* Corpus Juris-Cyc. References: Executions, 23CJ, p. 556, n. 31; Judgments, 34CJ, p. 467, n. 8; p. 469, n. 38; p. 470, n. 40; p. 938, n. 67; Recoupment, Set-off and Counterclaim, p. 641, n. 85; p. 682, n. 51; p. 724, n. 5; Injunction against enforcement of judgment as aid to equitable set-off of claim against judgment creditor, see annotation in 30 L.R.A. 569-571; 31 L.R.A. 763-770; 35 L.R.A. (N.S.) 142; 24 R.C.L. 806. This is an appeal, to settle the principles of the case, from a decree overruling a demurrer to an original bill and overruling a motion to dissolve a preliminary injunction issued pursuant to the prayer of the bill. It appears, in substance, from the bill that in 1920 Gertz Bros., a partnership, composed of the appellee, Ben Gertz, and Abe and Frank Gertz, engaged in the mercantile business at Lexington and Cruger, Miss., purchased from Helmers-Bettman Co., now Bettman-Dunlap Company, of Cincinnati, Ohio, a lot of shoes to be delivered at a future date, the price to be paid therefor to be in accordance with the market price thereof at the time of the delivery of the shoes. The shoes were shipped by Bettman-Dunlap Company to Gertz Bros., who declined to receive them on the ground that the price charged therefor was not in accordance with the contract. Bettman-Dunlap Company had the railroad company, in whose possession the shoes were, to return the shoes to it, and thereafter sued Gertz Bros. in the circuit court of Holmes county for the contract price of the shoes.
Several pleas were filed by Gertz Bros., one of which sets forth that Bettman-Dunlap Company had the shoes reshipped to it, and still retains possession thereof. A replication to this plea admitted the facts therein alleged, and set forth, in effect, that Bettman-Dunlap Company took possession of the shoes after they had been wrongfully refused by Gertz Bros., stored them in its warehouse, and holds them subject to the order of Gertz Bros. No reply seems to have been made to this replication. *Page 899 The case proceeded to judgment, and was appealed to this court (136 Miss. 160), where the judgment of the court below was reversed, and the cause remanded.
On the second trial in the court below, the jury returned the following verdict:
"We, the jury, find for the plaintiff in the sum of one thousand seven hundred eighty-three dollars and fifty-one cents and interest at six per cent. from January 1, 1921, and the defendant to receive the shoes."
A judgment was rendered on this verdict for the sum of two thousand two hundred ninety-eight dollars and twenty cents; that being the principal and interest. Afterwards the partnership of Gertz Bros. was dissolved, Ben Gertz continued in business at Cruger, and Abe and Frank Gertz removed to Greenwood, where they engaged in a mercantile business, but afterwards failed, and, in a proceeding therefor, were adjudged bankrupts. Among the liabilities scheduled by them in that proceeding was the judgment obtained against Gertz Bros. by Bettman-Dunlap Company. Afterwards G.H. McMorrough, attorney at law, who had represented Bettman-Dunlap Company in the litigation with Gertz Bros., called on Ben Gertz for the payment of the judgment, which he promised to pay provided Bettman-Dunlap Company would ship to him the shoes that Gertz Bros. had ordered from it, and for the price of which the judgment was rendered. To this McMorrough agreed, and a lot of shoes were shipped to Gertz, at Cruger, by Bettman-Dunlap Company. These shoes were inspected by Gertz after their arrival at Cruger in McMorrough's presence, and were rejected by him on the ground that they were different in character and less in quantity than as purchased. McMorrough then took possession of the shoes, and, according to the bill, still has them in his possession. *Page 900
Afterwards, McMorrough, representing Bettman-Dunlap Company, had an execution issued on the judgment against Gertz Bros. and placed in the hands of the sheriff, who was about to levy on the property of Ben Gertz. Gertz then exhibited this bill against Bettman-Dunlap Company, the sheriff, McMorrough, and Abe and Frank Gertz. The bill alleges, in substance, that Bettman-Dunlap Company is a nonresident corporation, and is indebted to Gertz Bros. to the amount of the value of the shoes, which exceeds the amount of the judgment held by it against Gertz Bros. The prayer of the bill is, in substance: (1) That the value of the shoes which Bettman-Dunlap Company failed to deliver to Gertz Bros. be ascertained, and, in the event it equals the amount of the judgment, that the one be set off against the other, and the collection of the judgment be perpetually enjoined; (2) in the event the value of the shoes exceeds the amount of the judgment, "they be granted a decree over therefor" against Bettman-Dunlap Company; and (3) that the shoes which McMorrough holds for Bettman-Dunlap Company be subjected to the payment of this decree over.
Equity will restrain the execution of a judgment when the judgment defendant has a debt against the judgment creditor which equals or exceeds the judgment, and which the judgment debtor cannot otherwise collect. 34 C.J. 467; Posey v. Maddox,65 Miss. 193, 3 So. 460; Feld v. Coleman, 72 Miss. 545, 17 So. 378. In these cases the inability of the judgment debtor to collect the debt due him by the judgment creditor was caused by the insolvency of the judgment creditor, but the nonresidence of a judgment creditor who has no property in the state is also a sufficient reason for the intervention of a court of equity. 34 Cyc. 641; 34 C.J. 470; 24 R.C.L. 806; 15 R.C.L. 758. CompareSterling Products Co. v. Watkins-Gray Lumber Co., 131 Miss. 145, 95 So. 313. *Page 901
But it is said by counsel for the appellant that the appellee should have set off the value of the shoes against the claim for the price therefor in the litigation in which Bettman-Dunlap recovered the judgment against him; and, having failed so to do, he thereby waived any right of set-off he may have had. There can be no merit in this contention, for the appellant sought and obtained a judgment for the full value of the shoes on a plea, in effect, that the shoes were the property of Gertz Bros. and were being held by it subject to their orders. Having obtained a judgment accordingly, it cannot repudiate its obligation to deliver the shoes or pay the value thereof.
Again it is said by counsel for the appellant that to warrant a set-off the claims "must be mutual," and "furthermore both judgments must be between the parties in the same capacity." We are not called upon to determine whether that mutuality exists between the two claims here under consideration that would permit one to be set off against the other in an action at law, for the "doctrine of mutuality is not permitted to work an injustice, for, whenever it is necessary to effect a clear equity or to prevent an irremediable injustice, the set-off will be allowed, in equity, although the debts are not mutual, and the set-off therefore one which a court of law would not be authorized to make." 34 Cyc. 724; 3 Story's Eq. (14th Ed.), section 1875;Hall v. Waddill, 78 Miss. 16, 27 So. 936, 28 So. 831. What the appellee is attempting to do here is to set off, against a judgment rendered against him and two others, a debt due by the judgment creditor to himself and the other two judgment debtors. The consideration on which this judgment rests is the promise of Gertz Bros. to pay for the shoes; and the consideration on which the promise of Gertz Bros. to pay for the shoes rests is the promise of Bettman-Dunlap Company to deliver the shoes. The two claims therefore "grow out of the same transaction, *Page 902 and the consideration of each undertaking rests upon the other; so that a clear equity intervenes, that one obligation shall not be enforced unless the other is satisfied, and that each claim, if neither undertaking is performed, shall, as far as they are equal, cancel and satisfy the other." It would be most inequitable to permit the appellant to collect its judgment from the appellee without delivering or paying for the shoes.
It is not necessary for us now to consider, and we express no opinion on, the appellee's claim to a judgment over against the appellant in event the value of the shoes should exceed the amount of the appellant's judgment.
Affirmed and remanded.
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