Berry v. Mathewes

• Decision Date: 30 September 1849
• Docket Number: No. 77.,77.
• Citation: 7 Ga. 457
• Parties: William W. Berry and others, plaintiffs in error. vs. John R. Mathewes and others, defendants in error.
• Court: Georgia Supreme Court

7 Ga. 457

William W. Berry and others, plaintiffs in error. vs. John R. Mathewes and others, defendants in error.

No. 77.

Supreme Court of the State of Georgia

SEPTEMBER TERM, 1849.

In Equity, in Habersham Superior Court. Tried before Judge Dougherty, April Term, 1849.

This bill was filed by the plaintiff's in error, returnable to April Term, 1843, as creditors of the Habersham Iron Works Company, against the defendants in error, as stockholders, seeking to make them liable individually for the debts of the corporation, on various grounds; all of which, on demurrer, were declared insufficient, except one, viz.: "That large dividends had been distributed by the corporation to the stockholders, which ought to have been applied to the payment of the company's debts." As to this, the bill was retained and leave given to complainants to amend. An amendment was made, for the result of which, see 1 Kelly, 519, S. C.

At April Term, 1.847, there was a trial and decree, and an appeal taken to October Term, 1847. At April Term, 1849, the case being called in its order, John R. Stanford, one of the parties, and also counsel in the cause, moved a continuance, on the ground that he desired to make a substantial amendment to the bill, which he deemed material. The Court overruled the motion, and complainants excepted.

A motion was then made to amend, instanter, on the ground that that was the first term of the appeal; the death of one of the defendants having been suggested at the October Term, 1847, and parties made only at this term. The Court refused the motion, and complainants excepted.

The death of Philip Hudgins, one of the complainants, being suggested, the complainants' counsel moved a continuance to make parties. The Court overruled the motion, and complainants excepted.

The complainants then moved the Court to decide upon several exceptions to defendants' answers, filed before the first trial, but never disposed of, although replication had been filed. The Court refused to hear them, and complainants excepted.

Defendants being called on to respond to a notice served by complainants, to produce various books and papers, on which notice was the affidavit of Stanford, that he believed the books to be in existence, and material to the cause, sundry books and papers were produced, and others named in the notice, were not. John E. Mathewes, one of the defendants, then swore that no such books and papers were in his power or possession, nor of Dobson or Frazer, two other defendants, whose agent he was. Complainants objected to this response; but the Court held it sufficient, as far as Mathewes was concerned, and that complainants were entitled to the benefit of the Statute as to the other defendants, on making the affidavit required by the Rule of Court; and that the affidavit of Stanford, on the back of the notice, made before the former trial, was insufficient for this purpose. To which decision complainants excepted.

Complainants offered in evidence a printed paper purporting to be a circular issued by the Habersham Iron Works Company, to obtain a practical mechanic to take charge of their Iron Works. The paper gave a description of the property of the company— the health of the country—the geography of the State—its miner-al and agricultural productions—its railroads and canals, completed and projected —the mint —the gold mines-stage routes and mail arrangements—the extent of the navigation of the rivers of the State— their sources and mouth— the population of Habersham county, and the number of physicians therein, &c. &c. And among other things, that the \'\'company had just been chartered with a capital of $600,000." This paper professed to be signed by no one, and was produced by defendants under notice.

The Court rejected the circular until proved to have been issued and circulated by the company. To which decision defendants excepted.

Counsel for complainants requested the Court to charge, "That the liabilities of the company included the capital stock thereof, and that the company was not authorized to declare a dividend among its stockholders, unless they had on hand property over and above their debts and liabilities."

The Court charged "that the capital stock of the company was a liability among the corporators themselves; and when the corporation was dissolved, and all debts due other persons paid, then the capital stock, as well as other things belonging to the company, should be divided among the stockholders, and as before stated, the company had no right to make dividends of such capital, until all debts were paid; and until that time, the profits only were subject to be distributed."

To Which charge complainants excepted.

Counsel requested the Court farther to charge, "That the issue of assessment stock, without any thing being paid therefor by the stockholders, is nothing more nor less than a declaration of a dividend, and must be refunded as other dividends."

On this point the Court charged, "that if the capital stock had at any time been increased by assessments or otherwise, such increase was in the same condition as the original stock, and could not be legally abstracted, by way of dividends, any more than the original stock."

To which charge the complainants excepted.

The Court farther charged the Jury, that if the company had. made any profits at or l)efore the day they organized under the charter, and such profits did not become a part of the capital stock, they had a right to make a dividend thereof, and were not liable to creditors therefor, if solvent at the time."

To which charge complainants excepted.

And on these several exceptions, error was assigned.

John E. Stanford and H. CoBB, for plaintiffs in error.

John W. H. Underwood and T. E. E. Cobb, for defendants.

By the Court.—Warner, J., delivering the opinion.

The first ground of error assigned on the record is, that the Court below refused the complainant a continuance of his cause, for the purpose of making a substantial amendment to his bill, according to the provisions of the 4th Common Law rule of practice.

The complainant was not entitled, as a matter of right, to a continuance of his cause to make a substantial amendment to his bill. The 4th Common Law rule of practice does not apply to Equity causes. Amendments of bills pending on the Equity side of the Court on the appeal are to be allowed, according to the practice in Courts of Equity, at the discretion of the Court.

In this case the cause had been set down for trial, and replica' tion filed to the defendant's answers. The amendment was not allowable as a matter of course, but some special reason ought to have been given to the Court why it had not been made before. Story's Eq. Pleading, 879, §§886, 887. Whitmarsh vs. Campbell, 2 Paige's Rep. 67. Prescott vs. Hubbell et all Hill's Ch. Rep. 217.

The discretion of the Court below in not allowing the amendment of the bill to be made instanter was. in our judgment, properly exercised.

The next ground of error assigned is, that the Court refused a continuance of the cause, on the suggestion of the death of Philip Hudgins, one of the complainants.

The bill is filed by sundry creditors against the defendants, who assert their separate and distinct claims, and the question is, whether the death of one of the complainants, having a separate and distinct demand from the other complainants, necessarily abates the suit as to them. In this case, the name of Hudgins, the deceased complainant, was stricken out of the bill, and the cause ordered to proceed in the name of the other complainants. The general rule is, that if any of the parties to a suit die. the suit abates. Mr. Maddock, after stating the general rule, qualifies it by the following remarks: "An abatement by death is occasioned only by the death of such as are so far material parties, and concerned in interest, as to make it necessary to have their representatives before the Court, previous to a final determination of the cause." 3 Maddock\'s Ch. Practice, 526.

It does not appear to be necessary that the representatives of Hudgins should be before the Court to enable the surviving complainants to obtain a decree for their respective demands, and upon the score of principle, we do not see any good reason why the suit should abate as to the surviving complainants, who are creditors, seeking to enforce the collection of their separate debts, in which the deceased complainant had no interest. See 3 Daniel's Ch. Practice, 1699.

The Court below did not err in refusing to decide upon the exceptions which had been filed to the defendant's answer before the first trial of the cause, at the appeal trial. After the exceptions had been filed to the answer,...