Sanders v. Culpepper
Sanders v. Culpepper
Opinion of the Court
Walter Sanders, as trustee in bankruptcy of the Atlanta Times, Inc., brought a complaint in Fulton Superior Court against numerous defendants, alleging that: The corporation was chartered by Fulton Superior Court in June, 1961, failed in August, 1965, and was adjudicated a bankrupt in the United States District Court for the Northern District of Georgia, Atlanta Division, in January, 1966. The plaintiff duly qualified as trustee in bankruptcy and brings this action under written order of the referee in bankruptcy. The defendants are stockholders in the corporation, holding unpaid shares of stock, and subscribers of unpaid shares of stock, as shown by an attached exhibit. The scheduled claims of creditors of the corporation are in the amount of $2,218,994.45, and all assets will not exceed $1,294,846.07. The action is brought in equity. The amounts due by the defendants constitute a trust fund for the payment of the debts of the corporation and the action is brought to marshal the assets to pay the indebtedness of the bankrupt corporation.
Demand was made for a decree in equity, that the action be maintained against all the defendants to avoid a multiplicity of suits and establish the plaintiff’s equitable rights, and that the plaintiff have judgment against the defendants in the respective amounts shown by the attached exhibit.
The defendants Brooks and Marion Culpepper filed motions to dismiss the complaint for lack of jurisdiction, alleging that they are residents of Talbot County, Georgia. The trial judge entered an order on January 12, 1970, sustaining these motions. On February 5, 1970, the judge entered another order, reciting the former order, in which he held that “there is no just reason for delay in entering final judgment” in favor of these defendants, pursuant to § 54 of the Civil Practice Act (Ga. L. 1966,
The trustee in bankruptcy appeals from these two orders.
We consider first the question of whether the appeal is premature. The instances in which judgments and rulings may be appealed are provided by Ga. L. 1965, p. 18, as amended by Ga. L. 1968, pp. 1072, 1073 (Code Ann. § 6-701). The only division of this statute applicable in the present case is Division 1, as follows: “Where the judgment is final — that is to say —where the cause is no longer pending in the court below.”
This language has the same meaning as that portion of the former appellate statute providing that, “No cause shall be carried to the Supreme Court or Court of Appeals . . . while the same is pending in the court below. . .” Code of 1933, § 6-701. Under the language of the former statute, this court has held that where several defendants are sued jointly on a joint cause of action, and there is a final dismissal as to some of the defendants, the judgment of dismissal cannot be reviewed until the final termination of the action; but where several defendants are sued jointly, but not on a joint cause of action, the judgment of dismissal is such a final judgment as can be reviewed immediately. Johnson v. Motor Contract Co., 186 Ga. 466 (1) (198 SE 59); Veal v. Beall, 189 Ga. 31, 33 (5 SE2d 5); Beavers v. LeSueur, 191 Ga. 361, 362 (12 SE2d 581); Millers Nat. Ins. Co. v. Hatcher, 194 Ga. 449 (1) (22 SE2d 99); Moore v. Harrison, 202 Ga. 814, 817 (44 SE2d 551); Stanley v. Greenfield, 205 Ga. 99 (52 SE2d 467).
The defendants in the present case were sued jointly, for the purpose of avoiding a multiplicity of actions, but not on a joint cause of action. A separate judgment is sought against each defendant on the separate contract of such defendant with the bankrupt corporation. Therefore the cause is no longer pending as to the two appellees, and the judgment is a final judgment subject to review.
“Equity cases shall be tried in the county where a defendant resides against whom substantial relief is prayed.” Constitution, Art. YI, Sec. XIY, Par. Ill (Code Ann. § 2-4903).
The trustee in bankruptcy was authorized to join the defendants Brooks and Marion Culpepper in this equitable action, although the complaint was not filed in the county of their residence, and the trial judge erred in dismissing the complaint as to these parties.
Judgment reversed.
Dissenting Opinion
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.
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.
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
Case-law data current through December 31, 2025. Source: CourtListener bulk data.