Morgan v. Scott

Judge Crenshaw

delivered the opinion of ithe Court.

It appears from the bill, that Click and Morgan were co-partners in trade; Click, without the consent or know-ledge of' Morgan, and contrary to the articles of copartnership, fraudulently executed an instrument of writing under seal, in the name of the firm, for the payment of a sum of money to Scott, on what consideration complainant knows not. Click, with a view of charging Morgan with this debt, permitted Scott to obtain a judgment at law. Morgan, in fact, had no notice of the proceedings or opportunity to defend until after the judgment had been obtained. That Click most fraudulently and iniquitously combined with Scott to charge Morgan, and prevented Scott from entering certain credits on the execution. Though not expressly charged, it is strongly intimated, that Scott was in' combination with Click through the whole transaction, and that Click is insolvent. Scofi demurred to the bill, and the Circuit Court sustained the demurrer, dissolved the Injunction, and dismissed the bill w-ith costs.

It is a well settled principle that one partner cannot charge the firm by his writing under seal, unless he is au-thorised to do so by the articles of copartnership, or by the express consent of his copartners. But equity ' cannot relieve against a judgment at law on such instrument, against the firm, if obtained without surprise, fraud, or connivance-; because the copartners, who had not consented to the instrument, might have made full and effectual defence at law-. But against an improper judgment surreptitiously or eollu-sively obtained, it .is the peculiar province of a Court of Equity to afford relief; for without the aid of equity the complainant would be remediless, havinghad no opportunity to defend at law. The demurrer admits the truth of all the charges and allegations in the Bill; therefore I cannot hesitate in concluding that this instrument of writing was intended as a fraud on the complainant, and that the judgment Was obtained without his having any knowledge of the pen-dency of the suit, orany opportunity of making a defence. The complainant had also the right to apply to a Court of Equity for a discovery of the amount of the credits which •ought to have been entered on the execution, and to compel the plaintiff at law to enter satisfaction pro tanto. The demurrer, therefore, ought not to have been sustained.

M’Clury and H. G. Perry, for plaintiff. Owen, for defendants in Error.

As to the second assignment- — I conceive that it was at the option of the complainant to bring the cause to a final hearing, on the coming in of the plea or answer of one defendant, provided that sufficient matter was disclosed or submitted to enable the Chancellor to determine on the rights of all parties concerned, otherwise the plea should stand until the the coming in of the answers of the others.

The decree of the Circuit Court must be reversed, and the cause be remanded for further proceedings. In this opinion the Court are unanimous.