Atkinson v. Allen

• Decision Date: 02 December 1895
• Docket Number: 576.
• Citation: 71 F. 58
• Parties: ATKINSON et al. v. ALLEN et al.
• Court: U.S. Court of Appeals — Eighth Circuit

71 F. 58

ATKINSON et al. v. ALLEN et al.

No. 576.

United States Court of Appeals, Eighth Circuit.

December 2, 1895

This is an appeal from a decree dismissing a bill brought by the appellants, R. G. Atkinson and E. B. Houston, to enjoin the appellees, James H. Allen, Thomas West, and J. C. Bush, from prosecuting an action at law against the appellants upon their promissory note and contract. From 1877 to 1886 the appellants were merchants at Pine Bluff, in the state of Arkansas, and the appellees were commission merchants at New Orleans, in the state of Louisiana. Between July, 1877, and February, 1885, the appellees advanced moneys to the appellants at various times, and the latter shipped cotton to the former, which was sold by them on commission, and its proceeds were credited to their account. During a large portion of this time the appellants agreed to pay to the appellees 8 per cent. per annum interest, and 2 1/2 per cent commission, on the amount of the advances they received, and also agreed to ship to them each year one bale of cotton for every $10 of their indebtedness, to be sold by the appellees on commission, and that, if they failed to ship that number of bales during each year, they would pay to the appellees $1.25 on each bale of their deficiency. The appellees frequently rendered to the appellants statements of their account, and in each statement they added the interest and commissions to the date of the statement, and then treated the balance, which was always against the appellants, as a new principal. During these years the appellees sold cotton for the appellants which realized about $500,000, and at all times after 1879 the latter were so heavily indebted to the former that they could not pay them, and their credit would have been impaired, and they might have been financially ruined, if the appellees had sued them for the balance of their account; and by these circumstances they were compelled from year to year to renew their agreement to pay these commissions and this interest, in preference to standing an action at law for their debt. The appellants were partners as R. G. Atkinson & Co. in all these transactions, and in February, 1885, Atkinson went to New Orleans, examined allowed, and settled the account of the appellees against his firm, which disclosed all the charges for interest and commissions of which the appellants now complain. This account showed that Atkinson & Co. owed the appellees $17,929.84, and the latter demanded that the appellants should then give them their promissory notes for that amount and should agree to ship to them during the year commencing September 1, 1885, 1,793 bales of cotton, and to pay them $1.25 for every one of that number of bales which they failed to so ship, and threatened that, if they did not execute such notes and such an agreement, they would sue them for the balance of this account in New Orleans, before Atkinson could leave that city. Thereupon Atkinson allowed the account, and signed the notes and agreement with his firm name. One of these notes was for $3,250, payable in December, 1885, and the appellants paid it at maturity. The other was for $14,679.84, and was payable in January, 1886. The appellants paid this note, with the exception of $4,886.09 and interest from maturity, but they did not ship any of the cotton according to their agreement. In December, 1886, the appellees brought an action at law against the appellants in the United States district court for the Eastern district of Arkansas, to recover the balance due upon this note and the $2,241.25 which the appellant had agreed to pay for their failure to ship the 1,793 bales of cotton. Thereupon the appellants brought this suit in equity, alleged that the notes and contract were tainted with usury, and were obtained by duress, and prayed that the appellees be enjoined from prosecuting the action at law; that the account which had been settled by the notes be restated, purged of all illegal, unjust, and improper charges and exactions; and that they recover of the appellees any amounts found due them on such restated account. The complaint of the appellants in this court is that the court below dismissed their bill upon this state of facts.

D. H. Rousseau, for appellants.

W. E. Hemingway (M. L. Stevenson, Jacob Trieber, and M. A. Austin, with him on the brief), for appellees.

Before SANBORN and THAYER, Circuit Judges.

SANBORN Circuit Judge, after stating the facts as above, .

The grounds on which the appellants sought to maintain this suit in equity were that the note and contract upon which the action at law was founded and the account stated, in settlement of which the note was given, were tainted...