Hinton v. Hobbs

• Decision Date: 19 August 1977
• Citation: 349 So.2d 28
• Parties: Claude A. HINTON et al. v. Boyd L. HOBBS et al. SC 2436.
• Court: Alabama Supreme Court

Page 28

349 So.2d 28

Claude A. HINTON et al. v. Boyd L. HOBBS et al.

SC 2436.

Supreme Court of Alabama.

Aug. 19, 1977.

William M. Acker, Jr., and Ezra B. Perry, Jr., Birmingham, for appellants.

John A. Owens and Randolph M. Fowler of Phelps, Owens & Jenkins, Tuscaloosa, for appellees.

EMBRY, Justice.

Claude A. Hinton, Jr., by Frank S. Blackford, as Trustee of the Bankrupt Estate of Claude A. Hinton, Jr., appeals from a summary judgment entered in favor of defendant First State Bank of Tuscaloosa. Consent judgments against Boyd L. Hobbs and Henry J. Brislin in the same action are not involved in this appeal.

This appeal evolves from a suit filed, on 23 October 1974, by Hinton against Boyd L. Hobbs, Henry J. Brislin, and

" * * * A through Z, persons, firms or corporations who withheld the truth as to facts pertinent to the transactions herein described, and whose correct names are unknown but will be furnished when ascertained. * * * "

The complaint charged in four counts that the defendants suppressed, and withheld from Hinton, various material facts and made certain material misrepresentations of facts which induced Hinton to loan money to Hobbs or to introduce sums into Hobbs' account at First State Bank of Tuscaloosa.

After filing his action Hinton was adjudicated a bankrupt and a trustee was appointed who became the real party in interest and was substituted as party plaintiff.

On January 26, 1976, Blackford amended the complaint by designating the First State Bank of Tuscaloosa as the party defendant which had previously been referred to as "A" and by striking the remaining fictitious defendants. The amendment withdrew counts two and four, and added to the complaint counts five and six, which alleged that the original defendants, Hobbs and Brislin, had been acting in the line and scope of their authority as the major stockholder of the Bank and President and Chief Executive Officer of the Bank, respectively.

The Bank answered the amended complaint by pleading the statute of limitations as an affirmative defense.

A second amendment was filed by Blackford on October 6, 1976, to add counts seven and eight to the original complaint. In those counts, it was claimed that defendants had negligently induced Hinton to lend money to Hobbs for the benefit and advantage of the Bank; and defendants negligently extended credit to Hobbs and negligently induced Hinton to extend credit to Hobbs and Brislin for the benefit and advantage of the Bank.

On December 1, 1976, the Bank filed its motion for summary judgment. The basis of the motion was that, at the time the original complaint was filed, Hinton knew the name and the identity of the Bank and all the facts which constituted the alleged fraud.

Therefore, the question raised is whether substitution of the Bank for one of the fictitious parties described in the original complaint was appropriate under the facts of this case. We hold it was not and affirm the judgment of the trial court.

This appeal centers on the fictitious parties provision in Rule 9(h), ARCP.

In brief, Blackford asserts that his compliance with Rule 9(h), ARCP, permitted the amendment adding the Bank to relate back to the time of the filing of the original complaint (Rule 15(c), ARCP) because Hinton did not discover the fraud until less than a year before the filing of the amendment. He says, under Tit. 7, § 42, Code, the amendment is therefore timely.

Rule 9(h), ARCP, is in the spirit of, and closely drawn from Tit. 7, § 136, Code, dealing with fictitious parties. Committee Comments, Rule 9, ARCP. It provides:

"(H) Fictitious Parties. When a party is ignorant of the name of an opposing party and so alleges in his pleading, the opposing party may be designated by any name, and when his true name is discovered, the process and all pleadings and proceedings in the action may be amended by substituting the true name."

Title 7, § 136, and its statutory predecessors were intended primarily for cases in which the name of defendant was unknown; they were emergency statutes and included cases in which neither the name nor the identity of defendant is known, as where the cause of action only is known but the party liable is not, and there is need for immediate seizure of property by attachment or other appropriate writ, or there is urgent need to get service at the same time the identity and name are ascertained. McKelvey-Coats Furniture Co. v. Doe, 240 Ala. 135, 198 So. 128 (1940); Roth v. Scruggs, 214 Ala. 32, 106 So. 182 (1925).

Hinton concedes he knew the Bank's name at the time he filed the original complaint; however, this court is urged to adopt a liberal construction of Rule 9(h). It is argued that the proper interpretation of 9(h) is to permit the substitution of a named party for a fictitious one and let the amendment doing so relate back even if, at the time of the filing of the original complaint, the true name of the defendant was known but the plaintiff lacked knowledge of facts giving him a cause of action against that defendant. Cases of the California Supreme Court and District Courts of Appeals are cited in support of this argument since California's fictitious parties statute is almost identical to Rule 9(h). In this case we cannot construe 9(h) to find that Hinton was ignorant of facts giving him a cause of action against the Bank.

A careful review of the record demonstrates that under the most liberal of interpretations, Hinton could not be considered "ignorant" within the meaning of Rule 9(h), ARCP. The face of the original complaint is illustrative of this:

"COUNT ONE

"1. On, to-wit, July 25, 1973, defendant Boyd L. Hobbs was the major stockholder of First State Bank of Tuscaloosa, an Alabama corporation, and defendant Henry J. Brislin was the President of said Bank and also a stockholder.

"2. On or prior to said date, all defendants, singly and in concert, suppressed and withheld from plaintiff the material fact that the said Bank was and had been under examination by federal and state bank examiners and had been "3. Not knowing this very material fact, plaintiff borrowed from said Bank the sum of $50,000.00 and contemporaneously loaned the same said sum of $50,000.00 to Hobbs. No part of said sum has been repaid. Plaintiff would not have entered into such transaction had he knowledge of the pertinent facts.

warned not to lend any monies whatsoever to defendant Hobbs, or to any of his affiliated enterprises.

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