Millers National Insurance Co. v. Hatcher , 194 Ga. 449 ( 1942 )

1. The motion to dismiss the writ of error on the ground that there has been no final judgment is overruled, error being assigned by the plaintiff on a judgment sustaining a demurrer filed by one of two defendants, and as to such demurrant dismissing the action; the two defendants not being sued on a joint cause of action.

2. A petition in equity, in which a corporation and an individual are named as defendants, alleging that the plaintiff is a creditor of the corporation, which is now insolvent, and that the individual has converted to his own use assets of the corporation in excess of the amount of the plaintiff's claim, leaving no other assets sufficient in amount with which to pay the corporate debt, and which suit seeks to hold liable the individual as a trustee ex maleficio, states a cause of action.

3. In a suit of the character stated above, a demurrer on the ground of misjoinder, in that no reason appears why the two defendants should be sued together, and that the creditor had not theretofore reduced to judgment his claim against the primary debtor, should have been overruled.

4. It not appearing that in the plaintiff's acceptance of the note of the corporation, for the amount of the debt, it was expressly agreed that its acceptance should constitute an accord and satisfaction, a ground of demurrer based on such contention was without merit.

5. The plaintiff under his averments was not entitled to recover attorney's fees, and the demurrer to that part of the petition was properly sustained. This did not, however, entitle the defendant in error to a ruling dismissing the entire action as to him, since the petition otherwise alleged a state of facts which, if established, would entitle the plaintiff to substantial relief against the defendant in error.

No. 14246. SEPTEMBER 15, 1942. Millers National Insurance Company brought suit against Piedmont Trading Company and against Hatcher. It was alleged, that Piedmont Trading Company is a corporation of which Hatcher is president; that the company is insolvent; that petitioner is a creditor thereof; that although the company is inactive, it had sufficient assets to pay off its creditors, but the same were converted by Hatcher to his own personal use, to the exclusion of the creditors; that the company had been selling insurance for petitioner and others, and when petitioner discovered that the premiums were not being remitted, it called on Hatcher, its president, for an accounting; that a note signed by the Piedmont Trading Company, by Hatcher, president (made a part of this petition), payable to petitioner, was executed; that payments on said note reduced the principal amount to $274.56, besides interest and attorney's fee; that at the time the note was given the defendant corporation had assets of not less than $3000, of which (as alleged on information and belief) not less than $2500 was collected by Hatcher and converted to his own use. It is also alleged on information and belief that the Piedmont Trading Company still has assets of a face value of about $500, and an actual value of $50 or $75; that petitioner gave notice to Piedmont Trading Company that suit was to be filed on this note, as required by law in order to collect attorney's fees. A copy of the notice attached, addressed to Hatcher, president of Piedmont Trading Company, gives notice that suit will be brought on said note to the December term, 1941, of the superior court of Bibb County. Suit was filed to the February term, 1942. The prayers were: for injunction, restraining the defendants from disposing of any of the remaining assets of the Piedmont Trading Company; that Hatcher be decreed a trustee ex maleficio; that Piedmont Trading Company be decreed a trustee ex maleficio for the benefit of the creditors; that petitioner have judgment against Piedmont Trading Company for $274.56 principal, $28.92 interest, and $46.51 attorney's fees, and have judgment for like amounts against Hatcher as trustee ex maleficio; and for general relief. The court sustained Hatcher's demurrer, and as to him dismissed the suit. The plaintiff excepted. 1. A motion has been made to dismiss the writ of error, on the ground that no final judgment has been obtained in the court below, but that the suit is still pending against Piedmont Trading Company, a codefendant, its liability being dependent upon the liability of the codefendant Hatcher. Ordinarily where a petition is filed against several defendants, and a separate demurrer filed by one of them is sustained, this is such a final ruling as may be brought to the Supreme Court by the plaintiff while the case is still pending in the trial court as to the other defendant. McGaughey v. Latham, 63 Ga. 67 (2); Kidd v. Finch, 188 Ga. 492, 497 (4 S.E.2d 187). The instant case does not fall within the rule applied in Johnson v. Motor Contract Co., 186 Ga. 466 (198 S.E. 59), since here the two defendants are not sued on a joint cause of action. The cause of action against Piedmont Trading Company, a corporation, is based on a note; that against Hatcher, the individual, is based on the theory that he, having converted to his own use the assets of the insolvent corporation, is liable as a trustee ex maleficio to the creditor of the company. The motion to dismiss is overruled.

2. The plaintiff alleges that it has against the Piedmont Trading Company a claim of something in excess of three hundred dollars, represented by a promissory note; that at the date of the note the maker had assets of not less than three thousand dollars, of which, it is alleged on information and belief, not less than twenty-five hundred dollars was fraudulently converted by Hatcher to his own use; and, on like information and belief, that the Trading Company still has assets of a face value of about five hundred dollars, but of an actual value of fifty or seventy-five dollars. These allegations sufficiently allege insolvency of the original debtor, and state a case against Hatcher as a trustee ex maleficio. Tatum v. Leigh, 136 Ga. 791 (72 S.E. 236);Smith Co. v. Austin Co., 143 Ga. 254 (84 S.E. 444). Petitioner does not allege that he has been informed and believes, but instead makes a positive allegation, although based on information and belief. Nance v. Daniel, 183 Ga. 538,543 (189 S.E. 21); Bowers v. Dolen, 187 Ga. 653, 656 (1 S.E.2d 734). That the petition does not state that the suit is brought for the benefit of plaintiff and other creditors does not render it subject to the demurrer. It does not appear that there are other creditors. The plaintiff as a creditor, according to the allegations, has suffered an injury at the hands of the defendant, for which he is entitled to redress.

3. The demurrer raises the question of misjoinder of parties defendant, the insistence being that Hatcher is improperly joined with the Piedmont Trading Company, and that no reason is shown why they can be sued together, either at law or in equity. It is argued that a judgment can not be obtained against Hatcher as trustee ex maleficio until the creditor has first reduced to judgment his claim against the corporation and a return of nulla bona entered upon the execution issued thereon. The decision inLamar v. Allison, 101 Ga. 270 (28 S.E. 686), does not so hold. That was a suit against the stockholders alone, the corporation not having been made a party, as in the instant case. The ruling there made must be applied with that situation in view. In the opinion it was said: "The corporation was not itself a party to this suit, and therefore it can never be judicially determined in this suit that there has been a breach of duty upon the part of the corporation toward this plaintiff. So, even if this action were maintainable at all, it could not be prosecuted to judgment without the corporation being made a party defendant." If in seeking to apply the principle announced inLamar v. Allison, this court misapplied it in Green v.Atlanta Barbers Supply Co., 169 Ga. 805 (151 S.E. 504), the decision in the latter case is not controlling here, for there the individuals sued were not alleged to be stockholders, nor was it a suit to charge them as trustees ex maleficio, there being no allegation that they had converted assets belonging to the corporation. It was a suit charging that they had conspired with the corporation to defraud the plaintiff, in that they confederated to sell him worthless barber-shop equipment for which he made a cash payment and gave notes for the balance. Nor is Tatum v. Leigh, supra, authority for the proposition that both could not be proceeded against in the same suit. In that case the suit was against the corporation and its officers, for the purpose of charging the latter as trustees and as liable for the debt.

The petition was filed in a court of equity. It prayed for equitable relief. It has never been held that in a case such as this, one sought to be charged as trustee ex maleficio could not be sued until there had been in a previous suit a judgment against the original debtor. No practical end would be served by such a requirement. In other situations analogous to this it has been held that the creditor may pursue both in the same suit. InDeLacy v. Hurst, 83 Ga. 223 (9 S.E. 1052), and the many cases following along the same line, this court held that the former rule that courts of equity would not entertain a bill as long as the plaintiff had a common-law remedy, and that he must allege and prove that he had sued on his claim to judgment and had an execution issued thereon, on which a return of nulla bona had been made by the sheriff, before equity would take jurisdiction and aid him by setting aside fraudulent conveyances, etc., has been abolished since the passage of the uniform-procedure act of 1887, which confers upon the superior courts jurisdiction to hear and determine all causes of action, legal or equitable, or both.

Under our materialmen's lien laws, before the lien can be enforced against the owner it is necessary that an action be commenced against the contractor for the amount of the claim, within a specified time. Code, §§ 67-2001, 67-2002; Southern Ry.Co. v. Crawford, 46 Ga. App. 424 (167 S.E. 756); s. c.178 Ga. 450 (173 S.E. 91). And yet it was held that it was proper practice for one seeking to enforce against the owner of real estate a lien for labor and material, arising under the Code, § 67-2001, to join in his action the owner of the realty and the person who had contracted with the latter for the erection of the building thereon. Royal v. McPhail, 97 Ga. 457 (25 S.E. 512); Lombard v. Trustees, 73 Ga. 322; Castleberry v.Johnston, 92 Ga. 499 (17 S.E. 772). See Baldwin v.Shields, 134 Ga. 221 (67 S.E. 798).

The facts alleged do not bring the case within the principle announced in Lenney v. Finley, 118 Ga. 718 (45 S.E. 593), Van Dyke v. Van Dyke, 123 Ga. 686, (51 S.E. 582, 3 Ann. Cas. 978),Pope v. Jennings, 34 Ga. App. 496 (130 S.E. 348), andCitizens National Bank v. Jennings, 35 Ga. App. 553 (134 S.E. 114). Here no effort is made to hold a third party responsible as a principal on a note under seal not signed by him. The liability asserted against Hatcher does not arise out of the transaction for which the note was given, and no attempt is made to hold him as an undisclosed principal, as was true in the VanDyke case, on which the defendant relies.

4. Nor is there merit in that ground of the demurrer based on the contention that the allegations construed most strongly against the pleader show that the plaintiff had a complete accounting with Piedmont Trading Company, and at the conclusion thereof accepted its note, which amounted to an accord and satisfaction. It does not appear that in taking the note it was expressly agreed that it amounted to a satisfaction; and this is necessary before it would amount to a satisfaction. Code, § 20-1201. It was an accord, but not a satisfaction. Parker v.Pender, 174 Ga. 579 (3) (163 S.E. 506); Georgia NationalBank v. Fry, 32 Ga. App. 695 (2) (124 S.E. 542). An accord unexecuted will not suffice. Redman v. Woods, 42 Ga. App. 713 (157 S.E. 252).

5. There are no allegations on which to predicate a liability on the part of Hatcher for attorney's fees. He is not sued on a note containing an obligation to pay attorney's fees. The only notice of suit was one which stated that it would be brought to the December term, 1941, whereas it was filed to the February term, 1942. This was no compliance with the Code, § 20-506, even if it be assumed that the section is here applicable. No facts are averred which would otherwise render him liable for the attorney's fees. The demurrer, in so far as it attacked the claim for attorney's fees, was properly sustained; but since the petition in other respects stated a cause of action as to Hatcher, it was erroneous to dismiss the entire action as to him.

Judgment reversed. All the Justices concur.