Court Opinion

ID: 6813626
Source: CourtListenerOpinion
Date Created: 2022-07-23 18:57:51.022127+00
Date Added: 2024-06-11T08:44:56.817681
License: Public Domain

Sims, J.,
dissenting:
If the statute, section 1103-a, Pollard’s Code of Va., 1904, has not taken it away, courts of equity have jurisdiction to entertain a bill such as that of the appellants in the case before us, to cancel a stock subscription obtained, as alleged, by fraudulent misrepresentations. Section 3300, Pollard’s Code of Va., 1904; Rohrer v. Strickland, 116 Va. 755, 82 S. E. 711; Burks’ Pl. & Pr. 454; 1 Whitehurst Eq. Pr., sec. 296, p. 510; Selden v. Williams, 108 Va. 542, 62 S. E. 380; 3 Elliott on Contracts, sec. 2428; -9 Corpus Juris, p. 1174; Manning v. Berdan (C. C.), 135 Fed. 161; Jones v. Bolles, 9 Wall. 364, 19 L. Ed. 734; Dotson v. Kirk, 180 Fed. 15, 103 C. C. A. 368; 16 Va. Law Reg. 520; Kilbourne v. Sunderland, 130 U. S. 505, 9 Sup. Ct. 594, 32 L. Ed. 1005; Bosher v. Richmond, etc., Co., 89 Va. 455, 16 S. E. 360, 37 Am. St. Rep. 879; Oglesby Co. v. Ould Co., 117 Va. 546, 85 S. E. 475; Richlands Oil Co. v. Morris, 108 Va. 288, 61 S. E. 762; Jordan v. Annex Corp., 109 Va. 625, 64 S. E. 1050, 17 Ann. Cas. 267. This is conceded by the majority opinion.
To the well settled rule that “Courts of equity having once acquired jurisdiction never lose it because jurisdiction of the same matters is given to courts of law, unless the statute conferring such jurisdiction uses prohibitory or restrictive words” (8 Ency. Dig. Va. & W. Va. Rep., p. 869), there is a necessary corollary, namely, that where such a statute uses prohibitory or restrictive words, the equity jurisdiction is not taken away beyond the requirement of such words.
*362With respect to the statute, sec. 1103-a, referred to, the following may be observed:
The statute, as appears on the face of it, was enacted to limit and confine the remedy for the enforcement of stock subscription contracts to courts of law, in suits or motions to recover such unpaid subscriptions. It was enacted for the benefit of the subscribers to stock and not in any way to limit or confine their remedy for relief from liability on stock subscription contracts when such remedy theretofore existed. As was held by this court in Mountain Lake Land Co. v. Blair, 109 Va. 147, 63 S. E. 751, of said statute, “All that was intended to be accomplished by the statute, was to deprive courts of equity of * * * concurrent jurisdiction with courts of law in the enforcement of the legal rights, and to restrict the bringing of actions upon the contract of subscription to the law court. Apart from this purpose of the act, it leaves courts of chancery with their jurisdiction unimpaired. Reed v. Gold, 102 Va. 37, 45 S. E. 858 [868].” (Italics supplied)'.
The statute in question, therefore, is not applicable to and does not in any way affect the right of a stock subscriber to institute and maintain a bill in equity for relief from a stock subscription contract. It is concurrent with his right given by section 1103-a to insist that a suit against him to enforce the stock subscription contract by the company or other person named in such statute be instituted by them only in a common law court. That is to say (as indeed clearly appears from the language of said statute, section 1103-a, itself) such statute provides with respect to “all suits or motions for the recovery of unpaid subscriptions to the stock of any joint stock company,” initiated by the persons named in the statute, that they shall “be brohght in the courts of common law of this Commonwealth * * *” And the provision in such statute that the courts of common law “shall have exclusive juris*363diction to hear and determine all questions involving the validity of such subscriptions.” (Italics supplied), must be read and interpreted in the light of the sole object of the statute aforesaid, namely, “to deprive courts of equity of * * * concurrent jurisdiction with courts of law in the enforcement of the legal rights” (of the persons named in the statute, against the stock subscriber) “upon, the contract of subscription * * *” The language, “all questions involving the validity of such subscriptions” used in such statute, can, therefore, refer only to questions arising in suits “brought" or initiated by such persons against the stock subscriber to enforce such subscription contracts, which in turn are necessarily confined to questions of defense of the stock subscriber interposed to the enforcement against him of such contracts. The statute gives the stock subscriber no right to any affirmative relief against the company, to obtain a cancellation of the contract. It did not need to do so, since he had that remedy in equity. The statute added to this remedy in equity the right in the stock subscriber to require any proceeding against him to be by a suit or motion in the courts of common law. Finding such right given by statute to fall short of giving him the relief which his remedy for cancellation of the contract, existing in equity as aforesaid, would give him, the stock subscriber, in the case before us, by bringing his suit in equity, as he did, waived his right to require the plaintiff in such action to enforce the alleged contract only in a court of law, and would not be heard to complain if the court of equity should enforce such contract in the equity suit in the event he should fail to prove the fraudulent representations he alleges. The statute, section 1103-a, having reference only to suits initiated by those seeking to enforce stock subscription contracts and not to suits in equity initiated by the stock subscriber', cannot be construed to take away or limit the jurisdiction of a court of *364equity in suits initiated by the stock subscriber invoking the ancient and well settled jurisdiction of equity to cancel such a contract as aforesaid. Such jurisdiction, existing as aforesaid, once taken at the instance of the stock subscriber, extends to the going on of the court to give complete relief to all parties, even to the extent of enforcing the stock subscription contract against the plaintiff, if such relief is sought by the defendant therein by appropriate pleading in accordance with the practice established in equity.
The majority opinion does not touch upon what is said in the next preceding paragraph, but it is in accord with the residue of what is said above, if the stock subscriber should institute a suit in equity to cancel the stock subscription contract before suit or motion under section 1103-a aforesaid, holding that in such case the last-named statute has no application. The majority opinion adds, however, that if the stock subscriber delays action until after suit or motion has been brought against him to recover his unpaid subscription, “he cannot then resort to equity, or otherwise oust the exclusive jurisdiction acquired by the common law court under the statute. Nevertheless, the statute affords the stockholder an adequate and complete remedy. * * *” I cannot concur in these conclusions.
With respect to the former conclusion: I do not perceive anything in the statute in question making it any more applicable to such a suit as aforesaid by a stock subscriber after than before suit or motion under it has been instituted to enforce the stock subscription contract. I think the true distinction is that such statute has no application at any time to a suit in equity as aforesaid by a stock subscriber; and that after suit or motion under such statute has been instituted to enforce the stock subscription contract, the stock subscriber still has his remedy *365aforesaid in equity unimpaired, unless he is cut off therefrom by section 3300, Pollard’s Code, 1904, by reason of his having tendered in the common law proceeding a plea which had not been there rejected, raising therein the same issue of fact which he would have to rely on in the equity suit, and issue in fact being joined in the common law proceeding on such plea and such issue being there found against him.
Said section 3300, so far as applicable, is as follows: “If a defendant, entitled to such plea as is mentioned in the preceding section, shall not tender it, or though he tender it, if it be rejected for not being offered in due time, he shall not be precluded from such relief in equity as he would have been entitled to if the preceding section had not been enacted. If, when an issue in fact is joined thereon, such issue be found against the defendant, he shall be barred of relief in equity upon the matters alleged in the plea, unless upon such ground as would entitle a party to relief against a judgment in other cases. * * *” ■
It is the raising by the stock subscriber of such issue in the common law proceeding and the decision of such issue against him there which alone can deprive him of his remedy in equity aforesaid; not the institution of the suit or motion against him under section 1103-a aforesaid.
Nor can I concur in the conclusion that the statute, section 1103-a,-affords the stock subscriber “an adequate and complete remedy.” It affords him no remedy to cancel the stock subscription contract. It, as aforesaid, does not even purport to give the stock subscriber any affirmative relief. It does not authorize the common law court to cancel the contract. Without statutory authority such court is powerless to grant such relief. This being true, it seems clear to me that such statute does not afford an adequate and complete remedy to the stock subscriber.
*366For the foregoing reasons I am of opinion that the decree complained of is erroneous and should be reversed, and I am, therefore, constrained to dissent from the majority opinion of the court.

Affirmed.