Aron v. Chaffe

• Decision Date: 08 January 1895
• Parties: ALBERT ARON v. CHAFFE, POWELL & WEST ET AL
• Court: Mississippi Supreme Court

17 So. 11

72 Miss. 159

ALBERT ARON v. CHAFFE, POWELL & WEST ET AL

Supreme Court of Mississippi

January 8, 1895

FROM the chancery court of Leflore county, HON. W. R. TRIGG Chancellor.

Bill by Albert Aron against Chaffe, Powell & West and L. T. Basket. The bill alleges that Aron and Basket were partners as merchants until March, 1891, when the firm was dissolved and Aron purchased the interest of Basket for $ 2,500, executing therefor his three promissory notes for the same, with the understanding that they were to be subject to any offset that Aron might have against Basket; that afterwards Basket began business as a merchant in his own name, and deposited said notes with Chaffe, Powell & West as collateral security for advances to be made by them to him; that, at the request of Basket, and for his accommodation, complainant, Aron, gave a written statement, which was delivered to Chaffe, Powell &amp West, stating that he held no offsets against the notes; that Basket failed in business in January, 1892, and made an assignment of his property for the benefit, of creditors with preferences; that Chaffe, Powell & West joined in a creditors' bill seeking to vacate the assignment and subject the property to the payment of their debt, that case being styled W. R. Moore & Co. v. L. T. Basket; that said creditors' bill was pending and undetermined when this suit was brought; that Chaffe, Powell & West hold also, as collateral security for their debt, other notes executed by J. H. and J. D. Sullivan, who are solvent, and who hold no equities against their notes; that if the creditors' bill should succeed, the property subjected would be sufficient to satisfy the indebtedness due to Chaffe, Powell & West; that they have instituted an action at law on two of the notes in their hands given by complainant to Basket, claiming a balance due of $ 935.16; that complainant has offsets against Basket more than sufficient to cover this amount; that Basket is insolvent, and if complainant is required to pay the notes, he will be deprived of the benefit of his offsets that $ 200 had been paid on the notes in question by complainant, which had not been credited, and that When said payment was made complainant was advised that Chaffe, Powell & West would look alone to Basket for payment. The bill prays that Chaffe, Powell & West be required to make discovery and file a schedule of all other collaterals given them by Basket; that they be enjoined from further proceedings in the action at law on the notes until the termination of the creditors' suit against Basket; that, if they should not then realize the balance due them from said suit, they be first required to exhaust the other collaterals in their hands before pursuing complainant on his notes; that said notes be credited with the $ 200 paid; and that general relief be granted. The injunction, as prayed for, was issued. A decree pro confesso was entered against Basket.

Chaffe Powell & West answered, denying the material allegations of the bill upon which the right to relief was predicated; denied that the other collaterals, held by them as security for Basket's indebtedness, were solvent, and averred that the same were worthless. They averred, also, that they credited Basket on the faith of the notes of Aron and his letter stating that he had no offsets against the same. After testimony taken, the cause was set down for final hearing on pleadings and proof, and a motion was made by defendants to dissolve the injunction, and for the allowance of damages. There was a controversy of fact as to the $ 200 alleged to have been paid by complainant, and complainant testified that he had an offset against Basket amounting to $ 833.55.

On the hearing, among other things, the defendants introduced in evidence a decree, which had been rendered in the case of Moore v. Basket, which showed the amount of the indebtedness from the latter to Chaffe, Powell & West. Complainant objected to the introduction of this decree, on the ground that he was not a party to the suit in that case, and was not bound by the decree; and, further, it was objected that the decree could not be introduced without the whole record. The objection was overruled, and the decree, without other parts of the record, was read in evidence. A decree was then rendered in favor of defendants, finding that Basket was indebted to Chaffe, Powell & West in the sum of $ 585.87; that Aron was indebted upon his notes more than this amount, and that he was not entitled to relief. The court further decreed that the injunction was wrongfully sued out, and the same was dissolved, and a decree was entered against complainant and the sureties on his injunction bond for $ 100 damages, the amount of the defendant's attorney's fees. And a decree was also rendered against complainant for said sum of $ 585.87, the amount ascertained to be due upon said notes. From this decree, the complainant appeals. The opinion contains such further statement of the case as is necessary to an understanding of the questions decided.

Reversed and decree.

Rush & Gardner, for appellant.

Under the equitable doctrine of marshaling securities, it was proper that the injunction should issue, as Basket was indebted to Aron in a sum more than the amount due on said notes. By staying the action at law, Aron was benefited and defendants were not injured. Where an injunction is issued upon sufficient grounds, and is afterwards dissolved upon the removal of such grounds, complainant should...