Gordy v. Levison & Co, (Nos. 3806, 3807.)

Decision Date27 February 1924
Docket Number(Nos. 3806, 3807.)
Citation157 Ga. 670,122 S.E. 234
CourtGeorgia Supreme Court
PartiesGORDY et al. v. LEVISON & CO. et al. LEVISON & CO. et al. v. GORDY et al.

(Syllabus by the Court.)

Russell, C. J., dissenting.

Error from Superior Court, Dougherty County; W. V. Custer, Judge.

Suit by F. L. Gordy and others against Levison & Co. and others. Judgment for defendants on demurrer. A motion to dismiss was overruled, and plaintiffs bring error, and defendants file cross-bill of exceptions. Judgment on main bill affirmed, and on cross-bill affirmed in part and reversed in part.

F. L. Gordy, doing business under the trade name of F. L. Gordy Lumber Company, C. D. Smith of Albany, Dougherty county, Ga., and John W. Shiver of Americus, Sumter county, Ga., brought an equitable petition, and alleged in substance the following:

Defendants John D. Pope and S. S. Bennet are residents of Dougherty county, Ga., practicing law under the firm name of Pope & Bennet. Defendant Samuel Birdsall & Co. is a nonresident corporation, with its principal office and place of business in New York City, with no agent upon which service can be perfected in the state of Georgia, and defendant Levison & Co. is a partnership of the state of New York. F. L. Gordy negotiated a loan with Levison & Co., and as security for the loan deposited certain collateral with Levison & Co., the collateral being "accounts and acceptances of the customers of F. L. Gordy Lumber Co." The accounts and acceptances deposited with Levison & Co. have been paid and liquidated sufficiently to pay whatever debt or obligation that Levison & Co. may have had, or has, against F. L. Gordy Lumber Company. Although the debt or obligation due Levison & Co. by F. L. Gordy Lumber Company has been liquidated. Levison & Co. is fraudulently claiming that F. L. Gordy Lumber Company is still indebted to Levison & Co. in the sum of $20,000.

R. F. Crawford was in the employment of F. L. Gordy Lumber Company, and was directed by that company to go to New York for the purpose of discounting and borrowing money on certain accommodation acceptances of C. D. Smith and John W. Shiver, the acceptances now being in the possession of Pope & Bennet, attorneys for the other defendants. Levison & Co. knew for what purpose the acceptances were deposited with them, and the limitations and restrictions on Crawford's authority, and knew that the acceptances were deposited with them for no other purpose than that above alleged. Crawford had no authority to deposit the acceptances referred to with Levison & Co., except for the purpose of securing a loan thereon; no such loan was secured by Crawford of F. L. Gordy Lumber Company; nor were the acceptances discounted by Levison & Co. from Crawford, nor was any money advanced on them; and the possession of them was secured by Levison & Co. from Crawford in fraud of the rights of F. L. Gordy Company, and without the knowledge or consent of either of the plaintiffs. Levison & Co., without authority and fraudulently in collusion with Samuel Birdsall & Co., devised and concocted a scheme by which to defraud plaintiffs out of the sum-claimed to be due Levison & Co., in order to force collection of the accommodation acceptances referred to, Levison & Co. going through a form of transferring and delivering the acceptances to Samuel Birdsall & Co., and petitioners are advised and believe, and now allege, that the acceptances were transferred after their maturity and with notice of the right and equity of plaintiffs thereto. Levison & Co. and Samuel Birdsall & Co. in furtherance of their fraudulent and illegal scheme, have forwarded to Pope & Bennet, attorneys, of Albany, Ga., the accommodation acceptances for the purpose of having "some of the same sued in the name of Samuel Birdsall & Co." as the owners of said acceptances, and some in the name of Levison & Co. The acceptances are now in the possession of Pope & Bennet.

The acceptances given by John W. Shiver to F. L. Gordy Lumber Company were without consideration and merely for accommodation, and they are the property of F. L. Gordy Lumber Company, C. D. Smith, and John W. Shiver, and Levison & Co. and Samuel Birdsall & Co. have no right or interest in them, and are merely retaining them by virtue of the fraudulent scheme referred to. F. L. Gordy alleges that he has paid in full all money due Levison & Co.; but, if there is any amount due Levison & Co., he stands ready and willing and tenders said amount. Gordy has repeatedly asked and insisted that a statement of his account be given, but Levison & Co. has refused and now refuses to make a statement or accounting to Gordy, and has rendered no statement since October 1, 1921, although Levison & Co. had in its possession at that time securities aggregating the sum of.$60,000, exclusive of the acceptances referred to. Samuel Birdsall & Co. has filed suit in the city court of Albany against C. D. Smith, on the accommodation acceptances herein referred to. Pope & Bennet, as attorneys for Levison & Co. and Samuel Birdsall & Co., have announced their intention to file suit in favor of Levison & Co. and Samuel Birdsall & Co. against John W. Shiver in the city court of Americus, or the superior court of Sumter county, Ga., on the accommodation acceptances given by John W. Shiver to F. L. Gordy Lumber Company, aggregating the sum of $——. The assignment or delivery of the acceptances by Levison & Co. to Samuel Birdsall & Co. under the fraudulent scheme in law and in equity constitutes a conversion of the property, the same being of the value of $25,000. Plaintiffs claim title to all of the acceptances hereinbefore referred to.

In order to avoid a multiplicity of suits and to determine the true ownership of the acceptances and to have an accounting between Levison & Co. and F. L. Gordy Lumber Company, plaintiffs pray: (a) That Pope and Bennet, individually and as attorneys for Levison & Co. and Samuel Birdsall & Co., be restrained from filing suit against John W. Shiver on the acceptances, (b) That the suit now pending in the city court of Albany in fayor of Samuel Birdsall & Co. against C. D." Smith be enjoined, and the plaintiff in said suit be required to set up its rights in this suit, (c) That Pope and Bennet, individually and as attorneys, be enjoined from disposing of the acceptances or removing them beyond the jurisdiction of this court, and that they be held within the jurisdiction by the attorneys to abide the final decision in this matter, (d) That there be an accounting between Levison & Co. and F. L. Gordy Lumber Company, (e) That the rights and interests of the parties to the acceptances be determined, and a decpee entered declaring their respective interests, (f) That the decree determine the rights and interests of all parties in the subject-matter involved, (g) That plaintiffs have judgment against defendants in the sum of $25,000, in the event the property cannot be restored to the plaintiffs; otherwise a decree for the property, (h) That plaintiffs have such other relief as the court may deem proper.

Levison & Co. and Samuel Birdsall & Co. filed separately special appearances, substantially alike, and "for the sole purpose of objecting to the jurisdiction of the court, and for the sole purpose of showing to the court that it has no jurisdiction over these defendants, and that no legal service has been had upon these defendants, and no legal seizure of any property of defendant has been made, " and alleged the following: Levison & Co. is a partnership organized and acting under the laws of New York, and it and each member thereof is a citizen and inhabitant of the state of New York and not a resident of Georgia, and has no office or agent or place of doing business in the county of Dougherty or elsewhere in the state of Georgia, and the foregoing conditions existed at the time of the filing of this suit and ever since. This defendant at the time of filing the suit did not have, and does not now have, any property in the county of Dougherty or of the state of Georgia which could be legally seized by the sheriff or process of this court, or be legally affected by an injunction of this court under any of the pleadings filed, the only property or representative of property which this defendant then and now has in said county and state being certain copies of negotiable papers in the form of drafts or trade acceptances due by the plaintiffs which were then and are now in the hands of this defendant's attorneys at law, Pope & Bennet, for collection, and this defendant insists that said choses in action, being mere representative in valuer were then and are now located in law and have their situs at the residence of this defendant and its members in the state of New York. No facts are alleged in the petition which would authorize the court to issue an injunction or other process against the negotiable instruments and choses in action, or otherwise to acquire jurisdiction of this defendant or its interest in said choses in action. No facts are alleged which would authorize any injunction, or seizure of the choses in action, or any other property orany interest therein in the state of Georgia belonging to this defendant, and have service perfected against the defendant by publication under section 5554 of the Civil Code, in that no facts are alleged showing that the purpose of the petition is one provided for in section 5554. And if any construction by this court of any law of the state of Georgia would authorize such process or action against said choses in action under the facts alleged, the purpose of which would be to give this court jurisdiction over this defendant or over the choses in action, that would be to deprive this defendant of its property without due process of law, in violation of article 1, f 1, par. 3, of the Constitution of Georgia, which provides that no person shall be deprived of life, liberty, or property, except by due process of law, and...

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