Buist v. Williams
| Decision Date | 16 November 1908 |
| Citation | 62 S.E. 859,81 S.C. 495 |
| Parties | BUIST v. WILLIAMS et al. |
| Court | South Carolina Supreme Court |
Appeal from Common Pleas Circuit Court, Barnwell County; Geo. E Prince, Judge.
Action by C. S. Buist against Geo. W. Williams and others. Judgment for plaintiff. Defendants appeal. Modified and remanded for further proceedings.
Simons Seigling & Cappelmann, Buist & Buist, and Smythe, Lee & Frost, for appellants.
Bates & Simms, for respondent.
The issues made by this appeal had their origin in an action instituted by C. S. Buist, on behalf of himself and all other creditors who might come in and contribute to the expenses of the action, against the Merchants' & Planters' Bank of Blackville, S.C. The complaint in that action alleged that the bank had become insolvent, owing the plaintiff and other depositors more than $10,000. The relief asked was "that an injunction be granted restraining the defendant from making any disposition of its assets; that a receiver be appointed pending the trial of this action; that judgment be rendered against the said defendant for plaintiff's demand as above stated, and for the demands of other creditors who may come in and accept the benefits of this action upon the terms above stated; that an accounting be had with the said bank and the respective liabilities of the parties be paid, and for such other and further relief as may be just and equitable." The bank answered, and under an order to show cause, John O'Gorman, Esq., was appointed receiver on 11th February, 1901, and the assets were collected and distributed by him. The stockholders of the bank were not made parties to the cause. In the course of the distribution counsel fees were paid by the receiver, under orders of the court, to H. F. Buist, Esq., attorney for the plaintiff, Buist, aggregating $1,000, and to Messrs. Bates & Simms, attorneys for the receiver, $1,200. The other costs and expenses incurred by the receiver, together with his commissions, amounted to $2,117.67. All these expenses aggregating $4,317.67, were taken from the total sum of $18,309.48 collected by the receiver, and the remainder, $13,991.81, was paid to the creditors of the bank. After applying this sum so ascertained as the net credit applicable to these debts, there remained due to creditors, according to the receiver's account, the sum of $7,332.21. By an order dated March 26, 1904, the receiver's accounts were approved and confirmed, and he was "authorized and directed, as he may be advised by the receiver's attorneys herein," to institute suits against the stockholders to enforce their statutory liability for the amount remaining due to the stockholders. Thereafter this action was instituted in the name of the receiver, for the benefit of creditors, against the stockholders of the bank, to recover $7,332.21, the remainder alleged to be due on the debts of the bank. The liability of each stockholder was stated to be 105 per cent. of the face value of his shares of stock, instead of 100 per cent., because the bank was incorporated in 1889, and the liability was fixed, therefore, by the Constitution of 1868, and the statute enacted thereunder, and not by the Constitution of 1895. A number of the stockholders appeared and demurred to the complaint, on the ground that the action should have been brought in the name of the creditors, and not in the name of the receiver. On the hearing a decree was made by the circuit judge (1) for judgment against the stockholders who had defaulted, and who had answered and not demurred; (2) sustaining the demurrer; (3) giving leave to plaintiff's attorneys to amend by substituting for the receiver, as plaintiff, C. S. Buist, in behalf of himself and all other creditors, and by making appropriate changes in the complaint. The defendants George W. Williams, Jos. F. Norris, H. Klatte, J. A. Smyth, F. W. Wagener, George A. Wagener, P. E. Trouche, E. F. Weiters, as executor of the will of J. C. Weiters, and Carolina Savings Bank then answered, admitting that they held stock in the insolvent bank, but denying the other material allegations in the complaint. The answer also contained allegations not involved in this appeal, as to the defendants' equity of contribution from other stockholders. The cause was heard under the complaint, as amended, and the answer. The circuit court adjudged the stockholders liable for the entire sum of $7,332.21, appearing in the accounts of the receiver as the amount of unpaid debts of the bank after exhausting its assets, and also for a reasonable counsel fee for plaintiff's attorneys in this action against the stockholders.
George W. Williams and the other stockholders, who are the appellants, first assign error in allowing the amendment substituting for the receiver, as plaintiff suing on behalf of creditors, C. S. Buist, a creditor suing for himself and other creditors. The power of the circuit judge to allow such an amendment in his discretion has been sustained in a number of decisions. Jennings v. Springs, Bailey, Eq. 181; Coleman v. Heller, 13 S.C. 491; Baker v. Hornick, 51 S.C. 313, 28 S.E. 941; Sentell v. So. Ry. Co., 67 S.C. 229, 45 S.E. 155; Greenwood L. & G. Assoc. v. Williams, 71 S.C. 421, 51 S.E. 272. The exception as to the amendment is overruled.
The defendants are not liable for the fees of attorneys employed by creditors to prosecute their action against the bank, or their action against the defendants in this cause, and the circuit court was in error in not sustaining the position of appellants on this point. It is a rule of equity, universally recognized, that where one creditor institutes proceedings for the benefit of all creditors, those creditors who claim the benefit or fruit of the action must contribute to the expenses, including counsel fees, and the court will direct the payment of such fees and expenses before the division of the property recovered. It was therefore quite proper that the fee of Mr. H. F. Buist, who was the attorney who filed the...
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