Boyd v. Robinson
| Decision Date | 19 July 1898 |
| Citation | 31 S.E. 29,104 Ga. 793 |
| Parties | BOYD v. ROBINSON et al. |
| Court | Georgia Supreme Court |
Syllabus by the Court.
1. Where the property of a building and loan association, upon petition of some of its stockholders, has been placed in the hands of receivers, among whose duties is the collecting of its assets, and subsequently the petitioners and the receivers unite in an amendment to the petition in the nature of a supplemental bill, which amendment seeks, among other things, the marshaling of the assets of the corporation, the ascertainment of the rights and liabilities of various stockholders, and the final distribution of the assets, and where, in such amendment, all of the members of the association, including those who have received loans or advancements upon their stock as well as those who are "nonborrowers," are made parties defendant, such amendment is not demurrable upon the ground of misjoinder of parties plaintiff or defendant or on account of multifariousness.
2. A member of a building and loan association who has received a loan or advance upon his stock, and who has hypothecated the stock as security for the loan, by an absolute transfer of the same to the company, does not thereby lose his membership in the association.
3. The court in which the original petition was filed and the receivers appointed has jurisdiction to entertain the proceedings instituted by the amendment above described especially where some of the defendants against whom substantial relief is prayed reside in the county where the original suit was brought.
Error from superior court, Fulton county; J. H. Lumpkin, Judge.
Action by Roby Robinson and others, praying for an injunction and appointment of a receiver for the Southern Mutual Building & Loan Association. J. S. Boyd was made one of the defendants and demurred to the amendment of petitioners. From a judgment overruling the demurrer, he brings error. Affirmed.
Where the property of a building and loan association, upon petition of some of its stockholders, has been placed in the hands of receivers, among whose duties is the collecting of its assets, and subsequently the petitioners and the receivers unite in an amendment to the petition in the nature of a supplemental bill, which amendment seeks, among other things, the marshaling of the assets of the corporation, the ascertainment of the rights and liabilities of various stockholders, and the final distribution of the assets, and where, in such amendment, all of the members of the association, including those who have received loans or advancements upon their stock as well as those who are "nonborrowers," are made parties defendant, such amendment is not demurrable upon the ground of misjoinder of parties plaintiff or defendant or on account of multifariousness.
The following is the official report:
Robinson and others, stockholders of the Southern Mutual Building & Loan Association, a corporation having its principal office in Fulton county, brought to the superior court of that county their petition against the association, alleging that it was insolvent, and praying for the appointment of a receiver to take charge of the assets and property of the association, and to wind up the association, pay its debts and distribute the balance of its funds pro rata among the stockholders, according to their interest therein, etc. Subsequently the petitioners filed an amendment to their petition, in which amendment they alleged that the Union Loan & Trust Company and others, who were thereby made parties defendant, had in their possession certain assets of the association, which came into their possession fraudulently and were held in violation of the rights of the petitioners, and it was prayed that these defendants be required to turn over to the receiver such assets of the association as were alleged to be in their hands. The court granted an injunction, and appointed Anderson and O'Byrne receivers, and in the order of appointment authorized and directed them to collect all sums due to the association, and authorized them to institute or become parties to such suits as they might deem advisable in order to accomplish this purpose, and to make themselves parties to any suit to which the association might be a party, and to take such proceedings therein as in their judgment might be necessary for the protection or collection of the assets or interests of the corporation. The petitioners then filed a supplemental petition, the receivers joining therein, in which such of the stockholders of the association as were indebted to it for money advanced or loaned by it on their stock were made parties defendant, one of whom was James S. Boyd, who, as appeared from the petition, was a resident of Dekalb county, and had conveyed to the association, as security for the loan made to him, certain land situated in Fulton county. Boyd filed a demurrer on the following grounds: (1) The petition shows that the superior court of Fulton county has no jurisdiction of him; (2) there is a misjoinder of parties plaintiff; (3) there is a misjoinder of parties defendant; (4) the petition is multifarious; (5) the facts set forth in the petition show that the petitioners are not entitled to the relief prayed for, or to any other relief, as against this defendant. The demurrer was overruled, and Boyd excepted.
The supplemental petition alleged, in substance: The defendant company is a building and loan association, and its income was derived largely from the dues, premiums, interest, and fines paid by its members or stockholders. Its stockholders are divided into two different classes: One, those who have simply paid in the dues on their stock, as provided by the charter and the by-laws, and who might, for convenience, be called "investment stockholders"; the other, those who have been advanced or have gotten money on their stock from the association, called, for convenience, "advanced members,"--the two classes being generally, though inaccurately, distinguished as "nonborrowers" and "borrowers." These two classes are subdivided in minor classes, the association having issued at different times, and concurrently, different classes of stock, known as classes A, B, C, D, E, and F, under which classes, while the amounts to be paid and the time of maturity and other details were more or less different, the general scope and plan were practically the same (as shown by the charter and by-laws of the association, copies of which are exhibited), and all stockholders in all of these classes were mutually interested in the profits, and the expenses and losses, of the business. At the time the receiver was appointed, there were outstanding 32, 607 1/4 shares of stock of the association issued to and held by the members or stockholders, divided among the various classes mentioned, of which number 23,406 13/20 shares had not been advanced or borrowed upon. The remaining shares had been advanced or borrowed upon by the members holding the same. From the time these shares were issued to the holders they became members or stockholders of the association, and, on account of their shares, entitled under the by-laws of the association, to share in the profits, and were correspondingly liable to bear the expenses and losses of the association. After setting out the receipts of the association, the amounts paid out by it during its existence, and the assets which the receivers were able to find, and alleging that losses in amounts stated had been sustained by the association by reason of the disappearance of a portion of the assets which could not be traced, the depreciation in value of real estate held by it, etc., the petition alleged that each and every share of stock is liable to bear its pro rata share of these losses, and that, to find the amount to which each share is entitled in the distribution of the assets, it is necessary that each and all of these losses and expenses be accurately ascertained, and that each and all of the stockholders should be before the court for these purposes. With the exception of a comparatively small amount of property heretofore bought in by the association, and the few thousand dollars collected by the receivers, the bulk of the assets consists in the money advanced or loaned to certain of the members of the association, and for which their bonds, notes, mortgages, and other evidences of indebtedness are held. In order to realize on the assets of the association, so as to equitably distribute them, it is necessary to call in and collect these various indebtednesses due by the members or stockholders, and to do so in such a way and on such a plan that each member, and each share of stock held by him, whether advanced to or not, shall prorate with every other share its proportion of the losses and expenses. This being a mutual company, any other plan would be unjust and inequitable. As a large part of the fund for final distribution must arise from the amounts collected from the stockholders who have received advances, and as on account of the insolvency of the association, for causes stated, it would be inequitable to make them bear alone the whole burden of all these losses and expenses which would probably result to each of them if they were sued separately on the contract, it is equitable and just that the burden of these losses and expenses should be borne by non advanced stockholders as well as those to whom advances have been made. It is also necessary that all stockholders who have received advances should be made parties to one suit, in order that a single and uniform rule as to the proportion of the losses and expenses which all of them should bear may be laid down, and that a proper rule of apportionment thereof and contribution thereto may...
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