Court Opinion

ID: 3882950
Source: CourtListenerOpinion
Date Created: 2016-07-06 09:13:53.501758+00
Date Added: 2024-06-11T07:41:58.954124
License: Public Domain

I can not concur in the opinion of the majority. The complaint in this action alleges that the plaintiffs were stockholders in the Farmers Fertilizer Company, a corporation which owned valuable property. That the defendant was the general manager of the corporation, and, as such, had charge, control and direction of its affairs and knew the value of the stock. That the defendant conceived the idea of selling the property and making a large profit for himself. That in pursuance of this plan, he entered into negotiations with others for the sale of the franchises and property, but kept the knowledge to himself. That after ascertaining the true value of the property, and the price for which it could be sold, the defendant did not call the stockholders together, but went from individual to individual, and, concealing the value of the stock and the condition of the corporate affairs, and leading them to believe that the affairs of said corporation were in embarrassing condition, thereby induced the plaintiffs and other stockholders to sell their stock to him for much less than he knew it to be worth. That after purchasing all, or nearly all the stock, the defendant sold the property and franchise for a large sum, and at a much larger than the sum at which it was estimated in the purchase of said stock, and made large gains for himself contrary to the obligation which he owed to the plaintiffs. The gains were the loss of the plaintiffs and not an increase in market value. That the plaintiffs in selling said stock to the defendant, *Page 319 
relied upon his representations and good faith and defendant's knowledge arising from the position which he held as general manager of said corporation.
The plaintiffs brought suit on behalf of themselves and all others who would come in under these proceedings and asked for an accounting and a judgment for the difference between the value at which the stock was sold and the true value.
The defendant made a motion to make the complaint more definite and certain as to (a) unnamed plaintiffs; (b) unnamed purchasers; (c) separation of causes of action.
The defendant also demurred because they claimed (1) that there was no allegation of a joint cause of action; (2) that plaintiff had not rescinded or offered to rescind the contract.
The motion was heard before his Honor, Judge Gage, who overruled both motions, but ordered stricken from the complaint the words, "and those who were acting for or in conjunction with him."
From this order the defendant appealed.
Exception One. "Upon the ground that the same does not state facts sufficient to constitute a cause of action, in that it fails to state facts which, if true, constitute a joint cause of action in behalf of the plaintiffs against the defendant, and if it states any cause of action at all, states a separate and distinct cause of action in favor of each of the plaintiffs against the defendant, it being submitted that such separate and distinct causes of action do not constitute a joint cause of action and cannot be sued upon as a joint cause of action and cannot be joined in one cause of action."
In my opinion this exception ought to be sustained. There must be some joint interest. Here there is none. The sales were made by each individual for himself. Separate contracts of sale, and, so far as the complaint shows, may have been at different prices. They claimed no interest in *Page 320 
the corporate property. This was a suit on twenty-two contracts, made with twenty-two different people, at different times, and each demanding, it may be, and depending on different evidence a different money judgment. The plaintiffs are not associated in any way, and each ought to bring his separate action.
In Hellams v. Switzer, 24 S.C. 40, there was an injury that arose from one cause, and yet this Court required all the plaintiffs to be withdrawn except one.
Ency. of Pl.  Prac., vol. XV, 541-2: "Where two or more have a separate interest and sustain a separate damage they may and must sue separately, and cannot join even though their several injuries were caused by the same act."
The injury here was to the holding of stock and the holding of stock is several. If two or more owned jointly a certain block of stock, of course, the joint owners must sue together. There is no allegation of joint ownership in the complaint.
It will be observed that the evils that arise from a multiplicity of suits is in noway avoided by the consolidation of suits here. A is not entitled to recover because there was fraud in the purchase from B. A may have been in urgent need of money and willing to take less than the value in order to provide for his immediate necessities and a misstatement was not required. It would be manifestly unfair to allow A to recover because of the fraud in the contract with B. The fraud in each of the twenty-two contracts must be proven or he who fails to prove fraud ought to fail. This is not a case in which there was a fraudulent sale of the property of the corporation where the same act necessarily affected all. The same testimony that proved fraud as to B would prove the fraud as to the others. The small and distant stockholder has the same burden in the consolidated as in the separate suit, in theory. In practice it will be found that proof in one case will inure to the benefit of all and the wholesome protection provided by the exclusion of *Page 321 "res inter alios acta" will be denied the defendant. I do not see a single bond of union. The complaint does not even allege that the defendant now has the proceeds of sale, and the plaintiffs are entitled to share in the fund.
For these reasons I dissent.
I agree with the majority as to the other exceptions.
MR. JUSTICE HYDRICK concurs.