Lake Charles Rice Milling Co. v. Pacific Rice Growers' Ass'n

• Decision Date: 21 January 1924
• Docket Number: 4029.
• Citation: 295 F. 246
• Parties: LAKE CHARLES RICE MILLING CO. v. PACIFIC RICE GROWERS' ASS'N et al.
• Court: U.S. Court of Appeals — Ninth Circuit

295 F. 246

LAKE CHARLES RICE MILLING CO. v. PACIFIC RICE GROWERS' ASS'N et al.

No. 4029.

United States Court of Appeals, Ninth Circuit.

January 21, 1924

Rehearing Denied March 3, 1924.

The appellant brought a suit in equity against the appellees for an accounting and for the recovery of a judgment against each of them. The bill alleged that the appellee the Pacific Rice Growers' Association, hereinafter to be called the association, entered into contracts with the other appellees who were individual owners and growers of rice, all residents of the state of California, whereby the latter authorized the association to enter into contracts with the appellant, the substance of which was that said owners and growers agreed to ship rough or paddy rice to the appellant at its mill in Louisiana, the appellant to receive and mill the same as rapidly as possible and sell the clean rice so produced in such manner and at such times as in its judgment would net the best returns to the owners, and specifying the charges of the appellant for its services; that the appellant was to advance freight from the shipping point to its mill and to advance to the association for account of the owners $5 per bag of paddy rice when received, depending upon the quality of the rice as determined by the mill's grader; that the appellant was to make no charge for interest on advances, and the association was to deduct the sum of 5 cents per hundredweight to cover its own regular commission charges out of the final returns made by the appellant. The bill alleged that thereafter the growers shipped to the appellant paddy rice, and that the appellant advanced to the association pursuant to the agreements, $5 per sack, amounting in the aggregate to $374,310, and paid the freight charges on said rice in the sum of $52,368.02; that the appellant milled said rice and the milling charges thereon under the agreement were $44,064.45; that in pursuance of the agreement the appellant remitted to the association from time to time various sums aggregating $30,363.57, and it still has the further sum of $7,272.26 derived from the proceeds of the sale of said rice which it is willing to pay to the persons who may be adjudged to be entitled thereto.

The bill further alleged that the appellant has milled all the rough rice so shipped to it and has sold the same to the best advantage for the owners thereof and has received from the sale thereof $435,805.49, and that there is now due and owing to it from the appellees the sum of $72,572.81. Upon information and belief the appellant alleged that by reason of its payments to the association, which was acting in a fiduciary capacity both for the appellant and the other appellees, some of the appellees have received a larger portion of the proceeds of the sale of rice than they are entitled to receive, and that others have received less than they are entitled to receive; that the appellant has demanded an accounting from the appellees, but they have each failed and refused to make an accounting and no accounting has been had, and that a full, complete, and final accounting is necessary in order to determine the respective rights between the appellant and the appellees and between the association and the other appellees. The appellant further alleged on information and belief that on or about October 13, 1921, the directors of the association adopted a resolution to cease all corporate functions, and since said date the said corporation has performed no corporate function and has abandoned its office and principal place of business and no one is in charge of its business or property. On a motion to dismiss for want of equity, for multifariousness, and for misjoinder of parties defendant, the suit was dismissed.

McCoy &amp Moss, of Lake Charles, La., and William E. Kleinsorge, of Sacramento, Cal., for appellant.

Arthur C. Huston, of Woodland, Cal., for appellees.

Before GILBERT, HUNT, and RUDKIN, Circuit Judges.

GILBERT Circuit Judge (after stating the facts as above).

The court below held that the rights of the appellant as against each of the appellees were wholly separate and distinct as arising under independent contracts with each, and that there was no community of interest between them. It may be conceded that under the provisions of section 267 of the Judicial Code, enacted for the purpose of emphasizing the protection of a trial by jury guaranteed by the Seventh Amendment, and providing that no suit in equity may be maintained in any case where a plain, adequate, and complete remedy may be had at law, if the case here is one in which no equitable rights are involved and the actions against the 49 individual defendants are all distinct and involve different issues and different proofs, the ruling of the trial court was correct and the cause was properly dismissed. But we do not so regard the case. The appellant, in conducting its milling operations, dealt with these 49 growers and owners of rice not directly, but through their trustee, the association. The rice, when received by the appellant, was necessarily mingled in a mass, and after the cleansing process it must have been sold by the appellant in mass and without attempting to distinguish the...