Others v. Others

• Decision Date: 10 June 1887
• Citation: 2 S.E. 733,83 Va. 504
• Parties: Barnett and others v. Barnett and others.
• Court: Virginia Supreme Court

2 S.E. 733

(83 Va. 504)

Barnett and others

v.Barnett and others.

Supreme Court of Appeals of Virginia.

June 10, 1887.

1. Judgment—Equitable Relief—Sham Bond.

A party against whom a judgment has been entered on a bond cannot obtain relief in equity against such judgment, on the ground that he was acting as the agent of the judgment plaintiff in the sale of territory in which to sell a patented article, and that such bond was only a "sham" by which to induce others to purchase patent rights, and was never to be enforced against him.

2. Same—Discharge of Bond.

In a suit in equity to obtain relief against a judgment obtained on a bond, if the bond has been discharged, that fact cannot avail complainant, as he should have set it up as a defense in the action on the bond.

3. Evidence—Parol—Agreement not to Enforce Bond.

In the absence of fraud, parol evidence is not admissible to show that the obligee, contemporaneously with the execution of a bond, promised not to enforce it as against one. of the parties who executed it.¹

4. Contract—Rescission—Misrepresentation.

A misrepresentation which will entitle a party misled to a rescission of the contract must have been made as part of the same transaction.

5. Equity—Laches—Relief from Judgment.

Where a bill to obtain relief against a judgment on a bond, which it was alleged was procured by fratid, was not filed until six years after the perpetration of the fraud, relief was refused on the ground of unreasonable delay.

Appeal from circuit court, Montgomery county.

Staples & Sullivan, for appellants.

Phlegar & Johnson, for appellees.

Lewis, P. This was a suit in equity in the circuit court of Montgomery county. The object of the suit was to obtain relief against a judgment rendered in the said court at its November term, 1884, in favor of the appellee John W. Barnett against the complainants in the bill, who were the appellants here. The judgment was founded upon a ceitain writing obligatory ex-ecuted by the appellants, a copy of which was exhibited with the bill, and which was as follows:

"We bind ourselves to pay to J. W. Barnett twelve hundred dollars, in satisfactory notes, for the sale of territory in the counties of Buckingham, Cumberland, Fluvana, Albemarle, and all of Bedford except the territory now sold to Hopkins & Thaxton, one precinct to P. Cofer, and about five farm rights, during the term of twelve months, as witness our hands and seals this third day of June, 1879. R. C. Kidd. [Seal.]

"Thos. M. Barnett." [Seal.]

The prayer of the bill was that the enforcement of the judgment, upon which an execution of fI. fa. had been sued out, be enjoined; that the judgment by proper order be vacated and annulled; and for general relief. And the prayer of the bill was based on several grounds. The first was that, the appellee John W. Barnett being the owner of a certain patented process for curing tobacco, the appellants, in the early part of the year 1879, agreed with him to act as his agents in selling patent-rights, upon certain terms; that he represented this process to the appellants as possessing very great merit; and that tobacco cured thereby was more salable, and commanded a much higher price, than the same quality of tobacco cured by the ordinary process; and that, having thus acted as agents for several months, the appellants, on the third of June, 1879, executed the writing obligatory mentioned in the bill. The bill then alleged that it was distinctly understood, at the time, that the said writing was not to represent a real obligation, but that it was taken from the appellants to serve as an inducement to others to buy patent-rights, and that, after it was taken, the complainants continued to act merely as agents of the defendant John W. Barnett, and not otherwise. The second ground upon which relief was prayed, was that, if the said writing should be held conclusive evidence of a contract between the parties, the contract ought to be rescinded, and the judgment founded upon it annulled, because the complainants were induced to execute it solely by reason of the said representations as to the merits of the said patented process, which representations were false and fraudulent. The bill also alleged that, for the patent-rights sold by the complainants, bonds were taken payable to the defendant John W. Barnett, and that all the bonds thus taken were turned over by them to the said defendants, except one for $20, and three others aggregating $175; and, finally, that, being advised that their remedy was in equity, the complainants made no defense at law, and judgment went against them.

The said defendant demurred to the bill, and also answered. The answer admitted that the plaintiffs acted as his agents prior to the third of June, 1879, but averred that the transactions between the parties prior to that time had nothing to do with the bond upon which the judgment had been obtained. It denied that the complainants undertook to sell the territory mentioned in the bond as his agents, or that they acted as his agents after the third of June, 1879.. On the contrary, it averred that they "bought the said territory, and received from the respondent an absolute deed therefor, which they still retain; that they have never offered to reconvey any part of the said territory, and have sold and conveyed most of it to others, and cannot place the respondent in the position he occupied when the sale was made to them." It also denied that the complainants had turned over to the respondent any of the bonds taken for the territory which they had purchased, or that the bond upon which the judgment had been obtained was not taken and intended as a valid security. On the contrary, it averred that the transaction was real and bona fide, and that the territory mentioned in the bond had been actually conveyed to the complainants, pursuant to the contract. It denied that the complainants had been induced to purchase by any representations of the respondent, and averred that they made the purchase because, while acting as agents as aforesaid, they had tested and ascertained the salableness of thepatent, which it also averred was a valuable invention, and not worthless, as charged in the bill.

Testimony was taken, and at the hearing the bill was dismissed by the decree complained of.

1, Upon the theory that the appellants acted merely as agents in the transactions mentioned in the bill, it is very clear that the suit cannot be maintained; for, if this theory be founded upon fact, (and the bill alleges that it is,) and if it also be true, as alleged, that, at the time the writing upon which the judgment is founded was executed, the understanding between the parties was that it was to have no validity as an obligation, but was to be used merely as a blind, or, in the language of one of the appellants in his deposition, as "a sham, " by which to induce others to buy patent-rights, then a palpable fraud was attempted to be perpetrated upon innocent strangers to the transaction, which cannot be countenanced or upheld in a court of equity. In such case, the parties being in pari delicto, the complainants are not entitled to relief; for potior est conditio defendentis.

Moreover, since the appellants cannot be heard to allege their own wrong, the case falls within the ancient and well-settled rule of evidence which declares that a written contract cannot be contradicted or varied by parol evidence of what occurred between the parties previously thereto, or contemporaneously therewith. And the rule is the same in equity as at common law. 1 Greenl. Ev. § 275; Watson v. Hurt, 6 Grat. 633; Tovmer v. Lucas' Ex'r, 13 Grat. 705. In the last-mentioned case, the rule and its exceptions were very clearly stated in the opinion of the court, and the question decided was that, in the absence of fraud, parol evidence was not admissible to show that the obligee, contemporaneously with the execution of a bond, promised not to enforce it as against one of the parties who executed it.

2. These principles, however, are not controverted by the appellants in this court. In their position for appeal they chiefly rely on the ground that they were purchasers, and that the bond upon which the judgment is based was procured by the fraudulent misrepresentations of the obligee, John W. Barnett; and, if this allegation be true, then undoubtedly the case is within the jurisdiction of a court of equity, there having been no defense in the action* of law; for the statute, which gives to a defendant in an action on contract the right to file a plea, alleging fraud in the...