Dunbar v. Fant

• Decision Date: 01 November 1934
• Docket Number: 13933.
• Parties: DUNBAR v. FANT et al.
• Court: South Carolina Supreme Court

176 S.E. 866

174 S.C. 49

DUNBAR v. FANT et al.

No. 13933.

Supreme Court of South Carolina

November 1, 1934

Appeal from Common Pleas Circuit Court of Spartanburg County; E. C Dennis, Judge.

Action by Claude R. Dunbar against Albert S. Fant and another. From an order denying plaintiff's motion to amend the complaint and granting defendants' motion to dismiss the complaint and an order denying plaintiff's motion to plead over in the original cause of action, the plaintiff appeals.

Affirmed.

The orders of Circuit Judge E. C. Dennis directed to be incorporated in the report of the case follow:

This action was brought in December, 1931, by the receiver of a defunct state bank against Albert S. Fant, state bank examiner, and the surety on his official bond, to recover damages alleged to have been sustained by the depositors and other creditors of the bank by reason of the alleged failure of the examiner to perform the duties of that office, as required by the statutory provisions now incorporated in sections 7844 and 7852 of the 1932 Code. The complaint alleged that Fant "failed to perform his duties, in that he failed to remedy or discontinue" certain violations of the banking laws, and that "after the said bank became insolvent and the dishonest conduct of the bank continued, he failed to take and retain possession of the assets of said bank, and place the affairs of same in the hands of a receiver"; and that "said nonfeasance on the part of the defendant, Albert S. Fant, and failure to well and truly perform his duties as required by law constitute a breach of the condition of his bond."

This cause was tried before Hon. W. H. Grimball in December, 1931. At the close of plaintiff's testimony, the trial judge directed a verdict in favor of both defendants, upon the following grounds: First, the bank examiner was not required by section 7844 to remedy or discontinue violations of the banking laws discovered by him; second, the examiner, under section 7852, was given discretionary power in the matter of taking over the assets of a bank found to be insolvent or so dishonestly or fraudulently conducted as to jeopardize the interests of creditors, depositors, and stockholders; third that the examiner was not liable for damages except upon proof of bad faith or corruption, evidence of which was lacking.

Upon appeal to the Supreme Court, an opinion was rendered herein on August 24, 1933 (Dunbar v. Fant, 170 S.C. 414 170 S.E. 460, 90 A. L. R. 1412), in which the trial Judge's construction of the bank examiner's statutory duties was sustained. The trial judge's order directing a verdict for the defendants was reversed, however on the ground that a motion for a directed verdict cannot be properly made until all the evidence on both sides has been introduced. A motion for a rehearing was denied by the Supreme Court.

The remittitur was duly sent down to the circuit court, and the case set down for trial at the January, 1934, term of court. More than four days before the opening day of the term, the defendant Fidelity & Deposit Company of Maryland served upon the plaintiff notice that upon call of the case it would move for an order dismissing the complaint upon the ground that it failed to allege facts sufficient to constitute a cause of action, in that no corruption, bad faith, malicious motives, or other breach of duty on the part of the bank examiner was alleged. Likewise, more than four days before the opening day of the term, the plaintiff served upon the defendants notice that upon call of the case for trial he would move for leave of the court to amend his original complaint by alleging that the acts therein complained of were done "wilfully, intentionally, corruptly, maliciously, in bad faith, in a wanton, reckless and grossly negligent manner." This matter came on before me to be heard upon both motions, simultaneously made.

The motion for leave to amend is made under section 494 of the 1932 Code, and counsel for the plaintiff so stated at the hearing upon the motion. Any right which he may have had to amend as of course under section 493 was waived by his motion for leave of the court to amend, and he thereby submitted himself to the discretion of the judge. Hamilton v. Carrington, 41 S.C. 385, 19 S.E. 616.

I am of the opinion that the proposed amendment is improper. The allowance of amendments under section 494 is within the sound discretion of the trial judge. Metts v. Wenberg, 158 S.C. 411, 155 S.E. 734. In the exercise of that discretion, I am constrained to disallow the amendment proposed.

The Supreme Court, in a number of decisions, has undertaken to expound the meaning of section 494. An amendment is proper, under this section, only to cure a defectively stated case, and not to substitute a new cause of action. Knight, Yancey & Co. v. Ætna Cotton Mills, 80 S.C. 213, 61 S.E. 396. This section was intended to be used only to perfect a proceeding in which the amending party has been successful, and not for the purpose of obtaining a new trial on a new cause of action after the case has been lost on the original cause of action. Clayton v. Mitchell, 31 S.C. 199, 9 S.E. 814, 10 S.E. 390; Martin v. Fowler, 51 S.C. 164, 28 S.E. 312.

It appears to me that to allow the proposed amendment would be to permit an unsuccessful party to substitute a substantially new cause of action, after he has lost on the original one. The two-fold gravamen of the plaintiff's original cause of action is (1) failure of the examiner to remedy or discontinue violations of the banking laws, and (2) failure of the examiner to close a bank found to be insolvent. In other words, the plaintiff is complaining of statutory nonfeasance. The Supreme Court has held that the examiner's supposed duties of remedying or discontinuing banking law violations and closing insolvent banks are nonexistent. Hence, there could be no nonfeasance in failing to perform those supposed duties. Now the plaintiff seeks to amend by alleging the common-law delict of malfeasance. I am of the opinion that the purpose of the proposed amendment is to obtain for the plaintiff a new trial on a substantially new and different cause of action, after he has been unsuccessful on his original cause of action. Such an amendment, in my opinion, is improper.

Section 494 places one condition upon the exercise of the trial judge's discretion in the matter of allowing amendments. That condition is that the proposed amendment must be in furtherance of justice, and I am called upon to exercise my discretion in determining whether or not that...