Earle v. Webb
| Decision Date | 02 December 1936 |
| Docket Number | 14391. |
| Parties | EARLE v. WEBB et al. (ASBURY et al., Interveners). |
| Court | South Carolina Supreme Court |
Appeal from Common Pleas Circuit Court of Greenville County; G Dewey Oxner, Judge.
Action by O. P. Earle against J. M. Webb and others, individually and representing a class of stockholders of the Mechanics Building & Loan Association, wherein Mary Lou Asbury and others intervened and filed a cross-complaint for themselves and all others in like situation. From an adverse order, the interveners appeal.
Affirmed.
H. K Townes and B. F. Martin, both of Greenville, for appellants.
R. N Ward, Haynsworth & Haynsworth, W. G. Sirrine, L. O Patterson, and Dakyns B. Stover, all of Greenville, for respondents.
On October 2, 1934, the stockholders of Mechanics Building & Loan Association voted to go into liquidation, and wind up its affairs, and, for the purpose of carrying out said intent, appointed a liquidating committee. On December 12, 1934, in order to aid in and facilitate the liquidation of said association, the State Board of Bank Control appointed plaintiff-respondent as conservator thereof. This was done pursuant to an act of the Legislature approved May 16, 1933 (28 St. at Large, p. 489).
This act also provided that conservators appointed by authority of same may apply to the courts for directions and instructions on questions arising in the liquidation of such associations.
In August, 1935, plaintiff-respondent commenced an action in the court of common pleas for Greenville county against certain individuals, alleged to represent every class of stockholder of the association, and against such stockholders as representing a class of stockholders, the number of stockholders being too numerous to make it practicable for each stockholder to be made a party; the purpose of the action being to get instructions from the court in reference to liquidating the affairs of the association, especially as to priority among the various classes of stockholders; to enjoin all creditors, stockholders, and other persons from instituting or prosecuting any action or suit, or any other legal proceeding against the conservator or the association, except in the action brought by him; to compel all creditors of the association to be called into this action, and they and all other interested persons be allowed to intervene and become parties to this action.
We deem it unnecessary to make a detailed statement of the allegations of the complaint, since up to this point appellants were not parties to the action, nor considered by the plaintiff-respondent as having any possible interest in the liquidation of the affairs of the association of which he was conservator.
On September 26, 1935, Hon. G. Dewey Oxner, Judge of the Thirteenth Circuit, at chambers, signed an order, which was consented to by the attorneys representing the various classes of stockholders, who had been made parties-defendants, in which it was:
"Ordered, that all creditors, claimants and other persons be and they are hereby restrained and enjoined from instituting or prosecuting any action or proceeding against the plaintiff other than in this action, and from levying upon, attaching or selling, or attempting to levy upon, attach or sell any of its property, and it is;
Further Ordered, That all creditors of the Mechanics Building and Loan Association of Greenville, S.C. be and they are hereby called into this action and required to set up their claims in this action, and to file the same, duly proven, with the Master in Equity in and for Greenville County on or before the thirtieth day from the completion of the advertisement, as hereinafter provided for, or be forever barred. The Master shall advertise by publishing a notice in the Greenville Daily News once a week for four (4) consecutive weeks, advising the creditors and claimants of the requirements of this order as to filing of claims, the first of such notices to be published within five days after the date of the order, and publication to be completed and the thirty (30) days for filing of claims to begin on the date of the fourth (4th) publication of said notice. For the purpose of the establishment of all claims, liens and priorities, this case is hereby referred to the Master of Greenville County to take the testimony and other proof and report to the Court his conclusions of law and fact, with leave to report any special matter, upon issues arising upon any claim filed or any objection to any of said claims.
It is Further Ordered, That the conservator or any party to this action, or any shareholder, investor or creditor of the Association may, within ten (10) days after the expiration of the time of the filing of claims, object to any claim, provided such objection be made in writing, specifying the grounds thereof, and notice thereof be given to the claimant.
It is Further Ordered, That all stockholders, investors and creditors of said Association, who may elect to intervene in this action be and they are hereby required to file their answer and/or cross complaint to the amended complaint, serving a copy thereof on the plaintiff and on each of the named defendants, or their attorneys, and
It is Further Ordered, That the original complaint be forthwith filed in the office of the Clerk of Court in and for Greenville County, with a copy of this order."
Subsequent to the filing of the above order, dated September 26, 1935, the appellants intervened as alleged creditors serving an answer to the complaint of plaintiff-respondent, and a cross-complaint, paragraphs 4 and 5 and a portion of paragraph 6 being as follows:
"4. These intervenors are creditors of said Association, and are informed and believe that the creditors were not made parties of this action, either as plaintiffs, or as defendants, either in their own right or as persons represented by any defendant or defendants appearing for the class of creditors-the pleadings herein making a case for which only the Conservator and the stockholders are parties, and amounting to no more than a stockholder's bill and a proceeding for instructions. And these intervenors are creditors who have elected to come into the case, pursuant to the order of the Court, to establish their claims, rights and priorities; they are former borrowers from the Association who allege that they have overpaid to the Association, prior to the Conservatorship, the amounts due on their loans, under a system of adjustment put into force by said Association which resulted in over-payments in all such cases of considerable amounts, which they cannot state exactly, and which can only be shown correctly from the Books and records of the Association.
5. They allege upon information and belief that there are hundreds of persons, widely scattered in and out of the State, entitled to recover in this action such overpayments being in like situation with these intervenors, and the questions involved being questions of a common or general interest of these very numerous persons, whom it is impracticable to bring before the court; such persons are not only numerous but scattered, it being wholly impracticable to reach by advertisement, especially a brief advertisement such as is provided in this case and such method is inadequate, for the further reason that many of such parties are ignorant of their rights, and the calculation in such cases, with many payments, is difficult and intricate and dependent upon a knowledge of the law not possessed by them as laymen-and therefore these intervenors defend and sue for the benefit of the whole. These claims of intervenors and such other persons in like situation are here set up by way of cross complaint against the plaintiff and the named defendants.
6. The claims of the plaintiffs, and all those in like plight, are based upon bonds and notes evidencing loans by the said Association and mortgages, duly recorded, to execute same, and upon the records of the Association, showing payments by such Claimants and the application thereof by the Association, same in all cases being applied without reduction of interest, as they are informed and believe, and credited upon alleged stock subscriptions instead of applying same first to the payment of interest due, and then each to the principal according to the United States interest rule, as prescribed by the Supreme Court of this State in such cases-amounting in the case of each of the named intervenors, as they are informed and believe, to a considerable sum, the exact amount being not known to them, and the memoranda in most cases being lost; their cases are illustrative cases and some or all of the mortgages involved are as follows:"
The plaintiff-respondent replied to the answer and cross- complaint of appellants, as did defendant-respondent L. O. Patterson, for himself and representing all others in like plight with him, denying that the association was indebted to appellants in any amount. It is unnecessary to set out the special defenses contained in the replies.
Subsequently notice was given by appel...
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