United States v. Bitter Root Development Co.

GILBERT, Circuit Judge, after stating the case as above, delivered the opinion of the court. The bill sets forth a series of trespasses, continuing over a period of some ten years, which are alleged to have been committed by all of the defendants jointly. The appellant had its remedy in such a case by an action of trespass to recover damages based upon the value of the standing timber when taken, or, if the trespass was knowingly and wrongfully committed, by an action in the nature of trover, to charge the appellees with the value of the timber, as manufactured into lumber. Woodenware Co. v. United States, 106 U. S. 432, 1 Sup. Ct. 398, 27 L. Ed. 230. But the appellant, while admitting that it has a remedy at law to obtain redress for the acts complained of, denies that such remedy is as plain, speedy, or adequate as the remedy afforded by a suit in equity. The inadequacy of the legal remedy is said to consist in the trouble and difficulty of unraveling before a jury the devious and confusing methods adopted by the appellees in creating corporations, and in transferring property from one to the other thereof, and other devices to cover their tracks, and that these methods and devices may only be brought to light through an inspection of the books and records of those corporations. It is not denied that inspection of all of these books and records may be obtained in an action at law, but the contention is that it would be more convenient to present such complicated evidence in a suit in equity. But the greater convenience of the equitable remedy is no ground, in itself, for resorting to equity, or for depriving a party of his constitutional right to a jury trial. The controlling consideration is whether the equitable remedy will afford more complete or effectual relief in kind or degree than the legal remedy. If the remedy at law is “as practical and efficient to the ends of justice and its prompt administration as the remedy in equity,” it must be pursued. Insurance Company v. Bailey, 13 Wall. 616, 20 L. Ed. 501; Buzard v. Houston, 119 U. S. 347, 7 Sup. Ct. 249, 30 L. Ed. 451, and cases there cited; Scott v. Neely, 140 U. S. 106, 110, 11 Sup. Ct. 712, 35 L. Ed. 358. It is contended that the bill presents several grounds for equitable relief, one of which is the jurisdiction of a court of equity in matters of accounting. This, it is true, is one of the established grounds of equitable jurisdiction in cases where it is shown that an accounting cannot be fairly and adequately had in a court of law, or where there are fiduciary relations between the parties, or where the accounting is incident to recognized equitable relief sought by the bill. But there are no accounts in this case between appellant and appellees. The cause of action, as set forth in the bill, arises wholly in tort. A cause [279] of action arising in tort cannot be converted into a cause of action on an account at common law. Sandeen v. K. Cy. & St. Jo. R. Co., 79 Mo. 278; Albertson v. Grier, 4 Houst. (Del.) 541; Western & Atlantic R. Co. v. Mead & Co., 4 Snead, 107; Spencer v. Hewett, 20 Ga. 426; Atchison, T. & S. F. R. Co. v. Wilkinson, 55 Kan. 83, 39 Pac. 1043. Nor can the appellant, by resorting to equity, convert its cause of action which arises on the facts disclosed in the bill into a suit in equity for an accounting. In addition to this, no facts are alleged in the bill to show the necessity for an accounting. It is not alleged in the bill that an accounting is necessary to enable the appellant to ascertain the quantity of timber that has been wrongfully cut from the premises described therein. It is not even alleged that the desired accounting will develop such proof, nor is it alleged that the appellees cut no timber from lands other than those so described, or that they received no logs from other sources. The prayer of the bill in this connection is that the plaintiff recover from the defendants the profits, gains, and advantages which they have received or made by reason of the said trespasses and conversion of the timber so cut. The relief so prayed for is not obtainable upon the facts alleged by any form of suit or action. The right of the appellant is confined to damages for trespass, or damages recoverable in an action in the nature of trover, in an amount to be based upon the actual value of the manufactured product, and not upon the amounts, gains, and profits received by the appellees. But it is said that the bill presents a case of mutual accounts. This is asserted upon the theory that the appellant had granted to the appellees licenses to cut timber on small portions of the tracts described in the bill, of which licenses the appellees took advantage to wrongfully cut timber from adjacent lands. How this presents a case of mutual accounts, we are unable to see. The acts with which the appellees are charged are a series of torts. As to the lands on which licenses were given to cut timber, no demand for damages for such cutting can arise in favor of the appellant, and as to those lands no relief is sought. Those transactions can occupy no place in an accounting. It is claimed that the bill may be sustained on the ground that it is brought to establish a trust. The cases of Newton v. Porter, 69 N. Y. 133, 25 Am. Rep. 152, and The American Sugar Refining Co. v. Fancher, 145 N. Y. 552, 40 N. E. 206, 27 L. R. A. 757, are cited to sustain the doctrine that such a trust may arise through a tort. In the first of those cases it was held that the owner of negotiable securities stolen, and afterwards sold by the thief, might follow and claim the proceeds in the hands of the felonious taker, and that this right attached to any securities or property in which the proceeds may have been invested, so long as such proceeds could be traced and identified. But in that case the original tort feasor was insolvent. There was no remedy at law. No redress was possible unless the owner could proceed in equity to charge with a trust the property in which the stolen securities were invested. So, in the case of The American Sugar Refining Co. v. Fancher, the sale of personal property had been induced by fraud on the part of the vendee, and the property was by him sold to another. The proceeds of the sale were specifically identified in the hands of the latter. Since the vendee was wholly insolvent, it was held that a court [280] of equity had a remedy to reach such proceeds and apply them for the benefit of the defrauded vendor. No such facts are presented in the present case. It is not alleged that any of the defendants is insolvent. On the contrary, it is shown that the estate of Marcus Daly, who, according to the allegations of the bill, was the initiator and principal actor in all the trespasses so complained of, and who, as one of the joint tort feasors, would be chargeable with the whole of the damages recoverable on account thereof, amounts to $12,000,000. Nor is it alleged in the bill that the profits fraudulently obtained by the appellees through the tort complained of have been invested or are now discoverable in any particular form of property which might be charged with a trust in invitum. It is said that on the allegations of the bill the appellant is entitled to a discovery. But the appellant’s remedy having been, as we have seen, an action at law, there is no necessity for resorting to equity to procure discovery in aid thereof. It has been held that in ordinary cases a pure bill of discovery cannot be maintained in the equity courts of the United States, for the reason that section 724 of the Revised Statutes [U. S. Comp. St. 1901, p. 583] renders it no longer necessary. Ex parte Boyd, 105 U. S. 647, 26 L. Ed. 1200; Rindskopf v. Platto (C. C.) 29 Fed. 130; United States v. McLaughlin (C. C.) 24 Fed. 823; Preston v. Smith (C. C.) 26 Fed. 885; Paton v. Majors (C. C.) 46 Fed. 210. Section 724 of the Revised Statutes enables a plaintiff in an action at law to obtain in that action all discovery of books, papers, and documents, as fully as it could be done in a suit in equity. Again, it is the settled rule that the federal courts are without jurisdiction of a suit for the discovery of evidence to be used in the enforcement of a legal demand. In Scott v. Neely, 140 U. S. 106, 11 Sup. Ct. 712, 35 L. Ed. 358, the court said: “The Constitution, in its seventh amendment, declares that in suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved. In the federal courts this right cannot be dispensed with, except by the assent of the parties entitled to it, nor can it be impaired by any blending with a claim prwperly cognizable at law of a demand for equitable relief in aid of the legal action, or during its pendency. Such aid in the federal courts must be sought in separate proceedings, to the end that the right to a trial by a jury in the legal action may be preserved intact.” In Safford v. Ensign Mfg. Co., 120 Fed. 480, 56 C. C A. 630, it was held that a federal court is without jurisdiction of a suit in which discovery and relief are sought, but the only ground for equitable relief appears to be the discovery of evidence to be used in the enforcement of a purely legal demand. It is contended that the bill may be sustained for the reason that Margaret P. Daly is sued as executrix of the estate of Marcus Daly, deceased. It is true that courts of equity have exercised jurisdiction over controversies in which executors and administrators are parties defendant. But it is only in cases where such personal representatives are to be considered trustees for the heirs, legatees, devisees, or creditors. According to the allegations of the bill, Margaret P. Daly is not a trustee for the appellant. The appellant presents a claim for unliquidated damages. Margaret P. Daly is made a party defendant [281] only for the reason that she is the personal representative of Marcus Daly, who was the principal tort feasor, according to the averments of the bill. She has the same right to a trial by jury that her husband would have had if living. There is no charge of fraud against Margaret P. Daly, as executrix, and no discovery of the assets of the estate in her hands is required. According to the bill, she is possessed of ample funds to meet the whole of the demand of the appellant. The decree of the Circuit Court is affirmed.