Dillon alleges to have been entered fraudulently upon a bond, which, at the date of the entry of judgment, was fully paid. The answer also alleges that the bond was void, originally, for usury.
The equity of the complainant to be relieved against the action upon the common counts, as set forth in the bill is, that Dillon’s claim, disclosed in the bill of particulars filed in that action, arose out of partnership transactions, which are cognizable only in a court of equity; that, upon a fair and full accounting and settlement between the parties, in this Court, Dillon will be found indebted to him ; in corroboration of which statement, the complainant exhibits what he claims to be an account stated between them on the 25th of June, 1869, of their transactions to that date, including the debt secured by this bond, and showing, on its face, a balance, then due to -Plunkett, of $334.17, for this balance Dillon gave his due bill, which is yet unpaid. The bill specifies sundry errors in the account, alleging that were it opened and re-settled, a still larger sum would be found due to him. The bill further states that the complainant cannot safely go to trial at law without a discovery of some of these .transactions by
The defendant, by his answer, without admitting the alleged partnership, nevertheless does not resist the injunction so far as it restrains the action upon the common counts ; and he submits to an account and settlement in this Court of all outstanding claims between the parties. But, with respect to the action for damages, the defendant moves for an order to dismiss the bill, and to dissolve the injunction. The motion is argued, (1) upon the want of equity on the face of-the bill, and (2) upon the denial by the answer of those allegations upon which the complainant rests his equity.
1st. As to the equity of the bill — I am still of the opinion formed when the injunction was ordered, that the bill, on its face, entitles the complainant to protection against a trial at law of the question whether the bond for $3,000 had been paid. The equity to this relief rests upon the allegation made, in effect, that the bond was given, not for a loan from Plunkett to Dillon,but in order A? secure an advance for the purchase of real estate on the partnership account, and to be repaid only out of the proceeds of the real estate. The theory of the bill is, that
It is true, from all that appears, Plunkett need not have resorted to this equitable defense, — but might have stood his ground at law. For, on the suit at law, the bond would have been treated as Dillon’s absolute debt, and he would have been held to proof of full payment, in order to sustain the suit. Nevertheless, if the bond was, in fact, given to carry into effect transactions cognizable in this Court, as we must assume, while considering the sufficiency of the bill on its face, that consideration entitles the complainant to relief here.
It would be otherwise did the question of payment depend upon a transaction cognizable in a court of law; as if the case made by the bill, were the ordinary one of a judgment recovered for an individual debt, and the questions were whether it had been paid, the fact of payment to be shown by the usual evidence of receipts, admissions, &c. In such a case the question of payment
A distinct ground upon which the equity of the bill was controverted in argument was, that the contract alleged was, on its face, a cover for usury under the guise of a partnership. I cannot so read it. The feature which saves it from the taint of usury is that, according to its terms, Plunkett is liable, in all events, for a share of the losses, and, therefore, his principal is at risk, i. e., the risk of the adventure and not of Dillon’s solvency, merely. This clearly distinguishes it from the authorities cited from Cowp. 793; 4 T. R. 353; 2 Parsons on Cont. 420. The terms are grossly unequal for a partnership, and open to suspicion of usury ; but the transaction is asserted to be a partnership, and no usury appearing on its face, we cannot assume it at this stage of the case.
Another ground taken in support of the motion to dissolve, for want of equity in the bill, was. that, even admitting the contract to be as alleged, still the account annexed to the bill, and relied on by the complainant as showing a balance of $334.17, due him on 28 June, 1869, would, if corrected, show a large balance in favor of the defendant, after the full payment, the judgment being included in the account. One very gross error is pointed out — Dillon is charged $2,656, as the full proceeds of 166 feet of land sold, and is credited $409.33 as his share (one third) of profits on the same sale, whereas, according to the contract relied on in the bill, Dillon was chargeable with nothing arising out of this transaction except
2d. I next proceed to consider the motion, so far as it is supported by the denial of the answer.
The answer denies the existence of any partnership, and insists that the bond was given for money loaned to Dillon, to be repaid at all events; it positively alleges that the bond has been fully paid ; more than this, that it was paid prior to the entry of the judgment. The giving of the due-bill on the 28th, June, 1869, for $334.17, as a balance then due to Plunkett, is admitted ; but it is denied that this was a balance struck upon a settlement mutually made upon investigation. The due-bill was given, as the answer alleges, in order to satisfy a demand on the part of Plunkett, and on his representation, in which Dillon then had confidence, that there was such a balance due Plunkett. The answer states that the account appended
The answer directly traverses the bill in its two material allegations, viz : that the bond was given for a partnership advance, and that there is a balance still unpaid upon it. If the case, as left by the answer, raised only the question whether a judgment, legally entered, has since been paid, I should dissolve the injunction, and remit the parties to the action at law, considering that the simple question of payment, as before suggested, could be as well tried at law as here. But the case made by the answer, as well as that of the bill, is one cognizable only in equity, and the effect of dissolving the injunction would be to send the parties out of this Court only to return again upon a bill to be filed by Dillon, fora decree declaring the judgment void, preparatory to the further 'prosecution of this action for damages. It will be observed that, upon the case made by the answer, Plunkett is chargeable, in damages, not for neglect to enter satisfaction pursuant to the statute, of a judgment originally valid but paid since it was entered, but ior having fraudently caused the entry ot a judgment upon a bond which, it is alleged, had been paid before the judgment was entered. Now, a judgment cannot be impeached collaterally, but only by a direct proceeding to vacate it or set it aside. Such a proceeding may be taken either in the court where the judgment was entered, under the equitable jurisdiction which every court exercises over its own records ; or it may be by a bill in equity in this Court. The Superior Court has heretofore declined, except in very simple cases, to enter
The injunction will stand continued, so far as concerns this action for damages,'No. 143, to May Term 1870, to which action the motion applies. I observe, however, a clause in the injunction which gives it too large an operation. In its terms, it restrains the defendant from commencing in any other court, pending this suit, any suit, action or plaint against this complainant, touching, concerning, connected with, or arising out of, the matters stated in the bill. The objection to this is, that it leaves open the question whether a suit, which might be hereafter brought, does or does not arise out of the matter stated in this bill. The injunction under this clause has not the requisite certainty. It should operate upon subject-matters so specific, that the party restrained may certainly know what he is forbidden to do. On the other hand, so general a clause is not necessary for the complainant’s protection ; for after any suit brought to the prejudice of his remedy here, he can at once apply to have the injunction extended. I shall, therefore, order the injunction to be amended by striking out that clause.