Hattiesburg Lumber Co. v. Herrick

• Decision Date: 10 February 1914
• Docket Number: 2342.
• Citation: 212 F. 834
• Parties: HATTIESBURG LUMBER CO. v. HERRICK.
• Court: U.S. Court of Appeals — Fifth Circuit

212 F. 834

HATTIESBURG LUMBER CO. v. HERRICK.

No. 2342.

United States Court of Appeals, Fifth Circuit.

February 10, 1914

On Application for Rehearing, March 24, 1914.

Shelby Circuit Judge, dissenting.

This was a suit in equity filed by the appellant and cross-appellee against the appellee and cross-appellant in the chancery court of Harrison county, Miss., and removed therefrom by defendant to the Circuit Court of the United States for the proper division and district. The bill prayed for an attachment on certain lands of the defendant, who was a nonresident of Mississippi, pursuant to a state statute and for a sale of said lands to answer the decree of the court for whatever amount, upon an accounting between plaintiff and defendant, was found to be due the plaintiff upon a contract between the parties, and also for damages for the alleged breach of the contract. The defendant answered the bill of complaint, and at the same time filed a cross-bill against the plaintiff, which was served upon it and by which he claimed a decree for two certain items under the contract, aggregating $8,000, and for damages for the alleged breach of the contract sued upon by the plaintiff, to which the plaintiff interposed an answer. The case was then, by consent of the parties and by order of court, referred to a special master to take the testimony and report the same to the court at its next regular term, together with his conclusions and findings, both upon the evidence and the law of the cause. Pursuant to the order, the master thereupon proceeded to take the evidence, and, having completed the taking of it, to report it, together with his conclusions and findings both of law and of fact, to the court. Both parties thereupon filed exceptions to the findings of the master. After hearing the exceptions, the court entered a decree, in part sustaining and in part overruling the exceptions of the defendant, and overruling the exceptions of the plaintiff, and it is from this decree that each of the parties has appealed to this court. There is submitted, along with the submission on the merits, a motion filed by the appellee to dismiss the appeal, because the action being, as contended by it, one at law, the only remedy available to plaintiff to review the decree was by writ of error.

Baskin & Wilbourn, of Meridian, Miss., Bowers & Griffith, of Gulfport, Miss., and Callaway & Huie, of Arkadelphia, Ark., for appellant and cross-appellee.

J. I. Ford, of Pascagoula, Miss., W. A. White, of Gulfport, Miss., and Edwin T. Merrick, of New Orleans, La., for appellee and cross-appellant.

Before PARDEE and SHELBY, Circuit Judges, and GRUBB, District Judge.

GRUBB District Judge (after stating the facts as above).

The jurisdiction of a court of equity over the action is sought to be sustained upon two grounds:

(1) That the Mississippi statute (section 536 of the Code of Mississippi) confers on the chancery court of the state--

'jurisdiction of attachment suits based upon demands founded upon any indebtedness, whether the same be legal or equitable, or for the recovery of damages for the breach of any contract, express or implied, or arising ex delicto, against any nonresident, absent or absconding debtor, who has lands or tenements in this state.'

The suit was brought in the state chancery court by attachment against the lands of the defendant under this statute, and removed by him to the Circuit Court of the United States. The contention of the defendant is that the state statute could not confer on the Circuit Court of the United States jurisdiction in equity of a cause of action, in its nature legal, as distinguished from equitable. We find it unnecessary to decide this question, as the jurisdiction of the court over the appeal may be sustained upon the other ground upon which it is contended the case is one of equitable cognizance.

(2) That an accounting is sought by the bill between the parties to it of mutual transactions covering a period of two years, involving numerous items of claim and counterclaim, the accounting being complicated in its nature, and one which it was impractical to arrive at fairly and adequately by the ordinary common-law proceedings. We are of the opinion that the following authorities tend to support the jurisdiction of the Circuit Court to entertain the cause upon its equity side, upon the ground of the necessity for an accounting: Fechteler v. Palm Bros. & Co., 133 F. 462-465, 66 C.C.A. 336; Fenno v. Primrose, 119 F. 801, 56 C.C.A. 313; Kirby v. R.R. Co., 120 U.S. 130, 7 Sup.Ct. 430, 30 L.Ed. 569; Beggs v. Edison Electric Co., 96 Ala. 295, 11 So. 381, 38 Am.St.Rep. 94; 1 Cyc. 420-424; 4 Pomeroy Eq. Jur. (3d Ed.) Sec. 1420.

If there is doubt as to whether the bill contains equity, for an accounting, if it had been assailed upon that ground in the court below, we are clearly of the opinion that it is sufficient in that respect, as against an attack first made upon it, upon that ground, in this court. The record shows that the defendant answered the original bill without objecting to the equitable jurisdiction of the court, also filed a cross-bill and consented to an order appointing a master, excepted to the master's report upon other grounds, and brought the record to this court by a cross-appeal, and first objected to the jurisdiction of the Circuit Court, as a court of equity, over the cause, after the cause had reached this court by appeal, and by a motion filed by him, in this court, to dismiss the appeal upon the ground that the cause was one of legal cognizance, and the final judgment in it would not sustain an appeal.

There was, at least, some ground for equitable jurisdiction, as for an accounting. It was not a case where the cause of action was indisputably a legal one. It was open for contention between the parties as to whether a sufficient case for an equitable accounting was presented. The defendant in the lower court made no contention against the equity of the bill, but consented to proceed with the cause upon the equity side of the court, and first objected to the exercise of the equity jurisdiction of the court below after appeal had been perfected from the decree of the lower court, and by a motion to dismiss the appeal, made in the appellate court. Having been tried as an equity case in the court below, and without objection by the appellee, and the cause of action being one embraced with one of the general heads of equity jurisdiction, the issue as to whether the pleadings and facts brought the case sufficiently within the jurisdiction of a court of equity will not be permitted to be made by the appellee, for the first time, in this court, but it will be treated in this court, as it was tried in the lower court, as an equity cause and properly reviewable by the remedy of appeal. Highland Boy Gold Mining Co. v. Strickley, 116 F. 852, 54 C.C.A. 186-188; Hollins v. Brierfield Coal Co., 150 U.S. 371, 14 Sup.Ct. 127, 37 L.Ed. 1115; Reynes v. Dumont, 130 U.S. 354, 9 Sup.Ct. 486, 32 L.Ed. 934; Tyler v. Savage, 143 U.S. 79, 12 Sup.Ct. 340, 36 L.Ed. 89; Burbank v. Bigelow, 154 U.S. 558, append., 14 Sup.Ct. 1163, 19 L.Ed. 51; Guaranty Co. v. Mechanics Co., 80 F. 772, 26 C.C.A. 146; Perego v. Dodge, 163 U.S. 160, 16 Sup.Ct. 971, 41 L.Ed. 113; Toledo Computing Scale Co. v. Computing Scale Co., 142 F. 919, 74 C.C.A. 92; 18 Encyc. Pl. & Practice, p. 119; Simpkins' Federal Equity Suit (2d Ed.) p. 25; 1 Cyc.p. 428.

The motion to dismiss the appeal is therefore dismissed. This renders it unnecessary for us to consider appellee's motion to dismiss a writ of error, which was subsequently sued out by appellant; the contention being that it was sued out after the expiration of the six months within which a writ of error lies to this court.

Coming to the merits, the purpose of the bill was to recover amounts alleged to be due under a contract entered into between the plaintiff and defendant, for an accounting to determine the amounts so due, and for the recovery for damages for its alleged breach. The cross-bill sought to recover certain items alleged to be due appellee under the contract, and for the recovery of damages for the alleged breach of the contract by appellant. At the time the contract was entered into, the plaintiff was the owner of about 12,000,000 feet of timber and a sawmill, which it was operating, cutting the timber which it owned. The defendant was the owner of about 80,000,000 feet of timber, adjoining plaintiff's, but had no mill. The then price of lumber was such as to make the manufacture of lumber attractive to both parties. In this situation the parties opened negotiations. The defendant was anxious to arrange for the cutting and sawing of his timber at the plaintiff's mill. This was agreeable to the plaintiff, provided the cutting and sawing of the defendant's timber was deferred until the plaintiff's timber had been first cut and sawed and marketed. Each party was desirous of getting the benefit of the present market prices for lumber, and naturally wished its or his lumber to be first disposed of. This obstacle to agreement was surmounted by the defendant's purchasing the plaintiff's timber on a stumpage basis, and the plaintiff agreeing to cut and saw the timber so purchased, as well as that originally owned by defendant, for a consideration to be paid it by defendant. On this basis the contract of March 26 1906, that which is alleged to have been broken, was entered into. It provided for the logging, sawing, grading and placing on railroad cars of all merchantable pine timber, 10 inches and larger at the stump, that was then standing on lands owned by defendant in Harrison county, and which was indicated on a plat attached to the contract. The defendant agreed to pay the...