Sherwood Bros., Inc. v. Yellow Cab Co.

Argued May 4, 1925. Plaintiff having sued defendant for an alleged breach of its written agreement "to purchase from [plaintiff] all the motor fuel consumed by [defendant] in the conduct of its business in Philadelphia" between certain dates, filed the present bill in equity, in aid of the suit at law, averring its pendency, that discovery was needed of the extent of defendant's business during the period specified, in order to prepare a proper statement of claim in the action at law, and prayed that defendant be required to answer certain interrogatories. The first two of these related to the extent of defendant's purchases between the dates named, and hence were material; the third was immaterial, as respects the purpose for which discovery was sought, since it asked only for the names of the other concerns from whom defendant had supplied its needs. Defendant answered, setting forth what it alleges is a full defense to plaintiff's claim; the court below dismissed the bill on the ground that, under the facts stated, plaintiff could, in the action at law, recover nominal damages only, and it thereupon appealed. The decree of dismissal is erroneous, so far as relates to the first two interrogatories.

Two preliminary questions are raised. Defendant contends that, as plaintiff ordered the case for a hearing on bill and answer, the averments of the latter must be taken as true. The rule referred to is much too broadly stated; it applies only to such well-pleaded facts as are relevant to a consideration of the points to be determined at the particular hearing. As we will show later, the ultimate defense to the suit at law was not relevant in the proceedings in equity.

Defendant also claims that plaintiff is barred from now complaining of the rulings and decision of the court below, because it did not file exceptions thereto in accordance with Equity Rules 69 to 72. These rules apply only to cases which have been tried, where findings of fact and conclusions of law have been reported, and ten days allowed for exceptions thereto; they have no applicability where, as here, the hearing is on the pleadings, and a final decree is forthwith entered.

This brings us to a consideration of the main question involved. By section 13 of the Act of June 13, 1836, P. L. 784, 789, it is provided that equity shall have jurisdiction "so far as relates to . . . . . . the discovery of facts material to a just determination of issues, and other questions arising or depending in the said courts." As applied to the pending case, this means facts which will be "material" in the trial of the suit at common law. No other meaning has ever been given to the word "material," when referring, as here, to the obtaining or production of evidence, whether at the trial, or by bills of discovery, depositions, commissions or letters rogatory. In all such instances, facts are "material" which tend to establish any of the issues raised, although each of them may be but weak links in the chain of proof leading up to the recovery sought. The statute does not otherwise limit the right to have discovery of such material facts; nor do the courts, unless it should clearly "appear on the face of such a bill that the claim . . . . . . in aid of which discovery was sought, could not be maintained because forbidden by law, or contrary to public policy, or for other such conclusive reason": Lesser v. Henry, 50 Pa. Super. 440, 443.

Since plaintiff is seeking, by its action at law, to recover damages for defendant's failure to purchase, between the dates specified, all the motor fuel used in its Philadelphia business, necessarily a knowledge of the extent thereof, as inquired of in the first two interrogatories, is most "material," for otherwise it can neither properly prepare its statement of claim, nor successfully prove its case at the trial. The other points referred to in the opinion below, and in the brief of appellee, are prematurely raised, and hence are not now decided by us.

The decree of the court below is reversed at the cost of appellee, and the record is remitted with directions that a decree be entered requiring defendant to make full and complete answers to the first and second interrogatories attached to plaintiff's bill of complaint.