The opinion of the court was delivered by: BYERS
This is a motion to vacate or amend an interlocutory order or decree of January 20, 1939, directing an accounting. There was a final order settling the account on October 15, 1940, from which no appeal was taken so far as the records of this court disclose.
The history of this litigation can be gleaned from these reports: D.C., 23 F.Supp. 420; D.C., 25 F.Supp. 745; D.C., 35 F.Supp. 80, and D.C., 45 F.Supp. 305, 310.
In the latter appears the opinion disposing of the contest finally, which closes with these words: "It, therefore, becomes clear that while the Saint Paul Converted the agency to its own use without legal right, the plaintiff's action must fall and she cannot recover damages because of the lack of proof upon which a finding of damages in her favor can be made."
Elsewhere therein it is shown that the inability to prove damages proceeds not from the defendant's retention of the books and records of the agency (after delivery by the plaintiff and failure to procure return) but from the showing made by the books, which reflected an annual loss (except in 1936) which totaled about $25,000.00 from 1932 to the decedent's death on July 31, 1937.
The moving affidavit by plaintiff's attorney states in part:
"It is thus now conclusively established that the defendant had been guilty of tortious and reprehensible conduct. A court of equity should not have extended equitable relief to the defendant by directing an accounting, but should have postponed the accounting proceeding until the question of the propriety of defendant's actions was determined. Defendant should have been held to the equitable rules that he who comes into equity must come in with clean hands; and that he who seeks equity must do equity.
"Your deponent therefore prays that the Court reconsider its decision in the interlocutory order and vacate and set aside the same and permit the plaintiff to prove damages of a sum less than $63,000.00."
It is doubtful if Rule 52(b), Federal Rules of Civil Procedure, 28 U.S.C.A. following section 723c, contemplates such an amendment to the findings made three years and eight months prior to this motion. I should suppose that the final order of October 15, 1940, should have been appealed from, if the plaintiff proposed to review the aspect of the case which was properly denoted as equitable, when the first opinion was written and the order thereon was signed. Perhaps that is debatable, since all proceedings are about to ripen into one final judgment which will embody the outcome of the various proceedings, hearings and the trial heretofore had.
The motion must be denied on the following substantial grounds:
The motion to strike the equitable defenses and counterclaims was denied in spite of the plaintiff's assertion that the defendant had done the things which the Court has now declared the evidence to have established; i. e., deprived the plaintiff of her records and taken over the employees and the agency, etc.
That was the law of the case when the hearing was had pursuant to the order transferring to the then equity side of the court the equitable issues tendered by the defendant.
The most recent finding that "the Saint Paul without right converted the agency to its own use" does not change the fact that the decedent has been shown to have been indebted to the defendant in the sum of $63,277.08 arising from his mishandling of funds as the agent of the defendant.
The plaintiff brought the defendant into court, and no good reason appears, from all that has been laid bare in this long litigation, why the defendant should not have been permitted to plead ...