Case ID: app-dc_37/html/0568-01.html
Source: Caselaw Access Project
Author: {"author": "Mr. Justice Van Orsdel", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

CURRIDEN v. MIDDLETON.
    Equity; Discovery; Adequate Remedy at Law.
    1. A bill in equity is not maintainable for the mere recovery of damages, although it alleges fraud and deceit on the part of the defendant, as the complainant has an adequate remedy at law.
    2. A bill in equity is not maintainable as calling for discovery, merely because it alleges that books, papers, and documents necessary to prove the complainant’s case are in the possession of the defendant, as such documentary evidence can be procured by legal process. (Citing sec. 1072, D. C. Code [31 Stat. at L. 1358, chap. 854.])
    3. A party coming into equity for discovery alone must allege in his bill of complaint, and verify the allegation, that he has no other means of proving his case.
    No. 2293.
    Submitted November 7, 1911.
    Decided December 4, 1911.
    
      Hearing on an appeal by the complainant from a decree of the Supreme Court of the District of Columbia, sitting as an Equity Court, sustaining a demurrer to and dismissing a bill of complaint, for discovery and for restitution of money alleged to have been fraudulently obtained from the complainant
    
      Affirmed.
    
    The Court in the opinion stated the facts as follows:
    This is a suit in equity brought by appellant, Samuel WCurriden, plaintiff below, against the defendants, Frank L. Middleton, Henry S. Blackmore and William Gr. Orr.
    The amended bill, briefly stated, sets forth that plaintiff was induced through the false and fraudulent representations of the defendants, to invest about $40,000 in a certain patent consisting of a fluid called “Aromaform,” and an apparatus by which the fluid could be used for disinfecting purposes. The patent, plaintiff alleges, was represented to be of great value by the defendants Orr and Middleton; and, relying upon the representations of Middleton, who was a patent attorney, and presumed to be skilled in the art, and who claimed to act only as the agent of Blackmore, plaintiff and one Crandall, a friend of the plaintiff, agreed with Middleton to purchase all of the rights to said patent held by the patentee Blackmore, said rights to be paid for partly in cash and partly in stock of a corporation to be organized by them’with a capital of $500,000.
    It is alleged that in pursuance of the agreement the corporation was formed; that immediately after its formation plaintiff paid Middleton $15,000, for which Middleton receipted as agent; that thereafter plaintiff paid further sums and gave his-notes, incurring an indebtedness of about $40,000, and that all the rights acquired were transferred to said company. It is also alleged that after the corporation was organized, plans-were formulated to engage in the business for which the company had been brought into existence, namely, the manufacture and sale of the fluid and apparatus. A building was leased, and Blackmore, the inventor, was put in charge of the laboratory. One Bright was made president of the company; the plaintiff, treasurer; Crandall, manager; and Middleton and Bright, trustees. When efforts were made to increase the local business, plaintiff avers that he discovered that there had been gross misrepresentations made to him by the defendants in regard to the number of machines in successful use in Washington, and that upon investigation he found that the fluid •and apparatus were worthless for the uses purposed.
    Plaintiff alleges’that in 1906 he entered into an agreement with the company, through its trustees, by which he was to be released from certain obligations amounting to about $13,000, which he had assumed on behalf of the company; that plaintiff has performed his part of the agreement, but that the company, under the control of Middleton, has failed to perform its part, leaving the obligations still outstanding against the plaintiff, and that the corporation is hopelessly insolvent.
    The bill then sets forth the substantial misrepresentations claimed to have been made to plaintiff by defendants, in which it is averred that Middleton was not acting as the agent of Blackmore in the sale of this patent, but that he was in fact interested in the patent rights and expected to receive a portion of any money that might be realized from the sale thereof, and that the acts of defendants, as set forth in the bill, were parts of a conspiracy to deceive and defraud the plaintiff And Crandall; that the corporation was an agency used by the defendants, and especially the defendant Middleton, for the purpose of perpetrating the alleged frauds, and that the books and papers of the company are in the possession and control •of Middleton, for which plaintiff seeks a disclosure so as to enable him adequately to prove the wrongs and deceptions practised upon him by the defendants. Plaintiff prayed that process should issue, requiring defendants to answer the bill and make a disclosure of all facts charged, or that may be pertinent thereto, and that, upon such disclosure and the appearAnce of the truthfulness of the facts charged in the bill, the •court should afford plaintiff due relief by decreeing that defendants make due restitution by paying plaintiff the amounts of money by him paid, as set out in the bill. There is also a prayer for general relief.
    No service was made upon the defendants Orr and Black-more; hence they are not before us. Defendant Middleton demurred to the bill on several grounds, one of which is sufficient for the purposes of this appeal, namely, “because the allegations in said amended bill set forth on their face establish the fact that if the complainant bath any right of action at all against this defendant, it is not such a right of action as is enforceable in a court of equity.” On bearing, the court sustained the demurrer and dismissed the bill.
    
      Mr. L. A. Bailey and Mr. Wm. L. Chambers for the appellant.
    
      Mr. E. Hilton Jackson and Mr. C. R. Calvert for the appellees.
   Mr. Justice Van Orsdel

delivered the opinion of the Court:

It is true that Middleton is charged with having a financial interest in the patent rights; that be received a part of the proceeds of the sale, and that be represented to plaintiff that be bad no such interest, but was only an agent for the purpose of negotiating the sale. It also appears from the bill that be induced plaintiff to purchase a part of the invention with a view of their becoming interested in a corporation that should take over the invention, and each was to take a part of the capital stock. From the bill it appears that the plaintiff ■still owns and retains about three hundred shares of the capital stock of the corporation. He seeks no rescission of any contract, no fiduciary relation exists, and no offer is made to return the stock. the sole relief sought is a final decree for a money judgment to make good the damage be has sustained. Upon the averments of the bill it is contended by counsel for defendant that plaintiff has a full, adequate, and complete remedy at law.

An analysis of the bill discloses an action for fraud and deceit, without any of the essential elements present to entitle plaintiff to be heard in a court of equity. In the original, judiciary act defining the jurisdiction of the courts of the United States it is enacted that “suits in equity shall not be sustained in either of the courts of the United States in any case where a plain, adequate, and complete remedy may be had at law.” Rev. Stat. sec. 723. It follows, therefore, that the courts will not sustain a bill in equity for the mere recovery of damages when the same result can be obtained at law. Where a court of law can proceed to judgment without the aid of a court of equity, and the ends of justice can be equally well administered, the plaintiff must proceed at law, for the defendant is entitled to his constitutional right of trial by jury. Hipp v. Babin, 19 How. 271, 15 L. ed. 633; Buzard v. Houston, 119 U. S. 347, 30 L. ed. 451, 7 Sup. Ct. Rep. 249.

But it is insisted that since discovery is sought, relief can only be afforded by a court of equity. Neither the relief sought nor the relation of the parties is such as to prevent plaintiff from securing everything it is alleged the discovery will disclose by proper process at law. The books, papers, documents, and records of the several transactions set out in the bill are-all that is sought by the discovery. These are charged to be-in the possession of defendant. They can all be obtained by legal process. The statute affords ample relief. D. C. Code, sec. 1072 [31 Stat. at L. 1358, chap. 854], The court below, referring to this branch of the case, said: “Courts of equity are not inclined to maintain a bill merely for purposes-of discovery at the present day, where the statutes have afforded ample means of procuring the evidence in an action at law and this seems to be the sound view of the matter. The defendant is entitled under the Constitution to a trial by jury in matters strictly cognizable at law. In the present ease the plaintiff himself states that he does not feel sure enough of his ground to institute an action at law, and for that very reason wishes-to know what defendant will say. This is an admission that the present bill is an attempt to get the defendant committed upon various questions of fact before instituting legal proceedings, although the plaintiff does not pretend that he is ignorant of any of the matters of fact which he makes the basis of the bill. On the contrary he sets these facts forth with great particularity.”

Discovery is here sought because of uncertainty in the proof. The purpose is ulterior, and is not therefore a ground for ■equity jurisdiction. The American courts have laid down the principle that a party coming into equity for discovery alone must allege in his bill, and verify the allegations by affidavit, that he has no other means of proving his case. Gelston v. Hoyt, 1 Johns. Ch. 543. A review of the bill discloses that plaintiff has totally failed to bring his case within the rule. In the case of Tyler v. Savage, 143 U. S. 79, 36 L. ed. 82, 12 Sup. Ct. Rep. 340, relied upon by plaintiff, the facts, as disclosed by the bill, and the relief sought, are not analagous to the present case. There the bill prayed for an accounting of the assets and debts of the company; that the assets be realized upon as quickly as possible and the funds paid to its creditors, and that the money paid by the plaintiff for capital stock issued to her should be made a debt of the company, and payment of the same, with interest thereon, be decreed to her. An application was made for the appointment of a receiver to take charge of the effects of the corporation, and to administer them under the direction of the court, and for an injunction restraining the company, its officers, and agents, from managing or interfering with its affairs, with an additional prayer for general relief. It will be observed that the facts stated in the bill and the relief sought were entirely different from the present ease.

It is unnecessary to consider the other questions presented by the appeal. The demurrer was properly sustained. The decree is affirmed, with costs. Affirmed.

Upon application of the appellant, an appeal to the Supreme Court of the United States was allowed December 20, 1911.