Schaff v. Kahn , 121 Miss. 412 ( 1919 )

Stevens, J.,

delivered the opinion of the court.

The pleadings in this case consist of an original bill, answer, and cross-bill. This appeal is prosecuted from a decree of the chancery court overruling the demurrer to the cross-bill. The bill is one exhibited by Chas. E. Schaff, receiver of the Missouri, Kansas & Texas Railway Company, against Kahn & Bernstein to ■recover the value of a carload of mules which the complainant railway company transported from Ft. Scott, Kan., to Natchez, Miss., and by mistake delivered to appellees. The bill and cross-bill reflect'the following state of facts: A member of appellee firm went to Ft. Scott, Kan., for the purpose of buying mules and horses and there purchased from the Ft. Scott Horse & Mule Company a carload of horses and mules, consisting of twenty-one mules and eight horses, to be shipped to appellees at Natchez. This car was delivered to appellant railway company for shipment. At the same time one J. P. King of Tennessee purchased from the same parties twenty-six mules and delivered the same to the complainant railway company to be shipped to Dechard, Tenn. By mistake Mr. King’s carload of mules was billed to and delivered to appellees, while appellees’ mixed ear of horses and mules was shipped to Tennessee. When the King mules arrived at Natchez, Mr. Kahn, a member of appellee company, advised the agent that he, Kahn, did not think the mules belonged to appellees, but the agent insisted upon delivery and assured appellees that if any mistake had been made that appellees would not suffer. The shipment to Mr. King in Tennessee was rejected, and eventually the mixed carload of horses and mules was reshipped from Tennessee to Natchez and delivered to appellees. Appellant thereupon paid Mr. King the v^lue of his mules and by original hill sues appellees for the amount paid King. Appellant did not take a bill of sale or -assignment of the cause of action from Mr. King, and on that account avers in the original hill the necessity of instituting this suit in equity. The answer of the defendant is made a cross-bill in which it is averred that at the time the first shipment of mules reached appellees Mr. Berstein, a member of the firm, was absent buying mules and that his partner, Max Kahn, protested against receiving thé shipment and the agent then “told him to go ahead and sell the mules and pay the freight bill, and if it developed that that there- was a mistake then he could adjust with the railway company for what he got for the mules less the expenses of selling them and his reasonable commission,” etc., and with this understanding he did. pay the freight, sold and disposed of the mules, and by reason thereof is entitled to a reasonable charge or commission for selling them.

It is furthermore set forth in the cross-bill with a sufficient degree of certainty that the carload of horses and mules which appellees did buy -were erroneously shipped and diyerted to other points, Avere kept on the road a long time, that is to say, from February 5,1918, to February 23, 1918, and that on account of the long and circuitous journey the animals were debilitated, abused, and underfed and injured in transit and depreciated in value in the sum of at least one thousand dollars; that there was an overcharge in the feed bill amounting to three hundred and twenty-five dollars; and that three of the animals received injuries from which they subsequently died, and that the value of the three dead animals is at least four hundred and eighty dollars.

It is furthermore averred that appellees complained at the rough treatment given the shipment, and that an adjuster for appellant advised them not to put in a separate claim on account of alleged damages, hut stated that appellees’ claim for damages would be adjusted In connection with the settlement of the carload of mules delivered appellees by mistake, and that both claims had been treated and considered by all parties to this suit as a claim growing out of the same transaction, and that appellees are entitled to plead the amount of thei'r demand against appellant as a set-off. There is tabulated in the cross-hill the following itemized statement of appellees’ set-off:

Amount of freight paid on shipment sued for ..................................... $ 140 00

Amount of feed and expenses of handling 26 mules sued for .......................... 200 00

Reasonable commission for handling same ... 520 00

Total of above ....................... $ 860 00

Damage to animals in second shipment .... $1,000 00

Excess feed and freight bill................ 325 00

Value of three animals which died out of second shipment ........................ 480 00

Total damage on all of above items .... $2,665 00

It is furthermore averred in the cross-hill that if appellees are not entitled to plead their counterclaim by way of a set-off, they averred that the mistake in the two shipments is one transaction and that appellees should be permitted to plead their cross-demand by way of recoupment. There are other and further allegations in the cross-bill to- the effect that appellees should be accorded the right to plead their demand by way of cross-bill. The original hill seeks a recovery in the sum of six thousand, fifty-six dollars and ninety-six cents. There was a general demurrer to the cross-hill, submitting several grounds of attack, but the substance of the demurrer submits tbe main contentions that the unliquidated demand of appellees cannot be off-set against the socalled fixed demand sought to be recovered in the original bill and that the cross-demand of appellees is based upon a separate and distinct transaction and that the two demands are unrelated. The chancellor overruled the demurrer, but granted an appeal to settle the principles of the case.

There is no contention in this case that the cross-bill presents matter purely of common-law jurisdiction and not of equity jurisdiction, and upon this appeal no such question could arise. Irion v. Cole, 78 Miss. 132, 28 So. 803. The real issue upon the demurrer is whether the cross-bill introduces such new matter as is not necessary for appellees’ defense and that is in no way germane to the issue raised by the original bill. If the cross-bill is predicated upon a demand which grows out of the same subject-matter involved in the original bill, then certainly the demurrer is not well taken and was properly overruled. Dewees v. Dewees, 55 Miss. 315.

As we view and interpret the facts set forth in both the original bill and the cross-bill, the whole controversy is the offspring of a mistake for which appellant railway company must"be responsible. It is perfectly manifest from the pleadings that appellant received on the same day for shipment two separate carloads of live stock consigned to different parties at different places; that these two shipments were confused and interchanged; that appellant thereafter recognized and admitted its responsibility by settling with King and then initiates litigation which is the upshot of its own negligence. The very demand upon which appellant is forced to enter the door of equity is necessitated by (he very mistake which has given rise to appellees’ claim for damages. The two demands grew out of one transaction and- are vitally related. This being-true, we think the, issue presented by the cross-bill is germane to the issue made by the original bill. It is stated in 34 Oye., p. 646:

“In equity the most liberal rules prevail in allowance of set-off to prevent injustice and circuity of action.”

We believe it is the tendency of modern decisions to sufficiently relax the strict technical rules of pleading to permit matters in dispute between the same parties to be settled in one suit and thereby advance instead of delay justice and thereby avoid multiplicity of litigation. The rule has its reasonable limitations, and these limitations are usually expressed in equity practice under the general doctrine that the issue presented by the cross-bill must be germane to the main one presented by the original bill. To maintain the cross-bill in this case will, we think, promote justice and avoid, circuity of action. It appears upon the face of the pleadings that if appellees cannot maintain their cross-bill they will be forced to go to a foreign jurisdiction to prosecute their cross-action. Many authorities hold that nonresidence is a sufficient ground for an equitable set-off. Ewing Merkle Elec. Co. v. Louisville Light & W. Co., 92 Ark., 594, 124 S. W. 509, 30 L. R. A. (N. S.) 21, 19 Ann. Cas. 1041, and case note. Without intimating any opinion as to whether nonresidence is alone a sufficient ground for entertaining a cross-bill, we do think it is a circumstance which strengthens the equity of appellees’ demand.

The decree of the learned chancery court will be affirmed, and the cause remanded.

Affirmed and remanded.