Atlanta Ass'n of Fire Ins. Agents v. McDonald

Decision Date20 September 1935
Docket Number10632.
Citation181 S.E. 822,181 Ga. 105
CourtGeorgia Supreme Court

Syllabus by the Court.

1. The defendant in error filed a petition in equity in an effort to enjoin an alleged conspiracy on the part of plaintiff in error to destroy his business. The evidence developed before the auditor, to whom the case was referred, authorized findings of fact which bring the case squarely within the scope of the ruling of this court in Brown & Allen v Jacobs Pharmacy Co., 115 Ga. 429, 41 S.E. 553, 57 L.R.A 547, 90 Am.St.Rep. 126.

2. The unclean hands maxim which bars a complainant in equity from obtaining relief has reference to an iniquity which infects the cause of action so that to entertain it would be violative of conscience. It must relate directly to the transaction concerning which complaint is made. 21 C.J. 187. See Code of 1933, § 37-104. The rule that equity refuses to interfere where both parties are at fault does not apply when the faults are unequal. If the fault of one decidedly overbalances the other, equity may interfere. Section 37-112. The rule that he who would have equity must do equity refers to equitable rights respecting the subject-matter of the action. Section 37-104. It does not embrace outside matters.

3. The injunction was not too broad, and, in view of the issues involved in this case, was sufficiently definite.

4. There is an exception that certain evidence specified was overlooked or misinterpreted by the court below; but, if there was any mistake in stating the evidence upon the particular points referred to, it was not of such materiality as to require another hearing.

5. There was no abuse of discretion in rendering the judgment excepted to, and in taxing the fees and costs in the case.

Error from Superior Court, Fulton County; John D. Humphries, Judge.

Suit by A. L. McDonald against the Atlanta Association of Fire Insurance Agents and others. To review a judgment for plaintiff, defendants bring error.


Haas Gambrell & Gardner, Little, Powell, Reid & Goldstein, Spalding, MacDougald & Sibley, and Sidney Smith, all of Atlanta, for plaintiffs in error.

Edgar Watkins and Watkins, Grant & Watkins, all of Atlanta, for defendant in error.

BECK Presiding Justice.

The record in this case is voluminous. We have given full consideration to all the assignments of error and the briefs of counsel. The case is in one respect unusual, if not peculiar, in that it was agreed by counsel for all parties that the court might pass upon questions of fact involved in the motion to recommit, without referring the case again to the auditor, reserving to each party the right to except to any findings of the court as fully as if they had been based upon findings by the auditor.

It is contended that the right of action to the relief awarded by the final decree, if any one is entitled to such relief, is not in the defendant in error, McDonald, but, so far as relates to the things involved in the case, would be in a corporation of which he is a stockholder. This point is not well taken. McDonald introduced evidence which supports the auditor's view, as shown by his findings that McDonald had suffered such invasion of his equitable rights as merited relief.

Some months before the case was referred to the auditor, and after the petition had been amended, the court passed an order overruling all demurrers. No exception to this was entered. It has therefore been finally adjudicated that the petition as amended set forth a cause of action. On the hearing before the auditor, evidence was introduced tending to support these allegations in the pleadings which were essential to the granting of the relief embraced within the final decree, which relief the auditor had found should be granted. The report was approved by the court. In rendering final judgment, the judge filed an opinion with which we are in accord. It is unnecessary to discuss here in detail all the matters presented by the record. The opinion and judgment of the court are as follows:

"The plaintiff alleges generally that the defendants individually and collectively through the Atlanta Association of Fire Insurance Agents, herein designated as Association, conspired to injure plaintiff in his business by procuring cancellation of contracts under which plaintiff represented certain insurance agencies; to boycott plaintiff; to unlawfully restrain competition; to obtain a monopoly; and to fix prices in the insurance business. The plaintiff alleges that as a result of said combination agency contracts under which he had operated for years were canceled, and that the defendants are conspiring to cause the cancellation of other agency contracts held by him, and to destroy his business as an insurance agent. These agency contracts were lost, he alleges, as the direct result of the conspiracy, boycott, and threats of defendants acting through the Association and under the by-laws of the Association. The prayers of the plaintiff under his petition as amended are:

1. That he recover nominal damages.

2. That the defendants, their agents, officials, employees, and representatives be enjoined from interfering with plaintiff's business and from preventing him from obtaining the right to continue his business.

3. That the defendants through the alleged combinations be adjudged to constitute an unlawful restraint of trade and an unlawful coercion and boycott; and that each and all be enjoined from prosecuting and continuing such restraint of trade, boycott, and coercion.

4. That the defendants be enjoined from preventing any person, firm, or corporation or agent thereof, and from preventing named companies or agents thereof, from doing business with plaintiff.

5. That the defendants be enjoined from threatening to boycott, or withhold customers and patrons from persons doing business with plaintiff or who propose to do so, and from intimidating or coercing in any manner, directly or indirectly, any insurance company or agent thereof, whether general or special, from doing business with plaintiff.

6. That defendants be enjoined from circulating among themselves or others the by-laws of the defendant association, adopted January 29, 1932.

7. That the defendants be enjoined generally from doing anything that will interfere with plaintiff's business by boycott, publication, joint-action, or other restraint.

The answer of the defendants constitutes a general and complete denial of any purpose to interfere with the plaintiff or his business, and of any illegal act or purpose on their part. The defendants admit the existence of the Atlanta Association of Fire Insurance Agents, and membership therein, and make direct reference to the purposes of the organization as set forth in its charter and by-laws, which, the defendants contend, are legal and for the benefit of themselves, their respective companies, and the public generally, and in no way a violation of the plaintiff's rights.

The object of the corporation, as set forth in its charter which was granted by the superior court of this circuit, February 3, 1930, is as follows:

'The object of said corporation is not pecuniary gain or profit, but the formation of an organization for the promotion of harmony and good fellowship among its members; for the establishment and maintenance of a code of ethics for the conduct of the local fire, automobile-fire, and theft and tornado insurance business; for upholding and assisting in the enforcement of the insurance laws of the State of Georgia; for social purposes; and for the promotion of the general welfare and best interests of the local insurance.' The by-laws of the association adopted January 29, 1932, are lengthy, but in effect they bind the menbers of the association as follows:

1. Not to do business with non-members, except as provided in its by-laws. A copy of the by-laws appears in the brief of evidence reported by the auditor.

2. Not to accept or retain the agency of any company, including underwriters of same, who has or whose general agent or management has agents within the jurisdiction of this association who are not members of same.

3. Fines and penalties are imposed for violations of the by-laws of the association.

The case was referred to an auditor December 6, 1933. At that time the plaintiff was seeking the recovery of damages in the sum of $88,264. However, by amendment, allowed December 15, 1933, the plaintiff amended his prayer for damages by limiting the same to nominal damages only. After that amendment was allowed, there was no motion on the part of the plaintiff or defendants to revoke the order of reference to the auditor.

The case is now before the court on:

First. A motion to recommit to the auditor; and,

Second. Exceptions of law and fact to the auditor's report.

Counsel for the parties have agreed that the court may pass upon questions of fact in the case involved in the motion to recommit, without referring the case back to the auditor, and upon all questions of fact in the case, reserving to each party to the case the right to except to the findings of the court as fully and completely as if the same had been passed upon findings by the auditor.

In his report the auditor has denominated a subdivision thereof as: 'Opinion of the Auditor.' In this division the auditor has really made findings of fact without designating them as such. Among them are the following:

'1. It does not appear from the evidence introduced in this case that the association was organized for the purpose of controlling premium rates in the insurance business, or commissions paid to insurance agents.

2. The evidence does not justify the inference that defendants'...

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  • Atlanta Ass'n Of Fire Ins. Agents v. Mcdonald, 10632.
    • United States
    • Supreme Court of Georgia
    • September 20, 1935
    ...181 Ga. 105181 S.E. 822ATLANTA ASS'N of FIRE INS. AGENTS et al.v.Mcdonald.No. 10632.Supreme Court of Georgia.Sept. 20, 1935.[181 S.E. 823]Syllabus by the Court. 1. The defendant in error filed a petition in equity in an effort to enjoin an alleged conspiracy on the part of plaintiff in erro......

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