Hardie v. Bulger

• Decision Date: 13 May 1889
• Citation: 66 Miss. 577,6 So. 186
• Court: Mississippi Supreme Court
• Parties: J. T. HARDIE ET AL. v. M. BULGER ET AL

6 So. 186

66 Miss. 577

J. T. HARDIE ET AL. v. M. BULGER ET AL

Supreme Court of Mississippi

May 13, 1889

FROM the chancery court of Harrison county, HON. SYLVANUS EVANS Chancellor.

The facts appear in the opinion.

Decree affirmed and cause remanded.

T. S Ford, I. P. Hornor, and Elliott Henderson, for appellants.

1. The amendment to the bill was repugnant to the former pleadings and not only changes the character of the suit but makes a new one. The original case, as set down for final hearing involved the validity of the first trust-deed and bonds alone. The amendment presents the issue of the validity also of a second series of bonds and the trust-deed to secure them. No action was being taken or threatened on the second trust-deed. No breach of its condition had occurred. The beneficiaries in it were passive and did not propose any action relative to it. Appellees were aware of its existence when the original bill was filed, yet they did not enjoin as to that. So the amendment introduces a new case, different from that stated in the original and first amended bills. This cannot be done. Brown v. Bank, 31 Miss. 454; Wright v. Franks, 61 Ib. 32; Clark v. Hull, 31 Ib. 520; Miazza v. Yerger, 53 Ib. 135; Story's Eq. PI., §§ 885 and 886.

2. The amended bill is multifarious. It seeks relief on different grounds against parties between whom there is no privity. Boyd v. Swing, 38 Miss. 182. Complainants do not assert a common right against persons having a community of interest in all or any of the subject-matter. Roberts v Starke, 45 Miss. 257; McNeal v. Burton, 1 How. 510. Complainants, as existing creditors, may have a right to attack the second deed of trust, which would not exist as to the first, they not being creditors at the time of its execution. It is multifarious because, as creditors, appellees are not estopped from attacking either trust-deed because of having participated in the proceeds thereof, while as stockholders they would be estopped by such participation.

The matters united in one bill by this amendments are distinct and unconnected equities against different defendants. Columbus Ins. Co. v. Humphries, 64 Miss. 258.

3. The president of the company was authorized to negotiate these loans and borrow the money. He had charge of the business of the company, with knowledge of its directors and members. It is not necessary for us to show a vote or other corporate act authorizing him to act. The company ratified his acts by accepting and using the money. Bank of U.S.v. Dandridge, 12 Wheat. 79; Burgess v. Pue, 2 Gill. 254; McCullough v. R. R. Co., 4 Gill. 58; Topping v. Bickford, 4 Allen 120; Angell & Ames on Corp. 108. It does not make any difference that the bends were bought by the corporate officers. Man. Co. v. Bradley, 15 Otto 175 and 183; Hotel Co. v. Wade, 7 Otto 13.

4. Neither creditors nor stockholders are real owners of the estate of a corporation so as to maintain an action to remove clouds from title. Code 1880, § 1883.

Upon the points presented by this brief counsel submitted the following authorities, not cited above: Cook on Stock and Stockholders 675; Pullan v. R. R. Co., 44 Biss. 35; Story Eq. Jur., § 1539; Zabrinski v. R. R. Co., 23 How. 381; Merchant. s' Bank v. State Bank, 10 Wall. 645; Union Mining Co. v. Bank, 2 Colo.Terr. 248; Taylor v. R. R. Co., 4 Woods (U. S.) 575.

J. S. Hamm, for appellees.

1. It will hardly be questioned that the complainants could have embraced both the deeds of trust in their first bill; and, if that be conceded, then why cannot they enlarge the inquiry proposed by the bill as to the first deed of trust, by embracing by way of amendment the second deed of trust? The law abhors a multiplicity of suits.

The main object of the bill by complainants is to reach and subject certain property of the Mexican Gulf Hotel Co. To do this properly they find it necessary to remove certain obstacles that lie in the way. These are the two deeds of trust described in the original bill and the amendment. Complainants, during the progress of the suit, ascertain the existence of the second trust-deed, which embraces apparently the same property, and they seek to amend by including both trust-deeds in one suit as objects of attack.

The allowance of the amendment was a matter of discretion, to be used to promote justice. Tanner v. Hicks, 4 S. & M. 294; Truly v. Lane, 7 Ib. 332; Pass v. McRae, 36 Miss. 147; Hardin v. Boyd, 113 U.S. 756; Neale v. Neale, 9 Wall. 1.

2. The main objects and purposes of the bill and the amendments are the same. Ingraham v. Foote, 31 Ala. 123; Larkins v. Biddle, 21 Ib. 252.

3. The amended bill is not multifarious. It is not necessary that all the defendants should have an interest in all the matters involved in a suit. It will be sufficient if each party has an interest in some matters in the suit, and they are connected with each other. Story Eq. Pl., § 271; Waller v. Shannon, 53 Miss. 500; Taylor v. Smith, 54 Miss. 500; Brown v. Brinkerhoff, 7 Johns. 154; 64 Miss. 711; Barry v. Barry, 64 Ib. 263.

4. Complainants, as stockholders, had the right to file this bill. It is not merely a bill to remove clouds, but a bill to enjoin and cancel two void deeds of trust. As stockholders they had the right to protect the corporate property.

J. J. Curtis, on the same side.

1. The amendment to the bill did not change the nature of the suit, the parties to it or their interests. The relief sought remained the same, viz., the cancellation of incumbrances on the corporate property. New matter in support of the same relief against the same parties was introduced by way of amendment, to avoid multiplicity of suits. Candler v. Pettit, 1 Paige 628; Stafford v. Howard, Ib. 201; Greenleaf v. Queen, 1 Pet. 148; Daniels Ch. Pr., vol. 2, 15 and 16.

2. The amended bill is not multifarious. We need only cite authorities of our own court. McGowan v. McGowan, 46 Miss. 553; Waller v. Shannon, 53 Miss. 500. No definite rule can he relied on to determine multifariousness. But, under the rules usually applied, the objection does not lie to this amended bill. Every defendant has an interest in some matters embraced in the suit, and these matters are connected, and also connected with the relief sought.

OPINION

COOPER, J.

The demurrer of the appellant to the amendment was properly overruled. Appellant is trustee in a deed executed by the hotel company, to secure the payment of a series of bonds some of which are owned by the appellant, and some by Howard, who was one of the directors when the resolution of the board of directors was passed authorizing the execution of the mortgage and the sale of the bonds thereby secured. The original bill assailed the validity of the mortgage (or deed of trust), and the good faith of the directors and holders of the bonds in reference to their issuance and sale. This bill, after it was once amended, was answered by the defendants, and testimony was taken upon the issues thus presented. In the course of this investigation, facts were disclosed showing that the company had not been legally organized under its charter at the time of the election of the board of directors, by which the mortgage was authorized to be made, and thereupon the complainants obtained leave to exhibit an amendment attacking the validity of the mortgage, upon the ground that the board of directors so elected had no power to authorize the mortgage to be made. To so much of the amendment as sought relief on this ground, objection was made by the demurrer that the amendment changed the nature and character of the bill, and, further, that complainants were estopped to allege the irregularity of the organization of the company without offering to refund the price received for the bonds.

Neither position is maintainable. The object and purpose of the original bill was to vacate the mortgage for certain reasons therein stated. On this bill an issue of fact was made, and is yet pending and undetermined. The amendment sets up another and a...