Court Opinion

ID: 9846098
Source: CourtListenerOpinion
Date Created: 2023-09-24 03:34:35.38554+00
Date Added: 2024-06-11T09:16:33.312720
License: Public Domain

Felton, Justice,
dissenting. I dissent from the ruling of the majority in Division 2 of the opinion and from the judgment of reversal. A careful study of the cases cited by the majority will disclose that there is only one case, Story v. Belfor, 155 Ga. 192 (116 SE 539), which holds that an avoidance of a multiplicity of suits converts strictly legal actions into equity actions by a trustee in bankruptcy where the actions brought were to recover unpaid stock subscriptions from numerous subscribers of stock in a corporation. Such an action is a legal claim. Code §§ 22-901, 22-903, 22-904. Every one of the other cases cited was held to be an equity case for a reason other than the one given in Story v. Belfor, supra. The case of Hightower v. Thornton, 8 Ga. 486 (52 AD 412), cited in many cases, sometimes inappropriately, held that an action by a judgment creditor of a defunct banking company could be brought in equity for a proportional contribution by the stockholders. There was no such recovery at law authorized. All of the other cases cited by the majority were held to be equitable (except Story v. Belfor) and the facts in those cases show them to be true equity cases.
*602Since Hightower v. Thornton, supra, a provision has been added to our Constitution, quoted in the majority opinion. “Equity cases shall be tried in the county where a defendant resides against whom substantial relief is prayed.” Code Arm. § 2-4903. “Substantial relief” means equitable relief. Wright v. Trammell, 176 Ga. 84 (166 SE 866); Fowler v. Southern Airlines, Inc., 192 Ga. 845 (2) (16 SE2d 897). This court does not follow a decision of its own if the decision is in conflict with a provision of our Constitution, nor does it follow a statute in conflict therewith. We should refuse to follow Story v. Beljor, supra, or any other case holding that separate and distinct legal actions can be joined, especially against those who do not reside in the county where the suit is brought. Appellants go far afield in comparing this case with Hightower v. Thornton, supra, and with Mobley v. Rucker, 176 Ga. 178 (167 SE 104) and others which are simply not just a “batch” of separate legal claims. “The right to be sued in the proper county is not merely technical, but is a substantial, constitutional right.” Railroad Commission v. Palmer Hardware Co., 124 Ga. 633, 649 (53 SE 193). “It is inadmissible to combine numerous parties and causes of action under the claim of avoiding a multiplicity of suits.” Laken v. Sunbrand Supply Co., 214 Ga. 804, 808 (108 SE2d 323). See also Sayer v. Bennett, 159 Ga. 369 (3) (125 SE 855); I. Perlis & Sons v. National Surety Corp., 218 Ga. 667, 668 (129 SE2d 915). The same principle applies in joint trespasser cases. See Lee v. West, 47 Ga. 311 (2); Ryner v. Duke, 205 Ga. 280 (3) (53 SE2d 362). Kelley v. Gill, 245 U. S. 116 (38 SC 38, 62 LE 185), states the correct Georgia Law, to the effect that a court of equity has no jurisdiction, on the ground of avoiding a multiplicity of actions at law, of an action against a corporation which has been adjudicated a bankrupt to enforce collection of unpaid subscriptions by stockholders of such corporation, as the liability of each stockholder presents a separate controversy unconnected with that of any other. In the Kelley case (p. 120), the court stated that “. . . the cause of action sued on is the failure of the several stockholders to perform their unconditional promises to pay definite amounts at fixed times which have elapsed. The amount payable by one *603is in no way dependent upon what is due from another. The corporation had a separate right against each alleged stockholder; and the remedy open to it was a separate action at law against each. The trustee rightly assumes that the corporation could not have brought a single suit in equity against all these stockholders, although a very large number of actions at law would be required to make collection of the balances unpaid on the stock. There was no common issue between these alleged stockholders and the corporation; and the liability of each would have presented a separate controversy unconnected with that of any other. Thus elements essential to jurisdiction in equity to avoid multiplicity of actions at law by the corporations were lacking.”
The misconception of the import of certain cases relied on by appellant is illustrated by the rulings of this court in Mobley v. Rucker, 176 Ga. 178, supra, wherein this court held the case to be an equity case. In Hill & Merry v. Jackson Stores, 137 Ga. 174 (73 SE 13) the court explains the difference between a law action and an equitable action under Civil Code 1910 covering equitable recovery against stockholders who transact business before the minimum capital stock has been subscribed for. See also John V. Farwell Co. v. Jackson Stores, 137 Ga. 174 (73 SE 13).
If a majority of this court follows Story v. Belfor, 155 Ga. 192, supra, it will have joined the judges participating in that case in amending the Constitution of the State of Georgia by repealing the provision quoted at the beginning of the majority opinion — a function which I think is beyond our jurisdiction.
I sincerely believe that the majority has the erroneous conception that in all circumstances where a representative of creditors, whether called a trustee or receiver, or like term, holds the assets of a defunct corporation for creditors, he is entitled to sue in equity to recover from stockholders the full balance due upon their stock subscriptions, where the action shows the debts to be separate and distinct legal claims. Before the law gave a legal cause of action, as held in older cases, equity gave a remedy to recover proportional parts of the subscriptions, not all. This erroneous conception will lead to all kinds of absurd results. *604Does the receiver or trustee of a defunct corporation have a complaint in equity on the promissory notes owned by the corporation? No, because one does not need to resort to equity when he has legal title to proceed upon. The rulings by this court in Lyle v. Keehn, 195 Ga. 508 (24 SE2d 655) answers every question in this case as will readily be seen by a mere casual reading. Where a claim has been reduced to a legal claim, an action against stockholders is a legal and not an equitable action and a stock subscriber may not be sued jointly with another outside the county of his residence. That is the instant case. The claims sued on in this case are purely legal claims, made so by the 'Code sections above cited. There is no effort to recover proportionate amounts from stockholders. There is no effort to collect proportionate amounts to cover dividends paid out of capital assets. There is no effort to collect debts incurred because business by the corporation was begun before the minimum capital was subscribed. There is no basis under the sun on which to base an equitable claim in this case, except a legal claim, plus avoidance of a multiplicity of suits. In my opinion only one case in Georgia supports such a basis and that is Story v. Belfor, supra. The opinion in Lyle v. Keehn, supra, has all the answers. I am fearful that other judges who follow us will interpret this case to mean in effect that all one needs to sue citizens outside the counties of their residence is to show a legal claim and a suit by a representative of creditors and avoidance of a multiplicity of suits. If this happens, the representative of the creditors of a defunct corporation can sue citizens of Georgia, living in 158 counties, on accounts or notes due, in the County of Fulton. That can happen if all that a representative of creditors needs is a separate legal claim against each defendant and convenience of avoiding a multiplicity of suits. This court in this instance has failed in its duty to preserve and defend the Constitution.
The plaintiff originally prayed for a money judgment against each subscriber sued, and they were not all sued, but the complaint was amended to pray for a decree in equity in lieu of a money judgment. I think the wrong end of the petition was amended. Allegations of fact showing a case in equity instead *605of a purely legal action were evidently not offered as an amendment because such an allegation would not have stated the truth.