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decided: March 22, 1966.


Appeal from decree of Court of Common Pleas of Montgomery County, No. 61-9718, in case of The Stuyvesant Insurance Company v. Keystate Insurance Agency, Inc.


George E. Beechwood, with him Beechwood & Lovitt, for appellant.

Charles A. Kerlavage, with him William P. Manning, Jr., and Wright, Spencer, Manning & Sagendorph, for appellee.

Bell, C. J., Musmanno, Jones, Cohen, Eagen, O'Brien and Roberts, JJ. Opinion by Mr. Justice O'Brien.

Author: O'brien

[ 420 Pa. Page 579]

On October 31, 1961, appellee, The Stuyvesant Insurance Company (Stuyvesant), filed a complaint in equity against appellant, Keystate Insurance Agency, Inc. (Keystate), alleging that appellant, its former agent, had breached the agreements between the parties relative to premiums remitted and by failure to report losses, dailies or issued policies. Appellee alleged that appellant was a trustee of certain funds to which appellee was entitled and requested a complete accounting. Appellee also requested that the court compel appellant "to report and account finally and fully to plaintiff . . . to the extent that same have not yet been finally and fully accounted for, including in said account an accurate statement of all premiums or other moneys collected and not remitted to plaintiff . . . to deliver to plaintiff all records of expirations on business accepted by plaintiff . . . to report to plaintiff notice of all claims in connection with policies issued." The complaint also named the principal officers and stockholders of Keystate, individually, as defendants.

[ 420 Pa. Page 580]

These individual defendants filed preliminary objections in the nature of a demurrer. The court below, by an order dated February 8, 1962, sustained the preliminary objections and the complaint, as to the individual defendants, was dismissed without leave to amend. In the same order, other preliminary objections filed by the corporate defendant, Keystate, were dismissed, and it was ordered to answer the complaint within twenty days. Appellant's answer denied that it was in possession of any money or trust funds of appellee, and by way of counterclaim, asserted that appellee had wrongfully terminated its written agreements with appellant, was tortiously interfering with appellant's business and was retaining money belonging to appellant.

Appellee, in reply to the counterclaim, alleged that its agency agreement with appellant was terminated for good cause and denied that any money was due appellant or that trade libels or slanders were committed against appellant. Eight full days of hearings before the chancellor produced a voluminous record consisting of 1164 pages of testimony and 777 pages of exhibits. On this record, the chancellor made his adjudication, resolving all issues in favor of appellee. He held that appellee was justified in terminating the agency agreement, and that it was entitled to a money judgment for $197,699.70, together with costs and interest thereon from August 31, 1961.

Appellant filed exceptions to the chancellor's adjudication, which were overruled by the court en banc. The decree nisi was entered as the final decree and this appeal followed.

[ 420 Pa. Page 581]

Appellant contends that equity does not have jurisdiction in that appellee had a full, complete and adequate remedy at law. It is well settled in Pennsylvania that a suit in equity will not lie where a plain, adequate and complete remedy at law may be had. Meehan Page 581} v. Cheltenham Twp., 410 Pa. 446, 189 A.2d 593 (1963). Appellant's brief correctly states that "Equity takes jurisdiction only when the accounts are mutual or complicated or when discovery is needed and is material to the relief. Ebbert v. Plymouth Oil Co., 348 Pa. 129 (1943)." This conclusion from Ebbert v. Plymouth Oil Co., supra, was based upon three cases, the most recent being Williams v. Finlaw, Mueller & Co., 292 Pa. 244, 141 A. 47 (1928). In that case, we said: "But where the matter to be determined involves the accounts of different parties, to which debit and credit items attach and are intermingled, it can generally be held that a jury would not be qualified to state such an account. We might even go farther and say that equity will entertain jurisdiction where it is doubtful whether adequate relief could be had at law: Southampton Dock Co. v. Southampton, etc., Board, L.R. 11 Eq. 254, 269. . . . But where the principal has reposed confidence in his agent, and the matters for which an accounting is sought are peculiarly within the knowledge of the latter, equity will assume jurisdiction: [citing cases]." In the instant case, the working relationship of the parties necessarily imposed a trustee's obligation on the agent to account to the principal for money collected. That the accounts were complicated is indicated by the fact that the chancellor appointed Main LaFrentz & Co., under Pa. R. C. P. 1515, to study the accounting issues, examine the books and accounts of both parties, and to submit to the chancellor a report of its findings. The manager of this firm devoted approximately 500 hours to this assignment and, in addition, a resident partner in the firm spent 50 to 100 hours on it. These circumstances enable us to reach the conclusion that this was a very complicated account, and one in which a jury would have extreme difficulty in reaching a fair conclusion. On this basis, and under the doctrine set forth in Williams v. Finlaw, Page 582} Mueller & Co., supra, the chancellor reached the correct decision in holding that equity had jurisdiction in the instant case.

Appellant also contends that it, in fact, did not breach its agreements with appellee, that appellee wrongfully terminated its insurance agreements with appellant in failing to give required 30 days written notice. Appellant further contends that the chancellor erred in his finding of fact No. 20, which reads as follows: "Defendant's accounting records indicate plaintiff's accounts current were paid late for the months of February and April 1961. The May 1961 and subsequent accounts current remain unpaid and overdue, except to the extent plaintiff was able to partially collect amounts receivable from defendant's sub-brokers." Under the contract with appellee, appellant was obligated to tender the monthly payment 87 days after the end of the month for which the account was rendered. The chancellor's finding of fact No. 19 finds that the plaintiff terminated the agency agreement on August 24, 1961. Under the contract, the monthly payment for May would not be due until the 26th day of August. The chancellor's finding of ...

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