Ponce & Guayama Railroad v. American Railroad

7 P.R. Fed. 131
CourtDistrict Court, D. Puerto Rico
DecidedJune 4, 1914
DocketNo. 887
StatusPublished

This text of 7 P.R. Fed. 131 (Ponce & Guayama Railroad v. American Railroad) is published on Counsel Stack Legal Research, covering District Court, D. Puerto Rico primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Ponce & Guayama Railroad v. American Railroad, 7 P.R. Fed. 131 (prd 1914).

Opinion

HamiltoN, Judge,

delivered tbe following opinion:

What is called the Ponce & Guayama Railroad Company, the complainant herein, is apparently not a single corporation, but an association in the nature of a partnership or a syndicate between three different corporations. Two of these were the Centrals Aguirre and Fortuna, owning 58 of the 61 kikn meters of railroad between Guayama and Ponce. The remaining 3 kilometers were owned by the defendant, the American Railroad Company of Porto Rico. The three companies entered into an agreement, approved by the executive council of Porto Rico, by which the American Railroad Company was to operate through trains, passenger, freight, and mixed, over the line between Ponce and Guayama, receiving certain compensation for operating and auditing expenses, and the net balance was to be divided among the three corporations in certain proportions. This contract was to last for one year from October 1, 1911, and, although renewed for several years subsequently, the dispute now in question relates only to this first year. While the contract provided for passenger, freight, and mixed trains, in point of fact it was found expedient to operate only a mixed train, that is one composed of passenger coaches and freight cars. The contract provided for 50 cents per train per kilometer to the American Railroad Company for passenger and freight service. Settlement under the contract was to be at the end of the period, which was one year. In point of fact, however, the American Railroad Company rendered monthly statements to each of the associate companies, showing all details connected with the operation, remitted the proportionate compensation and a bill for the 50 cent services. These bills were paid by the complainant without question [134]*134until at the end of the period a final settlement was bad, and then complainant first objected to the 50 cent charge as applicable under the contract to freight services and to passenger services, but not to the mixed train service, — the only service actually rendered. The amount involved is not disputed, for it is stated by the complainant in his bill as $20,652.57, as made up from the defendant’s own statements.

' The suit now comes up upon the merits and upon a motion to dismiss for want of equity. This requires a consideration of the basis of the bill.

1. The bill purports to be one for an accounting, and there is no question that a complicated account is one of the grounds of equity jurisdiction. In this case, however, there would seem to be no complicated account involved, for if there was ever any complication, it has been resolved by statements made and agreed upon between the parties. It is not every matter of account that is cognizable in equity, for if this were true a bill for dry goods and groceries could be tried in chancery. It would not seem that a case where an account is agreed upon would give jurisdiction to a court of equity. Fowle v. Lawrason, 5 Pet. 495, 8 L. ed. 204; Baker v. Biddle, Baldw. 394, Fed. Cas. No. 764; Pom. Eq. Jur. § 178. A party cannot by any colorable suggestion of fraud, account, etc., use a bill in equity in place of the common-law remedy. Lewis v. Cocks, 23 Wall. 466, 23 L. ed. 70.

2. The ground of account, however, is re-enforced by that of mistake. It is alleged in the bill, and sought to be shown by the testimony, that the defendant was mistaken in its interpretation of the contract, and that the complainant either fell into the same mistake or acquiesced therein temporarily, [135]*135but has now raised the point before any rights are vested one way or the other. A mistake must be either of fact or of law. If of law, there is no remedy in any court. People are supposed to know the law and are held accountable accordingly. If, however, it was a mistake of fact, then that is not necessarily a ground of equitable jurisdiction. It may be so in some cases, but where the mistake is one which can be remedied at law, there is no reason for pursuing a remedy in equity. Lesslie v. Eichardson, 60 Ala. 563; Youngblood v. Youngblood, 54 Ala. 486. Is this, then, such a mistake as is cognizable at law? If so, there is an adequate remedy at law, and nothing can be taken in equity.

3. TJnder the allegations of the bill, here is a case of accounting from time to time under a wrong conception, perhaps mutual, of the meaning of a contract, resulting at the end of the contract period of one year in a mistake against the complainant of some $20,000. If it were a mistake as alleged, it is a mistake of construction of the contract, under which one party has retained money which ex equo et bono belongs to the other. So far as the amount in controversy is concerned it is a pure matter of calculation, and indeed has been calculated in the bill itself, and is not disputed in the answer. Baker v. Biddle, Baldw. 394, Fed. Cas. No. 764. A mere matter of recovery of money is cognizable in a court at law, and to that extent is not cognizable in a court of equity. The 7th Amendment to the Constitution provided that “in suits at common law where the value in controversy shall exceed $20, the right of trial by jury shall be preserved.” Carrying out this principle it is provided in Revised Statutes, § 648, Comp. Stat. 1913, § 1584, that the trial of issues of fact in the circuit courts shall [136]*136be by jury except in causes of equity, and under § 723 of the [Revised Statutes, “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:” The recovery of a money judgment must be at law. Whitehead v. Shattuck, 138 U. S. 151, 34 L. ed. 874, 11 Sup. Ct. Rep. 276. “Whenever one person has in his hands money equitably belonging to another, that other may recover it by assumpsit for money had and received. . . . The remedy at law is adequate and complete.” Gaines v. Miller, 111 U. S. 395, 28 L. ed. 466, 4 Sup. Ct. Rep. 426.

4. Besides invoking the equity jurisdiction as to account and mistake, the complainant alleges that the defendant company stood in a fiduciary relation to the complainant, and therefore the bill invokes the equitable jurisdiction over trusts. It is true that the defendant collected and disbursed all the money taken in under the contract. This, however, did not make it so much a trustee as an agent, perhaps even in the nature of a cashier or bookkeeper. At all events, whatever the nature of the relation, it had under the allegations of the bill been reduced to the one in which the defendant retained the money, whose amount is clearly fixed, which belongs to the complainant. There is in this not a trust in the technical sense of the word, but a debt.

5. There is one point of view which has not been fully discussed in the argument. There was either a final settlement between the parties, or a number of partial settlements which could be added up into a final settlement. Under such circumstances can a court of equity revise the settlement between parties? Says Pomeroy: “Section 1421. The instances in which [137]*137tbe legal remedies are beld to be inadequate, and therefore a suit in equity for an accounting proper, are: 1. Where there are mutual accounts between the plaintiff and the defendant,' — - that is, where each of the two parties has received and paid on account of the other; 2. Where the accounts are all on one side, but there are circumstances of great complication, or difficulties in the way of adequate relief at law; 3.

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Fowle v. Lawrason's
30 U.S. 495 (Supreme Court, 1831)
Bend v. Hoyt
38 U.S. 263 (Supreme Court, 1839)
Lewis v. Cocks
90 U.S. 466 (Supreme Court, 1874)
Gaines v. Miller
111 U.S. 395 (Supreme Court, 1884)
Whitehead v. Shattuck
138 U.S. 146 (Supreme Court, 1891)
Chesebrough v. United States
192 U.S. 253 (Supreme Court, 1904)
United States v. New York & Cuba Mail Steamship Co.
200 U.S. 488 (Supreme Court, 1906)
Youngblood v. Youngblood
54 Ala. 486 (Supreme Court of Alabama, 1875)
Lesslie v. Richardson
60 Ala. 563 (Supreme Court of Alabama, 1877)
State Trust Co. of New York v. City of Duluth
104 F. 632 (U.S. Circuit Court for the District of Minnesota, 1900)

Cite This Page — Counsel Stack

Bluebook (online)
7 P.R. Fed. 131, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ponce-guayama-railroad-v-american-railroad-prd-1914.