Scott v. Mortgage Service & Realty Co.

• Decision Date: 13 November 1928
• Docket Number: 6200.
• Citation: 145 S.E. 586,106 W.Va. 304
• Parties: SCOTT et al. v. MORTGAGE SERVICE & REALTY CO. et al.
• Court: West Virginia Supreme Court

145 S.E. 586

106 W.Va. 304

SCOTT et al. v. MORTGAGE SERVICE & REALTY CO. et al.

No. 6200.

Supreme Court of Appeals of West Virginia.

November 13, 1928

Submitted October 30, 192 8.

Syllabus by the Court.

A bill will not usually be regarded as multifarious where the matters joined therein, though distinct, are not absolutely independent of each other, and it will be more convenient to dispose of them in one suit.

[Ed Note.-For other definitions, see Words and Phrases, First and Second Series, Multifariousness.]

A bill filed on behalf of certain alleged creditors of a corporation, in their own right and on behalf of all other creditors, setting up that it has surrendered its charter and has not caused any funds to be set apart, either in whole or in part, for the payment of any of the debts of said corporation, asking for a marshaling of the assets of same and that the same be applied to the payment of its debts, and that a receiver be appointed, is good on demurrer.

Appeal from Circuit Court, Raleigh County.

Suit by E. Clyde Scott and others against Mortgage Service & Realty Company and others. From an adverse decree, plaintiffs appeal. Reversed and remanded.

Ward & Sanders, of Beckley, for appellants.

Dillon Mahan & Holt, of Fayetteville, for appellees.

WOODS J.

This is a suit in chancery against Mortgage Service and Realty Company, a corporation, its directors, and others, for the purpose of having the assets of said corporation marshaled and applied to the payment of its debts, and a receiver appointed to take charge of the assets and wind up its business, as provided for in sections 58 and 59, chapter 53, Code, and, as ancillary thereto, to enjoin certain of the defendants from the collection of certain notes executed by the plaintiffs.

The injunction was awarded and a receiver appointed on application. Joint and separate demurrers and answers to the bill were filed, and plaintiffs, by leave of court, filed an amended and supplemental bill. After a motion to dissolve the injunction and discharge the receiver on the ground of insufficient notice was overruled, the defendants demurred to the plaintiffs' bill and amended and supplemental bill, assigning as grounds therefor, among other things, that the bill is multifarious and that it does not state a cause of action, and moved that the preliminary injunction be dissolved and the receiver discharged. The trial court after due consideration sustained the demurrers on the ground that the bill was multifarious and did not state a cause of action, and dismissed it. It is from this decree that the plaintiffs appeal.

The averments of the bill and amended and supplemental bill are in substance as follows: Prior to October 22, 1925, the date of the incorporation of the Mortgage Service and Realty Company, C. F. Lyda and J. G. Ridinger were engaged as partners under the firm name and style of Mortgage Service & Realty Company, and also did business under the style of Lyda and Ridinger. Their business was that of writing insurance and acting as agents for persons lending money, for which they received a brokerage or commission. This latter business was put into the corporation, but the two men continued to do business under the firm name and style of Lyda and Ridinger, loaning money for persons and securing loans for others, of which they received a commission. This brokerage or commission, under an agreement, belonged to the corporation which was operated for the benefit of Lyda and Ridinger. The corporation secured from plaintiff's notes payable to themselves without any consideration therefor, some of which are now in the possession of defendants Lewis, Wilson, Gray, and Falconer, who claim to be holders for value. The corporation carried insurance to the amount of some $90,000 on the life of C. F. Lyda. The several insurance policies were transferred to Lewis, Wilson, Gray, and Falconer, to secure them in the payment of notes to them by Lyda and Ridinger and the corporation by indorsement or otherwise. Plaintiffs have been compelled to pay a number of such notes. They are in fact creditors of the Mortgage Service & Realty Company and said partnership of Lyda and Ridinger. Lyda died November 24, 1926. The several defendants aforesaid, including Ridinger, as well as the administrators of Lyda, deceased, have combined, conspired, and agreed among each other, to collect on said insurance policies so assigned as aforesaid, and to collect on said notes as well, and for the purpose of carrying out this conspiracy and agreement the said stockholders held a meeting and surrendered their charter, but have not caused funds to be set apart, either in whole or in part, for the payment of any of the debts of said corporation, and said stockholders have not taken any steps to secure the payment of the debts of the corporation.

The cases upon the subject of multifariousness are extremely various, and the courts, in deciding them, seem to have considered what was convenient in particular circumstances rather than to have attempted to lay down any absolute rule. However, a bill will not usually be regarded as multifarious where the matters joined therein, though distinct, are not absolutely independent of each other, and it will be more convenient to dispose of them in one suit. Nulton v. Isaacs, 30 Grat. (Va.) 738; Almond v. Wilson, 75 Va. 613; Hill v. Hill, 79 Va. 592; Alexander v. Alexander, 85 Va. 353, 7 S.E. 335, 1 L. R. A. 125; Saunders v. Bank, 113 Va. 656, 75 S.E. 94; Ross' Adm'x v. Ross, 72 W.Va. 641, 78 S.E. 789; Johnson v. Sanger, 49 W.Va. 405, 38 S.E. 645; Dudley v Niswander, 65 W.Va. 461, 64 S.E. 745; North American Coal Co. v. O'Neal, 82 W.Va. 186, 95 S.E. 822. The question as to what...