Pollard & Bagby Inc v. Morton G. Thalhimer Inc

• Decision Date: 13 January 1938
• Court: Virginia Supreme Court
• Parties: POLLARD & BAGBY, Inc. v. MORTON G. THALHIMER, Inc.

194 S.E. 701

POLLARD & BAGBY, Inc.

v.MORTON G. THALHIMER, Inc.

Supreme Court of Appeals of Virginia.

Jan. 13, 1938.

Appeal from Circuit Court of City of Richmond; Julien Gunn, Judge.

Suit by Morton G. Thalhimer, Incorporated, against Pollard & Bagby, Incorporated, to compel division of commissions on the sale of a home. From a judgment for the plaintiff, the defendant appeals.

Affirmed.

Argued before CAMPBELL, C. J., and HOLT, GREGORY, EGGLESTON, and SPRATLEY, JJ.

Montague & Montague and Dave E. Satterfield, Jr., all of Richmond, for appellant.

Christian, Barton & Parker, of Richmond, for appellee.

HOLT, Justice.

This is a suit brought by one real estate agent against another to compel division of commissions on the sale of a home near Richmond.

The issue, in short form, is this: Plaintiff, Morton G. Thalhimer, Incorporated, contends that it had a customer, Dr. C. C. Coleman, who desired to purchase a home, and that the defendant, Pollard & Bagby, Incorporated, had for sale a home known in the record as the "Finlayson home"; that these two corporations, working through their respective agents, Lester D. Wallerstein and C. I. Arnall, agreed to pool their efforts and to divide commissions if a sale to Coleman could be effected; and that as a result of their joint efforts this Finlayson home was finally sold to Dr. Coleman. Plaintiff now demands an accounting. Defendant claims that any agreement theretofore made had long expired before there was any sale, and that it was in fact finally made through its own unaided efforts.

The original bill of complainant was filed in the circuit court of the city of Richmond at the second November rules, 1933.

At the first December rules, 1933, defendant filed its demurrer and answer.

In the demurrer it was said that, if the plaintiff had any valid claim at all, it was legal and not equitable.

On March 20, 1934, plaintiff filed its motion for judgment against the defendant in the law and equity court of the city of Richmond, part II. In this motion the same facts were relied upon to sustain a recovery that were set out in the bill. This common-law action was tried before a jury on July 20, 1934. There was a mistrial, the jury being unable to agree, and that case was continued.

On October 15, 1935, the defendant moved that the chancery suit be dismissed on the ground that a common-law action had been instituted based upon the same state of facts. That motion by decree was on that day overruled. The court in overruling this motion said: It is "ordered, adjudged and decreed that the plaintiff herein do make an election, forthwith, as to which proceeding it shall elect not to prosecute against the defendant, and that the plaintiff herein after making such election forthwith dismiss and discontinue such proceeding as it shall elect not to prosecute."

Thereupon, on October 15, 1935, plaintiff filed its amended bill, which the defendant answered. On December 14, 1936, this cause came on to be heard upon depositions and exhibits. The chancellor being of opinion that these parties were engaged in a joint adventure and that the equities were with the plaintiff so decreed and ordered that the plaintiff recover from the defendant $2,187.50, with interest from November 1, 1933.

In plaintiff's bill and amended bill, it is charged that in 1931, the plaintiff, acting through its agent, Lester Wallerstein, entered into a verbal agreement with C. I. Arnall, agent for the defendant, whereby it was agreed that they should work together in an effort to sell to Dr. C. C. Coleman, a prospect of the plaintiff, a valuable dwelling on the western edge of the city of Richmond, known as the Finlayson house and lot, on the Cary Street Road, in Henrico county, which property was then listed with the defendant for sale. In the event that such a sale was perfected, commissions were to be equally divided. The joint efforts of these two salesmen to perfect this sale were continued, and finally resulted in the purchase by Coleman of this property in October, 1933. The commissions from this sale the defendant has declined to divide.

Plainly equity had jurisdiction, as appears from the cause of Home v. Holley, 167 Va. 234, 188 S.E. 169, 171, where this subject received careful consideration at the hands of Eggleston, J., and where many authorities are collected. He quotes with approval these statements of the law:

" 'A joint adventure has been aptly defined as a "special combination of two or more persons, where in some specific venture a profit is jointly sought without any actual partnership or corporate designa tion.'" 33 C.J. p. 841, §1; Dexter & Carpenter v. Houston (C.C.A.4) 20 F.2d 647, 651.

"The obligations inter se of persons engaged in a joint adventure are similar to those existing between partners. The relation is one of mutual trust and confidence. The utmost good faith, the most scrupulous honesty, is exacted of each party toward the other. Each must guard the interest of his coadventurer equally with his own, and must make a frank and full disclosure of all material facts. Each is regarded by a court of equity as a trustee or agent of the other with respect to the enterprise to be undertaken.

" 'Within the scope of the enterprise they stand in a fiduciary relation each to the other, and are bound by the same standards of good conduct and square dealing as are required between partners. This obligation begins with the opening of the negotiations for the formation of the syndicate, applies to every phase of the business which is undertaken, and continues until the enterprise has been completely wound up and terminated.' 33 C.J. pp. 851, 852, § 36. See, also, 15 R.C.L. p. 501, § 3; Dexter & Carpenter v. Houston (C.C.A.4) 20 F.2d 647, 652; Maas v. Lonstorf, [6 Cir.], 194 F. 577; Meinhard v. Salmon, 249 N.Y. 458, 164 N.E. 545, 62 A.L.R. 1, and note."

The demurrer was properly overruled.

These proceedings are both consistent and inconsistent--consistent in that full relief might flow through either channel; inconsistent in that plaintiff can be compensated but once.

By instituting its action at law, it concedes that the law court also might give to it complete and adequate relief. Can it bring a suit in chancery, and before any action is taken thereon, institute an action at law on the same state of facts, where both courts have power to give complete and adequate relief; and if so, can an election be ordered, and when must it be made?

The mere institution of double-barrel litigation is not necessarily an election.

"If a suit in equity and an action at law between the same parties and touching the same subject matter are pending at the same time, the court of equity, upon the application of the defendant, should compel the complainant to elect which he will prosecute." Keys Planing Mill Co. v. Kirk-bridge, 114 Va. 58, 75 S.E. 778, headnote by Judge Burks; Priddy v. Hartsook, 81 Va. 67; Zetell v. Myers, 19 Grat. 62, 60 Va. 62.

In Sangster et al. v. Commonwealth, 17 Grat. 124, 58 Va. 124, the court said:

"When A wrongfully takes the property of B and sells it, B may bring trespass, trover, detinue or assumpsit for money had and received, against A at his election; but having elected one of these forms of action, and prosecuted it to judgment, he cannot then abandon it and bring another."

From which it follows that a second action might have been instituted had the first not yet been brought to final judgment.

In Richmond, etc., R. Co. v. New York, etc., R. Co., 95 Va. 386, 28 S.E. 573, 576, Keith, P., said:

"As to what act constitutes an election is the subject of conflict among the adjudicated cases. By some it is held that the bringing of the suit is an election, by others that the suit must be prosecuted to judgment, and by yet a third class that the judgment must be satisfied. We are not called upon to discuss--far less reconcile--these cases."

The authorities cited appear to indicate that the institution of an action at law, after the bringing of a chancery suit, does not constitute an election, and this conclusion appears to be supported by the weight of authority elsewhere. 9 R.C.L. p. 961, and Permanent Supplement, vol. 4, p. 2579. Plaintiff itself appears to have recognized this and contends not that the institution of the common-law action was an election but that it "by instituting and prosecuting the action at law * * * (it) had thereby elected to prosecute and proceed to a final determination of its said claim in said action at law."

Of course, there can be but one satisfaction for one cause of action.

If the second rule suggested by Judge Keith is to be adopted unmodified, then there has been no election because the common-law action progressed to a mistrial and not to a judgment.

Judge Moncure appeared to be of opinion that a final judgment is necessary, and Judge Keith thought that it was at least necessary if the mere institution of the common-law action was not conclusive. See, also, Gibson v. Finley, 4 Md.Ch. 75, at page 80; American Process Co. v. Florida, etc., Brick Co., 56 Fla. 116, 47 So. 942, 944, 16 Ann.Cas. 1054; McGunn v. Hanlin, 29 Mich. 476, 480; Knott v. Seamands, 25 W. Va. 99.

In Putnam v. Ford, 155 Va. 625, 155 S.E. 823, 824, 71 A.L.R. 1217, we cited with approval this statement of the law from 9 R. C.L. p. 961:

" 'It is of the essence of estoppel that the act relied upon as such should have been injurious, and to the prejudice of him who relies upon it as estoppel.'

" 'In that class of cases in which the remedies are not inconsistent but are alternative and concurrent, there is no election until one of them has been prosecuted to judgment, unless the plaintiff has gained an advantage, or the defendant has suffered a disadvantage. In some of the cases in this class it has been determined that there is no estoppel until satisfaction has been obtained.' "

The doctrine of election is founded upon estoppel, and estoppel itself is an equitable rule. Intervening equities...