Equity jurisdiction over matters of account shall extend to:
(Orig. Code 1863, § 3063; Code 1868, § 3075; Code 1873, § 3130; Code 1882, § 3130; Civil Code 1895, § 3989; Civil Code 1910, § 4586; Code 1933, § 37-301.)
Law reviews.- For article, "Some Problems in Providing for Nonjudicial Settlement of the Trustee's Accounts," see 3 Ga. St. B.J. 417 (1967).
JUDICIAL DECISIONSANALYSIS
General Consideration
An accounting may be had at law.
- The mere necessity of accounting to ascertain the amount due on a contract is insufficient to give equity jurisdiction to order an accounting. Insurance Ctr., Inc. v. Hamilton, 218 Ga. 597, 129 S.E.2d 801 (1963).
Therefore, an equitable accounting is not a proceeding to which every litigant has a right. It is granted only in carefully prescribed and determined circumstances, such as when an accounting at law is inadequate, and when the relationships and dealings between the parties are as set forth in this section. Herring v. Standard Guar. Ins. Co., 238 Ga. 261, 232 S.E.2d 544 (1977).
An equitable accounting is evidentiary in nature but the determination that an equitable accounting will be ordered is an interlocutory or preliminary matter separate and distinct from the equitable accounting itself. Herring v. Standard Guar. Ins. Co., 238 Ga. 261, 232 S.E.2d 544 (1977).
Right to attorney fees.
- Because there were no excess proceeds from the foreclosure sale to which a condominium association would have been entitled, and regardless of whether it was the owner of the condominium at the time of the foreclosure it was not entitled to an equitable accounting, the association was also properly denied attorney fees under O.C.G.A. § 13-6-11 resulting from the bank's failure to provide an equitable accounting. Riverview Condo. Ass'n v. Ocwen Fed. Bank, FSB, 285 Ga. App. 7, 645 S.E.2d 5 (2007), cert. denied, No. S07C1254, 2007 Ga. LEXIS 705 (Ga. 2007).
This section contemplates only petitions in equity involving the traditional filing of the action and the issuance and service of process. Bodrey v. Bodrey, 225 Ga. 822, 171 S.E.2d 614 (1969), rev'd on other grounds sub nom. Wiley v. Wiley, 233 Ga. 824, 213 S.E.2d 682 (1975).
Equity does not have jurisdiction merely because the application for partition prays for an accounting as to common grantors when there was no filing of an action and summons and process. Bodrey v. Bodrey, 225 Ga. 822, 171 S.E.2d 614 (1969), rev'd on other grounds sub nom. Wiley v. Wiley, 233 Ga. 824, 213 S.E.2d 682 (1975).
When a fiduciary relation exists, an accounting in equity is proper. Atlanta Trust Co. v. National Bondholders Corp., 188 Ga. 761, 4 S.E.2d 644 (1939).
When petitioners, remainder legatees under their mother's will, sued defendant in three different capacities, namely, as trustee for the life estate under the will, as executrix, and as an individual, seeking an injunction against the sale of realty of the estate, partition, judgment, an accounting, and other and further relief, petitioners were entitled to an accounting. Matson v. Crowe, 193 Ga. 578, 19 S.E.2d 288 (1942).
In a proceeding to obtain an accounting, the complainant is not obliged to show how much is due, provided he avers facts sufficient to indicate that something will be found to be due him by the defendant. Atlanta Trust Co. v. National Bondholders Corp., 188 Ga. 761, 4 S.E.2d 644 (1939).
An injunction may be granted to continue during an accounting. Henderson v. Turner, 36 Ga. 263 (1867).
Action for accounting pending in court of law not automatically subject to injunction by filing equitable action.
- Where it appears from a petition praying for an accounting that there was pending in another court an action by the corporate defendant against the plaintiff, such court being empowered to render an accounting between the parties, and no special reason being set out why a court of equity should assume jurisdiction for such purpose, equity will not enjoin the proceedings and processes of a court of law in the absence of some intervening equity or other proper defense of which the party, without fault on his part, cannot avail himself at law. Peeples v. Peeples, 193 Ga. 358, 18 S.E.2d 629 (1942).
There must be some special reason why a court proceeding in equity should take charge of an action where an accounting is requested, the petition must show, and this means more than the mere assertion of a conclusion, some reason why the remedy at law is inadequate. Peeples v. Peeples, 193 Ga. 358, 18 S.E.2d 629 (1942).
When transfer of accounting case from Supreme Court to Court of Appeals mandatory.
- A suit for an accounting case, on appeal, must be transferred to the Court of Appeals from the Supreme Court, where the alleged facts show no unusual complication in the transactions or other ground for equitable relief additional to the relief which might be afforded by an accounting and judgment at law. Universal Garage Co. v. Fowler, 184 Ga. 604, 192 S.E. 299 (1937).
Borrower was not entitled to an equitable accounting because the borrower failed to allege facts sufficient to show that the borrower lacked an adequate remedy at law to ascertain the amount due on the borrower's loan. Phillips v. Ocwen Loan Servicing, LLC, F. Supp. 2d (N.D. Ga. Sept. 10, 2013).
Cited in McLaren v. Steapp, 1 Ga. 376 (1846); Napier v. Napier, 6 Ga. 404 (1849); Shivers v. Palmer, 14 Ga. 342 (1853); McRarey v. Huff, 32 Ga. 681 (1861); Dill v. McGehee, 34 Ga. 438 (1886); McDonald v. Davies, 43 Ga. 356 (1871); Wilson & Co. v. Riddle, 48 Ga. 609 (1873); Sloan v. Cooper, 54 Ga. 486 (1875); Epping v. Aiken, 71 Ga. 682 (1883); Neel v. Morris, 73 Ga. 406 (1884); Gould v. Barrow, 117 Ga. 458, 43 S.E. 702 (1903); Allen v. Grant, 122 Ga. 552, 50 S.E. 494 (1905); Houston v. Polk, 124 Ga. 103, 52 S.E. 83 (1905); McArthur v. Jordan, 139 Ga. 304, 77 S.E. 150 (1913); Greer v. Jackson, 146 Ga. 376, 91 S.E. 417 (1917); McKey v. Wright, 147 Ga. 662, 95 S.E. 217 (1918); Central of Ga. Ry. v. Wright, 148 Ga. 86, 95 S.E. 963 (1918); Burress v. Montgomery, 148 Ga. 548, 97 S.E. 538 (1918); Mathewson v. Reed, 149 Ga. 217, 99 S.E. 854 (1919); Payne v. West Point Whsle. Grocery Co., 151 Ga. 46, 105 S.E. 608 (1921); Pickens v. Jackson, 152 Ga. 100, 108 S.E. 536 (1921); Goolsby v. Board of Drainage Comm'rs, 156 Ga. 213, 119 S.E. 644 (1923); Arthur Tufts Co. v. DeJarnette Supply Co., 158 Ga. 85, 123 S.E. 16 (1924); Thigpen v. Aldred, 175 Ga. 120, 165 S.E. 27 (1932); City of Macon v. Ries, 179 Ga. 320, 176 S.E. 21 (1934); New Winder Lumber Co. v. Guest, 182 Ga. 859, 187 S.E. 63 (1936); Kennedy v. Howard, 183 Ga. 410, 188 S.E. 673 (1936); Grimmett v. Barnwell, 184 Ga. 461, 192 S.E. 191 (1937); Henderson v. Curtis, 185 Ga. 390, 195 S.E. 152 (1938); Reynolds v. Hyers, 190 Ga. 200, 9 S.E.2d 78 (1940); Park v. Park, 37 F. Supp. 185 (N.D. Ga. 1941); O'Rear v. Lamb, 194 Ga. 455, 22 S.E.2d 74 (1942); Clement A. Evans & Co. v. Waggoner, 197 Ga. 857, 30 S.E.2d 915 (1944); Martin v. Home Owners Loan Corp., 198 Ga. 288, 31 S.E.2d 407 (1944); Clark v. Bandy, 198 Ga. 564, 32 S.E.2d 245 (1944); Fulmer v. Wilkins, 201 Ga. 322, 39 S.E.2d 405 (1946); Walker Elec. Co. v. Walton, 203 Ga. 246, 46 S.E.2d 184 (1948); Regents of Univ. Sys. v. Carroll, 203 Ga. 292, 46 S.E.2d 496 (1948); Ballenger v. Houston, 207 Ga. 438, 62 S.E.2d 189 (1950); West View Corp. v. Thunderbolt Yacht Basin, Inc., 208 Ga. 93, 65 S.E.2d 167 (1951); Cashin v. Markwalter, 208 Ga. 444, 67 S.E.2d 226 (1951); Gaulding v. Courts, 210 Ga. 527, 81 S.E.2d 460 (1954); Adams v. McGehee, 211 Ga. 498, 86 S.E.2d 525 (1955); Johnson v. Wilson, 212 Ga. 264, 91 S.E.2d 758 (1956); Kirchman v. Kirchman, 212 Ga. 488, 93 S.E.2d 685 (1956); Douglas-Guardian Whse. Corp. v. Todd, 212 Ga. 791, 96 S.E.2d 275 (1957); Springs v. Bulloch, 213 Ga. 164, 97 S.E.2d 582 (1957); Harrison v. Harrison, 214 Ga. 393, 105 S.E.2d 214 (1958); Mendenhall v. Kingloff, 215 Ga. 726, 113 S.E.2d 449 (1960); Gandy v. Robinson Co., 216 Ga. 190, 115 S.E.2d 341 (1960); Edwards v. United Stone & Allied Prods. Workers of Am., 220 Ga. 183, 137 S.E.2d 632 (1964); Rogers v. Griggs, 134 Ga. App. 528, 215 S.E.2d 291 (1975); Meredith v. Smith & Shiver, 157 Ga. App. 522, 277 S.E.2d 805 (1981); Faircloth v. A.L. Williams & Assocs., 219 Ga. App. 560, 465 S.E.2d 722 (1995); HAAC Chile, S.A. v. Bland Farms, LLC, F. Supp. 2d (S.D. Ga. Aug. 26, 2008).
Mutual Accounts
Mutual accounts may be setoff at law by former Civil Code 1910, § 4341 (see O.C.G.A. § 13-7-4) although equity has jurisdiction under former Civil Code 1910, § 4586 (see O.CG.A. § 23-2-70). Hardin v. Stanton, 14 Ga. App. 299, 80 S.E. 698 (1914).
An agent must account to his principal where he has sold unknown quantities of goods to third persons. Mitchem v. Georgia Cotton Oil Co., 139 Ga. 519, 77 S.E. 627 (1913).
Complicated and Intricate Accounts
Facts rendering equitable accounting proper.
- The life tenant having sustained a fiduciary relationship to the plaintiff, a remainderman, and the subject matter of the accounting being shown to be complicated because of the life tenant confusing and commingling her own funds with the money which upon her death became part of the remainder estate, the accounting, properly granted, is an equitable accounting. Perkins v. First Nat'l Bank, 221 Ga. 82, 143 S.E.2d 474 (1965).
Equitable accounting was unavailable absent allegations that the accounts were particularly complicated or that the amount owed could not be determined through the discovery process. Ralls Corp. v. Huerfano River Wind, LLC, 27 F. Supp. 3d 1303 (N.D. Ga. 2014).
Trust Fund Account
Remedy when trustee's funds commingled with trust funds.
- When a trustee has so mingled the trust funds with the trustee's own estate that they cannot be distinguished, a cestui que trust may bring a bill in equity to reach the trustee's interest. Evans v. Pennington, 50 Ga. App. 146, 177 S.E. 357 (1934).
Partners or Tenants in Common
A court of equity has jurisdiction in all cases of an accounting and settlement between partners. Smith v. Hancock, 163 Ga. 222, 136 S.E. 52 (1926).
An accounting without dissolution will be granted where one partner refuses to allow another to participate in the business. Hogan v. Walsh, 122 Ga. 283, 50 S.E. 84 (1905); Zerounis v. Berry, 199 Ga. 410, 34 S.E.2d 275 (1945).
A prayer that one partner be compelled to pay another one-half of the net profit of the business includes a prayer for accounting. Bennett v. Woolfolk, 15 Ga. 213 (1854).
Depreciation of assets subsequent to the dissolution must be borne by the partnership. Houston v. Polk, 124 Ga. 103, 52 S.E. 83 (1905).
Partners may have a receiver appointed to settle the partnership affairs. Bennett v. Smith, 108 Ga. 466, 34 S.E. 156 (1899).
The waiver of discovery by a partner is immaterial. Huger v. Cunningham, 126 Ga. 684, 56 S.E. 64 (1906).
When equitable action not maintainable.
- Where the plaintiff contends all partnership relations between the plaintiff and the defendant have come to an end, that a balance has been struck, and that an indebtedness is allegedly due by the defendant to the plaintiff, which cannot be affected by any transactions between the partnership and its creditors or debtors, this is not an equitable action by a member of a firm against his copartner, but an action of law, one man against another who had formerly been his partner, upon an indebtedness a part of which grew out of the formerly existing partnership between them. Manry v. Hendricks, 192 Ga. 319, 15 S.E.2d 434 (1941).
Action for accounting not tenable in equity.
- Where the partnership has been fully dissolved by written contract and the rights of each party definitely established, in case of a breach of such contract equity will not order an accounting, as the remedy is at law. Manry v. Hendricks, 192 Ga. 319, 15 S.E.2d 434 (1941).
When an accounting is involved a city court is without jurisdiction. Dixon v. Hyde, 25 Ga. App. 84, 102 S.E. 910 (1920).
Cotenant may be compelled in equity to account to another for a just share of the profits. Huff v. McDonald, 22 Ga. 131, 68 Am. Dec. 487 (1857).
Equity has concurrent jurisdiction with courts of law, over matters of account between tenants in common, and when asserted, a court will hold and exercise equitable jurisdiction for the purpose of settling all the equities between the tenants, growing out of the tenancy in common. Bailey v. Bell, 209 Ga. 566, 74 S.E.2d 881 (1953).
A case in equity is presented by a petition which not only embraces a statutory application for partition, but also prays for an accounting from cotenants for rents and profits. Werner v. Werner, 196 Ga. 1, 25 S.E.2d 676 (1943).
Exercise by the superior court of its equity jurisdiction to fully and adequately resolve all issues between tenants in common would not be an interference with the orderly administration of estate. Evans v. Little, 246 Ga. 219, 271 S.E.2d 138 (1980).
When action for partitioning and accounting proper.
- Where a number of cotenants are in possession of all of the common property, and are collecting the rents and profits thereof, an equitable action for partitioning and accounting by those not in possession of the property is a proper remedy. Bailey v. Bell, 209 Ga. 566, 74 S.E.2d 881 (1953).
Accounting between cotenants for a just share of the profits is applicable where a partition of the land is granted. Turnbull v. Foster, 116 Ga. 765, 43 S.E. 42 (1902).
A court may entertain a partition proceeding without trying first, or in connection therewith, a suit for accounting concerning the same property held in cotenancy. Lankford v. Milhollin, 200 Ga. 512, 37 S.E.2d 197 (1946).
It is within the power of the court to order a sale of the common property prior to the trial of the main accounting suit. Whether such partition proceeding is heard before the trial of the suit for accounting is a matter resting within the sound discretion of the court. Lankford v. Milhollin, 200 Ga. 512, 37 S.E.2d 197 (1946).
While equity jurisdiction ceased when the General Assembly gave a specific remedy at law, and while a specific legal remedy for partition was provided by statutory partition (O.C.G.A. § 44-6-160) and under former Code 1933, § 85-1501 (see O.C.G.A. § 44-6-140) equity will not ordinarily take cognizance of a partition proceeding unless the remedy at law was insufficient, or peculiar circumstances render the proceeding in equity more suitable and just, accounting between tenants in common will alone and of itself give a court of equity jurisdiction of a partition proceeding, whether or not there were other peculiar circumstances which render the proceeding in equity more suitable and just. Mills v. Williams, 208 Ga. 425, 67 S.E.2d 212 (1951).
Counterclaim for partition by sale proper.
- Where a tenant-in-common sues his cotenant for an accounting and for rents and profits, and a cross action (now counterclaim) is filed by the latter for partition by sale of the common property, such cross action (now counterclaim) is germane to the original action, and the court may direct partition by sale where it appears that the common property cannot be fairly and equitably divided by metes and bounds and it is proper for the decree to direct that the funds be held in court pending the trial of the action for accounting. Lankford v. Milhollin, 200 Ga. 512, 37 S.E.2d 197 (1946).
Distribution of sales proceeds upheld.
- In a dispute over real property and specific performance of a Redemption Agreement, the trial court did not abuse the court's discretion in making an equitable award because O.C.G.A. §§ 44-6-140 and44-6-141 granted the court the authority to adjust the accounts and claims of the parties as required by the circumstances and, more specifically, authorized the trial court to consider all of the circumstances, including any circumstances that occurred after the making of the contract. Bagwell v. Trammel, 297 Ga. 873, 778 S.E.2d 173 (2015).
Accessory to misapplication of trust funds accountable to injured person.
- One who aids and assists a trustee in misapplying trust funds, with knowledge of his misconduct, is directly accountable to the person injured by such misapplication, even though the person thus assisting the trustee does not himself reap the fruits of the misappropriation. Atlanta Trust Co. v. National Bondholders Corp., 188 Ga. 761, 4 S.E.2d 644 (1939).
Person injured by the misconduct may join in one suit the person occupying the fiduciary relationship and one who aids and assists one in misapplying trust assets. Atlanta Trust Co. v. National Bondholders Corp., 188 Ga. 761, 4 S.E.2d 644 (1939).
Some evidence admissible in accounting action.
- In an action for accounting and other relief between joint owners of property, tax receipts tending to show that one of the owners had paid the tax on the joint property for certain years were admissible. Head v. Lee, 203 Ga. 191, 45 S.E.2d 666 (1947).
Effect of consent decree on equitable action between cotenants.
- Where one tenant in common brings an equitable action against his cotenants for partition of land and for an accounting of rents, issues, and profits, and a consent decree is taken, fixing the rights and liabilities of the parties as between themselves, and decreeing their respective interests in the land, in the further progress of the case, where the decree is not attacked, the parties will not be permitted to go behind the decree so as to reopen the subject. All prior agreements and controversies between the parties, whether such were expressly pleaded or not, are merged in the decree. Johnson v. James, 246 Ga. 680, 272 S.E.2d 692 (1980).
Multiplicity of Actions
Equitable jurisdiction not grounded on avoidance of multiplicity of actions alone.
- While avoidance of a multiplicity of actions, in a proper case, may be considered as an independent ground of equitable jurisdiction, and not a mere auxiliary to other equities present, it does not alone create an equitable cause of action, regardless of other circumstances. Dobbs v. FDIC, 187 Ga. 569, 1 S.E.2d 672 (1939).
Consolidation of actions seeking equitable accounting warranted.
- Where the issue in dispossessory warrant and distress warrant proceedings is the same, to wit: does the lessee in those cases owe any rent to the lessor therein? and where a third case involves the same lease contract, the same parties, and the same claims for rent, and the lessee's petition asserts a defense to the lessor's claims on the ground that, upon an equitable accounting, it will be found that the lessee does not owe the lessor any sum as rent, but that on the contrary the lessor is liable to the lessee, and the lease contract has not terminated, the three cases should be consolidated. West View Corp. v. Thunderbolt Yacht Basin, Inc., 208 Ga. 93, 65 S.E.2d 167 (1951).
Because an employee had a breach of contract claim for failure to pay the employee severance that came with the availability of extensive discovery, the employee had an adequate remedy at law, and the trial court did not err in granting the employer's motion for summary judgment on the employee's equitable accounting claim. Vernon v. Assurance Forensic Accounting, LLC, 333 Ga. App. 377, 774 S.E.2d 197 (2015), cert. denied, No. S15C1837, 2015 Ga. LEXIS 864 (Ga. 2015).
RESEARCH REFERENCES
Am. Jur. 2d.
- 1 Am. Jur. 2d, Accounts and Accounting, § 52 et seq.
ALR.
- Rights of cotenants inter se as to timber, 2 A.L.R. 993; 41 A.L.R. 582.
Avoidance of multiplicity of suits as ground of jurisdiction in equity of a suit by one out of possession to quiet title against persons in possession of different portions of the land in severalty, 30 A.L.R. 109.
Accounting in equity in case of tort, 53 A.L.R. 815.
Right of owner of property to maintain bill for accounting against lien holder or pledgee, 79 A.L.R. 201.
Propriety of suit in equity by or against several insurers under fire policies covering same risk, 98 A.L.R. 181.
Previous demand for, and refusal of, an accounting, as condition of actions of account or for an accounting, 143 A.L.R. 1211.
Availability of equitable remedy of accounting between principal and agent, 3 A.L.R.2d 1310.
Delay as defense to action for accounting between joint adventurers, 13 A.L.R.2d 765.
Equity jurisdiction to determine valuation, where arbitration or appraisal has failed, under long-term lease providing for appraisal of premises and fixing rental value at stated intervals, 26 A.L.R.2d 744.
Right of partner or joint adventurer to accounting where firm business or transactions are illegal, 32 A.L.R.2d 1345.
Right to accounting between attorneys associated in practice, in absence of formal partnership, 81 A.L.R.2d 1420.