Silver Hill Sand & Gravel Co. v. Carozza Corp.

Henderson, J., delivered the opinion of the Court. The appeal in this case is from an order of the Circuit ■Court for Prince George’s County overruling a demurrer to the appellee’s amended bill of complaint. It is contended that the cause of action is primarily a legal one, that a Court of equity is without jurisdiction to entertain the amended bill under the facts alleged, and that the Court below erred in its ruling. The facts set out in the amended bill are: that the appellant is engaged in the business of mining, washing, delivering and selling sand and gravel in Prince George’s County; that the appellant, for a valuable consideration, entered into an agreement with the appellee to pay the sum of 6 cents per ton for all sand and gravel mined, delivered or sold by it from any and all of certain described properties in Prince George’s County; that the appellant agreed to keep all the records oí its operations, and to issue statements and account to the appellee each month for the sand and gravel mined, delivered and sold for the previous month; that the appellee cannot ascertain the correct tonnage through its own efforts; that the appellant did issue statements and account for all sand and gravel mined, delivered and sold up to and including December 31, 1941, but has refused to do so since that date, although its operations have continued.

The bill prays a discovery and accounting, a decree for all sums due from January 1, 1942, to December 31, 1943, and for other and further relief. The original bill was filed on March 2, 1944. ²²⁸ The appellant relies primarily upon the case of Becker v. Frederick W. Lipps Co., 131 Md. 301 , 101 A. 783 . That case also was decided upon demurrer to a bill of complaint alleging that the Lipps Co. entered into a written contract to sell its entire output of empty barrels of various types to Becker and Company for the term of one year at prescribed prices, the buyer undertaking to remove all barrels from the manufacturer’s plant when notified. The bill further alleged a failure to deliver any sugar barrels.

There was a prayer for discovery and accounting. This Court held that the allegations of the bill were not such as to support a suit for an accounting. As. to discovery, it was pointed out that the information sought was merely a detailed statement of the number of sugar barrels manufactured during the year, and that since the right to discovery has been generally conferred by Statute upon courts of law, the ancillary jurisdiction of equity has been practically superseded. It was held that there was no occasion to invoke the equity jurisdiction for a discovery alone.

We think the Becker case is distinguishable from the case at bar. In the Becker case the action was for nonperformance of a contract to deliver merchandise, for the breach of which damages were sought, and the suit was not based upon the equitable grounds of mistake, accident, trust, accounting or the like. In the case at bar, the agreement was not one for the purchase and sale of merchandise; it was in the nature of a continuing royalty or leasing agreement, with an express undertaking to account each month during the life of the agreement to the Carozza Corporation, owner of the mining rights in the properties described. Thus, the relations between the parties were not those of buyer and seller, but were of a fiduciary character.

For the purposes of this case it is not necessary to define the relationship more precisely. In the case of Musch v. Underwood,, 179 Md. 455 , 19 A. 2d 699 , there was a bill for discovery and relief in an effort to recover money loaned. This Court held that ²²⁹ this presented no case for equitable relief, but said (179 Md. at Page 458, 19 A. 2d at Page 700) : “There are cases involving accounting between partners, or persons jointly engaged in some enterprise, from the nature of