Court Opinion

ID: 8753147
Source: CourtListenerOpinion
Date Created: 2022-11-26 11:35:38.515445+00
Date Added: 2024-06-11T17:01:04.994952
License: Public Domain

PARDEE, Circuit Judge
(dissenting). We have before us for all purposes the- entire record in Robinson v. The Alabama & Georgia Manufacturing Company and the Huguley Manufacturing Company et al. The question is whether or no the bill brought by the Riverdale Cotton Mills, purchasers under decrees in Robinson v. The Alabama & Georgia Manufacturing Company et al., is an ancillary and supplemental bill, within the cognizance and jurisdiction of the Circuit Court. I understand my Brethren to hold it to be an original bill, and, because of the citizenship of parties, beyond the jurisdiction of the Circuit Court.
A comprehensive statement of the facts of the case will be found, as recited by the Chief Justice, in Huguley Manufacturing Company v. Galeton Cotton Mills, 184 U. S. 290, 22 Sup. Ct. 452, 46 L. Ed. 546 et seq., and in Re Huguley Manufacturing Company and Alabama & Georgia Manufacturing Company, 184 U. S. 297 et seq., 22 Sup. Ct. 455, 46 L. Ed. 549. If more details and facts are required to properly understand the matter in hand, they will be found in the opinions of Mr. Justice Lamar and Judge Newman in Robinson v. Alabama & Georgia Manufacturing Company (C. C.) 48 Fed. 12; in the elaborate opinions of Judge McCormick in Manufacturing Co, v. Robinson, 56 Fed. 690, 6 C. C. A. 79; Id., 72 Fed. 708, 19 C. C. A. 152; in the opinion of Judge Newman in Robinson v. Manufacturing Co. (C. C.) 89 Fed. 218; and in the well-considered opinion of Judge Shelby in Huguley Manufacturing Company v. Galeton Cotton Mills, 94 Fed. 269, 36 C. C. A. 236 — all prepared when we thought we were *506dealing with substantial rights in a case where the jurisdiction is affirmatively shown by the pleadings and admissions of the parties.
In the record now before us it appears that the owners, promoters, and stockholders of the Alabama & Georgia Manufacturing Company, 'located on the state line between Georgia and Alabama, saw fit to procure a like charter of incorporation in each state, with the same corporators, the same stockholders, to own and manage the same property. In fact, there was only one real body, although it was chartered in two different states; there was only one property, although it was located in two4 different states; there was only one business, although it may have been carried on by a body incorporated in both states.
It is contended that, because the Alabama & Georgia Manufacturing Company was incorporated in the state of Georgia and in the state of Alabama, there were two distinct and separate legal entities — twins in law and in fact. If this contention be sound, then the fact that these twins in law had the same corporators, the same stockholders, the same officers, the same property, and the same business requires their assimilation to the celebrated Siamese twins, so united that wherever one was the other was necessarily present, and requires the holding that whatever was the act of the one was necessarily the act of the other. And it also seems clear that, if they were two separate legal entities, in regard h> the one plant and the one property and the one business, each was the full agent of the other, and each was bound by the other’s transactions. Whenever a bale of cotton was bought for the cotton mills or a yard of cloth was sold from the same, whether transacted by the Alabama & Georgia Manufacturing Company of Alabama or the Alabama & Georgia Manufacturing Company of Georgia, it was complete and binding on both; and also when the board of directors of both these corporations, acting for and in the name of the Alabama & Georgia Manufacturing Company (wherever incorporated) in 1883, granted the mortgage, which was the subject of foreclosure in the main suit in this case, without specifying which particular corporation was acting, each corporation was privy thereto, and the mortgage then executed was the mortgage of both “entities” and binding upon both “entities.”
When thereafter, in 1888, a bill was filed against said corporation (without naming the state granting the charter) in the superior court ■of Troup county, state of Georgia, wherein a receiver was appointed and contradictory proceedings had, and wherein thereafter, on a full hearing, a decree was rendered directing the sale of all the property of the Alabama & Georgia Manufacturing Company subject to the mortgage before referred to, and whereunder a sale of all the said property subject to the mortgage aforesaid was made to the Huguley Manufacturing Company, that proceeding was binding upon each and both of the said alleged “entities,” and thereafter. neither of them had any equity of redemption or other pecuniary interest in the mortgaged property.
In the original suit of foreclosure herein the Alabama & Georgia Manufacturing Company was made a party, with the allegation that it was a corporation created under and by virtue of the laws of the state of Georgia. Whether the complainants in that bill knew of the *507Alabama charter does not appear; but it does appear that counsel of the highest rank at the Georgia bar entered their appearance as solicitors for the Alabama & Georgia Manufacturing Company, and thereafter, in an answer duly filed, confessed as follows: “The citizenship'and residence of all the parties named in said bill are admitted as alleged.”
A further fact appears from the answer filed in that case, that the Alabama & Georgia Manufacturing Company had for. many years ceased to do business; that all the business that formerly was owned and carried on by the Alabama & Georgia Manufacturing Company was owned and carried on by the Huguley Manufacturing Company. As to the Huguley Manufacturing Company, there is an averment in the original bill that said company is a corporation created under the law's of the state of Georgia, and that allegation is fully admitted in the first answer filed.
The record shows that a Huguley Manufacturing Company was incorporated under the laws of the state of Alabama, and it is now averred, and is probably true, that the said Huguley Manufacturing Company was never incorporated in Georgia. The case against it, if presented on the theory that it was incorporated in both states, is the same as that against the Alabama & Georgia Manufacturing Company, with this difference: that the Huguley Manufacturing Company and parties claiming thereunder are the real parties in interest, and have been the active, persistent defendants in this long-pending litigation ; and the record shows that the said Huguley Manufacturing Company, without a whisper as to any double charter, in various instances petitioned for relief, was granted an accounting for the time elapsing between the first and second degrees, and actually drew therefrom the proceeds.
If, as the record now shows, the Huguley Manufacturing Company was never incorporated in the state of Georgia, then it is no twin entity (even of the Siamese variety), and in this litigation it occupies the position of a party who has falsely admitted his citizenship for the purpose of conferring jurisdiction, and thereafter losing his suit has repudiated the same.
However this may be, and on the ground that both of these legal “entities” were chartered in both states, then it is clear to me that if the Alabama & Georgia Manufacturing Company chartered in Alabama, and the Huguley Manufacturing Company chartered in Alabama, are separate “entities” from the corporations of the same name chartered in the state of Georgia, then they should be held to be joint tenants, privies in estate, and both fully bound by the proceedings had in the foreclosure suit. Under the circumstances, to hold otherwise, and permit the relitigation of all the issues in the case in another court, and before another tribunal, is to not only rob the parties who have litigated for these many years in the Circuit Court and appellate courts of all the fruits of the decrees rendered, but remit the purchasers of the mortgaged property, who have relied upon solemn decrees of the Circuit Court, wherein jurisdiction was apparent of record, to other and foreign tribunals, to relitigate the foreclosure of the mortgage granted *508by-,this-alleged Hybrid, -and probably be forced into another accounting with the Huguley Manufacturing Company of the business and transactions of a large cotton mill and plant for the last ten years. ;
. I do not say this would be a travesty on the administration of justice, though it lpoks much like it, but I must say that, through and by. the result now reached in this court, we judges, to say nothing of the learned justices and judges of the Supreme and Circuit Courts, have spent considerable time and labor in wrestling with hypothetical questions in a moot case, when we really thought we were passing upon substantial issues and rights, and when honesty and fair dealing required the Alabama & Georgia Manufacturing .Company and the Huguley Manufacturing Company and their counsel — unless they also were tricked — to make full disclosure of their citizenship and status as litigants.
My conclusions in this case can be shortly stated as follows: The-Alabama •& Georgia Manufacturing Company, wherever and how often incorporated, has no interest in this litigation, and is not a necessary or indispensable party, because long before the original bill was filed it had parted with its equity of redemption, and it had gone out of business and was practically defunct. If, however, it is to be treated as a party having any interest, then, as it was chartered in both Alabama and Georgia, the two legal “entities” resulting were joint tenants and privies in the mill property; and in .all the litigation carried on in the main case, wherein the Georgia corporation appeared and litigated, the Alabama corporation was a privy, and as fully bound as privies can ‘be bound in any decree.
The Huguley Manufacturing Company was in fact only chartered in Alabama, and on its appearance and its pleadings and admission in the answer to the first bill it is fully and conclusively bound by the-decrees rendered until they are judicially vacated and annulled. The bill filed by the Riverdale Cotton Company is, if definitions are worth •anything, an ancillary and supplemental bill, within the jurisdiction ratione materia of the Circuit Court on the facts stated therein, and yrithin that court’s jurisdiction ratione personae, through the prompt-appearance of the defendants named therein.
I have -not thought it necessary to support any legal proposition made-herein with citations of adjudged cases, as. those made seem too plain to require it, nor have I thought it necessary to review the cases cited in the opinion of the court, as I consider them all inapplicable to the real-questions involved herein. Questions of jurisdiction and of the corporate entities of parties, when raised in limine, should and do receive careful attention; but the principles therein involved are not at all applicable in determining who are the actual parties and privies bound in a concluded litigation, where the court has been deceived by false allegations and fraudulent admissions into passing upon the, merits, involved,
, There are some other questions raised in the assignments of error, the proper determination of which might require the reversal of the decree-below, and. a remand for further proceedings; but, as my. Brethren-insist on a, dismissal of the bilb.for want of jurisdiction, it is.. *509not necessary to consider them. For the reason here given, and many others that could be given, I respectfully dissent from both the opinion and decree of the majority of the court.