Merchants Union Trust Company, Successor To the Union Trust Company, a Corporation Incorporated Under the Laws of the Commonwealth of Pennsylvania, Trustee Named In a Certain Indenture of Mortgage, Dated the Tenth Day of June, A. D. 1905, Executed By New Philadelphia Graphite Company, a Corporation of the State of New Jersey, And Hiram C. Himes, Charles L. Reid And Edmund B. Seymour, Trustees for the Bondholders of New Philadelphia Graphite Company Under Deed of Trust Dated the Twelfth Day of December, A. D. 1910 v. New Philadelphia Graphite Company, a Defunct Corporation of the State of New Jersey, Keystone Graphite Company, a Corporation of the State of Delaware, Sarah Corbit Curtis, Executrix Under the Last Will And Testament of Frederick William Curtis, Deceased, Frederick D. Chester And Chester Graphite Company, a Corporation of the State of Pennsylvania

• Decision Date: 28 May 1913
• Citation: 10 Del.Ch. 155,87 A. 1022
• Court: Court of Chancery of Delaware
• Parties: MERCHANTS UNION TRUST COMPANY, Successor to THE UNION TRUST COMPANY, a corporation incorporated under the laws of the Commonwealth of Pennsylvania, Trustee named in a certain Indenture of Mortgage, dated the tenth day of June, A. D. 1905, executed by NEW PHILADELPHIA GRAPHITE COMPANY, a corporation of the State of New Jersey, and HIRAM C. HIMES, CHARLES L. REID and EDMUND B. SEYMOUR, Trustees for the bondholders of New Philadelphia Graphite Company under Deed of Trust dated the twelfth day of December, A. D. 1910, v. NEW PHILADELPHIA GRAPHITE COMPANY, a defunct corporation of the State of New Jersey, KEYSTONE GRAPHITE COMPANY, a corporation of the State of Delaware, SARAH CORBIT CURTIS, Executrix under the last will and testament of FREDERICK WILLIAM CURTIS, deceased, FREDERICK D. CHESTER and CHESTER GRAPHITE COMPANY, a corporation of the State of Pennsylvania

87 A. 1022

10 Del.Ch. 155

MERCHANTS UNION TRUST COMPANY, Successor to THE UNION TRUST COMPANY, a corporation incorporated under the laws of the Commonwealth of Pennsylvania, Trustee named in a certain Indenture of Mortgage, dated the tenth day of June, A. D. 1905, executed by NEW PHILADELPHIA GRAPHITE COMPANY, a corporation of the State of New Jersey, and HIRAM C. HIMES, CHARLES L. REID and EDMUND B. SEYMOUR, Trustees for the bondholders of New Philadelphia Graphite Company under Deed of Trust dated the twelfth day of December, A. D. 1910, v. NEW PHILADELPHIA GRAPHITE COMPANY, a defunct corporation of the State of New Jersey, KEYSTONE GRAPHITE COMPANY, a corporation of the State of Delaware, SARAH CORBIT CURTIS, Executrix under the last will and testament of FREDERICK WILLIAM CURTIS, deceased, FREDERICK D. CHESTER and CHESTER GRAPHITE COMPANY, a corporation of the State of Pennsylvania

Court of Chancery of Delaware, New Castle

May 28, 1913

A demurrer to the bill of complaint was sustained, ante p. 18 83 A. 520, and the solicitors for the complainants asked leave to file an amended bill of complaint. The cause was heard by the Chief Justice, owing to the disqualification of the Chancellor to hear and determine it, and the facts sufficiently appear in the opinion.

Application to file the amended bill refused.

Ward Gray and Neary, and with them E. B. Seymour, of the Philadelphia Bar, for the complainants.

Horace G. Eastburn, and with him James C. Sellers, of the Philadelphia Bar, for the defendants Sarah Corbit Curtis Executrix of Frederick William Curtis, deceased, Frederick D. Chester and Chester Graphite Company.

OPINION

THE CHIEF JUSTICE. The complainants ask leave to file an amended bill in the above stated case, in which a demurrer to the original bill was by a recent decision of this court sustained. The application is opposed on the ground that the demurrer covered every alleged ground of equity set forth in the bill, and for the further reason that, the opinion of the court having sustained the demurrer which covered the entire merits, the present application should be refused and the bill dismissed.

There can be no question about the rules which should govern courts of equity in proceedings of this character, and counsel differ not so much about the rules as their application to the present case.

It is not questioned that an amendment should be refused when the bill is wholly without equity; and that, when a demurrer to the whole bill is allowed, the bill is out of court, and no subsequent proceedings can be taken in the cause. The complainant will not be permitted to present an entirely different case by amendment. McLeod v. Dell, 9 Fla. 427; Puterbaugh v. Elliott, et al., 22 Ill. 157; Lyon & Brockway v. Tallmadge, 1 Johns. Ch. 184; Fisher v. Walter, 3 C. P. Rep. (Pa.) 161; 16 Cyc. 284; 1 Daniel's Chancery Pleading & Practice (4th Ed.) 597, 598; Smith v. Barnes, Dick. 67; Watkins v. Bush, Dick. 701; Mitford & Tylers Pleading & Practice 111, 309; March v. Mayers, 85 Ill. 177; Bannon v. Comegys, 69 Md. 411, 16 A. 129; Jones v. Van Doren, 130 U.S. 684, 32 L.Ed. 1077, 9 S.Ct. 685.

In Lyon & Brockway v. Tallmadge, 1 Johns. Ch. 184, the court said:

"Where a bill on demurrer is dismissed for want of equity on the merits of the case as stated, leave to amend the bill will not be granted."

The principles applicable to the present case are very clearly expressed in the case from which I have just quoted, and the following further quotation may be helpful and instructive, viz.:

"The motion for leave to amend the bill is not founded upon any specified omission or imperfection. The demurrer was decided upon the merits, and on the ground that the bill contained no equity. A general leave to amend would be the same as leave to make a new bill, and I think the indulgence of amendments is not to be carried so far. If the bill be found defective in its prayer for relief, or in proper parties, or in the omission or mistake of some fact or circumstance connected with the substance of the case, but not forming the substance itself, the amendment is usually granted. But the substance of the bill must contain ground for relief. There must be equity in the case, when fully stated, and correctly applied to the proper parties, sufficient to warrant a decree. Here, as I have already observed, the substance of the bill is defective. The plaintiff gives a plain and candid statement of his case, and it cannot entitle him to relief, for the reasons assigned in pronouncing the decree. In the absence of authority I should deny this motion, because, as far as the doctrine of amendments can be reduced to general rules, or principle, it is against it. But there are cases which govern the present one. In Napier v. Effingham, 2 P. Wms. 401, Lord Chancellor King observed that there was not any precedent, in this court, of an amendment to a bill in a part wherein it has been dismissed upon the merits; and in a case before Lord Talbot, and which is cited by Mr. Cox in his notes to P. Williams (2 P. Wms. 300), the Chancellor observed that, after a demurrer to the whole bill allowed the bill was regularly out of court, and there was no instance of leave to amend it."

The complainants contend that the allowance of an amendment is always within the discretion of the court, and this is perhaps true as a general proposition. It is equally true, that in equity, as in law, such discretion when exercised should be sound and reasonable. The amendment should not be allowed if it presents an entirely different case from that set up by the bill demurred to, or if the bill was wholly without merit, or the court has clearly decided the merits of the case. Amendments are frequently granted when the demurrer goes to matters of form only, and when there is some defect as to parties, but not when the bill, on demurrer, is dismissed on the merits of the case for want of equity. Such propositions are not seriously questioned by the complainants, but it is insisted that the application before the court comes clearly within the principle declared in the case in 1 Johns. Ch. above referred to, viz:

"If the bill be found defective * * * in the omission or mistake of some fact or circumstance connected with the substance of the case, but not forming the substance itself, the amendment is usually granted."

It becomes necessary, therefore, to determine whether the present case comes within such principle or exception, and in order to do that, the proposed amendments should be examined. In considering this point it should be remembered that the fatal defect in the original bill consisted in the fact that there was no privity of contract or estate shown to exist between the complainants and the defendants, and it was mainly because of that fact the court sustained the demurrer. If the amended bill does not cure that defect, that is, show such privity as will sustain the action, or show a state of facts from which the liability of the defendants can be reasonably inferred, the application to amend should be refused.

The amendments proposed may be briefly, but substantially and sufficiently, stated as follows: The existence of a second mortgage executed by the New Philadelphia Graphite Company to the Union Trust Company, complainant, and that the...