Harleston v. West Louisiana Bank

Sykes, P. J., delivered the opinion of the court. The bill of complaint of the appellee, West Louisiana .Bank, in short, alleged: That it was a banking corporation of Louisiana. -That in due course of business it had — 116 — advanced largo sume of money to one Dawson and The Pelican Construction Company to assist them in operating r gravel pit in Panola county, Miss. That certain collateral was given the bank by these parties, and also it held mortgages on the gravel pit and equipment which was being operated by them. That the gravel pit was owned by one Walker and was being operated by these people under a contract with him. That Dawson and the Pelican Construction Company borrowed some money in Mississippi, and gave deeds of trust in this state on the collateral and property which they had pledged to the complainant in Louisiana.' That in order for complainant to protect itself from great loss it became necessary for it to purchase these Mississippi mortgages, which it did, paying full value therefor, and that it was necessary for it to foreclose .these mortgages and purchase in the property at the sale. This property consisted of the necessary equipment to operate the gravel pit, and was located at the gravel pit in Panola county, Miss. That this property was of little value, and wholly insufficient to satisfy the indebtedness due the complainant, and that in order to make the property available and protect its interest it became necessary for the complainant to lease the gravel pit from Walker. The contract between Walker and the other parties having ended. The bill sets out in great detail why it became necessary for it to purchase the Mississippi securities, to foreclose the property, to purchase it at this sale and lease the gravel pit from Walker in order to realize upon the original indebtedness owed it, by Dawson and the Construction Company in Louisiana. It then sets out in detail the terms of the lease of the gravel pit by it from Walker. Thereupon the complainant subleased the pit and its equipment to the appellant Ilarleston, which contract is in writing. Under this contract Harleston was to operate the pit with all the accessories located on the land, consisting of railroad track, engines, shovels, plows, and other appliances belonging to complainant. — 117 — The complainant in its contract with Walker liacl agreed to pay Walker one dollar per car for all gravel and sand removed from pit. Harleston in his contract with complainant agreed to pay it fifteen cents a ton on all road gravel removed and fifteen cents a ton on all sand removed from the pit. There were also other stipulations here made in case the sand was not removed from the pit. Harleston further agreed to remove not less than fifty thousand tons a year of sand and gravel from the pit, thereby making the minimum royalty payable to the complainant of seven thousand, five hundred dollars a year, and that if he failed to do this the contract should become forfeited on demand of the bank. Settlements were to be made by Harleston on the 15tb day of each month. It ivas further agreed ‘that that complainant should have the right through its agent to examine the books of account of Harleston for the purpose of ascertaining the correctness of all settlements had or desired. There are other stipulations in the contract not necessary to' be mentioned. The bill alleges that the defendant Harleston has breached the contract by failing to pay the complainant the amounts agreed to be paid for the gravel at the appointed time. It then goes into detail to explain about two checks the defendant gave it upon, which he stopped payment. Second, it alleges that the defendant has refused to allow the complainant through its agent to examine his books. Third, that he had failed to account to complainant for the sales of sañd and gravel over and above the amount of fifty cents a ton, as he was obligated by the contract (which part of the contract we have not set out). It then alleges on information and belief that Harleston solicited Walker to enter into a contract with him for the .operation of the pit independent and in defiance of the complainant’s rights, thereby intending and attempting to abandon his contract with the complainant. The bill alleges that the defendant is indebted to the complainant in a sum approximating twelve thousand dollars, and asks for discovery. An itemized list of the property turned over by complainant to the — 118 — defendant under the contract is shown, and it is alleged that the defendant is daily using this property without authority, and declines and refuses to surrender it to the complainant, although defendant has forfeited his contract and right to use the property. It also itemizes the personal property owned by the defendant and in use by him at the pit, and states that all of the property is insufficient in value to pay the complainant the amount due it by the defendant under his contract. The prayer was for a writ of sequestration for the sheriff to take charge of all of the personal property, and that Harleston be temporarily enjoined from using any of the property or from operating the mine or from selling or disposing of the sand or gravel. The writ of sequestration was issued and a temporary injunction granted. The answer of the defendant challenges the right of the bank to maintain the suit upon the ground that the bank is doing business in Mississippi contrary to its charter and against the laws of the state of Mississippi. The answer further alleges that the reason these checks were not paid was because Walker,' the owner of the gravel pit, notified th.e defendant, Harleston, that the bank had breached its contract with him, and that he would look to Harleston to pay him. There are other allegations contained in the answer unnecessary to be here stated. A motion was made to dissolve the temporary injunction, which was heard upon bill, answer, and oral testimony. The chancellor declined to dissolve the temporary injunction, and from his decree this appeal is here prosecuted to settle the principles of the case. The contention of counsel for the appellant in brief is that, if Harleston unjustly refused to pay the royalty to the bank, the bank had a plain, adequate, and complete remedy at law, and that it is confined to this remedy, citing 27 Cyc. 716. The text therein is as follows: “Actions for the recovery of rents and royalties under mining leases are in general subject to the rules governing actions for the recovery of rent under ordinary leases. — 119 — Where the rent or royalty reserved in the leasing of mineral property is dependent on the amount of mineral taken, a bill in equity will lie to compel an accounting by the operator or lessees of the mines” — citing Swearingen v. Steers, 49 W. Va. 312, 38 S. E. 510. According' to the contract in this case the royalty reserved is dependent upon the amount of mineral taken, and therefore a bill in equity to compel an accounting is maintainable. In fact in this case the bill alleges the agreement allowing the complainant to inspect the books of the company and a refusal on his part to allow complainant to do so. It shows an amount due the complainant, and also asks that the complainant be compelled to discover, which is, of course, an equitable right. Without going into the merits of the testimony, we think the chancellor was justified in believing that the defendant was attempting to operate the pit in violation of his contract with the complainant, thereby damaging the equipment owned by the complainant and depleting the pit; of the sand and gravel. These facts were sufficient to justify the continuance of the temporary injunction. It is next contended by the appellant that the complainant bank in making these contracts and agreements relating to the gravel pit, and in purchasing the personal property under the foreclosure sale, was doing business in this state in violation of section 935, Code of 1906 (section 4111, Hemingway’s Code). That the case of Quartette Music Co. v. Haygood, 108 Miss. 755, 67 So. 211, is decisive of this question. In the Haygood case it will be noted that the music com-pan.v, a foreign corporation, had a branch house in the city of Tupelo, and was conducting its regular business there, Avithout having complied Avith section 935, Code of 3906, by filing a copy of its charter AAdth the secretary of state. The question sharply presented here is whether of not the complainant bank by the series of transactions, namely, purchasing the Mississippi mortgages, foreclosing — 120 — them, purchasing the personal property at the foreclosure sale, leasing the gravel pit from Walker and subleasing it to Harleston, was doing business in Mississippi in violation of this statute. The bill alleges and the testimony shows that the bank had loaned money to certain parties in Louisiana in the regular course of business, taking as security certain collateral and mortgages on the personal property subsequently brought to the gravel pit; that thereafter their debtors gave other mortgages in Mississippi, and for that reason, in order to attempt to realize and collect this indebtedness, it became necessary to transact this 'business in Mississippi. The end and aim of the entire transaction was but to protect the indebtedness previously contracted in Louisiana. This is not a doing of business in Mississippi, as contemplated by this section of the Code, but is merely the transaction of an isolated piece of business in Mississippi rendered necessary to protect an indebtedness contracted in Louisiana. The mere fact that in order to do this it became necessary to buy the Mississippi mortgages, foreclose them, purchase at the foreclosure sale, lease and sublease the gravel pit, does not make but the one isolated transaction of business, háving in view solely and only the one idea of protecting this indebtedness. Cooper Mfg. Co. v. Ferguson et al., 113 U. S. 727, 5 Sup. Ct. 739, 28 L. Ed. 1137. Affirmed and remanded.