CHARLES T. DAVIS v. EDGAR SPEIDEN

CHARLES T. DAVIS v. EDGAR SPEIDEN. Equity. — No. 5323. I. It is now settled in onr practice that the pleadings, orders, and proceedings in a cause, as well as the. final decree, constitute that, portion of the record for the purpose of examining all errors of law in a bill of review. II. An order overruling a demurrer to a hill of complaint, and giving-leave to the defendant to answer, is not appealable to the general term ; but if, in such case, there is an appeal bond approved by one of the. justices, it will operate as a stay of proceedings at I he. special term ; and if any decree affecting the rights of the. parties is taken at such special term during Lhe appeal, it will be error in a bill of review. IH. Unless the averments in a bill of complaint are precise and definite, no decree can be taken without proof, although a decree pro confesso has been previously obtained ; and such error may be assigned in a hill of review. • 1Y. A party must, in general, perform a decree before filing a hill of review. Where the decree is for the payment of money, he must either aver performance or set up his inability arising from insolvency. STATEMENT OF THE CASE. This is ao appeal from a decree overruling a demurrer to a bill of review. The bill in the original cause was filed in April, 1876, by Edgar Speiden against Charles T. Davis, who is the complainant herein. It alleges that the said Speiden purchased from Davis, May 17, 1875, twenty thousand dollars of District of Columbia bonds, commonly known as 3.65 bonds of said District, for -which he paid him $1,100 in cash and gave his note for $14,000, payable in thirty days, pledging said bonds as collateral security for the payment of the note; that on the 3d of July following Speiden made another purchase of 3.65 bonds for the sum of $30,000, at the rate of 74f- per cent., for which he gave his note for $21,000, payable in sixty days — the bonds being pledged as collateral security for the payment of said note also. He gave 1ns personal note for $1,425, payable at the same time. The notes were renewed at maturity, upon payment of the interest due thereon; in consideration of which Davis agreed to carry the bonds, and to hold them as collateral to the notes. Another renewal of the same kind was made in October, 1875, and finally, on the 7th day of December, 1875, the market value of the bonds having depreciated to 65 per cent., Speiden paid the interest due on the note and margin on the bonds, and gave Davis a new note for $30,000, payable ninety days after date, with interest at 8 per cent., and a personal note for $2,500, and Davis agreeing to carry the bonds as he had done before; that, on March 14, 1876, Congress passed an act providing for the payment of the semi-annual interest on the 3.65 bonds, whereupon they appreciated from 74J to 75 per cent., and Davis then claimed that he had sold the bonds at 66 per cent, on their face value; that although requested to render a statement of the said sale, Davis has never done so and retains the notes; and that he has brought suit against Speiden on the $2,500 note, claiming a balance due thereon, on the law side of this court. The bill also alleges the belief of the complainant therein that Davis never had the bonds, and that he had perpetrated a fraud upon him. The prayer is that Davis surrender the notes, and pay to Speiden the several sums of money which he has paid for interest and margins as aforesaid; that Davis may account for the market value of the bonds, and may be enjoined from prosecuting the suit at law. Upon this bill an injunction issued according to the prayer thereof, aud Davis having filed a demurrer, the same was overruled on the 8th September, 1876, with leave to answer the bill within ten days. An appeal from this order to the general term was perfected by filing an appeal bond on the 21st day of September, aud on the 23d of the same month, notwithstanding such appeal, the complainant thei’ein obtained a decree fro confesso for want of an answer, and on the 3d day of November following a final decree was entered at the special terra upon the bill. There was no reference to an auditor and no proof. It was decreed that the suit at law be enjoined, and that Davis pay the said Speiden the sum of $6,601, with interest until paid, and that he surrender the notes to be canceled — the amount decreed to be paid corresponding in the aggregate with the several payments alleged on the face of the bill to have been paid by the said Speiden for interest aud margins, as already stated. The general term decided, December 18, 1876, that an appeal would not lie from the order overruling the demurrer to the original bill, aud the same was remanded to the special term for further proceedings. Various other steps were taken in the- cause, with a view to setting aside the decrees pro confesso and the final one, which having been denied, Davis filed the bill of review in this cause, setting out the whole record and appending a copy of his proposed answer to the bill in the original suit. The errors of law assigned upon this record are: 1st. The special term had no jurisdiction to proceed with the cause pending the first appeal. 2d. The decree of November was unauthorized, without proofs. 3d. The cause having been remanded for further proceedings, the special term should have taken jurisdiction of the case as it was at the date of the appeal. 4th. The appellate court must determine its own jurisdiction, and pending such determination it is irregular for the special term to proceed with the cause, and such proceedings should be set aside on motion. Davis claims an irreparable injury by reason of the said erroneous proceedings, and that he is not indebted to the said Speiden in any sum whatever. To this bill of review Speiden demurs, claiming (1) that there is no error of law on the record; (2) that Davis has not performed the decree sought to be reviewed; (3) the bill of review not filed in time; (4) too late to review a decree after an appeal from it to the general term and a dismissal of the appeal there. After a hearing, the court in special term overruled the demurrer, sustained the prayer of the bill, set aside the decrees in original- suit subsequent to appeal therefrom, and gave Davis leave to answer in said suit instanter. From this decree Speiden appeals to this court. R. K. Elliott and Edwards & Barnard., for complainants. "Whether the appellate court bad jurisdiction or not, was for it alone to determine, and pending such determination the special term had no authority to proceed with the cause ex parte. (1 Md. Ch., dec. 330; 3 Id., 304; 6 Harr. & J., 328; 11 Gill. & J., 137; 34 Md., 236; United States v. Pacheco, 20 How., 263; Green v. Winter, 1 Johns. Chan., 77, 325.) The whole record was carried by the appeal to the general term, and it remained there, in contemplation of law, until December 18, 1876, when the appeal was dismissed and the cause remanded to the special term for further proceedings. (20 How., 263.) The demurrer to the bill in 4902 was not frivolous, nor the appeal merely for delay. The following authorities strongly indicate that the relief sought by the bill could have been obtained by way of set-off iu the suit at law, or by declaration at law. (High on Injunct., sec. 46; Rev. Stat. D. C., 96, sec. 810; Rev. Stat. U. S., 137, sec. 723; Thomp. Dig., 198; 2 Black., 545; 3 Leigh, 667.) When a cause has not been heard on its merits, the court may vacate the enrollment, and give the party an opportunity of being heard upon the facts whenever such hearing has been prevented by mistake, surprise, accident, or misapprehension or negligence of the solicitor. (Herbert v. Rowles, 30 Md., 271; Millspaugh v. McBride, 7 Paige, 509; and cases cited in Freeman on Judgments, secs. 100, 580; 2 Dan. Ch. Pr., 1038.) The court would have as much power when set in motion by a bill of review as it would on motion or petition. It may treat the bill as a motion in 4902 for purposes of substantial justice. (6 -How., 39.) A judgment irregularly entered will be vacated on motion or petition at any time, notwithstanding the term has passed. (Stacker v. Cooper Co., 25 Mo., 401; Freeman on Judgments, sec. 97.) The answer of Davis discloses a meritorious defeuse to the suit on the facts, and a court of equity will not permit a denial of justice through any technical mistake or misapprehension as to the proper rule of practice. The decree should not have been entered under the averments and prayers of the bill, without a reference to ascertain the facts. The bill and affidavit would not have authorized a judgment at law without proof. (Equity rule 15.) The performance of the decree sought to be reviewed is not always necessary. The court having discretionary power in the premises, may dispense with its performance until after hearing on bill of review. (Massie v. Graham, 2 McLean, 41; 2 Dan’l Ch. Pr., 1643, n.) William. F. Mattingly, for defendant. A bill of review may be brought in two cases: 1st. For error of law appearing in the body of the decree. 2d. Upon discovery of new matter. (Story Eq. Pl., 404; Mit. & Tyler Pl. Pr., 181; 2 Dan. Ch. Pr., 1631.) If the decree is for the payment of money, it must be paid before the bill of review is filed, or, at least, secured to be paid. (Story Eq. Pl., sec. 406; Mit. & Tyler, 185; 2 Dan. Ch. Pr., 1631; Wiser v. Blackley, 2 Johns. Ch., 488.) After the expiration of the term at which it was passed, a decree cannot be vacated, except by bill of review, for error apparent in the face of the decree, or upon discovery of new matter. (Cameron v. McRoberts, 3 Wh., 591; Sibbold v. United States, 12 Pet., 491; Bank of U. S. v. Moss, 6 How., 31; Bank of U. S. v. White, 8 Pet., 252; McMicken v. Perin, 18 How., 511; Putnam v. Bay, 22 Wall., 60; Roemer v. Simon, 1 Otto, 149; Jenkins v. Eldridge, 1 Wood & Mi., 62.) An appeal even from an appealable order does not stay proceedings below. (Riggs v. Murray, 8 Johns. Ch.; Ringgold's Case, 1 Bland, 15.) [MAJORITY — Mr. Justice MacArthur] Mr. Justice MacArthur delivered the opinion of the court, in substance as follows: In considering this cause, perhaps it will be as well to determine a point of practice in advance relating to bills of review, and that is as to what portion of the record we are at liberty to inspect for the purpose of discovering error in the decree sought to be modified or set aside by a bill of this nature. This practice has been regulated by the cele-' brated ordinance of Lord Bacon, according to which no bill of review can be entertained unless it shows error in law appearing in the body of the decree, without any other examination of fact'or proceeding in the cause. This rule was adhered to with reference to the form of a decree at that time. An enrolled decree in the English chancery consisted of a parchment upon which all the pleadings were engrossed, and the exceptions and orders made thereon, together with a statement of the facts which the chancellor found to be established by the proof; and then followed the judgment of the court. The question of error in law could be determined upon the face of the decree without any further examination. With ns the decree is usually confined to the judgment of the court; and, indeed, the rules of the Supreme Court of the United States forbid a recital of the pleadings or other proceedings in the cause in a final decree. If the rule of Lord Bacon, before cited, is to be applied to decrees thus general in form, it will be utterly impossible to sustain a bill of review for errors in point of law. This difficulty was early provided for by the Supreme Court itself. In Whiting v. The Bank of U. S., 13 Pet., 6, the court say: “It has been suggested at the bar that no bill of review lies for errors of law, except where such errors are apparent on the face of the decree of the court. That is true in the sense in which the language is used in the English practice. In England, the decree always recites the substance of the bill and answer and pleading, and also the facts on which the court founds its decree; but in America the decree does not ordinarily recite either the bill or answer or pleadings, and generally not the facts on which the decree is founded. But with us the answer and other pleadings, together with the decree, constitute what is properly considered as the record; and therefore, in truth, the rule in each country is precisely the same in legal effect, although expressed in different language, namely, that the bill of review must be founded on some error apparent upon the bill, answer and other pleading, and decree; and that you are not at liberty to go into the evidence at large to establish an objection to the decree founded on the supposed mistake of the court in its own deductions from the evidence.” The rule as thus explained is fully recognized in Dexter v. Arnold, 5 Mason, 311; Putnam v. Day, 22 Wall., 60; and Buffington v. Harvey, 5 Otto, 99. We may, therefore, consider it now settled that the pleadings, the proceedings, and the decree constitute a portion of the record for the purpose of examining all errors of law in a bill of review. In pursuance of this rule we can look into the proceedings to see if there is any mistake in the decree. We find that there was a demurrer to the bill' in the original suit, which was overruled at the special term, and the defendant had leave to answer the bill therein within ten days. Erom this order an appeal was taken to the general term, which appeal was dismissed for the reason that an appeal did not lie from an order overruling a demurrer to a bill and giving leave to answer. Much difficulty had been experienced by the court as to whether an order of this kind was appealable, and it was not until that term that it was expressly decided that an appeal would lie from such an order. In several instances of such appeals no question had been raised, and undoubtedly the decision of the court was unexpected by the counsel. However this may be, it cannot be doubted that as there was an appeal bond approved by one of the justices of the court, it operated as a stay of proceedings at the special term during the appeal. It appears from the proceedings that the decree of the 22d September, 1876, pro confesso, as well as the final decree on (he 3d of November following, were both entered in the cause at the special term while the appeal was pending; for it was not until the 18th of December,-1876, that the latter was dismissed and the cause remanded for further proceedings. In this we think there was manifest error. The proper practice on the part of tbe complainant in the original suit to pursue, under such circumstances, was to move for a dismissal of the appeal, and thus get rid of the impediment to his proceeding in the court below. The mere fact that the order turned out to be one from which no appeal in the opinion of the court would lie, did not authorize the complainant to disregard the supersedeas and take any order in the cause concluding the interests of the parties. For these reasons we think there was error on the face of the record. But, passing over this objection, the inquiry occurs whether the complainant in the original suit was entitled to the final decree passed in the cause, without any proof, except such as might be inferred from the pro confesso which he had previously obtained. Speiden alleged in his bill that he purchased from Davis on two occasions 3.65 bonds of the District of Columbia, making an aggregate of $50,000; that he made a small payment in cash and gave his notes for the balance, the bonds to be held by Davis as collateral security for the payment of the notes. Several renewals took place subsequently, interest was paid, and as the bonds depreciated margins were provided for; and finally the amount was merged in two notes, one for $30,000 and the other for $2,500, the bonds all the time remaining as collateral security. He also alleges that in consequence of an act of Congress making provision for the payment of the semi-annual interest of the bonds, the value appreciated to 741,- and 75 per cent, and that Havis sold the bonds for 66 per cent, at that time. He states various requests for a settlement without success, and expresses his belief that Havis never had the bonds, and was practicing a fraud upon him. He requests the notes to be surrendered, and an action at law commenced by Havis for a balance due him on one of the notes to be enjoined. The decree in his favor was for all the money he had paid Havis for interest and margins, and which he had specifically set up in the bill. Now, whether he was entitled to this amount depended upon whether Havis had sold the bonds, and when, and .for how much. If Havis had sold the bonds for 66 per cent., as alleged in the bill, the proceeds would be insufficient to satisfy the notes, and hence no doubt Havis had commenced the action at law to recover the balance. We think, although there was a decree pro confesso, the averments of the bill were not of that precise and definite character as to dispense with some proof, or taking an account for the purpose of ascertaining more clearly the interests of the parties. We therefore come to the conclusion that in this respect there is also error in the decree. But another rule of Lord Bacon, that has prevailed ever since, is, that a party must perform the decree before the bill of review can be filed. This rule has some exceptions, or, rather, the court will dispense with a strict compliance of the decree under special circumstances; such as the release of a mortgage, the surrender of a lease, or of a homestead, or place of business, where the party would be left in destitution, or where otherwise it is impossible for the party to perform it. But there is no discretion left in the court where the decree is for the payment of money, as in this case, unless the complainant sets up his utter inability arising from insolveney. No excuse of this kind is stated in the bill, and we would be disposed to sustain the demurrer, and dismiss the bill without prejudice to filing another, after the complainant had complied with the decree. But time for' filing a bill of this kind has expired, and that course would deprive him of the benefit of the error in the decree. To obviate this result, and at the same time give the defendant the benefit of the rule, we will now give the complainant an opportunity to bring the amount into court nunc pro tunc. This will be a substantial compliance with the rule, without subjecting the complainant to the loss of his equitable remedies. The decision of the court is that the decree appealed from overruling the demurrer to the bill of review will be affirmed, upon condition that complainant brings into court the amount of the decree in the original suit; otherwise the decree herein to be reversed and the bill dismissed.