Cabaniss v. Reco Min. Co.

• Decision Date: 31 May 1902
• Docket Number: 1,164.
• Citation: 116 F. 318
• Parties: CABANISS et al. v. RECO MIN. CO. et al.
• Court: U.S. Court of Appeals — Fifth Circuit

116 F. 318

CABANISS et al. v. RECO MIN. CO. et al.

No. 1,164.

United States Court of Appeals, Fifth Circuit.

May 31, 1902

C. A Turner (B. M. Davis, Geo. S. Jones, John I. Hall, and Olin J Wimberly, on the brief), for appellants.

Minter Wimberly and Alexander Akerman (Jesse C. Harris, on the brief), for appellees.

Appeal from the Circuit Court of the United States for the Southern District of Georgia.

Before PARDEE, McCORMICK, and SHELBY, Circuit Judges.

PER CURIAM.

Cabaniss and others, as the trustees of the Roger & Joiner Commission Company, brought a suit at law against the Reco Mining Company in the court below, and soon thereafter three bills in equity were filed in the same court, which relate to the action at law. The three equity cases were consolidated, and the court granted the prayers of the several bills by appointing Leon S. Dure receiver of the property of the Rogers & Joiner Commission Company, and of all the property of Rogers and Joiner individually which they had placed in the hands of the trustees, and of all the assets of the Reco Mining Company, and of all the books and documentary evidence relating to the business of the parties. A motion was made to discharge the receiver, which was refused, and the receiver continued in office. From the order appointing a receiver and from the order continuing him in office as receiver this appeal was taken by Cabaniss and others (trustees) and D. C. Joiner under the act of June 6, 1900 (31 Stat. 660). There are several assignments of error which aver that the court erred in the order appointing a receiver. Although this appeal is taken from an interlocutory order, it brings before us the question of the equity of the bills on which the decree is based, and we may, if the pleadings justify it, either enter or direct a final decree, dismissing the bill. Smith v Iron Works, 165 U.S. 518, 17 Sup.Ct. 407, 41 L.Ed. 810.

The Action at Law: The litigation in the court below was begun by an action at law. It was brought by Cabaniss and others trustees of the Rogers & Joiner Commission Company, all citizens of the state of Georgia, against the Reco Mining Company, a corporation organized under and pursuant to the laws of the state of New Jersey, for the sum of $2,082.92, alleged to be due on an account. The account was due to the Rogers & Joiner Commission Company, and had been transferred and assigned by deed of trust which conveyed all of the assets of the company to the trustees, plaintiffs in the suit at law. An attachment was sued out in the case and levied on property of the Reco Mining Company. That case is pending on the law docket of the court below. We refer to it fully, because it is the subject more or less of the several bills in equity involved in this appeal.

The First Bill in Equity: The Reco Mining Company filed its bill against the Rogers & Joiner Commission Company, and J. W. Cabaniss and others, trustees of that company, and John M. Barnes, United States marshal. The purpose of the bill, as shown by its averments and prayers, is to enjoin the further prosecution of the suit at law; to have a receiver appointed to take charge of all the property of the Rogers & Joiner Commission Company, and the property of that company held by the trustees, and to administer the same; and for an order to allow the complainants to operate their mine, which it is averred had been closed by the levy of the attachment. The bill describes the suit at law, and it is claimed that it should be enjoined, and that the complainants should have relief in equity on grounds which are stated in the sixth, seventh, and eighth paragraphs of the bill, as follows:

'Humbly complaining, your orator shows that on the 27th day of January, 1902, R. Morrison Rogers, president of the Reco Mining Co., your orator, made and executed three certain promissory notes made payable to Rogers & Joiner Commission Co., signed by R. M. Rogers, president of the Reco Mining Co., as follows: One note due March 28, 1902, for $2,000; one note due April 20, 1902, for $4,000; one note due May 27, 1902 for $4,000,-- which said notes were indorsed by the Rogers & Joiner Commission Co., of New York City. And your orator avers and charges that said Rogers & Joiner Commission Co. received the proceeds of said notes and used the same in their business; that there was no consideration whatever moving your orator to sign said notes, save and except the desire to accommodate the Rogers & Joiner Commission Co., and your orator received no consideration whatever for signing said notes; that all the money realized from the sale or discount of said notes with the Mercantile National Bank was received by the Rogers & Joiner Commission Co., and your orator charges and avers that the Rogers & Joiner Commission Co., realizing this fact, credited y our orator upon their books with the proceeds of said notes, whereby it appears upon the books of the Rogers & Joiner Commission Co., that the Rogers & Joiner Com. Co. are indebted to your orator in a balance of seven thousand four hundred and twenty-six and 77/100 dollars ($7,426.77). And your orator avers and charges that while said notes were given for the sole purpose of accommodating the Rogers & Joiner Commission Company, and with the understanding that Rogers & Joiner Commission Co. should pay said notes at maturity, and the said Rogers & Joiner Commission Co. have failed and neglected to pay the first of said notes, to wit, this defendant has become liable as the maker of said note in the sum of two thousand dollars, in the event that the Rogers & Joiner Commission Company should fail to pay said note.'

It will be seen by these averments that the basis of the complaint is that the complainant made certain promissory notes, amounting in the aggregate to $10,000, for the benefit and accommodation of the Rogers & Joiner Commission Company, and that the Rogers & Joiner Commission Company received the proceeds and benefit of the notes, which notes were payable to, and are now held by, the Mercantile National Bank of New York City, and that the complainant is liable on these notes. It does not appear that it has paid any part of them. It apprehends that it may be required to pay them, and it is therefore contended that the plaintiffs in the suit at law, the trustees of the Rogers & Joiner Commission Company, should not be allowed to prosecute that suit against them. If the Rogers & Joiner Commission Company, or their trustees, should pay off and discharge the notes, then the complainant would have nothing to complain of. The bill is filed under the apprehension and fear that the complainant will hereafter be made to pay these notes. If the complainant had already paid the notes, it would then have no remedy in equity until their claim for reimbursement had been reduced to judgment, and a lien had been fixed, by execution or otherwise, upon the property of the Rogers & Joiner Commission Company. But, not having paid the notes, the complainant is not yet in a position to assert a right of action on the notes, either at law or in equity.

It does not appear from the bill that the trustees of the Rogers &amp Joiner Commission Company are insolvent. It does appear from the bill that the $10,000 debt to the Mercantile National Bank of New York City is provided for by the deed of trust, and there is nothing to show that...