Stevens v. Duckett , 107 Va. 17 ( 1907 )

Harrison, J.,

delivered the opinion of the Court,

This appeal is from several decrees of the Circuit Court of Fauquier county in a chancery cause, wherein He appellee, R. H. Duckett was complainant and He appellant, C. Amory Stevens, was defendant.

The hill alleges that in July, 1899, a partnership was agreed upon between the appellant and the appellee, which was consummated in December, 1899, for the purchase of the Kelly gold mine in Fauquier county, and such other real estate as might he thought desirable, and for He purchase of personalty useful in mining operations. The terms of He partnership are alleged to have been Hat appellant was- to furnish all necessary funds to purchase the property mentioned, to develop and run the mine, and to provide appellee wiH funds to run his house, and cloHe Ms family; Hat appellee, on Ms part, wais to stay on the premises, do He mining, oversee all the work at the mine, conduct all negotiations for other property to be held by them, and to furnish the partnership Ms experience in mining, building mills and installing machinery, and to run the business; that all the property purchased was to be partnership property, appellant to have a three-fourths interest therein, and appellee a one-fourth interest; that a large amount of property was bought under this partnership agreement, and conveyed from motives of policy to thiei appellant; that the partnership agreement remained in force until January, 190-1, when appellant claimed the exclusive ownership of all the property, and notified appellee that he must give up bis house and leave the premises. The prayer of the bill is that the property in question may be declared to be partnership property, that a division of the personal property and a partition of the real estate may be had between the parties according to their respective rights.

The appellant filed an answer to the bill, in which he denies the formation, consummation or existence, at any time, of the alleged partnership; sets forth that appellee had been an employee of the appellant, upon the terms that if the mining operations proved successful appellee was to receive; as compensation for his services, three-sixteenths of any profits realized; details the expenditure by appellant of more than $100,000, the heavy losses incurred' in consequence of the ignorant and unfaithful conduct of appellee, and the final resolve of appellant to cease operations in order to save himself from continued imposition and eventual disaster.

There was a demurrer to the bill, which was properly overruled.

It appears from a nunc pro tunc order entered in the cause at the February term, 1907, and brought to this court by writ of certiorari, that at the Hay term, 1905, the circuit court, over the protest of the appellant, awarded an issue out of chancery, in advance of the introduction of any evidence, to he tried by a jury, to ascertain whether a partnership existed between appellant and appellee, and, if so, the terms thereof, and what property it embraced. This nunc pro tunc order shows that thie- basis for awarding -the issue out of chancery was an affidavit filed by the appellee, in which it is stated that the issue to be determined would be rendered doubtful by conflicting evidence of the opposing party, and that hie believed an issue out of chancery should he directed in the cause; and also a joint affidavit by counsel for the appellee, saying that they had read thle affidavit of their client, that they were fully acquainted with the points in issue, and knew that thle evidence would he conflicting, and that in their opinion it would he proper to award- an issue out of chancer;-'. The first and most important question to be considered on this appeal involves the court’s action in directing this issue to be tried by -a jury.

It has long been settled by the decision's of 'this court that an issue oult of chancery will not be directed when the claim is altogether unsupported by evidence. The rule has been that the defendant cannot be deprived, by an order for an issue, of his right to a decision by the count on the case as made by the pleadings and the proof, unless the conflict of the evidence is so great and its weight so nearly evenly balanced that the court is unable to determine on which side the preponderance is. Pryor v. Adams, 1 Call 381, 1 Am. Dec. 533; Wise v. Lamb, 9 Gratt. 294; Smith v. Betty, 11 Gratt. 752; Beverly v. Walden, 20 Gratt. 147; Mahnke v. Neal, 23 W. Va. 57.

It is also settled by numerous decisions of this and other courts that the ordering of issues depends on the application of sound legal discretion to the circumstances of the case. It is not a power to he 'exercised at pleasure, and depending on arbitrary discretion. Ordering an issue must always depend upon sound discretion, to he cautiously and diligently exercised, according to the circumstances of each particular case. Beverly v. Walden, 10 Gratt. supra; Mahnke v. Neal, supra.

The object of an issue out of chancery is to satisfy the conscience of the chancellor in a doubtful case. Almond v. Wilson, 75 Va. 613. But the authorities all show that there must be proper evidence that the case is doubtful. Iu this connection it becomes necessary to consider the statute recently enacted by the General Assembly and now carried into section 3381, Va. Code, 1904, which is as follows: “Any court in which a chancery case is pending may direct an issue to he tried in such court or in any Circuit or Corporation Court, and the court shall have the discretion to direct such an issue to he tried before any proof has been taken by either plaintiff or defendant, if it shall be shiowtn by affidavit or affidavits, after reasonable notice, that the case will he rendered doubtful by the conflicting evidence of the opposing party.”

It will he observed that, this act, in conformity with the rule theretofore existing, reposes in the court the exercise of its discretion in determining whether or not an issue shall he directed. The modification of the former rule governing in such cases is founid in the provision that before any proof has bem taken the court may act upon 'affidavit or affidavits. In other words, the affidavit takes the place of the testimony .required prior thereto. The court cannot properly exercise sound discretion or tell whether “the case will be rendered odoubtful by the conflicting evidence of tine opposing party” unless the affidavits provided for shall contain facts sufficient to furnish a proper basis for the court’s judgment.

In. the case before us, the affidavits of the appellee and his counsel are mere opinions that in their judgment tine evidence of the opposing party would he conflicting, and an issue out of chancery proper. If thie statute were held to have intended that the affidavits filed should^ contain! only the language of the statute without any facts, then in every chancery case the direction of an issue would become a matter of right and not of discretion, as a party to the suit can always state that in his opinion “the case will he rendered doubtful by the conflicting evidence of the opposing party.” The Legislature, by the express language of the statute, reposed in thie court thie exercise of discretion in determining when there should he an issue out of chancery, and it could hardly have intended, in the same breath, to require the court to surrender its judgment and discretion and transfer the decision of that question to a party to the litigation, or his counsel.

We aire of opinion that it was not intended by the statute to change the firmly established rule of law, that the chancellor was to properly exercise his discretion “on sound principles of reason and justice;” but that the change was merely to allow, instead of testimony of witnesses as to the facts, as theretofore, simply an affidavit as to the facts, or affidavits, as it might be that all the necessary facts would noit always be in the possession of a single witness. A chancellor cannot properly exercise reason and discretion unless the facts upon which be is to act are before him in some form. Any other interpretation of the statute would, as already said, make the whole matter of directing an issue one of right and not of discretion on the part of the chancellor.

The issue is not to he directed simply because the evidence is contradictory. Chancellors are constantly called upon to decide cases upon testimony which is conflicting and contradictory.

In Hord's Admr. v. Colbert, 28 Gratt. 49, 60, Judge Staples says: “It does not follow that an issue is necessary and proper in every case where the evidence happens to he conflicting. If this was the rule, the chief time of the chancery courts would he occupied with trials before juries, or in considering their verdicts. The Circuit Courts and the judges of this court are constantly called upon to decide questions of fact upon testimony of a very conflicting character.”

In Keagy v. Trout, 85 Va. 390, 395, 7 S. E. 329, Judge Lewis, speaking for the court, says: “The chancellor is not bound to direct an issue merely because the evidence is contradictory. He must exercise ih the matter a sound discretion, and, if his conscience is satisfied, the expense and delay which a jury trial involves ought not to he incurred, except in pan tieular cases in which by statute or practice, it is made a matter of right.”

It is suggested at bar that the Circuit Court having in this case directed the issue, and the jury having found the verdict, this court should not now disturb the result, even though of opinion that the issue was improperly awarded at the time it was ordered.

This court has repeatedly decided that the awarding of an issue out of chancery rests in sound discretion, subject to review on appeal.

In Beverly v. Walden, supra, it is said: “While it is true that directing an issue to be tried by a jury is a matter of discretion in a court of equity, it is' equally true that such discretion must be exercised upon sound principles of reason and justice.' A mistake in its exercise is a just ground of appeal; and the appellate court must judge whether such discretion has been soundly exercised in a given case.”

In deciding the question, this court should not be influenced by any matters connected with the testimony taken on the trial, but should look simply at the state of the proof existing when the issue was ordered. The mere fact that there was an issue directed and tried, and a verdict rendered for the plaintiff, affords no reason why the court should not reverse the decree if the order directing the issue was improperly granted. Collins v. Jones, 6 Leigh 530, 20 Am. Dec. 216; Smith's Adm'r. v. Betty, supra; Mahnke v. Neale, supra.

In the case of Smith's Adm'r. v. Betty, supra, the court said: “In the case of Prior v. Adams, 1 Call 382, 1 Am. Dec. 533, this court held that it was its duty, in reviewing a decree founded on the verdict of a jury, rendered on an issue out of chancery, to look to the state of the proofs existing at the time when the issue was ordered; and if satisfied that the chancellor had improperly exercised his discretion in directing the issue, to render a decree, notwithstanding the verdict, according to the 'merits, as disclosed by the proofs on the hearing when the issue was ordered.”

We are of opinion that the Circuit Court, in directing the issue in this ease, acted upon wholly insufficient affidavits, and failed to exercise the discretion contemplated by law in snch matters. Upon well established rules of law, the decrees complained of must be set aside, and the cause remanded for further proceedings not in conflict with the views herein expressed.

Reversed.