Bay State Gas Co. v. Lawson

• Citation: 74 N.E. 921,188 Mass. 502
• Parties: BAY STATE GAS CO. v. LAWSON et al.
• Decision Date: 23 June 1905
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

188 Mass. 502

74 N.E. 921

BAY STATE GAS CO. v. LAWSON et al.

Supreme Judicial Court of Massachusetts, Suffolk.

June 23, 1905

COUNSEL

Sherman L. Whipple and Alexander Lincoln, for plaintiff.

James R. Dunbar, Homer Albers, and Harrison M. Davis, for defendants.

OPINION

KNOWLTON C.J.

To this bill in equity the defendant Lawson has demurred generally and on special grounds. It is averred in the bill that the firm of Lawson, Weidenfeld & Co., of which the defendants Lawson and Weidenfeld were members, acted as brokers and fiscal agents for the plaintiff for a series of years, and in that relation received and disposed of a great deal of property belonging to the plaintiff, for which they were accountable. It is also stated that they rendered monthly accounts to the plaintiff, which purported to be statements of the true financial relations of the parties in reference to the business transacted between them. Upon the averments of the bill, these monthly accounts, covering a long period received by the plaintiff without objection, while the general relations of the parties remained unchanged, became accounts stated, which, prima facie, were binding upon them. It is alleged in the bill that these accounts were made falsely and fraudulently in many particulars, and among the prayers for relief is one that the accounts be opened, or that they be surcharged and falsified on account of the frauds and errors which appear in them. These are the substantive statements, which are made in detail, to which the other averments are ancillary. In this particular the case appeals to a well-known branch of jurisdiction in equity, especially in connection with the averments that these defendants were in a fiduciary relation to the plaintiff, and that the accounts were mutual, and of such a nature that they cannot be conveniently and properly adjusted and settled in an action at law. Brownell v. Brownell, 2 Bro. Ch. 62; Clarke v. Tipping, 9 Beav. 284; Alfrey v. Alfrey, 1 Macn. & Ger. 87; Williamson v. Barbour, 9 Ch. Div. 529; Greene v. Harris, 11 R.I. 5; Weed v. Smull, 7 Paige, 573; Floyd v Priester, 8 Rich. Eq. 248; Paulling v. Creagh's Adm'rs, 54 Ala. 646; 1 Story's Eq. Jur. 523-526; 1 Dan. Ch. Pl. & Pr. (6th Am. Ed.) 668. The charges of fraud and error are sufficient, both in form and substance, to entitle the plaintiff to present its case in evidence.

The allegations of fraud, collusion, and conspiracy on the part of the managing officer of the corporation, who controlled the other officers, are important as explaining the long delay of the plaintiff in seeking a remedy from the defendants. Except for some such explanation the plaintiff would appear to be bound by the acts of its officers in accepting these accounts and treating them as true, and would be barred by laches in neglecting to bring its suit earlier. But, if this part of the case is proved, the statute of limitations will not be a bar, and no laches will appear. Wells v. Child, 12 Allen, 333-335; Gould v. Emerson, 160 Mass. 438-440, 35 N.E. 1065, 39 Am. St. Rep. 501.

The failure to join Kimball as a party defendant is not fatal to the case. The averments as to the arrangement between him and the...