Marks v. F. G. Barton Cotton Company

Hart, J., (after stating the facts). The defendants filed a motion to transfer the case to the circuit qourt, and duly excepted to the action of the chancery court in refusing to grant their motion. It is first contended by counsel for the defendants that the allegations of the complaint were not sufficient to give the chancery court jurisdiction, and that the chancery court erred in not granting their motion to transfer the case to the circuit court. Conceding that the chancery court did not have jurisdiction under the allegations of the complaint, it does not follow that error was committed in refusing to transfer the case to the circuit court. The defendants filed a cross-complaint, in which it is alleged that the plaintiff had in its hands the exact date of all of the cotton shipped to it by the defendant, and was in possession of the market value of said cotton, upon the date of its arrival. They asked that it be required to state the date of the arrival and value of each bale of cotton, and its grade. They alleged that the plaintiff was ordered to sell the cotton immediately upon its delivery to it, and in effect they asked for an accounting by the plaintiff, and damages for failing to sell the cotton according to directions. Their cross-bill was founded on matters clearly cognizable in equity, and this supplied any defect of jurisdiction, The original complaint and cross-bill were but one cause of action, and imposed upon the court the duty of granting relief to the party entitled to it. Cockrell v. Warner, 14 Ark. 345; Sale v. McLean, 29 Ark. 612; Radcliffe v. Scruggs, 46 Ark. 96; and Hall v. Huff, 114 Ark. 206. The reason for the rule is clearly stated in Cockrell v. Warner, 14 Ark. 345, where the court closed a review of the authorities on the question with the following: “These authorities will suffice to demonstrate that the original and cross-ibill are but one cause; that both parties are as complainants, praying relief against each other, and having in view the object of bringing the whole controversy before the court, to the end that it may be finally settled on the merits, by such decree as the justice and equity of the case may require. In attaining this end, it must frequently happen that mere legal demands on, the one side or other, over which separately a court of equity would have no jurisdiction, have to be passed on, and relief afforded. But this, so far from being objectionable, is commendable, because it has a tendency to prevent a multiplicity of suits, in itself sufficient to give a court of equity .jurisdiction, although the subject-matter otherwise may be of a legal nature and of legal cognizance.” Therefore the chancery court did not.err in refusing to transfer the case to the circuit court. On the merits of the case, the chancellor found the facts in favor of the plaintiff, and his finding is borne out by the evidence in the record. On this branch of the case it may be stated, at the outset, that it is the duty of a cotton factor, in all transactions affecting the subject-matter of his agency, to act with good faith and loyalty for'the protection and advancement of the interests of his principal, and it is his duty to- obey the instructions of his principal, where they are definite and certain, and do not impair his security for advances. Burke v. Napoleon Hill Cotton Co., 134 Ark. 580; Joy Rice Milling Co. v. Brown, 167 Ark. 205; and Brown v. Southern Grocery Co., 168 Ark. 547. Counsel for the defendants rely upon the telephone conversation between F. K. Marks and R. B. Barton, had on the 17th day of March, 1920. To come to a full understanding of the matter, it was uecessary for the chancellor to consider everything that passed between the parties. In transactions of this sort consisting of letters, accounts, and verbal communications, tbe written and parol evidence throw light on each other. This was the case here. The parties had made an. arrangement whereby the defendants were to ship cotton .to the plaintiff, and the latter was to make certain advances on the cotton shipped. In the telephone conversation, it is apparent that the defendants did not wish the cotton to be sold, unless all of it could be sold at not less than thirty cents per pound. .According to the testimony of R. B. Barton, which is not contradicted in this respect, the plaintiff could not sell all of the cotton, or even the most of it, at that price. There was simply no market at the time for this grade of cotton. The plaintiff sold the cotton for the best price obtainable, and, so far as the record discloses,' acted in good faith throughout the whole transaction. His testimony in this respect is corroborated by the subsequent correspondence between the parties. On July 7, 1920, F. K. Marks wrote to the plaintiff, asking for advice about paying taxes on the cotton, and whether' or not the plaintiff could pay them at Memphis. He closes the letter by asking for the outlook in the future on cotton. On the 2d of October the plaintiff notified the defendants that it still had' on hand fifty-six bales of cotton, and that their indebtedness amounted to $5,273. It reminded the defendant that it had been carrying the cotton for some time, and that some new cotton should be shipped in, and applied to the old account. On October 13, 1920, the defendant answered this letter as follows: “In answer to your letter a few days ago in regard to shipping you some more cotton. In reply to same will advise you that we cannot ship you any cotton at the present time. However we hope to get in a position to ship you a little cotton, this season. But at the present time we have no money to pay.for cotton. The way we •are buying now is to sell in the morning, and buy during the day, however we are making about $150 a week. We have a long staple cotton in this country 3-16. What can you get on this cotton on your market at a ready sale? Now that will be the only way we can sell cotton for two or three months, that is ready sale, because, as slow as it is moving, from $600 to $1,000 a month is all we are making. As quick as you can move that cotton over here, I think we will all be 'better off. Do not feel shaky if our account over there falls behind. All the hard luck you will strike is being out of your money for awhile. Here’s hoping that this cotton will bring enough to pay expenses. Thanking you for the many past favors, I am. ’ ’ This letter shows conclusively that the defendants recognized that the plaintiff had been acting in good faith throughout the whole transaction,' and that its conduct with regard to the sale of the cotton, and the amounts due the plaintiff, was acknowledged and approved. It will be noted that the letter contains the following: “As quick as you can move that cotton over there, I think we will all be better off.” This is a direct and explicit recognition of the fact that the plaintiff had on hand fifty-six bales of cotton, to be applied to the credit of the defendants, and that its books showed that the defendant owed the plaintiff $5,273 on October 2,1920. Upon the whole record, we think that it can not be said that the finding of the chancellor is against the preponderance of the evidence, and the decree will therefore be affirmed.