Fulton v. Fisher

• Decision Date: 16 December 1911
• Citation: 143 S.W. 438
• Parties: FULTON v. FISHER, Judge.
• Court: Missouri Supreme Court

143 S.W. 438

FULTON v. FISHER, Judge.

Supreme Court of Missouri.

December 16, 1911.

Rehearing Denied January 27, 1912.

1. SET-OFF AND COUNTERCLAIM (§§ 34, 41)— CAUSES OF ACTION—DISTINCT CONTRACTS OR TRANSACTIONS.

A petition in equity alleged the formation of a syndicate to purchase coal lands in West Virginia; that three of the parties were appointed managers of the business; that large quantities of coal lands in West Virginia were acquired, which the managers had sold; that the amount received had been paid over to the syndicate subscribers, except a sum in the hands of a depositary for the syndicate; that, while the business was under way, the plaintiff was authorized by the managers to purchase for the syndicate certain coal lands in Ohio, taking title in the name of a corporation organized by the plaintiff for that purpose, and to advance the money to pay for the same, the managers promising to repay him therefor, with compensation for his services; that plaintiff did purchase large quantities of Ohio coal land, and had expended large sums therefor; that plaintiff had demanded repayment for his outlay, offering to transfer to the syndicate all the stock of the corporation organized by him; but that the syndicate had refused to take the property or to pay. A supplemental petition was filed, alleging that the purchaser from the syndicate claimed to have bought the syndicate's right to the Ohio coal lands, and was withholding a part of the purchase price until the controversy was determined. In response to the supplemental petition, the purchaser was brought in as a party and filed a cross-bill and amended cross-bill, which alleged that the Ohio coal lands belonged to the syndicate, and, if so, should be conveyed to the cross-petitioner. It further alleged that title to certain West Virginia coal lands purchased by it from the syndicate had failed, that the grantor of such lands, who was a member of the syndicate and a party to the action, had obtained a judgment in West Virginia for the purchase price, giving him a lien on the lands in that state purchased from the syndicate by the cross-petitioner, and asked relief against such judgment. The grantor of the West Virginia lands, who was a co-defendant, answered the original cross-bill and demurred to the amended cross-bill. Upon his demurrer being overruled, he answered the amended cross-bill. After a hearing before a referee, the original bill was dismissed. Held, on a petition for a prohibition to prevent the court from entertaining the amended cross-bill, that the matters set up were not a proper counterclaim, under Rev. St. 1909, § 1807, defining a counterclaim, since they did not arise out of a contract between the cross-petitioner and plaintiff, or out of the contract or transaction set up in the petition, as the foundation of plaintiff's claim, nor did they constitute a claim existing in favor of the cross-petitioner against the plaintiff.

2. PLEADING (§ 149)—CROSS-BILL—NATURE AND OFFICE.

Such cross-bill was improper, since the cross-petitioner sought relief which was not necessary to aid it in its defense to the original bill.

3. COURTS (§ 26)—JURISDICTION—MODE OF ACQUIRING.

The court acquired no jurisdiction as a result of the cross-bill, since a court can acquire jurisdiction only in the way pointed out by law, and, having obtained jurisdiction over a person for one purpose, cannot proceed against him on a different cause of action.

4. COURTS (§ 37)—JURISDICTION—WAIVER OF OBJECTIONS.

The codefendant, the grantor of the West Virginia lands, did not waive his objections to the jurisdiction of the court by answering the amended cross-bill after his demurrer thereto had been overruled, since under the express provisions of Rev. St. 1909, § 1804, an objection to the jurisdiction of the court is not waived by failing to take it either by demurrer or answer.

5. PLEADING (§ 149)—CROSS-BILL — MULTI-FARIOUSNESS.

Equity will not entertain a cross-bill for the purpose of preventing a multiplicity of suits, where it raises matters not arising between the same parties nor relating to the same subject as the original bill, since it will not entertain bills multifarious in character.

6. EQUITY (§ 38)—JURISDICTION—RETENTION WHEN ACQUIRED.

The rule that, when equity has obtained jurisdiction of a cause, it will retain it and do complete justice, does not authorize a court of equity, which has obtained jurisdiction of one cause of action, to assume jurisdiction over an entirely different cause of action, set up by a defendant against a codefendant.

Woodson, J., dissenting.

In Banc. Original petition by Elwood D. Fulton for a writ of prohibition directed to Daniel D. Fisher, Judge of the St. Louis Circuit Court. Writ awarded.

W. E. Haymond and Jones, Jones, Hocker & Davis, for relator. Glennon, Cary, Walker & Howe and Oscar E. Buder, for respondent.

VALLIANT, C. J.

Petitioner seeks a writ to prohibit the respondent, one of the judges of the St. Louis circuit court, entertaining jurisdiction of a cross-bill filed by one of the defendants against its codefendants and the plaintiff in an equity suit in that court. The petition alleges that the original suit has been dismissed by the plaintiff, but the court has refused to dismiss the cross-bill and is assuming to exercise jurisdiction to hear and determine the issues presented by it. The petitioner in this proceeding is one of the defendants in the original equity suit and is the one against whom the cross-bill is mainly aimed.

In order to determine whether the cross-bill went out of court with the dismissal of the original suit, it will be necessary to understand the relation it sustained to the original suit, whether it be considered as a cross-bill under the rules of equity pleading, or a counterclaim under our statute. The pleadings are very long and somewhat intricate, but the general purpose of each is perhaps all that is necessary for our present use. The amended petition stated substantially as follows: A written agreement was entered into between certain gentlemen having for its purpose the acquiring by purchase or building certain railroad properties, and purchasing coal lands in the state of West Virginia. The parties to the agreement were to furnish the money necessary for the venture in the proportion each set opposite his name. The amount was estimated to be $6,000,000, but in fact more than that sum was afterwards subscribed. The plaintiff Jones, though not one of the original parties, came in soon afterwards, subscribing $100,000. The association called itself the "Little Kanawha Syndicate." Three of the original parties to the agreement, Gould, Ramsay, and Guy, were appointed managers of the business and were given plenary powers to do as they thought best. Large quantities of coal lands in West Virginia were acquired as contemplated, and some railroad property likewise. The syndicate managers afterwards sold the syndicate property for $8,500,000, and the amount has been paid to the syndicate subscribers, except a sum less than $100,000, the exact amount plaintiff does not know, which is yet in the hands of the St. Louis Union Trust Company depositary for the syndicate. While the business of the syndicate was under way, the plaintiff Jones (so the petition says) was authorized by the managers to purchase for the syndicate certain coal lands in the state of Ohio, taking titles thereto in the name of the National Hocking Coal Company, a corporation organized by the plaintiff for that purpose, and to advance the money to pay for the same; the managers promising to pay him therefor together with a reasonable compensation for his services. Accordingly, plaintiff purchased 17,126 acres of coal land, taking titles as above indicated, and expended therein and thereabout the sum of $312,000, and still owes $90,000. Plaintiff has demanded payment for his outlay and for his services and has offered to transfer to the syndicate all the stock of the Hocking Coal Company; but they have refused to take the lands, or to pay for them, or to pay plaintiff for his services.

It is charged in the petition that certain of the defendants (naming them), subscribers to the syndicate agreement, purchased the stock of a small railroad in Pennsylvania, called the "Green County Railroad," the property not exceeding in value $70,000, which they endeavored to sell to the syndicate for $250,000, but on the objection of Mr. Gould that offer was rejected. But the petition goes on to say that afterwards, when Mr. Ramsay, one of the managers, was selling the property of the syndicate, he made it a condition of the sale that the purchaser should purchase the Green County Railroad at an exorbitant price, thereby making a large profit to himself. It is also stated in the petition that the managers of the syndicate have suffered the defendant Fulton (who is the relator in this proceeding) to obtain a judgment against them as managers and against property then or formerly owned by the syndicate to the amount of $360,000, which was afterwards increased to $371,000; that the judgment or decree was rendered against them by default through their negligence. That fact is pleaded to show the negligent management of the affairs of the syndicate bearing on the application for a receiver.

We have not attempted in the above statement to give the substance of the contents of the petition in the equity case with the particularity that would be necessary if we were passing judgment on the merits of the controversy between the plaintiff and the defendants in that suit, but only to show the general nature and purpose of the plaintiff's suit, in order to understand the relation which the cross-bill bears to that suit. The main if not the only purpose of that suit was to require the members of the syndicate to take title to those Ohio coal lands and reimburse the plaintiff for his outlay and pay him for his services. The charges of...