Briggs v. Neal

• Decision Date: 03 February 1903
• Docket Number: 434.
• Citation: 120 F. 224
• Parties: THE BRIGGS v. NEAL et al.
• Court: U.S. Court of Appeals — Fourth Circuit

120 F. 224

THE BRIGGS v. NEAL et al.

No. 434.

United States Court of Appeals, Fourth Circuit.

February 3, 1903

James E. Shepherd and Edward R. Baird, Jr., for appellants.

W. W Clark, for appellee.

Before SIMONTON, Circuit Judge, and BRAWLEY and WADDILL, District judges.

SIMONTON Circuit Judge.

This case comes up on appeal from the Circuit Court of the United States for the Eastern District of North Carolina. The cause originated in the superior court of Carteret county, in the state of North Carolina. It was commenced by summons and complaint on the part of R. S. Neal, and John Dunn and O. H Guion, assignees of Neal, and E. K. Bishop, on behalf of himself and other creditors of Neal, against George S Briggs, trading as George S. Briggs & Co. After certain proceedings had in the state court, which will be referred to hereafter, the cause was removed into the Circuit Court for the Eastern District of North Carolina, and the answer of the defendant was filed.

R. S Neal was a manufacturer of lumber in the town of New Berne, N.C., and George S. Briggs & Co. were commission merchants, sellers of lumber in the city of Norfolk, Va. On 22d March, 1900, an agreement in writing was entered into between these parties, whereby on his part Neal agreed to deliver to George S. Briggs & Co. all lumber manufactured at his mill on Bogue Sound, near Morehead City, Carteret county, N.C., from 22d March, 1900, up to and until 15th February, 1901, using all necessary and proper care in the manufacture of the lumber, so that it could be sold to the best advantage, and to manufacture, ship, and deliver the same in accordance with the directions and specifications of Briggs & Co., furnishing a statement daily or weekly, as may be required, of all timber cut and manufactured at the mill, the lumber to be inspected by a competent inspector at the mill as each car load or cargo is loaded, and the mill to be insured for the benefit of Briggs & Co., at cost of Neal. Neal agrees that Briggs & Co. shall receive 5 per cent. on all gross sales of lumber. Further, in consideration of an advance by Briggs & Co. of $5,000 to Neal, to be used in the operation of the mill and in the purchase of a steamer and of timber, it is agreed that Briggs & Co. shall be entitled to deduct from all sales of lumber $1 a thousand feet so long as the $5,000 advance is not paid. When $1,250 are paid, they can deduct 75 cents a thousand; when $2,500 are paid, 50 cents a thousand; and 25 cents per thousand when $750 ($3,750) are paid; with the right in Neal to anticipate his notes. The usual discount on all advances is to be paid by Neal. The payment of the $5,000 advance is acknowledged, and is represented by three notes, two or these each for $1,250, payable at six and nine months, respectively, from date of contract, and one for $2,500, payable 15th February, 1901, all without interest. On their part, Briggs & Co. agree to furnish all necessary vessels or barges for transporting lumber, on notice of its readiness for delivery, to handle all lumber received and dispose of it upon the best markets and at the best prices obtainable therefor, in the exercise of their best judgment to that end, and to render to Neal a statement of every cargo or car load delivered. They also agree to advance to Neal on all lumber at the mill or in sheds or in the yards $4 per thousand feet as and when said lumber has been manufactured and insured at Morehead, and also, when each cargo of lumber is loaded on a vessel or car or barge and a clean bill of lading signed, duly sent and presented to Briggs & Co., such further sum, in addition to the $4 per thousand, as will equal two-thirds of the cash value of said cargo at the mill, and to pay Neal the other one-third of selling price of the lumber 10 days after its arrival at the point of destination and it is discharged, inspected, and accepted, less the sum authorized to be deducted under this agreement. In order to secure his performance of his contract, and especially the repayment of the advances, Neal mortgages the steamer Nellie, the sawmill, and all the plant, and four tracts of land fully described. Neal to remain in possession until default, and, in case of default, Briggs & Co. to have the right to enter into possession and cause the lumber to be cut and delivered, the sawmill to be operated in the manufacture of lumber, until so much has been cut and manufactured as will repay all advances and all expenses incident to the manufacture of the lumber, a duty imposed by this contract on Briggs & Co.

Numerous shipments were made by Neal to George S. Briggs & Co. under this contract until September, 1900. At this time Neal became largely involved, and was forced into an assignment for the benefit of his creditors. A few days before this he had telegraphed Briggs to come to Morehead City. Upon his arrival, Briggs met Neal and his counsel, Mr. F. H. Busbee. Neal then stated that he owed other parties beside Briggs & Co. $18,000, and asked Briggs to make further advances to him. This Briggs was willing to do, if he were secured. Neal could not secure him, and, under the advice of Mr. Busbee, he turned over the whole mortgaged property to Briggs. Then in a few days he made the assignment above spoken of, and in it he stated his debt to Briggs to be $8,350. Very shortly thereafter the suit was brought in Carteret county. The burden of the complaint is that out of the lumber shipped to him by Neal, and that turned over to him, Briggs had received full satisfaction for all sums advanced by him to Neal. Under the prayer of the complaint an injunction was issued against Briggs & Co. restraining them from operating the mill, and the assignees in the assignment were made receivers. The injunction was continued, and the receivers were confirmed in the federal court. After defendant appeared in the court below, he moved to dismiss the bill on a ground to be stated hereafter. This being refused, he answered, denying all the main allegations of the bill, and insisting that the debt and advances were not paid. Upon hearing the bill and answer, the court referred the cause to the deputy clerk of his court, as special master. This is made a ground of exception, and will be discussed hereafter. The court also allowed the testimony to be taken and the references to be held at New Berne, instead of at Elizabeth City, where the court was then sitting. This also is one of the grounds of exception to be discussed hereafter. The master held references, took the account between the parties, examined witnesses, and made a report giving his findings of fact and stating his conclusions of law. There is nothing in the record showing that the parties consented to refer the case to the master to hear and decide the issues. So the report was created as merely advisory to the court, to be accepted an acted on, or to be disregarded, according to the judgment of the judge. The master found, as a conclusion of law from his facts, that the defendant was indebted to the plaintiff Neal, after giving him all proper credits, in the sum of $5,108.15. To the findings of the master, exceptions were taken. At the hearing, the court sustained the master. An appeal was allowed, and the case is here on seven assignments of error.

In this connection the selection of the deputy clerk as special master is objected to. It is a bad practice to appoint clerks or their deputies special masters. It is forbidden by the act of Congress of March 3, 1879 (20 Stat. 415 (U.S. Comp. St. 1901, p. 591)), except when the judge shall determine that special reason exists therefor, to be assigned in the order of appointment. In the present case his honor assigns in his opinion a special reason for the appointment. Its omission in the order must have been an inadvertence. This is not reversible error.

1. The first assignment of error is that the appointment of receivers and of a special master, at the first presentation of ...