French v. A. H. Rainey & Co.

2 Tenn. Ch. R. 640
CourtCourt of Appeals of Tennessee
DecidedOctober 15, 1876
StatusPublished

This text of 2 Tenn. Ch. R. 640 (French v. A. H. Rainey & Co.) is published on Counsel Stack Legal Research, covering Court of Appeals of Tennessee primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
French v. A. H. Rainey & Co., 2 Tenn. Ch. R. 640 (Tenn. Ct. App. 1876).

Opinion

The Chancellor:

— In this case the complainant has excepted to the sufficiency of the answer of the defendant Rainey, and both parties have appealed from the rulings of the master on these exceptions. The point raised by one of these exceptions has been fought over in the courts for a hundred years, and cannot be said to have been yet determined. The question is whether a defendant who undertakes to defend by answering the bill, instead of demurring or pleading, can, by denying the complainant’s right to an account, protect himself from giving in his answer the account called for.

The bill discloses the following facts: On the 14th of October, 1869, the complainant commenced shipping to Rainey & Co., as factors, at New York, cotton for sale on his account. The complainant was to send samples of cotton, as purchased, to Rainey & Co., who were to contract in the market for the sale of the cotton at a future date to be met by the shipments. Rainey & Co. were to receive and sell the cotton, accept and pay drafts of complainant drawn on the faith thereof, and for such acceptances, and for the sale, storage, handling, etc., of said cotton, they were to [642]*642have reasonable compensation. Complainant continued to ship cotton to Rainey & Co., under this arrangement, until the 10th of September, 1872, shipping in all between 6,000 and 7,000 bales. In 1872, and prior to the last shipments, Rainey & Co. demanded collaterals to cover the risks of the business, and complainant, being the owner of a valuable lot in Nashville, with a warehouse thereon, sold the same to the defendant Blume for $30,000, taking his six notes for $5,000 each, two of them at one year, two at two years, and two at three years, and transferred three of these notes, being one of each set, to Rainey & Co. as collateral security. The payment of these notes was secured by a lien on the lot, retained on the face of the conveyance, and complainant agreed to give to the notes assigned to Rainey & Co. the priority of satisfaction.( In May, 1873, Rainey & Co. demanded a settlement of complainant’s accounts, producing a statement showing a balance then due of over $15,-000, and complainant gave them, in settlement of this balance, his three notes, dated May 1, 1873, at one, two, and three years, for $5,216 each. On the 14th of November, -1874, the defendant A. H. Rainey filed his bill in this court, against the complainant and Blume, to enforce the vendor’s lien reserved for the payment of the three notes for $5,000 each, executed by Blume as above, and assigned as aforesaid. Such proceedings were had in this cause that, at the October term, 1875, a decree was rendered for the sale of the land, and the application of the proceeds in satisfaction of said notes. Under this decree the property was sold, and the sale was about to be confirmed, when this bill was filed to enjoin the confirmation. This branch of the case was rested upon supposed errors apparent on the face of the decree, but the injunction was refused, and, as a bill of review, the case is not now before us.

Another object of the bill is to get behind the settlement of May, 1873, and surcharge and falsify the accounts upon which it was based. To this extent the bill is purely an original bill, having no connection with that part of the bill [643]*643filed as a bill of review. If, indeed, the balance due to Rainey & Co. from complainant could be reduced or extinguished by reopening the settlement under this bill, the proceeds of the sale under the bill of Rainey, or the property itself, if bought by Rainey, would pro tanto belong to complainant, and he would have the right to attach them, as he has done, under this bill. But, treating the sale to Blume as good — and there is nothing in the bill to the contrary, and, if there were, the complainant could not dispute its validity — Blume is the only person who can attack the decree of sale for error of law apparent upon any of the points made by the bill, and he acquiesces. The bill does not show that the complainant has any interest in that suit, except as the holder of some of the notes given for the land, and he does not complain that his rights in this regard have been treated otherwise than in accordance with law. Whether a bill of review for error apparent in a decree, and an original bill for a wholly distinct purpose, can be combined, is a question not before us. Nor ax-e we called upon to decide whether the bill contains upon its face matter sufficient to open a settled account. The present issue is as to the sufficiency of the answer.

The bill, as an original bill, seeks to go behind the settlement of May; 1873, upon the ground of the discovery of facts, since the settlement, which show that false and erroneous charges were made against the complainant in the account furnished to him by Rainey & Co. Although the complainant charges that he refused to settle at the time because the amount claimed was, in his opinion, not correct, and that he afterwards gave his notes in settlement upon the promise of Rainey & Co. that a full account should be made out and sent him, and errors, if any, corrected, yet the bill repeatedly, in setting out the charges complained of, states that it appeared “in the accounts rendered” to complainant that he is charged thus and so. From which it sufficiently appears that accounts were rendered to the complainant, and that these accounts were before him in [644]*644making out the allegations of his hill. The errors relied on, to which the exceptions in controversy relate, are as follows:

1st. The complainant authorized Eainey & Co. to make contracts for the sale of cotton to be delivered at a future day, the cotton to be purchased at Nashville and shipped to New York to meet the engagement; yet Eainey & Co. would sell complainant’s cotton on receipt, using the proceeds for their own purposes, and afterwards go into the market and pretend to buy other cotton, charging commissions, storage, etc., when no cotton was actually bought, or intended to be delivered, but a wager was made on the price of cotton at a future time, and a margin “put up” to cover the difference between the actual price at the time and the agreed price; that these contracts were made with persons unknown to complainant, and sometimes not with outside parties, but with members or clerks of the firm of Eainey & Co.; that the said contracts were illegal, and the charges thus created against complainant amount to $10,000.

2d. Eainey & Co. made false and fraudulent charges for insurance on complainant’s cotton, and for storage, to the amount of several thousand dollars, when they had not in fact paid one dollar of these charges.

Upon these charges the complainant required Eainey & Co. to answer, “ and exhibit a detailed statement of the sales of cotton, made by defendants, belonging to complainant;” also to state whether the “future” or illegal contracts were not taken by defendant Eainey, or some of the members or clerks of the house, and the names of the contracting parties; also in what office or company the insurance on the cotton was taken, in what warehouses the cotton was stored, and to exhibit receipts for the payment of such charges. The exceptions to the answer are that these requirements have not been complied with.

The bill shows a settlement of accounts, and the execution of notes in full of the balance due in May, 1873. It further shows that on the 14th of November, 1874, a bill [645]

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Cite This Page — Counsel Stack

Bluebook (online)
2 Tenn. Ch. R. 640, Counsel Stack Legal Research, https://law.counselstack.com/opinion/french-v-a-h-rainey-co-tennctapp-1876.