Simmons v. Camp
| Decision Date | 30 September 1883 |
| Citation | 71 Ga. 54 |
| Court | Georgia Supreme Court |
| Parties | Simmons. vs. Camp. |
[This case was argued at the last term, and the decision reserved.]
New Trial. Trustees. Estoppel. Corporations. Attorney and Client. Before Judge Erwin. Gwinnett Superior Court. September Terra, 1882.
This litigation has been to the Supreme Court in different forms three times, and will be found reported in 62 Ga., 73; 64 Id., 726; and 65 Id., 674. After the last decision, the complainant amended his bill. The leading ground for relief set up was as follows: The Gwinnett Manufacturing Company was solvent at the time what is called the Maltbie debt against the company, which formed the foundation of the litigation, was created, and complainant was a mere surety thereon; Camp, who indorsed before complainant, and was pursuing him for contribution as a co-surety, was a stockholder in the company, as were also his father and one Steadman. Complainant sold his stock in 1862, having only one share when the debt was made, and selling that a few days thereafter; afterwards, large dividends were made and certain property of the company was sold; the factory was burned in 1864, and the debris and property saved were sold and appropriated by Camp and Steadman. This property was more than enough to have paid the debts. The stockholders were liable for the debts of the company, and the property misappropriated was a trust fund for the payment of its debts; the company has become insolvent; Steadman has been adjudged a bankrupt, and the elder Camp is dead, leaving the defendant as his representative. The object of the bill was to hold Camp responsible for the funds andproperty thus misapplied and for the amounts; received by him individually and as administrator of his father to have an accounting concerning these matter, and to enjoin Camp from proceeding against him.
The answer denied the leading allegations of the bill; admitted the original solvency of the company, its present insolvency, the fire, and that property had been sold; but alleged that Steadman, a large stockholder and the agent and superintendent of the company, bold the property and applied some of the proceeds to the payment of debts and appropriated the balance. It was also alleged that while Simmons sold his stock in 1862, he purchased other stock in 1863, and acted as president and legal adviser of the company until 1870.
Two leading questions were pressed in this court: first, whether Camp alone or with Steadman misapplied funds of the company sufficient to pay the Maltbie claim; and second, did Simmons take part in it as a member of the company, or as legal adviser of the company, or of Camp or Steadman? The evidence showed that, after Simmons sold his stock, Steadman, the agent and superintendent, desired his assistance in operating the factory, and transferred to him a number of shares of stock, the agreement being that he was to have the dividends on them for his services, Steadman guaranteeing that they would amount to $1,000 per month. Simmons acted until the fire in 1864, after which he received no further salary. He reconveyed the stock and resigned the presidency in 1865 or 1866. He is variously spoken of in the evidence as president and legal adviser. It was in evidence that the sales of property were with the consent of the stockholders, and Simmons was consulted as legal adviser; but as to what was the extent of the consultation or advice, the evidence is meagre. There seems to have been no directors as distinguished from the general stockholders. Of the property sold, Steadman purchased some machinery, and Camp became part owner with him in another factory to which it was transferred.
The jury found a special verdict, and on it the chancellor decreed a perpetual injunction against the defendant. He moved for a new trial, which was granted, and complainant excepted.
This brief statement will serve to explain the questions decided.
W. E. Simmons; S. J. Winn; Mynatt & Howell, for plaintiff in error.
Clark & Pace; T. M. Peeples; Hillyer & Brother, for defendant.
We agree with the judge in his adjudication of the first, second, third, fourth, fifth and sixth grounds of the motion, overruling said motion on those grounds.
With his grant of the new trial on the seventh ground, so far as it grants it as contrary to evidence, we do not see clearly how we may legally, according to repeated rulings of this court, interfere. He presided on the trial of the case; heard all the testimony; is not satisfied with the verdict, and it is, therefore, right, in view of the repeated rulings of this court, that the case be tried again, especially as it is not clear from the record what relation the complainant bore to the Gwinnett Manufacturing Company during the transactions which resulted in the misapplication of the proceeds of a sufficiency of the property to have paid the Maltbie debt. Was he still a member of that company? Was he its president or its legal adviser? And to what extent, if at all, is he implicated in any misapplication of its assets, acting as president, or director, or counsel?
The law of the case, we think, is that if Camp, being a corporator and director, individually or in connection with others, got possession of enough of the assets of the company to pay the Maltbie debt, he became a trustee andcustodian of that fund to pay the debts of the company; and if, instead of paying those debts, he appropriated these funds, alone or in connection with others, to make money for himself and the others, instead of paying the Maltbie debt, then he cannot make Simmons, his co-surety, contribute to its payment by reimbursing him, unless Simmons participated in its misapplication also in the character of a corporator and director, and thus also a trustee, or advised the misapplication as counsel. The corporators had a perfect right to sell the property of the company; but when they...
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