120 F. 224 | 4th Cir. | 1903
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. Guión, 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 More-head 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
Numerous shipments were made by Neal to George S. Briggs &. Co. under this contract until September, 1900. At this time Neali 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-
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 the bill in the court below, was premature, there being no proof in the record making their appointment necessary or proper, and no proof of complainants’ claim, and no notice given to defendant or his counsel. The appointment of a receiver is a matter within the discretion of the court, and will not be reviewed unless there be a gross abuse of the discretion. Bates, Fed. Proc. § 582. We see no abuse of it here. The bill presented a case in which it was absolutely necessary to take an account. This being so, a reference was also neces
2. The second assignment of error is hardly in compliance with the twenty-first rule of the Supreme Court and the eleventh rule of this court. It embraces five distinct grounds of error. These rules require that the assignments of error shall set out separately and particularly each error asserted and intended to be urged. This second assignment charges error in the court in overruling defendant’s motion to dismiss the bill on the ground that it was vague, uncertain, and indefinite. We see no error in the action of the court. This assignment also charges as error that the court did not dismiss the bill, in that it did not state facts sufficient to constitute a cause of action. A motion of this kind belongs to code pleading. It has no place in equity practice. If the motion had been to dismiss the bill for want of equity, it could not have been granted, because the bill prayed an account, which is a ground of equity jurisdiction. This assignment also objects to the bill because it was signed by Neal alone, and he had already parted, by assignment, with all his interest in the property. The twenty-fourth rule in equity requires a bill to be signed by the counsel, for reasons stated in the rule. This bill is signed by all the counsel for all parties complainant. Neal only verifies the bill, the facts stated therein being practically within his knowledge. This assignment also alleges as error that no bond was required in granting the injunction. This is a matter within the discretion of the judge granting the injunction. Meyers v. Block, 120 U. S. 206, 7 Sup. Ct. 525, 30 L. Ed. 642; Russell v. Farley, 105 U. S. 433, 26 L. Ed. 1060.
The fourth assignment of error brings up the merits of the controversy. The Supreme Court of the United States and this court have frequently announced that the concurrence of the court below in the findings of fact of a master have great weight, and will be generally followed in the Appellate Court. But although this is the general rule, still the Appellate Court may, and indeed should, examine the record and come to its own conclusion. The case before us is one requiring this course.
When Neal, after doing business with George S. Briggs & Co., under the contract, from March to September, had an interview with Briggs, in which he was assisted by his attorney, Mr. Busbee, he stated that he was indebted to Briggs & Co. about $8,000. The master in his report finds as a fact that, instead of being a debtor, Neal was a creditor, of George S. Briggs & Co. in the sum of $5,108.15, growing out of a volume of business, in all $21,683.47. This result is sufficiently startling to induce an examination of the testimony. Briggs & Co. and Neal were business men of experience. They were dealing with each other under a written contract. By that contract Neal cut, manufactured, and prepared lumber for market, shipping it under orders from Briggs & Co. These orders specified the character of the lumber and the price. And in nearly every instance of shipment the order stated the price at which the lumber sold. This mode of doing business was kept up from March to Sep
A mortgagee put into possession of a going concern, under the operation of the mortgage, goes in as a quasi trustee or bailiff for the mortgagor. Jones Mortg. § 1116. He takes the business as he finds it, and conducts it to the best advantage. His duty in possession is that of an ordinarily prudent owner, and his liability is for negligence in failing to make the property as productive as it might be in the hands of a reasonably careful and prudent owner. Kiewert Co. v. Juneau, 24 C. C. A. 297, 78 Fed. 708; Schaeffer v. Chambers, 6 N. J. Eq. 548, 47 Am. Dec. 211. Out of the proceeds he pays all necessary current expenses, reimburses himself for all sums paid in taxes and necessary repairs. Jones, Mortg., supra; 4 Kent, Comm.
The decree of the Circuit Court is reversed, and the case remanded to that court, with instructions to state the account between Neal and Briggs & Co., allowing as credit to the latter the amount of his account — $8,210.16—and such demurrage as Briggs & Co. were compelled to pay by reason of default of Neal, and charging against said account any acceptances of Neal’s drafts unpaid by Briggs & Co., as also the profit realized by Briggs & Co., after taking possession of the mill and plant, deducting all necessary expenses for drying and handling and manufacturing the lumber on hand when the possession was taken by Briggs & Co. of the mill and plant, and for necessary repairs.
Reversed.