Walker v. Brooks

• Decision Date: 31 August 1878
• Citation: 125 Mass. 241
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court
• Parties: Joseph H. Walker & another v. James W. Brooks & another

125 Mass. 241

Joseph H. Walker & another v. James W. Brooks & another

Supreme Court of Massachusetts

August 31, 1878

Argued October 5, 1877

Worcester.

Demurrer sustained, and bill dismissed.

J. J Storrow, for the defendants.

G. F Hoar, (F. T. Blackmer with him,) for the plaintiffs.

Gray, C. J. Endicott & Lord, JJ., absent.

OPINION

Gray, C. J.

This bill was filed May 21, 1877, by Joseph H. Walker and George M. Walker, copartners, against James W. Brooks and Horace H. Bigelow. The material allegations of the bill are as follows:

1st. That on March 21, 1872, the defendant Bigelow executed to the two plaintiffs a lease of and license to use a certain patented machine for compressing heels for boots and shoes, for which the plaintiffs were to pay him a royalty of ten cents, or, in case of their rendering true accounts to him monthly, the sum of one half cent, for each pair of heels thereby compressed.

2d. That, at the same date, Bigelow entered into an agreement with Joseph H. Walker, one of the plaintiffs, to pay him monthly for certain services in introducing the machine to the public (which he afterwards performed) sums equal to those to be paid by the plaintiffs to Bigelow under the lease and license from him.

3d. That Bigelow has assigned each of these contracts to the other defendant Brooks, who has become in equity entitled to all the advantages thereof and to receive all sums of money due or to become due from the plaintiffs under the same, and has become in equity bound to perform all the obligations expressed or implied therein to be performed by Bigelow.

4th. That all the rights and obligations of Joseph H. Walker, under his agreement with Bigelow, have been assigned to and vested in the plaintiffs, and they are in equity entitled to receive all sums which are or may become due under the same.

5th. That the plaintiffs, under the lease and license to them, have used the patented machine, and have duly kept and rendered accounts to the defendants, and have paid to them in full for such lease and use to February 1, 1877, the sum of $ 3000, and now owe and are ready to pay to the defendant Brooks a further sum of $ 164.75 for such use since that time.

6th. That there is due a like sum from Brooks to the plaintiffs, and that they have demanded of him that he should pay to them the sum so paid by them, and should set off the sum so due from them as rent as aforesaid against the sum so in equity due to them from him; and that he has wholly refused to do so, and threatens to sue them for this sum, and to set aside and avoid the lease and license, and to seize upon and take possession of the leased machines, alleging that the plaintiffs have not performed the stipulations and conditions thereof on their part.

7th. That the plaintiffs have fully performed the same, and are ready and offer to do so hereafter, except that they insist and aver that in equity they are entitled to have the sums due as aforesaid, from either of the parties to the other, set off, and that such right to a set-off operates as an extinguishment and payment of those sums.

The prayer of the bill is for a discovery under oath; for an account of all sums due from the plaintiffs to the defendants or either of them, and from the defendants or either of them to the plaintiffs; for a set-off of such sums against each other; for an injunction against bringing any suit against the plaintiffs on account of any claim against them as above stated; and for further relief.

To this bill the defendants have demurred, because the plaintiffs have a plain, adequate and complete remedy at law, and because they have not stated such a case as entitles them to any discovery or relief in equity. We are of opinion that the demurrer is well taken, and that the bill cannot be sustained on any of the grounds assigned by the learned counsel for the plaintiffs.

It is attempted, in the first place, to bring the case within the rule, that where there are cross demands between the parties of such a nature that if both were recoverable at law they would be the subject of a set-off, then, if either of them is a matter of equitable jurisdiction, the set-off may be enforced in equity. It is said that the defendant Brooks, as the assignee of the claim of the other defendant Bigelow against the plaintiffs, has an equitable right of action against the plaintiffs, which, though at law it could only be sued in the name of Bigelow, might in equity be sued by Brooks; and that such right of Brooks to sue the plaintiffs in equity affords a foundation for jurisdiction in equity to order a set-off of that equitable right against the plaintiffs' claim.

But a court of equity will not entertain a bill by the assignee of a strictly legal right, merely upon the ground that he cannot bring an action at law in his own name, nor unless it appears that the assignor prohibits and prevents such an action from being brought in his name, or that an action so brought would not afford the assignee an adequate remedy.

In Hammond v. Messenger, 9 Sim. 327, 332, Vice Chancellor Shadwell so held, and said, "If this case were stripped of all special circumstances, it would be simply a bill filed by a plaintiff who had obtained, from certain persons to whom a debt was due, a right to sue in their names for the debt. It is quite new to me that, in such a simple case as that, this court allows, in the first instance, a bill to be filed against the debtor by the person who has become the assignee of the debt. I admit that, if special circumstances are stated, and it is represented that, notwithstanding the right which the party has obtained to sue in the name of the creditor, the creditor will interfere and prevent the exercise of that right, this court will interpose for the purpose of preventing that species of wrong being done; and, if the creditor will not allow the matter to be tried at law in his name, this court has a jurisdiction, in the first instance, to compel the debtor to pay the debt to the plaintiff; especially in a case where the act done by the creditor is done in collusion with the debtor. If bills of this kind were allowable, it is obvious that they would be pretty frequent; but I never remember any instance of such a bill as this being filed, unaccompanied by special circumstances."

It is true that Mr. Justice Story, in his Commentaries, observed upon that opinion, "This doctrine is apparently new, at least in the broad extent in which it is laid down; and does not seem to have been generally adopted in America. On the contrary, the more general principle established in this country seems to be, that wherever an assignee has an equitable right or interest in a debt or other property (as the assignee of a debt certainly has) there a court of equity is the proper forum to enforce it; and he is not to be driven to any circuity by instituting a suit at law in the name of the person who is possessed of the legal title. A cestui que trust may ordinarily sue third persons in a court of equity, upon his equitable title, without any reference to the existence of a legal title in his trustee, which may be enforced at law." Story Eq. Jur. § 1057 a. To the same effect is the statement in Story Eq. Pl. § 153.

But the adjudged cases, including those cited by the learned commentator, upon being examined, fail to support his position, and show that the doctrine of Hammond v. Messenger is amply sustained by earlier authorities in England and in this country.

A century and a half ago, parties for whose benefit their agent had obtained policies of insurance in his own name, brought bills in equity against the underwriters. But Lord Chancellor King refused to sustain them, saying, "At this rate, all policies of insurance would be tried in this court, for they are generally taken in the name of a trustee;" and again, "If I should give way to this attempt, no action would ever be brought on a policy." And his decision was affirmed in the House of Lords. Dhegetoft v. London Assurance Co. Mosely, 83, and 4 Bro. P. C. (2d. ed.) 436. Fall v. Chambers, Mosely, 193. Lord Hardwicke afterwards expressed a like opinion. Motteux v. London Assurance Co. 1 Atk. 545, 547.

In Cator v. Burke, 1 Bro. Ch. 434, Cator, with whom Hargrave had deposited, as security for a debt of his own to Cator, a bond made by Burke to Hargrave, filed a bill in equity against Burke and Hargrave, to compel Burke to pay the debt to the plaintiff, out of a counter bond for a larger amount, which Hargrave had made...