PER CURIAM:
¶1
After a careful study and consideration of the record in this case, in the light of the issues made by the exceptions, and after considering the briefs of counsel, we are of'the opinion that the Circuit Court in its well-considered decree, correctly decided the case. We adopt that decree as the judgment of this Court. Let it be reported.
¶2
Judgment affirmed.
Messrs. Associate Justices Bakeeí, Fishburne and Stukes, and Circuit Judges SeasE and Henderson, Acting Associate Justices, concur.
Download
Copy
Embed on your site
iframe Markdown Preview card Button Hover to preview · click to copy the code
Case posture Posture Before L.D. LIDE, J., Florence County, July, 1942. Affirmed.Action at Law by A.N. Rush against J.M. Thompson, and Equity Suit by J.M. Thompson against A.N. Rush, D. A. Baker, and others. From an Order of Judge Lide requiring that the Law Action be tried first, and that the Equity Suit be stayed until further Order of the Court, and denying certain other Motions of the parties, J.M. Thompson appeals.
The Circuit Order of JUDGE LIDE, unanimously adopted as the opinion of the Court, follows:
The first case stated will hereinafter be referred to as the law case, and the second case will hereinafter be referred to as the equity case. Mr. A.N. Rush, who is the plaintiff in the law case and the principal defendant in the equity case, will generally be referred to as Rush; and Mr. J.M. Thompson, who is the defendant in the law case and the plaintiff in the equity case, will generally be referred to as Thompson.
The law case was commenced on January 14, 1942, to recover the sum of $75,000.00 damages for the alleged fraudulent breach of a contract between Rush and Thompson, and the answer to this complaint, was in effect a general denial. The complaint, however, was subsequently by consent amended, and a demurrer to the same was duly filed by Thompson, on the ground that it appeared on the face thereof that there was a defect of parties because Sinclair Refining fining Company was not made a party defendant; but the Court on hearing the demurrer overruled the same, as will appear by reference to order dated April 6, 1942, for while the law case is based upon an alleged contract between Rush and Thompson, which involved an agency contract to which the company was a party, there were no allegations tending to state any case of action whatever against the company by reason of any breach of the agency contract or otherwise, and the company was not a party to the Rush-Thompson contract.
The answer of Thompson to the amended complaint sets up, in addition to what is in effect a general denial, affirmative defenses pleading the statute of frauds, lack of consideration, and that there is a defect of parties defendant, in that Sinclair Refining Company is not only a proper but a necessary and indispensable party to the determination of the rights of the plaintiff and of the defendant with reference to the subject-matter of the suit. But it will be observed that
Sinclair Refining Company was not made a party to the equity case.
The equity case was commenced on or about the 18th day of February, 1942, a little more than a month after the law case was instituted. The complaint in the equity case sets up three notes given by Rush to Thompson and secured by mortgages on certain lots of land in Olanta and Turbeville, respectively, and certain other evidence of indebtedness of Rush to Thompson. The complaint also in Paragraphs 13 and 14 refers to the contract between Rush and Thompson (doubtless the same contract mentioned in the law case but the allegations thereabout are different); and it is alleged in substance that this contract was merely a contract of employment upon a salary based on one-half of the net profits of the business, and that the contract had been terminated by Rush of his own violation. The complaint in Paragraph 16 thereof states the account between Thompson and Rush shows a balance due by Rush to Thompson of $2,977.13, as of May 15, 1939, and the prayer of the complaint is for a mutual accounting, foreclosure of mortgages, etc.
It should be stated that the defendants in the equity case other than Rush were merely made parties to the suit because they have or assert certain claims by way of mortgage and judgment liens against the property described in Paragraphs 3 and 6.
The answer of the defendant Rush to the complaint in the equity case sets up by way of defense the pendency of the law case, which is pleaded in abatement; that the equity case is merely a defense to the prior law case, and that Thompson should be required to set up all his defenses in the first action; and that the equity case should be held in abeyance until the final disposition of the prior action, to wit, the law case.
And then reserving his right to move the Court to pass on his plea in abatement, abeyance, etc., the defendant Rush sets up certain affirmative defenses, the first of which admits
with very slight variation all the allegations of the complaint with reference to the mortgages and other evidences of indebtedness of Rush to Thompson; and admits that the items of credit and debit between the plaintiff and the defendant are substantially correctly set out as of May 15, 1939, except that the item designated as `Salary' therein was the defendant A.N. Rush's half of the net profits of the business.
And in the second affirmative defense Rush sets out the contract as in the law case, and alleges that an accounting was had in full on or about May 15, 1939; and that Rush is not now indebted to Thompson, his share of the profits of the business of the Sinclair agency under his agreement with the plaintiff having more than covered the balance due under the mortgages as set out in the complaint. And in the third affirmative defense it is alleged that no mutual accounting is necessary, as Rush admits the amount due as of May 15, 1939, and has tendered the amount due under the mortgages upon compliance by the plaintiff with his contract that foreclosure is premature under the contract; and that Rush is entitled to a jury trial upon his allegations of a fraudulent breach of contract. The fourth affirmative defense sets up usury; and the prayer of the answer is that the equity cause be dismissed or held in abeyance until the trial of the law case.
Thompson gave notice through his attorneys of a motion before me to consolidate the two cases above stated, and also for an order referring the equity cause, or the consolidated cause, to the Master, with instructions to take the testimony and report the same to the Court with all convenient speed. And Rush by his attorneys also gave notice of a motion before me for an order sustaining his plea of abatement of the equity cause, or for an order holding the same in abeyance until the trial of the law case, and requiring the defendant Thompson to put in all his defenses in that case.
Both of the motions came on to be heard before me at my chambers at Marion on June 27, 1942, and after argument of counsel were taken under advisement.
Upon a review of the record it is quite clear that most (if not all) of the allegations in the equity complaint might have been set up by way of counterclaim or defense in the law case, if counsel for Thompson had seen fit to do so. In other words, the equity case is somewhat in the nature of a cross-bill. Hence if we approach the matter realistically it is apparent that both cases are concerning the same controversy, and that the only matters vitally in issue arise out of or relate to the contract (presumably a parol one) between Rush and Thompson referred to in both cases.
If the two cases were formally consolidated and referred merely to take the testimony or otherwise, or if the equity case were alone referred, the practical effect would be to deprive Rush of a jury trial of the issues raised in the law case first brought by him, which as definitely appears from the allegations of the complaint is for damages for the alleged fraudulent breach of a contract. If the matters set up in the equity complaint had been pleaded defensively to the law complaint, we would of course have had but one action, and although involving both legal and equitable issues, Rush could not have thus been deprived of his right to a jury trial on the legal issues. And where both legal and equitable issues are involved in the same cause the Circuit Judge must determine in his discretion which shall first be tried. But it is argued here by counsel for Thompson that the equity issues should have priority. However, the true test is, which will probably be decisive of the controversy?
And in the case at bar the answer seems to be manifest, that whatever equitable issues there may be, they are really dependent upon the determination of the legal issues. If, for example, the law case is determined adversely to Rush, there is practically nothing left to try in the equity case, for he admits the correctness of the accounting as of May 15, 1939,
and the execution of the mortgages and the other evidences of indebtedness. On the other hand, if the law case terminates in his favor the mortgages and other indebtedness will have been adjudged wholly (or at least partially) paid. The Court of Common Pleas is scheduled by statute to convene on the third Monday in September next for two weeks; hence it does not appear that any undue delay should result.
Pomeroy on Code Remedies, Section 86, says: The equitable issues may be tried first and the legal issues afterwards, or the order may be reversed as the nature of the case and the relations of the issues seem to require. (Emphasis added).
This is quoted with approval in the case of Knox v. Campbell , 52 S.C. 461 , 30 S.E., 485 , 486 , where it was held that in that particular case the equitable issues should be tried first because this would probably render unnecessary all further proceedings in the case.
In the case of Oliver v. McWhirter , 109 S.C. 358 , 96 S.E., 140 , 142 , strongly relied on by counsel for Thompson, the Court says: Furthermore, when the pleadings present both legal and equitable issues, those should be tried first that are likely to result in a final judgment, and render unnecessary the consideration of the other issues. And in the case of Farmers' Merchants' National Bank v. Foster , 132 S.C. 410 , 129 S.E., 629 , 632 , the Court said: Where an equitable defense is interposed to a legal action, it is within the discretion of the presiding Judge to try either issue first, etc.
The following statement from 1 Am. Jur., 477, seems to be well supported by the authorities generally:
The phrase `consolidation of actions' is used in three different senses, embracing: (a) The power of the Court to stay proceedings in some cases pending before it until it can be determined whether the disposition of another case may not settle all; (b) its power to order the several actions to be tried together; and (c) its power where several cases are
pending which might be made the subject of a single action or suit, to enter an order which fuses the several proceedings into one.
I also quote the following from 1 C.J.S., Actions, § 133, p. 1409: Where the same parties and the same subject matter are involved in both an action at law and a suit in equity, the pendency of one may authorize a stay of proceedings in the other, the facts and circumstances in each particular case determining in large measure whether the stay should or should not be granted.
The parties defendant to the equity cause other than the defendant Rush were given notice through their attorneys of at least one of the motions before me, and no objection to the exercise of the Court's discretion has been made in their behalf, and it does not seem to me that they will be prejudiced in any way by a prior trial of the law case, to which I have concluded Rush is entitled.
And on consideration of the entire matter, it does not seem to me that it would be expedient or desirable to consolidate the two cases involved here, except indeed in the sense indicated in subdivision (a) of the above quotation from American Jurisprudence, but that it would be proper to authorize a stay of the proceedings in the equity case pending the determination of the law case. Hence it is my conclusion, as I have already indicated, that the equity case should be stayed and held in abeyance until the further order of the Court, so as to permit the prior trial and determination of the law case; and that in all other respects both motions before the Court should be refused. And it is so ordered. Source: CourtListener
