Beggs v. Edison Electric Light & Illuminating Co.

• Decision Date: 21 June 1892
• Citation: 11 So. 381,96 Ala. 295
• Parties: BEGGS v. EDISON ELECTRIC LIGHT & ILLUMINATING CO.
• Court: Alabama Supreme Court

11 So. 381

96 Ala. 295

BEGGS v. EDISON ELECTRIC LIGHT & ILLUMINATING CO.

Supreme Court of Alabama

June 21, 1892

Appeal from city court of Birmingham; H. A. SHARPE, Judge.

Bill in equity by H. T. Beggs against the Edison Electric Light &amp Illuminating Company for an accounting and to recover certain money alleged to have been obtained through fraud. From a decree overruling a demurrer thereto, defendant appeals. Reversed.

Lane & White, for appellant.

Jas. H. Little, for appellee.

STONE C.J.

Courts of equity have, for a long time, exercised a general jurisdiction in cases of mutual accounts founded in privity upon the ground of the inadequacy of the remedy afforded by the common law; and this equitable interposition has been extended until equity will now entertain suits for accounts in matters which were formerly only cognizable at law. The ancient common-law action of account being so imperfect in its processes, and so inadequate in its remedies jurisdiction in such matters was originally given to equity, for the reason that the common-law courts could not give any remedy at all, or the remedy was not as complete as that furnished by the chancery court. As courts of equity now entertain concurrent jurisdiction with the courts of law, in matters of accounts, a decision as to the proper tribunal must be governed by considerations of convenience and adequacy; and this is determined by the facts pertaining to each individual cause of action and the relief sought. 1 Story, Eq. Jur. § 457. As said above, where the accounts are mutual and founded in privity, the jurisdiction of equity is undoubted. But where the accounts to be examined and stated are on one side only, the allegations of the bill must show the existence of certain conditions which are prerequisite to the exercise of equitable jurisdiction. There must either be so great a complication in the matters of account that a common-law court is unable to ferret them out, or there must be the allegations of such facts as show the necessity for a discovery, and this discovery must be prayed for. The reason for this rule is evident; for in going into courts of equity, one is met at the threshold with the inquiry, can complete and adequate remedy be obtained in a court of law? If this question be answered in the affirmative, the litigant must retrace his steps, unless the allegations of his bill show that the matters involved come within the exclusive jurisdiction of equity. The object of the present bill as gathered from its allegations and the prayer is the stating of an account between the complainant corporation and the defendant, and the obtaining of a decree against the defendant for $3,000, which is alleged to have been obtained by the defendant through fraud. There are general allegations in the bill of complication in the accounts between the defendant and the Merchants' Electric Light & Power Company, with which company complainant consolidated before the filing of the present bill. But there is no such particularity in these allegations as show in what way, and in reference to what matters, the accounts between the defendant and the company are complicated. There is no prayer for a discovery, nor does the frame of the bill disclose that a discovery is necessary. It is now the settled doctrine of equity jurisprudence that, when the accounts to be examined are on one side only, great complication ought to exist in the accounts or a discovery should be required in order to include a court of chancery to exercise jurisdiction. As is said by Mr. Story: "In such a case, if no discovery is asked or required by the frame of the bill, the jurisdiction will not be maintainable; *** for in such case there is not only a complete remedy at law, but there is nothing requiring the peculiar aid of equity to ascertain or adjust the claim." 1 Story, Eq. Jur. § 458. In Fowle v. Lawrason, 5 Pet. 495, Chief Justice MARSHALL, in delivering the opinion of the court, said: "In all cases in which the action of account would be the proper remedy at law, and in all cases where a trustee is a party, the jurisdiction of a court of equity is undoubted. It is the proper tribunal. And in transactions not of this peculiar character great complication ought to exist in the accounts, and some difficulty should be interposed, or some discovery should be required, in order to induce a court of chancery to exercise jurisdiction." It was said in Knotts v. Tarver, 8 Ala. 743, a leading case on this subject, "that it is not sufficient to give a court of equity jurisdiction that an account exists between the parties, or that fraud has been practiced; but there must be a discovery wanted in aid of the account, or to disclose the fraud, or the accounts must be so complicated as to require the aid of a court of chancery to adjust them; otherwise there is a complete remedy at law." In cases where a discovery is not prayed for, the complication must be so alleged in the bill, as to show on its face the inadequacy of a remedy at law. The rule stated by Lord COTTENHAM is: "Where the case is so complicated, or...