Mendenhall v. Stovall

• Decision Date: 05 December 1940
• Docket Number: 13540.
• Citation: 12 S.E.2d 589,191 Ga. 452
• Parties: MENDENHALL v. STOVALL.
• Court: Georgia Supreme Court

12 S.E.2d 589

191 Ga. 452

MENDENHALL v. STOVALL.

No. 13540.

Supreme Court of Georgia

December 5, 1940

Rehearing Denied Dec. 17, 1940.

Syllabus by the Court.

1. A judgment on one of the substantial issues in an equity case, which if not superseded would work an injury to the losing party that would not be completely cured by a reversal, is reviewable by the Supreme Court on a direct bill of exceptions, while other issues in the case are still pending in the trial court.

2. While it is the province of the judge in equity cases to determine upon whom costs shall fall, this is a matter that rests in the sound discretion to be exercised upon full view of all the merits and circumstances of the case. The rule excludes arbitrary action by the judge. An award of attorney's fees at an interlocutory hearing based solely upon the pleadings, where the verified answer shows that one partner is suing another, and that the defendant owns all the assets of the business, and the plaintiff has no interest therein, but has been guilty of converting to his own use property belonging to the partnership, and that the case is being prosecuted solely for the purpose of enabling the plaintiff's counsel to obtain a fee, granting plaintiff's counsel a fee of $300 is an abuse of discretion, and must be reversed.

P M. Stovall filed an equitable petition against C. M Mendenhall, alleging that the parties were partners in a certain business known as Glenwood Seating Company engaged in selling certain types of furniture. A copy of the partnership contract was attached to the petition as an exhibit. The contract provided that the defendant should arrange the financing of the original purchases of furniture, handle the general administration of the business, handle correspondence, furnish office space, local telephone and secretarial services; that the cost of the capital funds employed would be treated as an expense to be first taken out of any profits accruing to the business; and that the defendant should receive forty per cent. of the profits from the business. It provided that the plaintiff should act as purchaser and salesman, bear all of his traveling expenses incident to his making purchases and sales, and receive sixty per cent. of the profits. The contract further provided that on the first day of each month the defendant should draw an operating statement showing the condition of the business; and that the contract should continue in force as long as the parties should mutually agree to carry on the partnership.

The petition alleged that the parties have disagreed, and prayed for an accounting, receivership, and injunction. The defendant's answer admitted the execution of the contract and the operation thereunder, and further alleged that the plaintiff had violated his fiduciary relationship to the defendant by slipping into a warehouse leased by the defendant in Lexington, North Carolina, and taking therefrom 600 chairs valued at $700, disposing of same and converting the proceeds to his own use, without informing defendant or accounting for the same. The answer further alleged that because of such misconduct on the part of the plaintiff, the defendant informed him that the partnership relation would be terminated, and offered to sell same to plaintiff, which offer the plaintiff refused. The answer admitted that an end to the contractual relationship was necessary and offered to make a full and complete accounting of every item of business transacted, but denied that plaintiff was entitled to any other relief. The answer further alleged that for each month of the operation of the business the defendant had given the plaintiff a full and complete statement, and had paid in full the sixty per cent. of the profits to which the plaintiff was entitled, and that the plaintiff therefore had been paid every penny that he was entitled to from the business. The answer alleged, that the defendant was solvent, that the assets of the firm represented the original money which the defendant put in the business and other money which he had individually placed in the business subsequently, and that they were liquid with the exception of certain chairs in the warehouse in North Carolina, which the defendant could dispose of for a better price than they would bring under court procedure. It was further averred that the plaintiff claimed no interest in the business, and had expressed himself as desiring only to be relieved of any responsibility for its affairs and from criminal responsibility for his actions, that this entire proceeding was brought for the sole purpose of aiding plaintiff's attorney in his demand for a large fee from the assets of the business, and that the plaintiff's attorney was threatening lengthy court proceedings elsewhere unless his demands for a fee were met. The answer offered to post security bond, in whatever amount the court should fix, binding the defendant to account for the affairs of the partnership, and prayed that plaintiff's prayers be denied, and that plaintiff and his attorney be enjoined from filing further suits in connection with the business. This answer was duly verified. On August 5, 1940, the court entered a consent order authorizing the defendant to sell certain property belonging to the partnership and deposit the funds derived therefrom with the clerk of the court, and permitting the defendant to execute an indemnity bond in the sum of $5,000, conditioned to pay plaintiff any sum that might be found in his favor upon final accounting. By a subsequent order the court authorized the defendant to accept a ninety-day note for the merchandise which he had been authorized to sell and personally indorse the note and deposit it with the court. Pursuant to such orders, certain funds were deposited with the clerk of the court. Thereafter the plaintiff's counsel made application to Hon. Edgar E. Pomeroy, judge of the court, for an allowance of fees to himself as counsel for plaintiff, in which application it was alleged that as a result of plaintiff's action there was in the custody of the court cash or its equivalent of an unspecified amount, and that having been instrumental in bringing said sum into court and having rendered services incidental to said case, he was entitled to compensation for such services from said funds. On this application, with no evidence before him except the pleadings, the following order was entered by the judge: 'The foregoing application read and considered, and upon consideration thereof it is ordered and adjudged that the clerk of this court do pay to A. E.

Wilson the sum of three hundred dollars from the funds in his custody, same to apply on account of services rendered in the said case. This order to be superseded for five days. This 4th day of September, 1940. Edgar E. Pomeroy, judge superior court, Fulton County, Georgia.' To this judgment ordering the payment to the plaintiff's attorney, the defendant excepted.

John E. Feagin, of Atlanta, for plaintiff in error.

A. E. Wilson, of Atlanta, for defendant in error.

DUCKWORTH Justice.

1. Although no motion is made in this court to dismiss the bill of exceptions on the ground that it is premature, we believe that question is close enough to warrant consideration by the court to determine our jurisdiction. The general rule is that no cause shall be carried to this court upon any bill of exceptions while the same is pending in the court below unless the decision or judgment complained of, if it had been rendered as claimed by the plaintiff in error, would have been a final disposition of the cause or final as to some...