Monroe v. McIntyre, 41 N.C. 65, 6 Ired. Eq. 65 (1849)

June 1849 · Supreme Court of North Carolina

41 N.C. 65, 6 Ired. Eq. 65

MALCOLM MONROE & AL. vs. WILLIAM McINTYRE.

In an injunction case, if, upon the hearing of the answer, the statements are such as to leave in the mind of the Court a reasonable doubt, whether tho plaintiff's equity is sufficiently answered, the injunction will not be dissolved, hut will be continued to the hearing.

Where A. upon a good consideration gave to B. a power of attorney to prose» cute a suit at law in the name of A. but for the benefit of B., B. indemnifying A. against all responsibility for the costs, a Court of Equity will enjoin A. from dismissing the suit.

The cases of James v. Lemley, 2 Ire. Eq. 278, Mullen v. Washburn, 3 Ire. Eq. 161, and State v. Skinner, 3 Ired. 564, cited and approved.

Appeal from an interlocutory order of the Court of Equity, of Sampson County, at the Spring Term 1849, his Honor Judge Caldwell presiding.

This was an injunction bill filed in May 1848. The' plaintiffs, Malcolm Munroe and David B. Melvin, executor of Robert Melvin, allege in their bill, that one Wiley M. Fort was a constable in the County of Bladen in the year 1839 ; that the said Malcolm and Robert were sureties to his official bond : that the defendant William McIntyre placed sundry papers in the hands of the said Wiley M. Fort, as constable, for collection, among which was a note under seal made by one William Reeves and Thomas Fort payable to the said William McIntyre for the sum of $71 64, one day after date, and dated the 14th of January, 1840 ; that the said note was put into hands of the said Wiley Fort on the same day it bears date ; that, without taking any steps to collect the said note, the said Wiley, early in the month of February, 1840, absconded, leaving the said note, which was taken possession of by the said Malcolm and Robert. And the bill further alleges, that the said Malcolm and Robert, feeling it their duty to do so, instituted a suit against the said William Reeves and Thomas Fort for the recovery of the said debt, in the name of the said William McIntyre, and obtained a judgment, from which judgment an appeal was taken to the County Court of Bladen ; that while the suit was pending in this Court, the said William McIntyre, through his attorney, Thomas L. Hybart, Esquire, who was duly authorized to act as such by the said McIntyre, applied to the said Malcolm and Robert for payment oí his said claim on Reeves and Fort, and it was agreed between the said Hybart, as attorney for the said McIntyre, and the said Malcolm and Robert, that the latter would pay the said McIntyre the amount of his claim, upon his transferring to them his interest in it, but as there was a suit pending on it, no legal transfer could be made, without affecting the plaintiff’s right to recover therein ; that it was therefore agreed that McIntyre should execute to the said Malcolm and Robert a power of attorney to carry on the said suit, in the name of the said McIntyre, for the use and benefit of the said Malcolm and Robert; that the said Malcolm and Robert accordingly gave to the said Thomas L. Hybart, as attorney, their promissory note payable to the said McIntyre for the amount of the said claim ; that the said Hybart in return brought and delivered to the said Malcolm and Robert a power of attorney signed and sealed by the said McIntyre and witnessed by the said Hybart, authorizing the, said Malcolm and Robert to prosecute the said suitjn the name of the said McIntyre, but for the use and benefit of the said Malcolm and Robert, and that the said Malcolm and the executors of the said Robert, after his death, executed and delivered to the said attorney of McIntyre, their bond, conditioned to indemnify him against all liability for the costs of the said suit. The bill further charges, that the said suit was pending for many terms in the County Court of Bladen, where it was decided in favor of the plaintiff; that the defendants appealed to the Superior Court, and the cause was removed on affidavit to the Superior Court of Sampson County; that at the Spring Term 184S of the said Court, the plaintiffs being fully ready for trial, the said McIntyre refused to let the trial proceed, and intimated his purpose to dismiss the suit. And the plaintiffs allege, that they fear the said McIntyre will carry this threat into execution, unless prevented by the interposition of- this Court. It is further stated in the bill, that Robert Melvin is dead, and the plaintiff, Pavid B. Melvin, is his sole, surviving executor. The bill then prays for an injunction and for general relief.

The injunction was granted.

At the Fall Term 1848 of Sampson Court of Equity, the defendant McIntyre filed his answer. The answer admits, that the defendant placed in the hands of Wiley M. Fort, constable, the note described in the plaintiffs’ bill, that the said note has been paid to him, and that he has not now, nor has he had since the year 1841, any claim against Reeves or Fort. It avers that the defendant never instituted any suit, nor authorized one to be instituted, in Bladen or elsewhere, against the said Reeves and Fort. It says that the defendant’s regular attorney and legal adviser was Thomas L. Hybart, who had the management of his claims. The defendant then states in his answer, that, if he ever executed the particular power of attorney, set out in the bill as of the date of April 7,1841s which he by no means admits, but puts the plaintiff to striet proof thereof, then the defendant declares that it was not read to him nor read over by him, and must have been signed upon the application of Mr. Hybart, with the impression on the mind of the defendant, that it was some paper connected with his business necessary to be signed, and in total ignorance of its contents; and the defendant avers that it was not delivered when signed,-nor for four months thereafter, for the defendant has in his possession •an application in writing under date of the 7th of August, 1841, from Robert Melvin, requesting the defendant to execute a power of attorney to the said Melvin and the complainant Malcolm, to enable them to sue on the note of William Reeves and Thomas Fort, which had been paid and satisfied. The answer further states, that, in the year 1841, the defendant was surprised to learn that a suit was pending in Bladen County Court, and another in Bladen Court of Equity against William Reeves and Thomas Fort,at the instance of the defendant; that the defendant had no knowledge of the institution of these suits, until informed, as is admitted in the plaintiffs’ bill, that Robert Melvin and Malcolm Monroe had taken upon themselves to use his name, without his consent, and therefore directed his said attorney to dismiss the suit forthwith. The answer further alleges that the debt of .Reeves had been paid to the defendant by the said Hybart, but how collected and of whom the defendant is totally ignorant, and the defendant has now no claim against Reeves ; that when the payment was made, not a word was said of any purchase of the note or assignment thereon, but the payment was made as a payment and discharge of the debt. The defendant then denies, that he ever authorized Hybart to make any contract or agreement whatever with Robert Melvin or Malcolm Monroe, touching the use of his name in any suit against Reeves and Fort, or either of them. The defendant then states that he was amazed to find, that the suit, which he ordered Mr. Hybart to dismiss, was still pending, having been taken to the County of Sampson from the County of Bladen, and he admits he authorized Mi\ Dobbin, an attorney at law, to dismiss it, and he still insists upon his right to do so. He avers that the bond of indemnity, of which the plaintiffs speaks, was never delivered to the defendant; that Mr. Hybart was not authorized to take such bond and never communicated the fact to the defendant, and that, although the plaintiffs allege its execution - in 1846, the defendant never heard of it nor saw it, until, after the filing of this bill, it was found among Mr. Hybart’s papers.

The defendant says he is advised, that, if the paper, under the date of April 7th, 1841, is genuine and binding upon him, still, as it was coupled with no interest in Melvin and Monroe, and they were under no liability whatever for Reeves and Fort, nor at all interested in the note, it was a mere naked power, appointing them the attorneys and agents of the defendant to conduct a suit, and, as such, it was revocable, and, in point of fact, was revoked by the order to dismiss in July 1841, of which Melvin and Monroe had notice.

Upon the coming in of the answer, the defendant moved for a dissolution of the injunction, which motion was re* fused and the injunction continued to the hearing. From this interlocutory order, the defendant, by leave, appealed to the Supreme Court.

Strange, for the plaintiffs.

W. Winslow, for the defendant.

Nash, J.

It is a well established rule in Equity, that where an answer to a bill, praying for an injunction, fully denies the plaintiff’s equity, the injunction must be dissolved. To have this effect, however, the whole equity must be denied. The statements of the answer must be credible and exhibit no attempt to evade the material charges of the bill. Sharpe v. King, 3 Ired. Eq. 402. If upon the hearing of the answer, the statements are such as to leave in the mind of the Court a reasonable doubt, whether the plaintiff’s equity is sufficiently answered, the injunction will not be dissolved, but continued to the hearing. James v. Lemley, 2 Ire. Eq. 278. Mullen v. Washburn, 3 Ire. Eq. 161.

It is impossible in this case to say, that, if all the facts set forth in the defendant’s answer be true, the whole equity of the plaintiffs is denied, or that we have no doubt on the subject. The answer is so drawn, whether from haste or some other cause, we cannot tell, that it cannot have the effect desired by the defendant. It is unsatisfactory, and is, apparently, evasive — in no one instance meeting the averments of the bill, with a direct response, and in some material matters giving no reply whatever. Thus the plaintiffs state that Monroe andR. Melvin were the sureties of the constable, Willey M. Fort, on his official bond — the answer neither admits nor denies it; that Fort ranaway, and that they were held liable by him, the defendant, for the amount of the Reeves and Fort note — it makes no reply. In several other particulars it is defective in fulness and frankness, and is, therefore, unsatisfactory. For these reasons, alone, the injunction ought not to be dissolved. But enough does appear on the answer to entitle the plaintiffs to that aid from the Court, which they seek. The equity of the plaintiffs is, that, as sureties of the constable. Fort, on his official bond, they paid to the defendant, at his request, the amount of the Reeves and Fort note ; and that, under an agreement made by them with Mr. Hybart, the defendant’s attorney, that he would procure from the defendant a power of attorney authorising them so to do, they had instituted a suit in the name of the defendant against Reeves and Fort to reimburse themselves ; which suit the defendant threatens to dismiss. The answer admits, that Mr. Hybart was the defendant’s attorney to collect the money due on the note —that it was collected and paid over by Mr. Hybart to him; and that he has not, since its payment, had any elaim upon the note upon Reeves and Fort; and it, substantially, admits, that the defendant did execute a power of attorney to the plaintiffs Monroe'and Robert Melvin. This power of attorney is filed in the cause as an exhibit, and is witnessed by the defendant’s attorney, Mr. Iiybart, and fully authorized the use of his name by the sureties of the constable in the suit they had brought. The defendant then has no claim upon Reeves and Fort upon their note, and it is a matter of no importance, that Mr. Iiybart neglected to tell him, from whom he received the money — against the costs of the suit he is indemnified, for the delivery of the bond of indemnity to Mr. Hybart was a delivery to him. The defendant further admits, that he had directed Mr. Dobbin to dismiss the suit at law. This he had a clear legal right to do, being the plaintiff of record. It is a power, however, the exercise of which a Court of Equity will not permit, under the circumstances of this case. It will not suffer the defendant to interpose his mere legal right, to prevent the plaintiffs from their endeavor to ascertain their rights. 2 Sto. Eq. Sec. 903.

The equitable right of the plaintiffs to the aid they ask, is not shaken by the statements of the answer, but is rather strengthened and confirmed by the manner in which the averments of the bill are answered. The attempt of the defendant to dismiss the suit at law, is capricious, unjust and iniquitous.

We see no error in the interlocutory order appealed from.

Ruffin, C. J.

The plaintiffs had in their hands the notes of Reeves and Fort and could have returned them to the defendant, and thus exonerated themselves from liability, as the sureties of the constable, for. any thing more than the actual damages arising to the defendant from the negligence of the constable. As there is no suggestion of the insolvency of the debtors at the time, those damages would have been but nominal. State v. Skinner, 3 Ire. 564. That would have been of no substantial benefit to the creditor, while it would have subjected the sureties to the costs of an action. It was, therefore, thought by the plaintiffs, and by the defendant’s attorney and agent, to be best for all parties, that there should be no expensive, though fruitless, litigation between them ; and, to that end, that the sureties should make the debts their own, by paying the amount to the creditor, and it was agreed by the defendant’s attorney and agent, that, if the sureties would do so, they might, at their expense, sue the debtors on their notes in the name of the original creditor, the present defendant. That contract was accordingly made, and it was complied with by the present plaintiffs. Upon these facts a plain obligation arose on the defendant to fulfil the engagement of his agent, and allow the plaintiffs to recover the money from those, from whom it was really due, in his name, though for their benefit; and it is clear equity, that the defendant should be restrained from interfering with ihe plaintiffs’ efforts to do so, they indemnifying him against any costs of the action. Such is the State of the case between the parties, if the facts be as above supposed. That the facts are so, cannot be disputed in this stage of the cause ; because they are alleged in the bill, and the answer in no one particular denies them. It is true, the bill proceeds to say, that his attorney and agent further agreed with the plaintiffs, that the defendant would give the plaintiffs a written letter of attorney to prosecute in his name the suit which they immediately commenced on the notes ; and that the defendant approved of and confirmed the transaction of his agent, by subsequently executing the power of attorney. And it is also true, that the defendant answers to this latter matter, that he did not, by any act of his own, intend to confirm the alleged agreement of his agent, for it was not communicated to him: and that, if he executed any power of attorney, its contents and purpose were unknown to him. But that does not meet the plaintiffs’ equity at all; for those subsequent events are stated but as some of the evidences of, and the acts done under the original agreement with the agent, upon which the plaintiffs paid their money, whereby their equity arose. The answer, indeed, is not explicit as to those circumstances — not meeting the allegations of the bill on those points fairly, and denying or admitting them plainly; and, if the merits depended on those matters, the answer would not be sufficient to dissolve the injunction. But those are really but collateral circumstances, and, therefore,need not be particularly noticed : the substance of the case being the original agreement by the defendant's agent, and the payment of the money by the plaintiffs and receipt of it by the defendant under that agreement —which is not at all met by the answer. Therefore the order was right, and must stand affirmed, with costs in this Court.

Per Curiam.

Ordered to be certified accordingly.