Case ID: tenn_58/html/0246-01.html
Source: Caselaw Access Project
Author: {"author": "Nicholsos, C. J.,", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Riley v. Lyons.
    CHANCERY Pleading. Plea bad. To a bill seeking pay for stock in an incorporated company, which had been sold by defendant to plaintiff,, but not transferred on the books, and which had been appropriated to defendant's debts to the company, a plea that there had been a bill filed to settle up the business of the company and divide surplus among stockholders, that all the stockholders, including complainant, were before the court, and that the court pronounced a decree settling the rights and equities of all the parties to the suit, is a bad plea of former adjudication. The plea does not state what the equities were which were decreed upon,.nor what issue there was between complainant and defendant. It states a legal conclusion, and not the-facts from which the conclusion would follow.
    PROM HAWKINS.
    Appeal from Chancery Court at Rogersville. H. C. SMITH, Ch.
    BartoN, for complainant, said:
    The question in this case arises upon the sufficiency of the plea of defendant.
    The gravamen of the bill is, that Vm. E. Lyons,, being the owner of two shares of the company own-, ing the Rogersville Female Institute, sold to and assigned to complainant said two shares; that after the close of the war, in 1866, J. T. Shields and F. M. Fulkerson, as trustees, filed a bill to wind up the concern and sell the property for partition; that in the proceedings of the cause, the two shares of Lyons so sold and conveyed to complainant were treated as belonging to Lyons; that no transfer of the stock had or could have been made on the books of the company, because complainant was not an Old School Presbyterian; that in adjusting the accounts the value of said stock, to the amount of $585, was offset against a debt that Lyons owed the firm.
    Thus, by the decree in said cause, the value of the stock held by Lyons in trust for complainant was appropriated to the payment of Lyons debts, and he thereby becomes the debtor of complainant for that sum with interest.
    To this bill the defendant pleads: The filing of the bill by Shields and Fulkerson for the purpose of selling the property and settling the equities of the stockholders between themselves; that Riley was made a defendant to the bill, and was served with a subpoena to answer; that at the March Term, 1869, the court pronounced a decree settling the rights of all the parties; and, by way of recital — not averment,— that said decree being a solemn adjudication, by a court of competent jurisdiction, between the same parties, to the same matters and to the same effect, as the said now complainant doth, by his present bill, demand and set forth, etc.
    On argument, the Chancellor sustained the defendants’ plea.
    For complainant, I submit that this was error.
    1. The plea is defective, because it is not certain and positive in its recitals and averments: 1 Dan. Prac., 706-7.
    
      2. The plea does not meet the gravamen of tbe bill. The charge in the bill is, that the defendant being, on the books of the company, the holder of the two shares that complainant had bought and paid him for, and being so the holder, the debt due from the defendant to the company was paid by offsetting the value of the two shares' so held by him, and he thus become the debtor of the complainant.
    The plea does not answer the charge. It only avers the pendency of the suit as charged in the bill, and that complainant and defendant were parties defendants, and recites that the equities of the parties were settled. It does not meet the allegation, that in the suit the two shares were treated as defendant’s and -their value appropriated to the payment of his debt. It simply recites that the equities of the parties were settled. The equities of the parties were, that the debt due from Lyons to the firm should be paid before he or complainant, who held under him, could receive any part of the proceeds. This left him the debtor of complainant, as charged in the bill.
    C. W. Hall, for defendant:
    It is insisted that this plea must be sustained. The bill states the pendency of the other suit by Shields and Fulkerson,. trustees, against the parties interested in the female institute or its business. In that suit complainant could and should have asserted his claim to said shares. Courts of equity prevent rather than encourage multiplicity of suits. It is not right that defendant should be harrassed with a distinct suit for that which complainant, if he has right, might, and may still, assert in the original suit by such proceeding as the law allows. See Connel v. Fergason & Fawlkes, 5. Col., 405.
    The present bill is predicated on the fact that there has been error in the action of the court in the original cause, in that the court, by decree, has given defendant the benefit of these two shares of stock, which, in equity, belong to complainant. If this be true, then complainant’s remedy is, in said court, by appeal, writ of error, bill of review, or otherwise, to correct this error if it be one, and not by original bill, multiplying suits and accumulating costs unnecessarily. See Herd, cidm’r, v. Bewley, 1 Heis., 524.
    It may be insisted that the bill does not show that complainant was a party to the suit of Shields and Fulkerson, trustees, v. O. Riee et al. (the style of the suit referred to), and therefore the authority does not apply. To this it is answered, if that be so (which is not admitted), yet the plea expressly avers that complainant is a party to that suit, and there is no replication to the plea putting the fact in issue; but complainant appeals to this court upon the bill and plea, without more.
    The Chancellor’s decree was right, and we insist must be affirmed.
   Nicholsos, C. J.,

delivered the opinion of the court.

Complainant alleges that in winding up the affairs of a joint stock company known as the Rogersville Female College, through proceedings in the Chancery Court at Rogersville, the value of two shares — viz., $585 — was appropriated to the satisfaction of that amount owing to the company by W. F. Lyons, when in fact the said two shares belonged to complainant— the same having been sold by Lyons to complainant and paid for by complainant, but not assigned on the books of the company. Complainant prays for a decree for payment. Defendant Lyons defends by plea, and states that on the 27th of February, 1866, Shields and Fulkerson, as trustees, filed their bill for the purpose of causing sale to be made of the real estate and appurtenances belonging to the' Rogersville Female College, collect all the debts due the joint stock company, who then owned the same, pay off the debts due from them, and divide the remainder among the stockholders, and settle all equities between the stockholders themselves. The plea further states that all the stockholders, including complainant Riley, were made defendants and served with process; and that at the March Term, 1869, the court pronounced a decree in said cause, settling the rights and equities of all the parties to the suit; and said decree being an adjudication between the same parties to the same matters and to the same effect as complainant by his present bill demands, defendant pleads and relies on that adjudication.

This plea was set down for argument, when the Chancellor held it a sufficient defense and dismissed the bill, from which complainant now appealed.

The gravamen of the allegations of the bill is, that the defendant appearing on the books of the company to be the owner of two shares of the stock, when in fact complainant was the owner, the Chancellor appropriated the two shares in satisfaction of a debt due from defendant to the company, whereby complainant’s property to the value of $585 was appropriated to the benefit of defendant, and defendant thereby became debtor to complainant in that amount.

The plea admits the chancery proceeding as alleged, states that complainant and defendant were both defendants to the suit, and then avers, in general terms, that a decree was pronounced settling the equities between the parties. What the equities were which were settled between the parties, the plea fails-to state, but merely states and relies on a legal conclusion, without setting out the specific character and extent of the decree. The plea neither admits nor denies the allegations of the bill, nor does it state whether any, or if any, what matters were in issue between complainant and defendant, nor what decree was made settling these issues in the adjustment of the equities between the parties.

It is obvious that the question, whether complainant or defendant was the owner of the two shares,, was not necessarily involved in the suit, — for the reason that defendant appeared on' the books as the owner, and by a regulation of the company complainant was forbidden to be a member of the compapy because he lacked the requisite religious qualifications.

To have made the plea good, it should have shown, both by a recital of the matters in issue and by the decree thereon, that the matters in the two suits are the same.

The Chancellor erred in sustaining the plea, and his decree is reversed and the cause remanded for further proceedings. The defendant will pay the costs of this court.