De Pass v. Piedmont Interstate Fair Ass'n

Decision Date19 April 1950
Docket Number16344.
Citation59 S.E.2d 495,217 S.C. 38
PartiesDE PASS v. PIEDMONT INTERSTATE FAIR ASS'N.
CourtSouth Carolina Supreme Court

Osborne, Butler & Moore, Spartanburg, for appellant.

DePass & DePass, Spartanburg, Lyles & Lyles, Spartanburg for respondent.

OXNER, Justice.

This is an action to recover the sum of $4300.00 for professional services alleged to have been rendered by the late Alva C. DePass, a prominent member of the Spartanburg Bar, to the Piedmont Interstate Fair Association. It is before us on an appeal by the defendant from an order (1) refusing a motion to strike certain allegations of the complaint, and (2) referring the case to a special referee.

We shall first determine whether the Court below erred in granting a compulsory order of reference. Appellant contends that it is entitled as a matter of right to a jury trial on the issues raised by the pleadings.

The basis of the claim for professional services can better be understood by briefly referring to the facts and issues before this Court in the case of Johnson et al. v. Spartanburg County Fair Association et al., 210 S.C. 56, 41 S.E.2d 599. For a long number of years, the Spartanburg County Fair Association annually conducted a county fair in the City of Spartanburg. From time to time considerable friction developed among the stockholders. In January, 1946, or shortly prior thereto, a movement was started to organize a new fair association composed of Spartanburg and several adjoining counties to be known as the Piedmont Interstate Fair Association. This movement was led by George S. DePass, Esq., a lawyer and farmer of Spartanburg and a nephew of Mr. Alva C. DePass. Mr George DePass endeavored to secure from the stockholders of the Spartanburg County Fair Association a proxy authorizing him to vote at a meeting of the stockholder to be held on March 15, 1946, in favor of (1) the liquidation of said Association, and (2) the granting of a ninety day option to him and Mr. Howard McCravy to purchase the major portion of the assets of the Association for the sum of $17,718.12. The proposed option was to contain the following provision 'This option is given to the said George S. DePass and Howard McCravy in trust nevertheless for the purpose of conveying said option and all rights under same to a new fair association to be organized by them, to be named The Piedmont Interstate Fair Association, or any other name chosen by the directors, as soon as same can be formed, and within ninety days, or else this option to be null and void.'

At the stockholders' meeting held on March 15, 1946, those holding a majority of the stock voted in favor of a motion granting said option and a resolution authorizing the liquidation of the affairs of the Association. This action was approved at a meeting of the directors held three days later. On April 13, 1946, certain minority stockholders brought an action to enjoin the Association, its officers and directors, from selling its assets as contemplated in said option. It was claimed that the proposed action of the majority of the stockholders was illegal. Messrs. McCravy and DePass, who held the option, were allowed to intervene in said action and after issues were joined, the case was referred to the Master who found against the minority stockholders. His report was confirmed by the Circuit Court. On appeal to this Court by the minority stockholders, the judgment of the Circuit Court was reversed and in an opinion filed on February 12, 1947, the option heretofore mentioned was held to be invalid because it had not been approved by a vote of two-thirds of the total number of shares outstanding.

During the pendency of the above action, a charter was secured for the Piedmont Interstate Fair Association on July 13, 1946. A few days later a meeting of the directors of the new corporation was held, at which the option granted to Messrs. DePass and McCravy was accepted. Possession of the property mentioned in said option was delivered to the purchaser and a fair was held by the new Association in 1946, 1947 and 1948. It appears that a substantial profit was made during each of these years. Of course, the effect of the decision of this Court was to nullify the sale to the Piedmont Interstate Fair Association.

On March 19, 1947, certain stockholders of the Spartanburg County Fair Association commenced another action against the Association and the Piedmont Interstate Fair Association seeking, among other relief, the appointment of a receiver for the Spartanburg County Fair Association. On April 10, 1947, a consent order was taken wherein, after reciting that the hostile factions among the stockholders of the Spartanburg County Fair Association were earnestly seeking an amicable settlement of their differences and that it was to the interest of all parties that the appointment of a receiver be postponed pending said negotiations, the property of the Spartanburg County Fair Association was placed in the hands of three trustees named by the Court with authority to operate the business and to negotiate a settlement of all matters in dispute. A rew months later a tentative agreement was reached between said trustees and the Piedmont Interstate Fair Association whereby a stipulated amount was to be paid by the latter to the Spartanburg County Fair Association for certain property owned by the Spartanburg County Fair Association and for the use of its facilities during the fairs held in 1946 and 1947, and in settlement of all claims against the Piedmont Interstate Fair Association. It was further agreed that the fair to be held during 1947 and future years should be operated by the Piedmont Interstate Fair Association. On June 4, 1948, the Court issued an order approving, with slight modifications, the settlement recommended by the trustees.

In May, 1949, the executor of the will of Alva C. DePass, who died on January 6, 1948, filed a petition in the action which was appealed to this Court in which he asked that a fee of $2500.00 be allowed against the Piedmont Interstate Fair Association for services rendered in said litigation by Alva C. DePass to Howard McCravy and George S. DePass, as trustees under the option heretofore mentioned, and to the Piedmont Interstate Fair Association subsequently formed. This petition was dismissed a few weeks later upon the ground that the Court was without jurisdiction since the Piedmont Interstate Fair Association was not a party to the action in which the petition was filed.

The action now before us was commenced on June 11, 1949. It is alleged in the complaint that Mr. Alva C. DePass represented Messrs. McCravy and DePass and the Piedmont Interstate Fair Association in the action by the minority stcokholders to enjoin the sale under the option heretofore mentioned and that from these services considerable benefits inured to the Piedmont Interstate Fair Association. Respondent further alleged that Mr. Alva C. DePass was employed by the promoters of the Piedmont Interstate Fair Association to organize said corporation and obtain a charter; that he did all the legal work incident to the formation of said corporation, including the preparation of by-laws; and that he represented said corporation in numerous matters after it commenced doing business.

In its answer appellant denied entering into any contract of employment with Mr. DePass, denied that he rendered the services mentioned in the complaint, and further alleged that if such services were rendered, it was not liable therefor. It was further asserted that the amount claimed was excessive.

In concluding that the case was a proper one for a...

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