Georgia Veneer & Package Co. v. Florida National Bank

32 S.E.2d 465, 198 Ga. 591

• Court: Supreme Court of Georgia
• Decided: October 13, 1944
• Docket: 14957, 14964, 14968.
• Status: Published

Opinions

Duckworth, Justice.

The motion to dismiss the writ of error in case No. 14957 and docket the same as a cross-bill in case No. 14964 must be denied, but in view of the unusual condition of the case it is thought well to set forth the reasons which require a denial of the motion. In so far as it is sought to have the writ of error treated as a cross-bill, the insurmountable obstacle is, that this writ of error was signed by the trial judge on June 3, 1944, and filed in this court on June 24, 1944,, whereas the writ of error in case No. 149‘64 was presented to and signed by the trial judge on June 19, 1944, and filed in this court on July 3, 1944. Therefore, there was no writ of error in the trial court or in this court to which the writ of error in case No. 14957 could have, at the time of its approval and filing, been made a cross-bill of exceptions. It can not be so treated now. Sumner v. Sumner, 121 Ga. 1, 5 (48 S. E. 727).

With reference to the grounds of the motion which assert that the plaintiffs in error are estopped from excepting to the final judg ment of dismissal since it was rendered at their instance, this contention would be sound if the only question involved was an exception to this final judgment. Certainly a party will not be allowed, in the absence of circumstances which will later be discussed, to complain of a judgment of the trial court rendered on his motion, but in this case error is assigned on the final judgment solely because of an alleged erroneous antecedent ruling dismissing an amendment. It is freely admitted here that at the time the final judgment was entered it was the only judgment, as the case then stood, which could properly have been rendered by the trial court. This writ of error seeks a review of that judgment to the extent only that it is contended that the antecedent ruling, which is also excepted to in this writ of error, renders the final judgment erroneous. The antecedent ruling deprived the plaintiffs in error of the right to prosecute a counterclaim, and that ruling was excepted to pendente lite. It would be an unsound and unjust rule of law that would impose upon the defendants the burden of thereafter procuring a final judgment adverse to their interests in the remaining portions of the case as a condition precedent to a review of the antecedent ruling. Such a ruling would at once place in the hands of the opposite party the power to deprive the plaintiffs in error, the defendants in the trial court, of a review of that antecedent ruling. It happens in the present case that the petitioners below by writ of error except to the final judgment which -was adverse to them. They had not done so at the time the writ of error in case No. 14957 was sued out, and, in so far as the defendants below could know, they might never have excepted to that judgment. The exceptions in this writ of error, in the sense that a direct bill of exceptions was brought by the losing party, might properly have been made in a cross-bill, but we must consider the motion to dismiss as if the losing party had not éxcepted, for we are dealing with a vital question or rule of procedure. That rule must apply alike in cases where the losing party thus excepts and where the losing party does not except to the final judgment. There is an abundance of authority for the rule that a final judgment is reviewable by general exception in so far as it is affected by antecedent rulings which are properly excepted to in the same writ of error. Lyndon v. Georgia Railway & Electric Co., 129 Ga. 353 (3) (58 S. E. 1047); Rabhan v. Rabhan, 185 Ga. 355 (195 S. E. 193); Cheatham v. Palmer, 191 Ga. 617 (1 a) (13 S. E. 2d, 674). That rule is applicable here. Although dissatisfied with the antecedent ruling, the defendants below were not required to wait for an adverse judgment on the remaining issues in the ease in order to have reviewed the antecedent ruling, but are allowed to except, as is done here, to a favorable judgment. Their rights as embodied in the pleadings stricken by that ruling were thereby taken out of the case. They were entitled thereafter to seek full protection of all other rights remaining in the case, and by doing so they did not forfeit the right to a review of the previous ruling. They do not in this court retreat one iota from the position assumed in the trial court that the final judgment of dismissal was the only proper judgment that could be rendered in the state of the pleadings at that time. Eor the reasons stated, the motion to dismiss the writ of error is denied, and the motion to treat the same as a cross-bill is also denied.

The record in this case simply precludes any relief sought by the defendants’ amendment of November 8, 1943. The basis upon which that relief is sought is the alleged malicious use of civil process by the petitioners in the institution and prosecution of the case then pending, and to which the amendment was proposed as a part of the defendants’ defense. In the first place, the law is im flexible in its specific requirement that in an action for damages for the malicious use of civil process three essential elements must appear, to wit: (1) Malice. (2) Want of probable cause. (3) The proceeding complained of has terminated in favor of the defendants before an action for damages is instituted. Wilcox v. McKenzie, 75 Ga. 73; Georgia Loan & Trust Co. v. Johnston, 116 Ga. 628 (43 S. E. 27); Fender v. Ramsey, 131 Ga. 440 (62 S. E. 527); Ellis v. Millen Hotel Co., 192 Ga. 66 (14 S. E. 2d, 565); Marshall v. Armour Fertilizer Works, 24 Ga. App. 402 (5) (100 S. E. 766); Smith v. National Clothing Co., 29 Ga. App. 421 (116 S. E. 52); Darnell v. Shirley, 31 Ga. App. 764 (122 S. E. 252); Randolph v. Merchants &c. Loan Co., 58 Ga. App. 566 (199 S. E. 549). There is nothing in the record here to show or intimate that the proceeding complained of was instituted as the result of malice. The two interlocutory injunctions, restraining the defendants as prayed from making a sale of any of their properties and from disbursing any funds except upon proper order of the court, together with orders of the court specifying the procedure for making a sale and confirmation of sales upon application of the defendants, conclusively refute any contention that there was a want of probable cause. See Georgia Loan & Trust Co. v. Johnston, supra; McElreath v. Gross, 23 Ga. App. 287 (98 S. E. 190); Marshall v. Armour Fertilizer Works, supra. We have been requested by counsel for the defendants to review and overrule Short v. Spragins, 104 Ga. 628 (30 S. E. 810). However, that case is not applicable here, and the request to overrule is denied. The record compels the conclusion that, instead of there having been a termination in favor of the defendants as required by the rule, there has been some termination in favor of the petitioners. It thus appears that the amendment proffered met none of the three essential conditions which the law requires as prerequisites to the recovery there sought.

But it is contended in the brief of counsel for the plaintiffs in error on this issue that they should have been allowed to prosecute the claim made by the cross-action for the following reasons: (1) The petitioners had brought the main action in violation of the plain terms of the law. Code, § 22-711. (2) The petitioners were non-residents of the State. (3) Since the suit was brought in violation of the law, the court Was without jurisdiction ab initio, and, hence, everything done before the defendants’ cross action was filed was nugatory, and this pleading alone gave de jure jurisdiction, whereas the court’s jurisdiction previously was merely de facto. As to the first of these contentions, the two proper methods by which to attack the sufficiency of the allegations entitling the petitioners to prosecute their main action would be demurrer or motion to strike. Though it is inferable from the brief of counsel that a general demurrer was originally filed, it appears, from the recitals in the demurrer filed on December 1, 1943, to the petitioners’ amendment seeking allowance of expenses and counsel fees that che former demurrer was withdrawn, the latter reciting: “Come now” the defendants '“and formally withdrawing without prejudice their demurrer which has not been acted upon, heretofore filed to plaintiffs’ original petition,” etc. It does not appear that this general demurrer was ever reinstated and insisted upon, and the demurrer to the petitioners’ amendment makes it plain that the defendants were not demurring to the petition as amended. Special demurrers were filed to the amendment, but it related only to the allowance of expenses and counsel fees, a request for which might have been made even by oral motion, and anything found in the demurrers questioning the right of the petitioners to bring the main action can not, in view of the disclaimer that the petition as amended was demurred to, amount to an attack on the petition in the main action.

The defendants, in their answer to the rule to show cause why the prayers of the original petition should not be granted, did originally contest the right of the petitioners to maintain the action. The interlocutory order of September 20, 1943, provided that it was not to be construed as final as requiring, in case of objection, the tender of a bill of exceptions within twenty days. In that respect the court was without authority, as recognized by the defendants in their brief of counsel, to extend the time within which a bill of exceptions might be brought to this court assigning error on such order. The' defendants might, within the statutory time, have brought such a bill of exceptions to this court. They elected not to do so. Under this order, the court expressly retained jurisdiction to enter such other and further orders as it might deem meet and proper, and, in the event no sale be consummated, to give such further directions as might be meet and proper in the circumstances of the case. On October 12, 1943, the court enjoined the defendants from paying out, except for named purposes, any funds realized from the sale of assets or otherwise. The defendants did not except to this order, but on December 2, 1943, filed a motion to set it aside. The court overruled the motion, but modified the order so as to permit payment of debts and a distribution of $120 per share to stockholders. The defendants did not except to this order. On April 14, 1944, the court, in the exercise of its retained jurisdiction, and upon a motion filed by the defendants on April 3, 1944, further modified the order of October 12, 1943, so as to permit a payment of $10 per share to stockholders out of funds on hand. These two last-named orders were agreed upon by the parties “without prejudice.” In the meantime, the defendants, under and recognizing the restraint still imposed upon them, had petitioned the court to approve a proposed sale of the corporate assets, and these sales had been allowed by the court upon its determination of just and proper consideration for the assets. So, notwithstanding the issue made by the defendants' response to the rule to show cause, and notwithstanding any order entered without prejudice, and though the interlocutory order of injunction as such was not conclusive on the merits when entered, and though the defendants might have claimed a jury trial just as in a case where a judgment for money was sought and injunction was also prayed for, the record discloses that the defendants made no objection ultimately but yielded to the administration of the' assets by the court on the allegation by the petitioners that a sacrifice of the assets was impending, and finally made a motion to dismiss the case as moot, reciting the prayers of the petitioners and the various acts and doings of the corporation under the supervision and control of the court in a manner analogous to that of a receivership. Thus by their acts and conduct they did not persist in the issue made by their answer, but acquiesced in all the orders and directions of the court and have treated the issues as conclusively settled in favor of the petitioners, and are not now in position to urge in this court any deficiencies in the petition in the main action. As to them, the petition must be treated as conforming to the requirements of the Code, § 22-711. Peeples v. Southern Chemical Corp., 194 Ga. 388, 392 (21 S. E. 2d, 698), cited and relied on by the defendants, is clearly distinguishable. There the action was dismissed on a motion that no cause of action was alleged. Whether or not an equally satisfactory or better disposition of the corporate assets might have been made in the instant case without the administration by the court, this court is not called upon to determine. The accepted administration by the court has made that question academic. The jurisdiction assumed and the administration thereunder were predicated upon the contention of the petitioners that otherwise the assets would be sacrificed for the wholly inadequate price of $266,500. Their application for allowance of expenses and counsel fees alleges that by their efforts in obtaining such administration the corporation and its stockholders have been benefited to the extent of more than $200,000 above the amount for which the assets were to be sacrificed.

What has just been said applies equally to contention (3) made by the plaintiffs in error. We know of no law, and none has been cited by counsel, which would sustain the second contention to the effect that the non-residence of the petitioners is sufficient to abrogate the rule requiring termination of a suit in favor of the defendant before an action for malicious use of civil process can be maintained against the party who brings the alleged wrongful suit. Quite the contrary was held in Werk v. Big Bunker Hill Mining Corp., 193 Ga. 217, 222 (17 S. E. 2d, 825). The amendment, being thus fatally defective, was subject to the general demurrer, and the court did not err in sustaining the petitioners’ demurrer and dismissing the amendment.

The petitioners in case No. 14964 assign error on the judgment sustaining the defendants’ general demurrer to their amendment seeking reimbursement for expenses and allowance of counsel fees. This demurrer attacked the amendment on the ground that it did not appear therefrom that the court appointed a receiver or took any other action seizing any of the property of the corporation or that the court had possession of any res out of which payment might be made to the petitioners or anyone else. It is also contended, under the demurrer and the alleged authority of Churchill v. Bee, 66 Ga. 621, Alexander v. A. & W. P. R. Co., 113 Ga. 193 (30 S. E. 772, 54 L. R. A. 305), Wiley v. Sparta, 154 Ga. 1 (114 S. E. 45, 25 A. L. R. 1342), and the Code, § 55-314, that, in,order for the petitioners to be entitled to expenses and counsel fees as sought by their amendment, it would be necessary for them to obtain a verdict of the jury sustaining the averments of their petition and finding that they had brought money into the court aside from that arising from the sale of property turned over by the defendants; and that, if "the petitioners are entitled to such an award, the jury and not the court should fix the amount.

While in the present case no receiver eo nomine was appointed by the court, we think that the action of the court in allowing the assets of the corporation to remain in its physical possession, but subject to the supervision and control of the court pending the termination of the proceeding, was in substance the equivalent of a receivership. The res, in the immediate physical possession of the corporation, was thus held in trust and not in its own right. There is a dearth of specific authority on this question, but in the view above expressed we are supported bjr Porter v. Stewart, 163 Ga. 655 (137 S. E. 28), where there was presented for decision the right of a petitioning creditor to an allowance by the court of attorney’s fees and costs where a fund had been brought into court to which fund intervening creditors made claim. In the final decree the trial judge awarded expenses, including a counsel fee of $1000, to the petitioner, the moving creditor. Presiding Justice Beck, speaking for the court (page 659), said: “True, no receiver was prayed for or appointed, but the money was paid into the registry of the court, as we have stated; and this was analogous to the appointment of a receiver and the payment over of the funds in question to him. We think that the result obtained by the suit was beneficial to all the parties, that is, to the original plaintiff and the intervenors.”

The amendment here involved set out the proceedings that had been had under the orders and supervision of the court pursuant to the action brought by the petitioners on the theory that the assets of the corporation were about to be sacrificed; and that the apprehended sale had been prevented and sale made with the approval and confirmation of tfie court, it being contended that thus a substantial and real benefit had been conferred upon the corporation and its stockholders, by reason of which expenses and counsel fees should be allowed the petitioners. Generally every litigant must pay his own counsel fees. There are exceptions to this general rule. Where, as a result of the prosecution of an action by minority stockholders, the majority have been prevented from fraudulently sacrificing corporate assets and the court has obtained control of those assets, the petitioners are entitled to an order of the court allowing the payment from the common fund of the necessary expenses and counsel fees incurred by them. The applicable rule is stated in Eckford v. Atlanta, 173 Ga. 650, 652 (2) (160 S. E. 773), as follows: “A court of equity, however, will in its discretion order an allowance of counsel fees to a complainant who at his own expense has maintained a successful suit for the preservation, protection, or increase of a common fund or common propert)'-, or who has created at his own expense, or brought into -court, á fund in which others may share with him.” (Italics ours.) Supporting this rule, see Price v. Cutts, 29 Ga. 142 (74 Am. D. 52); Alexander v. A. & W. P. R. Co., supra; Peppers v. Cauthen, 143 Ga. 229 (2) (84 S. E. 477); Keating v. Fuller, 151 Ga. 66 (105 S. E. 844); May v. Chero-Cola Co., 168 Ga. 443 (148 S. E. 87) ; Greyling Realty Corp. v. Lawson, 179 Ga. 188 (175 S. E. 453); Christian &c. Assn. v. Atlanta Trust Co., 181 Ga. 576, 581 (3) (183 S. E. 551); United States Fidelity &c. Co. v. Clarke, 187 Ga. 774 (2 S. E. 2d, 608); United States Fidelity &c. Co. v. Clarke, 190 Ga. 46 (5) (8 S. E. 2d, 52); City of Atlanta v. Screws, 194 Ga. 214, 216 (21 S. E. 2d, 424); Nixon v. Nixon, 197 Ga. 426 (29 S. E. 2d, 613); Trustees v. Greenough, 105 U. S. 527 (26 L. ed. 1157); Central Railroad v. Pettus, 113 U. S. 116 (5 Sup. Ct. 387, 28 L. ed. 915); Hobbs v. McLean, 117 U. S. 567 (6 Sup. Ct. 870, 29 L. ed. 940). The rule was expressly recognized in Alexander v. A. & W. P. R. Co., supra, but expenses and counsel fees were not allowed the petitioning minority stockholders for the two-fold reason, that (1) the action was predicated upon the individual right of the petitioners and not that of the corporation, and (2) no common fund of the corporation was brought under the control of the court. In Porter v. Stewart, supra, this court quoted approvingly from the Federal case, Hobbs v. McLean, supra, as follows: “When many persons have a common interest in a -trust property or fund, and one of them, for the benefit of all and at his own cost and expense, brings a suit for its preservation or administration, the court of equity in which the suit is brought will order that the plaintiff be reimbursed his outlay from the property of the trust, or by proportional contribution from those who accept the benefits of his efforts.” If in fact a sacrifice of the assets of the corporation was averted by the efforts of the petitioners, they would, under the authorities above cited, be entitled to expenses and attorney’s fees no less than if they had brought into court an amount of money equal to the alleged savings.

The question is also presented whether or not in the exercise of his discretion the trial judge in the present equity case, rather than the jury, shall determine and fix the amount of expenses and counsel fees sought by the petitioners under their allegation that the prosecution of the suit has resulted in bringing the assets of the corporation into the control of the court and in benefitting the corporation and its stockholders. While the law provides that in equity cases the jury may recommend to the court the assessment of costs, yet it is the exclusive province and duty of the trial judge in the exercise of a sound discretion to determine upon whom the costs shall fall. Code, § 37-1105. The action of the judge in thus fixing the costs will not be disturbed unless there is an abuse of discretion. Ross v. Stokes, 64 Ga. 758; Wrenn v. Atlanta Trust Co., 187 Ga. 663 (2) (2 S. E. 2d, 67); Fitzgerald v. Vaughn, 189 Ga. 707 (7 S. E. 2d, 78); United States Fidelity &c. Co. v. Clarke, 190 Ga. 46; Mendenhall v. Stovall, 191 Ga. 452 (12 S. E. 2d, 589); Sangster v. Toledo Manufacturing Co., 193 Ga. 685 (19 S. E. 2d, 723). The provision of the statute that in an equity case the presiding judge shall determine upon whom the costs shall fall, while not in terms including the right to fix expenses and counsel fees, shows a clear recognition by the legislature of the power existing in the chancellor, as under the old English practice, to do in an equity case what could not be done by the presiding judge in a case at law, thus relaxing the rule found in the Code, § 24-3401, that, “In all civil cases in any of the courts, except as otherwise provided, the party who shall discontinue, fail, or be cast in such suit shall be liable for the costs thereof.” Upon this principle of equity power, this court has ruled that the right to fix counsel fees, no less than statutory costs, in an equity case resides in the chancellor and not in the jury. In Werner v. Werner, 196 Ga. 1 (25 S. E. 2d, 676, 146 A. L. R. 1263), it was held that the trial judge erred in refusing to consider the application of the petitioner for the payment of his counsel fees from the common fund. At page 6 in the opinion, after stating that the Code does not in terms provide for the payment of fees to counsel for the plaintiffs in an equitable partition proceeding, it was said: “But this failure can not be taken as a denial of the general power of the chancellor to make an allowance of fees out of the common fund to the attorney for plaintiffs in an equity case, whether the case be one for partition of land or for the administration of a fund for the benefit of more than a single creditor.” In the headnote, it is stated that “the judge of the superior court before whom the same [an equitable partition proceeding] is pending has the power under general equitable doctrine, in a proper case and where the circumstances justify it, to allow compensation for the plaintiff’s counsel as a charge against-the fund arising from the sale of the land partitioned.” In Nixon v. Nixon, supra, the authority of the trial judge in equity eases to allow counsel fees is recognized and emphasized. It, therefore, can not now be said to be an open question in this State as to whether or not the judge in a proper case in equity is authorized to direct payment from a common fund of counsel fees and expenses of the petitioners who bring such property or funds under the control of the court. To grant relief in such cases is the exclusive function of the trial judge, with which the jury is not concerned. It follows that the attack in the present case upon the application of the petitioners for expenses and counsel fees, on the ground that the application sought an order from the trial judge without submitting the matter to the jury, is without merit. While there is language in the opinion in Churchill v. Bee, supra, relied on by the defendants to support their contention that the allowance can be made only after a finding by the jury, it must be regarded as obiter, since there the presiding judge made the award and this court ruled that, as it appeared to be reasonable, it would not be reversed. If we are wrong in the appraisal of this language and it is to be regarded as a necessary ruling in the case, it is the opinion of five members ,of this court that such a statement of law in an equity case should be and it is hereby expressly disapproved. See the Code, § 6-1611.

Counsel for the defendants cite and rely upbn McWilliams v. Boswell, 145 Ga. 192 (88 S. E. 821), as conclusively showing that such question should be submitted to the jury. That decision, however, is clearly distinguishable. There, during the pendency of a trover action, a petition for injunction and receivership, involving the subject-matter of the trover action, was brought by the plaintiff in trover. When the injunction case came on for trial, it appeared from an inspection of the record by the court that the trover action had terminated and had resulted in a verdict and judgment for the plaintiff, and thereupon the court announced that there was no issue left for trial and entered a judgment against the defendant in the injunction and receivership suit for the costs of court. However, the pleadings in that suit showed an issue of fact between the parties as to the right of the defendant to retain the use of the subject-matter of the suit, a sawmill outfit, though title was in the plaintiff. Thus the defendant was contesting throughout the proceeding the right of the plaintiff to maintain the suit, and her plea had been undisposed of. -Whether or not the defendant was entitled to the possession of the sawmill outfit, was a question for determination by the jury, and, in the absence of a finding adversely to her, the costs of the injunction and receivership suit were erroneously and prematurely assessed against her.

It is, of course, the law that the trial judge is not authorized in any equity case to award counsel fees to petitioners where the prosecution of the action has not benefited the corporation or others in terested in the fund which is brought under the control of the court. Mohr-Weil Lumber Co. v. Russell, 109 Ga. 579 (2) (34 S. E. 1005); Buckwalter v. Whipple, 115 Ga. 484 (3) (41 S. E. 1010); Stovall v. Mendenhall, 192 Ga. 796 (4) (16 S. E. 2d, 546). While the exception here does not present the question whether or not the facts in the case entitle the petitioners to the payment of expenses and counsel fees from the assets of the corporation, it does present the question whether or not the application alleged sufficient facts to require the trial judge to consider the merits of the application. It does allege that by prosecuting the action the petitioners have prevented a sale of the corporate assets for the depressed sum of $266,500, and that the administration by the court, invoked by the petitioners, has resulted in obtaining a much greater sum for the corporate assets than that for which it was alleged the assets were about to be sacrificed. The application, together with the record in the case, makes a case requiring the determination by the trial judge .of the merits. It was error, therefore, to sustain the demurrer to the application and to dismiss the same. This renders the subsequent judgment dismissing the entire case, upon the ground that all questions had become moot, erroneous also.

Judgment affirmed on bill of exceptions in case No. 1^951 and cross-bill of exceptions in case No. lJj.968; and judgment reversed on main bill of exceptions in case No. 1J/.96J¡..

All the Justices concur, except