Georgia Veneer C. Co. v. Florida Nat. Bank , 198 Ga. 591 ( 1944 )

I dissent from headnote three and the corresponding division of the opinion, and think that the court was correct in sustaining the demurrer to the amendment to the plaintiffs' petition seeking attorneys' fees and expenses incurred. Despite the fact that my more learned colleagues hold, as I construe the opinion, that the allegations of the amendment to the plaintiffs' petition raise an issue for the judge to properly determine as to whether the plaintiffs had saved a designated large sum to the corporate assets by virtue of their equitable proceeding, I am unable to agree either that the record shows that the issues made by such amendment to the petition have been already foreclosed in their favor or that the amendment presents such an issue as can be properly determined by the judge. This court has not held that the issue is foreclosed by the record, but does hold that the amendment presents the plaintiffs' contention for determination by "the trial judge of the merits." In my opinion, since the controlling issue has not already been determined, only a jury, as pointed out by the demurrer, can adjudicate the issue. Whether such an alleged saving to the corporation has been effected by virtue of the plaintiffs' efforts appears to be the one outstanding, undetermined, and unadjudicated issue in the case. Although there appears to be no difference between what is held in the opinion and the view of the writer of this dissent on the proposition that the controlling issue has not been foreclosed in favor of the plaintiffs, since, if it had been, the judge might properly assess fees, I deem it not improper to revert, in passing, to that question. As I see it, while the counterclaim by the defendants for damages for malicious use of legal process was not maintainable for the reason that the litigation had not been finally terminated in the defendants' favor (Baldwin v.Davis, 188 Ga. 587, 588, 4 S.E.2d 458), and this would be true even though the orders actually taken in the main case might have been taken without prejudice, I am also convinced that the orders actually taken did not amount to a legal adjudication that the allegations of the original petition with respect to the fraudulent intent and purpose of the directors to sacrifice the corporate assets by the alleged threatened sale were true. Nor did the defendants' consent to the court's approval of the sale, as finally effected by the directors and confirmed by the court, have such legal effect. The directors, seeking to serve the interest of the stock-holders in quickly liquidating the corporation whose functions could be further continued only at great loss and sacrifice, might well have wished to thus avoid the continued delay of protracted litigation; and, in failing to except to the continuance of the order requiring confirmation of any sale as made by the directors, might well at one time have reached the decision that, in view of the accusations of the petition and the action of the court in refusing a receiver and in permitting the directors to retain the management and power of sale in their hands, they were content to have their actions confirmed by the court. Even had the judge specifically held — which he did not do even by indirection — that the allegations of the petition were true, even then, his findings on such facts would not constitute the law of the case. Albany Theatre v.Short, 173 Ga. 121 (159 S.E. 688); Voyles v. Carr,173 Ga. 627 (3) (160 S.E. 801); Reynolds v. Calvert Mortgage Deposit Co., 146 Ga. 534 (a) (91 S.E. 555). Nor am I able to see that the evidence at the hearing disproved the pleas of the defendants, in which they strenuously denied that the directors had any intent or purpose to enter upon any such contract of sale as was alleged in the petition. On the contrary, the evidence seems to indicate that, whatever may have been the subsequent attitude of one of the directors as to a sale to Tully, any purpose or plan which may have existed on the part of Tully to purchase the assets at the price charged, or at any price, had been openly and wholly abandoned by Tully at the stockholders' meeting held on July 28, 1943, at which the plaintiffs were represented; that they were at that time so advised by Tully; that at said stockholders' meeting authority was delegated to the directors to effect a sale, and that at a meeting of the directors, held on the same day, a sale price of $400,000 (not $265,000) was fixed by them, and arrangements were made to solicit bids at said price of $400,000; and that the persons who finally bought at $360,000 (which was satisfactory to the plaintiffs) were procured by the directors under an original offer made to them at the price of $400,000; that between July 28th and August 10th, on which latter date the plaintiffs' suitwas filed, the plaintiffs' representative had been advised at least three times by the corporation's president that its properties had been offered to prospective purchasers at a price of $400,000; a letter to which effect from the president to the plaintiffs being in fact attached to their own petition. In fact it appears from an affidavit made on behalf of the plaintiffs that "affiant says that he believes that, had it not been for the action of the minority stockholders at the stockholders' meetingof July 28th, all properties and assets of the corporation would have been sold for $266,500." (Italics mine.) The petition was filed thirteen days after the stockholders' meeting on July 28th, and after the plaintiffs were in possession of all the information stated. It thus appears to the writer that neither by virtue of any action taken by the court or by the defendants, nor by virtue of the evidence contained in the record, can it be said that the charges made in the petition have been sustained in law or in fact.

But, as already stated, it is not the ruling of this court that the record shows that the saving to the corporation, as alleged in the petition, was established. It is plainly held that, because the amendment asking for expenses and fees "alleged" such savings, the court erred in sustaining the defendants' demurrer. As shown by the statement of facts, the petition prayed "that the courtset a convenient date on which the matters and things set forth in the amendment may be inquired of by the court anddetermined; and that, after a hearing, the court order anddirect the payment of attorneys' fees," etc. (Italics mine.) It would thus seem that the amendment cannot properly be construed as asking for a trial by jury on the disputed allegations made in the amendment, but that the prayer was in effect plainly limited to such relief as the court setting and hearing the case might determine to be proper. The opinion clearly takes this view in stating that, "the application, together with the record in this case, thus makes a case requiring the determination by the trialjudge of the merits." (Italics mine.) In other words, for the purpose of awarding expenses and fees, this court has correctly construed the petition as asking the judge to make himself the trior of this, the only issue of fact made by the original petition and plea which had theretofore remained undetermined. InWiley v. Sparta, 154 Ga. 1 (4), 23 (supra), this court said: "A decree is the judgment of the judge in equitable proceedings, upon the facts ascertained. Civil Code, § 5424;Winn v. Walker, 147 Ga. 427 (94 S.E. 468). In this State the jury and the judge constitute the chancellor. Hargraves v.Lewis, 3 Ga. 162. The facts are to be submitted to a jury, who have the exclusive right to pass upon them, and matters of law are for the court alone. This is what is meant by the language of the last-cited case. Mounce v. Byars, 11 Ga. 180." In Holton v. Lankford, 189 Ga. 506, 523 (6 S.E.2d 304), this court quoted with approval the language of Judge Nisbet in Hargraves v. Lewis, supra, as follows: "It was at one time a question in Georgia, whether a jury was at all necessary in trials in equity. That is to say, whether the act of 1799, conferring chancery powers on the superior courts, did not clothe the judge with the powers of a chancellor in England. I advert to this, not for the purpose of discussing the question, but of saying that such a doubt no longer exists — that the usage of the superior courts for a long series of years has been to submit the facts in all trials in equity to a jury, and that this usage has been sanctioned by repeated acts of the legislature recognizing it." But the specific question as here presented was decided in Churchill v. Bee, 66 Ga. 621 (8) (supra), where the court laid down the rule in a case like the instant one, as follows: "The amount of fees of counsel for bringing the money into court should be fixed by the jury on proof of the value of the service, and the chancellor on their verdict should decree the payment thereof; but where the chancellor has decreed them without such verdict, and the amount is reasonable, this court will not set aside that decree, especially where the counsel for plaintiff in error declines to press this point here, though made in the bill of exceptions." This ruling cannot, it seems to the writer, be dismissed as mere obiter, because, after enunciating the rule, this court failed, on its own motion, to set aside a decree which was held reasonable in its terms, and which the opposite party declined to attack, but which the court in effect held would have been defective had such attack been made. It is true that since the rendition of the case last cited, the General Assembly has enacted legislation dealing with receivers, and in one portion of this act as embodied in the Code, § 55-314, provides as follows: "In all cases where a receiver shall be appointed under the laws of this State to take charge of the assets of any person, firm or corporation, and a fund shall be brought into court for distribution, the court having jurisdiction thereof shall award to counsel filing the petition and representing the moving creditor or creditors, out of the fund, no greater sum as fees for services rendered in filing such petition and bringing the fund into court than such services shall be actually worth," etc.; but, even had the judge in the instant case not refused to appoint a receiver, and had he appointed one "to take charge of the assets" of the corporation, instead of merely granting an injunction to preserve the status pending a final determination of the issues, except that he provided for a sale subject to the court's approval, even then, the Code section quoted seems to assume that no preliminary issue of fact as to whether the plaintiffs had brought a fund into court would be involved; and it is only where such fact has been adjudicated, or is not disputed, or where the parties consent, that he is authorized to act. However, I feel it is incumbent to say that it is my opinion that a court in its discretion can, even where no receiver has been appointed and where no issue of fact is involved, fix and allow an attorney's fee to one who has maintained a successful suit whereby he has indisputably increased or preserved the common fund. See, in this connection, Eckford v. Atlanta,173 Ga. 650, 652 (2) (supra); United States Fidelity Guaranty Co. v. Clarke, 187 Ga. 774 (12), 794 (supra). But this does not mean that, where the one contested issue is whether a petitioner has brought a fund into court, or preserved a common fund, the court, over the protest of one of the parties to the litigation, should assume the office of a trior, and in order to determine the propriety of attorneys' fees, himself adjudicate the main contention made by the petition and plea. Accordingly, as the writer of this dissent sees it, where this court in effect holds that the issues made by the amendment to the petition with respect to the alleged savings to the corporate assets by the plaintiffs were not by the record foreclosed in the plaintiffs' favor — even if the petition can be properly construed to mean that a prayer is made for an adjudication on such contested issue of fact — the only trior of such an issue, save by consent of the parties, is a jury; and; since the only interpretation which can properly be made of the plaintiffs' prayer is that the court is asked to set a convenient date and itself try these issues of fact, without recourse to a jury, not by consent, but over the actual protest of the defendants as set forth in the demurrer, the court properly refused to assume any such unauthorized function.