Opinion
07-01-1889
MAHER v. MUTUAL ELECTRIC MANUF'G Co. et al.
Henry S. Harris, for complainant. J. G. Shipman & Son, for defendant.
On motion to dissolve injunction and to dismiss bill.
Bill by John Maher against the Mutual Electric Manufacturing Company, to enjoin the prosecution of an attachment suit by said company against complainant.
Henry S. Harris, for complainant. J. G. Shipman & Son, for defendant.
BIRD, V. C. The questions on this motion are whether the bill is sufficient to sustain the preliminary injunction or not, and, if not sufficient for that purpose, then is it sufficient for any other. Maher was about to establish an electric plant at Belvidere, and being possessed of only a limited education, although of considerable business experience, he employed one Clark, who was an attorney at law, to act for him. In behalf of Maher, Clark agreed with the defendant company to take of it two dynamos and thirty-five lamps, and to pay there for, in the notes of Maher, the sum of $6,000. The said notes were to be indorsed by Gideon S. Wiley, and were to be made payable at three, four, and five months, respectively, after the date of the delivery of the two dynamos. One of the notes was to be for $2,010, one for $1,800, and the other for $2,440. The said notes were all to be secured by the delivery to the defendant of $10,000 worth of the first mortgage bonds of the Belvidere Electric & Gas-Light Company, when the said defendant company should have successfully operated the said plant in the said town of Belvidere for the space of 30 days. These bonds were to be surrendered as the said notes were paid. At the same time the said Clark entered into an agreement with the said defendant company, which set forth that, in consideration of the said Clark having procured the said sale to be made, the said defendant company would deliver to him the said note for the sum of $2,440, and also the $4,000 worth of bonds as security for the payment thereof. Upon the execution of these agreements, the notes were made and delivered in accordance with the terms of the agreements. The first two came to maturity, but were not paid, and an attachment was issued, and all of the interests of the said Maher in the said plant at Belvidere attached. The bill sets forth the foregoing matters, and charges that the said defendant company and the said Clark conspired to injure and wrong the said Maher, and asks that the said attachment may be enjoined. The defendant insists that the said Maher has a complete remedy at law.
Two of the elements which are regarded as fundamental in giving jurisdiction to courts of equity appear in the above statement of the case; that is, fraud and trust. If the bill be true, then Clark, the agent, deliberately entered into this contract, in fraud of his principal, and to his own profit, and the defendant company knowingly participated therein to its own profit; not only to its own profit to the extent of such profit as arises from an ordinary business transaction, but greatly in excess of such profit. Therefore the whole transaction is evidently tainted by the corruption. Hence the question, is the case of such a nature that complete justice cannot be done between the parties in an action at law? As counsel for defendant company insists, courts of law can determine questions of fraud as well as courts of equity; but there may be cases in which the former cannot effect complete justice in a single action, or it may be not in a series of actions. In other words, to do adequate justice between the various parties to a transaction, it may be quite essential for the tribunal hearing the case to have all of the parties and all parts of the transaction before it at the same time. In every such case, if the injured party is obliged to defend two or more actions, injustice is almost certain to be done to him. Therefore, it seems to me that, if it be possible, Maher is entitled to have all of the issues arising out of this apparently fraudulent transaction determined in one suit. Although there were two separate agreements,they were but one transaction as between Maher on the one hand and Clark and the defendant company on the other. As already stated, the fraud covers the whole case, and all of the parties interested are equally involved in the doing, if not in the profit.
1. The question of fraud and trust, as involved in this case, cannot be tried at the same time at law; for Clark is not and cannot be made a party to that action. That suit cannot be determined to his prejudice. In the attachment, whether he is or was the agent of Maher or not cannot be settled; for he is not before the court to answer, nor is the note which it is said he holds, by virtue of his corrupt agreement, in issue at all.
2. But, again, proceeding on the ground that the law court has jurisdiction as between the parties to the attachment proceeding, one of the allegations being that the defendant company participated in the fraud, if that should be proved to the satisfaction of the jury, how is it possible for such jury to settle the amount of the liability of the defendant company in the absence of Clark? for when Clark is brought into court, and pleads or answers, and is heard, it may be established that he has not been guilty of any breach of trust, and that the whole transaction was bona fide. Nothing can be presumed against him until he is heard.
3. And it has always been regarded as very proper for courts of equity to take jurisdiction of matters when by so doing a multiplicity of suits will be avoided. I do not mean to be understood as thinking that the question of damages for furnishing imperfect machinery can be inquired into in this court. All that I desire to be understood as saying is that, in my judgment, the rights of all the parties will be most imperfectly considered, if the question arising out of the alleged conspiracy between the agent and the defendant company be not determined in one suit. Notwithstanding the very able presentation of the case, it seems to me that this most important view has not been met. But Clark is not a party to this bill, and, as the case is most clearly imperfect without him as a party, the bill will be dismissed, unless he be made a party. But as this defect was not made a ground of the motion, costs will not be allowed thereon. The costs of the motion, on the ground named in the notice, will await the final determination of the cause.