Southwest Virginia Hospitals v. Lipps, 3817

CourtSupreme Court of Virginia
Citation193 Va. 191,68 S.E.2d 82
Docket NumberNo. 3817,3817
Decision Date03 December 1951

Wm. A. Stuart, for the appellants.

Fred B. Greear and Flannagan & Flannagan, for the appellee.


SPRATLEY, J., delivered the opinion of the court.

The decree complained of was entered June 20, 1950. Appellants filed their notice of appeal and assignments of error on August 25, 1950.

The appellee has moved to dismiss this appeal on the grounds, first, that the decree appealed from was final and appellants did not file their notice of appeal and assignments of error within sixty days after its entry, Rule of Court 5:4; and, second, failed to execute a proper bond allowing suspension of execution of the judgment granted in said decree. The grounds of the motion are without merit.

It will be observed from the recitals of the decree, hereinafter set out, that it adjudicates the principles of the cause, and was, therefore, appealable pursuant to the provisions of Virginia Code, 1950, section 8-462(2)(c). However, it lacks the essentials of a final decree in that it does not dispose of the whole subject of the suit, does not give all of the relief contemplated, nor provide for giving effect to its sentence. 4 Minor's Institutes, 1878 Edition, page 860. It decides one of the major issues in the cause and leaves two others for future determination on the merits. It is, therefore, interlocutory, and its nature is not changed by the fact that an appeal could be taken from it. Noel v. Noel, 86 Va. 109, 112, 9 S.E. 584; Allen v. Parkey, 154 Va. 739, 748, 149 S.E. 615, 619, 154 S.E. 919; Mann v. Clowser, 190 Va. 887, 895, 59 S.E. (2d) 78.

In Ryan v. McLeod, 32 Gratt. (73 Va.) 367, 376, the rule which we have consistently followed is stated as follows:

'According to the uniform decisions of this court, a decree which disposes of the whole subject, gives all the relief that is contemplated, and leaves nothing to be done by the court, is only to be regarded as final. Vanmeterv. Vanmeter, 3 Gratt. (44 Va.) 148; Harvey v. Branson, 1 Leigh (28 Va.) 108. On the other hand, every decree which leaves anything in the cause to be done by the court, is interlocutory as between the parties remaining in the court.'

The appellee, in his brief, concedes that the decree is interlocutory as to Southwest Virginia Hospitals, Inc.; but denies that it is final as to remaining appellants. The decree makes no distinction between the Corporation and the remaining appellants. Its provisions apply to all equally.

Where an interlocutory decree is appealable as adjudicating the principles of the cause, the aggrieved party is not limited to the period for perfecting an appeal from a final decree, but may appeal any time until final decree is entered and the time for an appeal therefrom has elapsed. Hess v. Hess, 108 Va. 483, 486, 62 S.E. 273; Richardson v. Gardner, 128 Va. 676, 684, 105 S.E. 225; 1 Freeman on Judgments, 5th Ed., section 38, pages 63, et seq., section 42, page 69.

As to the second ground of the motion to dismiss, it is settled in Virginia that the right of appeal is not affected by any defects or insufficiencies in the suspending bond or by the failure to give any suspending bond.

In Patterson v. Old Dominion Trust Co., 149 Va. 597, 140 S.E. 810, 141 S.E. 759, we said: 'The law of this State does not require a decree to be suspended or a bond given in order to apply for an appeal therefrom, and the omission to do either does not deprive the aggrieved party of that right.'

This proceeding involves a construction of the terms and provisions of an employment contract and an accounting between the parties to the contract.

Appellants are Southwest Virginia Hospitals, Inc., a nonstock corporation, not organized for profit, hereinafter called the Corporation, and fifteen hospitals located in the southwestern area of Virginia, hereinafter called participating hospitals or hospitals. The Corporation is an agency organized (Virginia Code, 1950, section 32-190, Acts 1940, page 376) to administer a group hospitalization plan, including medical and surgical services, hereinafter referred to as the Plan, to such persons as qualified for said service, by the payment of a stipulated sum of money each month. Its board of directors consisted of one representative, usually a doctor, from each of the participating hospitals. The appellee, James C. Lipps, was the managing director of the Corporation and its sole administrative official under a written contract, which defined the duties and obligations of the parties.

Upon the termination of the contract between Lipps and the Corporation in 1947, this controversy arose. The circumstances surrounding the termination are hereinafter set out.

Southwest Virginia Hospitals, Inc., instituted this action in December, 1947, against James C. Lipps and the New Amsterdam Casualty Company, surety on the bond of Lipps for the faithful performance of his duties. Its bill alleged that Lipps had quit his employment and ceased to perform his duties on October 27, 1947. It prayed for a mandatory injunction against Lipps requiring him to refund to the complainants $10,857, allegedly withdrawn without right or authority from the bank account of his employers; for discovery from Lipps of the state of its accounts with its customers; the reference of the cause to a special commissioner to ascertain and state accounts between the parties; and for other relief. The trial court granted a temporary injunction requiring Lipps to refund the $10,857. Thereafter, the complainant filed an amended and supplemental bill, denying that it was liable to Lipps for large sums of money claimed by Lipps on account of an alleged breach of his contract and for services rendered, and averring that Lipps was liable to it for losses caused by his improper conduct in the performance of his duties, and for moneys collected on its behalf and unlawfully withheld.

Fifteen participating hospitals of the Corporation -- Coeburn Hospital, George Ben Johnston Memorial Hospital of Southwest Virginia, Inc., Lee Memorial Hospital, Grundy Hospital, Lebanon General Hospital, Lee General Hospital, Inc., Mattie Williams Hospital, Norton General Hospital, Clinch Valley Clinic Hospital, Dickenson County Hospital, Dr. Botts' Eye, Ear, Nose and Throat Hospital, Norton Clinic, Pulaski Hospital, Inc., St. Elizabeth's General Hospital, and Waddell Hospital -- by their respective owners, filed a petition asking to be made parties complainant to the proceeding, alleging that since Lipps was contending that he had a cause of action against them as well as against the Corporation, and was threatening to prosecute such claim against them in separate litigation, they were entitled to become parties, and praying for a declaratory judgment as to whether they were liable to Lipps. The petitioners were admitted as parties complainant.

Thereafter, Lipps filed his answer and cross-bill, alleging that the Corporation and the hospitals unlawfully terminated their contract with him in order to obtain 'cheaper agency service,' or for some cause other than 'breach of contract, neglect, inefficiency, or like conduct or characteristics' on his part, and thereby became liable to him for damages in the sum of $59,109.60, in addition to $1,169.21 for commissions earned prior to the termination of his contract, and $325.66 for expenses incurred thereafter. He denied liability to the appellants in any amount.

Voluminous testimony was taken and hundreds of exhibits were filed upon the trial.

On June 20, 1950, the trial court entered its decree, holding that all of the appellants were parties to Lipps' contract and bound thereby; that the contract was breached by the appellants; and that since the monthly collections averaged $9,851.63, 10% of which was $985.16, Lipps was entitled, according to the schedule in the contract, to sixty monthly payments of $985.16, that is, $59,109.60. It accordingly adjudged, ordered and decreed that Lipps 'recover of the aforesaid original and petitioning complainants the sum of $59,109.60, to be paid at the rate of $985.16 per month, beginning with a monthly payment of $985.16, November 1, 1947, and continuing thereafter on the first of each month until sixty (60) monthly payments of $985.16 have been made, together with interest on each monthly payment from the time it falls due until paid. ' It further ordered that 'execution may issue for all monthly payments now due, together with interest thereon, and that in the event the monthly payments that hereafter fall due are not promptly paid that execution may be issued thereon as soon as any default in any payment may occur. ' It held that Lipps was entitled to recover the aforementioned sums of $1,169.21 and $325.66. It further held that Lipps was entitled to reasonable compensation for his service in sending out cancellation notices to subscribers. It then referred the issues as to the amount of such compensation, and whether appellants were entitled to damages for the alleged delay of Lipps in sending out cancellation notices, to a special commissioner for report after hearing additional evidence.

Appellants contend the trial court erred in construing the contract involved -- in holding that they breached it; in adjudging the Corporation and individual hospitals liable to Lipps for the sums mentioned; in authorizing execution to issue on its judgment before ascertaining the status of other claims and accounts between the parties; in decreeing the recovery of sums not yet due; in authorizing the issuance in the future of executions upon the non-payment of these sums; and in holding that Lipps was entitled to compensation for sending out notices cancelling the contracts for hospital service.

The principal questions, however, are whether the court erred in its construction of the Lipps' contract, and...

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