Church v. Anti-Kalsomine Co. , 118 Mich. 219 ( 1898 )

Moore, J.

The plaintiff commenced this suit in the circuit court for the county of Kent by declaration, a copy of which is found in the statement of the case. The defendant demurred to the declaration. The circuit judge sustained the demurrer. The plaintiff brings the case here by writ of error.

Several reasons are set up in the demurrer why the declaration is not sufficient. The reasons relied upon in the briefs and arguments of counsel are:

“1. The declaration purports to be in an action of tort, but sets forth a cause of action on contract only.

. “2. The cause of action set forth in the declaration is not the subject-matter of an action at law, and is cognizable only in a court of equity.”

As to the first reason assigned in the demurrer, while it is true the cause of action arose because of the contract relations between the parties, a considerable part of the case of the plaintiff rests upon matters outside of the contract, not a part of it, but connected with and dependent upon it, growing out of the duty which defendant owed to plaintiff. The declaration comes clearly within Chandler v. Allison, 10 Mich. 460; Allison v. Chandler, 11 Mich. 542; Oliver v. Perkins, 92 Mich. 304; Hanley v. Balch, 94 Mich. 315.

As to the second reason assigned, it is claimed on the part of the defendant: “The contract set out in the declaration created such fiduciary relation between Church and the Anti-Kalsomine Company that a court of equity has exclusive jurisdiction of controversies which arise between them under the contract; ” and that the case is controlled by Petrie v. Torrent, 88 Mich. 43; also citing Pratt v. Tuttle, 136 Mass. 233, and other cases. A reference to some of these cases shows them not to be in point, under our decisions. They state cases which are daily tried on the law side of our court without question.

The defendant also claims: “The contract between Church and the Anti-Kalsomine Company did not create a technical partnership. It did create a joint interest in the net profits of the wall-coating department of the AntiKalsomine Company’s business, which was so far analogous to a true partnership that only the same remedies are available to the parties that would be available to actual partners;” and cites, in support of this proposition, the cases of Marston v. Gould, 69 N. Y. 220; Channon v. Stewart, 103 Ill. 541; Hallett v. Cumston, 110 Mass. 32.

Defendant also claims: “Equity has exclusive jurisdiction over the case set forth in the declaration in this cause, because it is too complicated in its circumstances to be tried by a jury.” It is said the defendant is as much interested in the question of how the case shall be tried as the plaintiff; that it has a right to have the case so tried that there shall be a full, complete, and adequate disposition made of it. It is insisted the facts in the case are so complicated that a jury could not remember them, and a trial by a jury would be a farce. Counsel cite Blair, etc., Land Co. v. Walker, 50 Iowa, 376; Burt v. Harrah, 65 Iowa, 643; Garner v. Reis, 25 Minn. 475; Fair v. Stickney Farm Co., 35 Minn. 380; Hedges v. Methodist Church, (Sup.) 47 N. Y. Supp. 93. These cases all arose in code states, and some of them are cases such as frequently are tried upon the law side of pur courts. This case is already commenced upon the law side of the court. The defendant asks that it be dismissed, because the law side of the court will not give the plaintiff a full, complete, and adequate remedy, and because the case comes exclusively within the jurisdiction of a court of equity.

It becomes important to see just what is claimed by the declaration. It commences by giving a history of the relations between the parties which led up to the making of the contract. It sets out the contract in full. It states what duties one party to the contract owed to the other. It gives a history of transactions on the part of the defendant which were wrongful and fraudulent, which resulted in a breach of the contract on the part of the defendant, and a loss of the profits which should have been made and shared by the plaintiff. It asks damages for this wrongful and fraudulent breach of the contract. It does not show any fiduciary or trust relation between the parties different from the relation existing between the parties to any contract to observe its terms. There is no claim in the declaration that defendant has in its hands any property or any profits which plaintiff is entitled to share, or that there are mutual or unsettled accounts, or that the accounts are so complicated that an accounting is necessary. The claim is, in substance, that defendant fraudulently and wrongfully destroyed propertj7 and profits which should have accrued to plaintiff because of the contract relations between the parties. There is no suggestion that defendant has property in its hands as trustee for plaintiff. It does not appear that such a fiduciary relation exists between the parties as to give the court of equity exclusive jurisdiction. 1 Pom. Eq. Jur. § 157; Ward v. Peck, 114 Mass. 121; Frue v. Poring, 120 Mass. 507; Badger v. McNamara, 123 Mass. 117. Actions at law have been sustained where the fiduciary relation was said to exist. Bennett v. Smith, 40 Mich. 211; Wright v. Dickinson, 67 Mich. 580 (11 Am. St. Rep. 602); Murphy v. Craig, 76 Mich. 155; Collar v. Collar, 86 Mich. 507 (13 L. R. A. 621). But, inasmuch as the declaration does not claim that defendant has either profits, money, or property in its hands belonging to plaintiff, or in which he is entitled to share, the claim that defendant is shown to be the trustee of plaintiff is not sustained.

Upon the proposition that, inasmuch as the declaration shows there must be an accounting, therefore the case must be heard in equity, it may he said the action of account was originally cognizable only in the common-law courts, but later courts of equity exercised jurisdiction in cases of mutual account, because the remedy at law was inadequate, and have extended the remedy to many cases to which the remedy at law was never applied.

“ So that now the jurisdiction extends, not only to cases of an equitable nature, but to many cases where the form of the account is purely legal, and the items constituting the account are founded on obligations purely legal. Upon such legal obligations, however, suits, although not in the form of actions of account, yet in the form of assumpsit, covenant, and debt, are still daily prosecuted in the courts of common law, and legal defenses are there brought forward. But, even in these cases, as the courts possess no authority to stop the ordinary progress of such suits, for the purpose of subjecting the matters in dispute to the investigation of a more convenient tribunal them a jury, unless the parties agree to a voluntary arrangement for this purpose, the cause often proceeds to trial in a manner wholly unsuitable to its real merits.” 1 Story, Eq. Jur. § 442.

The case at bar is now on the law side of the court. There is a very clear intimation, in the section just quoted, that the jurisdiction is concurrent, and equity will not interfere where the case has been commenced on the law side of the court. In.l Pom. Eq. Jur. § 179, it is said:

“ In further limitation upon the power of equity to interfere where the primary rights, interests, or estates are legal, the doctrine is well settled that, when the jurisdictions of law and of equity are concurrent, the one which first takes actual cognizance of any particular controversy ordinarily becomes thereby exclusive. If, therefore, the subject-matter or primary right or interest, although legal, is one of a class which may come within the concurrent jurisdiction of equity, and an action at law has already been commenced, a court of equity will not, unless some definite and sufficient ground of equitable interference exists, entertain a suit over the same subject-matter,” etc.

See note to section 179,1 Pom. Eq. Jur.; Northeastern R. Co. v. Martin, 2 Phil. Ch. 758; Smith v. M'Iver, 9 Wheat. 532; Bank of Bellows Falls v. Railroad Co., 28 Vt. 470; Crane v. Bunnell, 10 Paige, 333; Mason v. Piggott, 11 Ill. 85; Ross v. Buchanan, 13 Ill. 55.

If we rightly interpret the meaning of the words used in this declaration, it is a claim for a money judgment, wherein plaintiff claims unliquidated damages for a fraudulent breach of a contract. This is a proper claim to be submitted to a jury. 1 Pom. Eq. Jur. § 178; Teft v. Stewart, 31 Mich. 367; Linn v. Gunn, 56 Mich. 447; Frue v. Loring, 120 Mass. 507; Badger v. McNamara, 123 Mass. 117.

It is urged that the accounts are so complicated that a jury could not retain the items, and a trial by a jury would be so long and so unsatisfactory as to be a farce. The declaration does not show there are mutual accounts, nor does it show there are long and complicated accounts upon one side. It is doubtless necessary, in a business of the magnitude shown to have been done by the defendant, to examine a good many books before conclusions shall be reached; but can it be said to be the law that in only simple cases, involving small amounts, may the parties insist on trial by jury ? Shall it be said, if the case is one of importance, a jury trial cannot be had? There are not many important cases tried where either the court or the jury can remember all the items of testimony introduced, but aided by counsel, and by experts who go over the accounts and reach results, it is usually not difficult to administer substantial justice. There is legislation which is intended to reach such difficulties as are suggested here. If the case was tried in equity, it is not at all likely the judge would hear the testimony and examine the books personally, but would refer it to a master. If the parties desired, the court, in the action at law, could refer the case to referees. 2 How. Stat. § 7378. It is true the court cannot do this if either party demands a trial by jury within 10 days after issue. If this is done, the court is authorized to appoint one or more auditors to investigate the accounts, and take evidence in relation thereto, and to make a report thereon, which report may be used in a jury trial. 2 How. Stat. §§ 7386, 7391. The plaintiff having elected to try his case on the law side of the court, he is entitled to have it tried there, so far as anything appears to the contrary in the declaration.

The judgment is reversed, the case is remanded, and defendant is given 20 days in which to plead.

The other Justices concurred.