Georgia Veneer & Package Co. v. Florida National Bank

32 S.E.2d 465 | Ga. | 1944

Lead Opinion

1. Where on demurrer an amendment to the defendants' answer seeking affirmative relief is stricken, and on motion of the defendants the court thereafter rendered a final judgment dismissing the case as moot, a bill of exceptions by the defendants excepting to the final judgment only to the extent that it was erroneous because of the antecedent error which entered into and controlled it, and on which antecedent ruling striking the defendants' amendment error is duly assigned, a motion by the defendants in error to dismiss the bill of exceptions and treat it as a cross bill to a bill of exceptions subsequently brought to this court by them, and excepting to the final judgment of dismissal, must be denied.

2. It is essential that an action for damages for malicious use of civil process show (1) malice, (2) want of probable cause, and (3) termination of the proceedings in a judgment in favor of the defendant. Where, as here, it appears that numerous orders and judgments granting relief prayed for by the petitioners had been acquiesced in by the defendants and had become final, the court did not err in dismissing on demurrer the defendants' amendment seeking to recover damages and attorney's fees because of the alleged malicious use of civil process by the petitioners in filing and prosecuting the main action.

(a) In the absence of a motion to strike or general demurrer to the petition brought by minority stockholders of the defendant corporation, or insistence upon a jury trial on the issue made by the response to the rule to show cause why the prayers of the petition should not be granted, these orders and judgments, acquiesced in by the defendants, adversely conclude them on the question whether the petitioners have complied with the provisions of the Code, § 22-711.

3. Where, as here, the amendment of the petitioners alleged large savings to the stockholders of the defendant corporation in the sale of its assets under the supervision and control of the court as a result of the suit filed on behalf of themselves and others similarly situated to prevent an alleged sacrifice of its assets by a sale by its directors in fraud of the stockholders, and alleged expenses and counsel fees incurred in filing and prosecuting the case, it was error to sustain a demurrer to the amendment and strike the same and thereafter render judgment dismissing the entire case upon the ground that the questions involved had become moot.

Nos. 14957, 14964, 14968. OCTOBER 13, 1944. REHEARING DENIED NOVEMBER 22, 1944, DECEMBER 4, 1944. Florida National Bank of Jacksonville, a corporation, and Mrs. Frances C. Blake, as executors under the will of Jay G. Carver, deceased, filed on August 10, 1943, an equitable petition against Georgia Veneer and Package Company, a corporation, and the following individuals who were alleged to be directors thereof: J. T. Whittle, Charles W. Stratton, B. C. Tully, Glenn Robinson, and George G. Wells. The petition alleged that the petitioners were stockholders of the defendant corporation, which was engaged in the business of manufacturing and selling fruit and vegetable packages, furniture veneer, and other lumber products, that they owned 240 shares of the capital stock of the defendant corporation, and that they brought the suit on behalf of themselves and others similarly situated. The petition also alleged in substance the following: The defendant directors of the defendant corporation formulated a plan to sell the entire assets of the corporation to B. C. Tully, chairman of the board, for the grossly inadequate price of $265,500, which would net the stockholders $100 per share on 2655 shares of outstanding stock, notwithstanding the fact that the corporation had $112,000 cash on hand and other assets consisting of the plant and timber lands and leases of the value of $400,000. The various steps taken by the defendants in furtherance of such plan included the creation of the office of chairman of the board of directors and the election of B. C. Tully to that office on December 10, 1942, whereby he, a resident of Memphis, Tennessee, and engaged in the lumber business in that city, was entrusted with virtually absolute control and direction of the affairs of the corporation. Within less than six months thereafter, on May 18, 1943, at a called meeting of the board of directors, Tully was directed to have the plant and other assets of the corporation appraised and to determine upon a method of disposing of said assets. No such appraisal was actually made, and the only method determined upon for disposing of the assets was a sale of the same to Tully at a price to net the stockholders $100 per share. Within a few weeks thereafter, on July 7, 1943, the stockholders were notified of a special stockholders' meeting to consider and act upon a proposal to be made for the surrender of the corporation's charter, its dissolution as a corporation, and its liquidation. It was stated in a letter of the president, the defendant J. T. Whittle, which accompanied the notice to the stockholders, that the management had reached the decision to shut down operations on or before August 1st, and that the directors and management had been negotiating with B. C. Tully with a view of getting him to make an offer to the stockholders for the entire capital stock outstanding. This letter emphasized the problems and difficulties of management, but furnished no information as to the value of the assets of the corporation or as to the price at which it was intended that the assets should be sold to Tully. Two weeks later, the defendant Whittle sent an air-mail notice to the stockholders, reporting that only one proxy had been received and urging that the proxies of other stockholders be immediately signed and returned, as requested in the notice of July 7th. Thereafter, between that date and July 28th, the defendant Charles W. Stratton made a trip to Jacksonville, Florida, for the purpose of calling upon the Florida National Bank, one of the petitioners, and stated to W. H. Goodman, its vice-president and trust officer, that it was the purpose of the directors to sell to Tully the entire assets of the corporation at a figure which would net the stockholders $100 per share, that is, for $265,500. Stratton stated that in his opinion this was a most desirable sale from the standpoint of the corporation and its stockholders. Goodman, as such vice-president and trust officer, declined to sign the proxy for the Carver estate, and made an independent investigation which disclosed that there was $112,000 cash on hand which, deducted from the proposed selling price, was equivalent to selling the other assets of the corporation, of a value of approximately $400,000, for approximately $154,000, despite the fact that the corporation's timber alone was readily salable in the market for a much greater sum, and that the officers and directors apparently had made no effort whatever to interest other purchasers in the property or to obtain competitive bids therefor or make or have made an independent appraisal of the property. Goodman determined to attend the meeting of the stockholders on July 28, 1943, and oppose the proposed liquidation in the manner stated and to urge the officers and directors to dispose of the assets in a manner more advantageous to the stockholders. He attended the meeting on July 28th and requested that the minutes of the meeting of the board of directors of May 18, 1943, and the stockholders' meeting of December 10, 1942, be read, which request was concurred in by other stockholders, but, at the suggestion of Stratton, these minutes were not read. Whittle then stated that the corporation could not operate except at a loss, and that the board of directors, somewhere around January 1, 1943, had directed Tully to investigate the question as to what should be done with the corporation and its assets, that he considered the corporation disorganized, competent foreman-supervision gone, and that it should be liquidated to conserve the assets. Stratton then stated that Tully had offered to buy the entire assets of the corporation at a price to net $100 per share to the stockholders. Tully stated that he had not definitely made such an offer, but that he was prepared to make an offer on short notice. Stratton then offered a resolution contained in previously prepared minutes to the effect that the directors be authorized to dissolve the corporation and take any and all other action necessary or desirable to sell the assets, except the cash on hand, with authority to delegate such authority to an officer or officers or a committee thereof or to others.

The above resolution was objected to by the petitioners on the grounds: first, that such completely open authority was not appropriate, and the basis of the terms of sale should be specified; and, second, that the directors should make every effort to obtain competitive bids within the next thirty days and submit all offers to the stockholders for their ratification. These objections were incorporated in an amendment to the original resolution, which was seconded by W. Worth Bean Jr., a stockholder, but the amendment was defeated. Thereupon an amendment was submitted by said Bean, seconded by Charles Moulton Davis, another stockholder, to sell the assets of the corporation, except the cash, receivables, and inventories, at not less than $100 per share net to the stockholders. This amendment was defeated by the same vote as the previous one. The Stratton resolution, giving blanket authority to the directors as aforesaid, was then put to a vote and was carried by the same vote that defeated the two amendments. Present at the meeting was W. W. Simmonds of Cummer Sons Cypress Company, representing by proxy Royal L. Vilas, the owner of 19 shares, who stated at the meeting that his company was prepared to make an offer for the assets of the corporation, exclusive of cash and accounts receivable, in excess of $160,000, if given an opportunity to investigate the assets of the corporation. This statement was disregarded, and the Stratton resolution was forthwith adopted. If Cummer Sons Cypress Company and other interested parties were offered an opportunity to cruise the timber and otherwise investigate the assets of the corporation, a sale price greatly in excess of that at which the directors planned to sell the same to Tully could be realized. Despite the request of Cummer Sons Cypress Company for a reasonable opportunity to cruise and investigate the timber, they were advised that a meeting of the directors would be held on August 11th. The petition prayed: 1. That the non-residents, Stratton, Tully, Robinson, and Wells be served by publication. 2. That the defendants and each of them and any agent or attorney or other person acting for them or in their stead be enjoined and restrained from disposing of the assets of the corporation by sale or otherwise except by the approval and confirmation of the court, and until sufficient time has elapsed to enable an independent appraisal of the property and cruise of the timber of the corporation to be made, and then only after a full and free opportunity has been given for competitive offers to be made. 3. That a receiver be appointed to take charge of the assets and properties of the corporation, to conduct the sale and distribute the proceeds thereof under the orders of the court. 4. That a rule nisi issue to the several defendants to show cause why the prayers of the petition should not be granted, and, pending a hearing on said order to show cause, the court issue a temporary restraining order preventing the defendants or any of them or any other persons acting for them or in their place, either directly or indirectly, from selling any of the assets of the corporation or accepting any offer therefor, except that such acceptance be subject to the approval of the court. 5. For such other and further relief as to the court may seem proper in the premises. 6. For process.

Upon presentation of the petition, a temporary restraining order was granted on August 10, 1943, and the defendants were directed to show cause on August 28, 1943, why the prayers of the petitioners should not be granted.

The defendant corporation filed an answer denying that the suit was a representative one, that the corporation had any intention of selling its properties and assets to B. C. Tully, or that it or its directors were guilty of any wrong against the stockholders; and praying that the restraining order be dissolved, that the relief sought by the petitioners be denied, and that the petitioners be enjoined from dismissing their suit until after notice to the defendants and a hearing, so that they may be held to answer for whatever damage the corporation may sustain by reason of the ill-advised and unauthorized action in filing the suit.

B. C. Tully filed a response to the rule nisi, stating that he had been furnished a copy of the response and answer of the corporation, and that he adopted such answer as his own and joined in the prayers thereof.

Upon a hearing, the court, on September 20, 1943, passed an order continuing in effect the restraining order theretofore granted, but declined to appoint a receiver. It was also provided that the corporation might receive on September 21, 1943, bids which had been asked for, and in that connection appointed Charles L. Gowen, of counsel for the petitioners, and Millard Reese, of counsel for the defendants, or any member of his law firm in his absence, to act as representatives of the court until further order, directing that they attend the meeting of the directors of the corporation on September 21, 1943, to be present at the opening of the bids, and to attend any and all other meetings of the directors as representatives of the court, requiring the defendants to afford them full information and access to all records of the corporation. It was further provided that, in the event any bid met the approval of the directors, they and the officers of the corporation should be at liberty to enter into a contract pursuant thereto, but subject to the approval and confirmation of the court, with the right of any party to the cause or representative of the court to report to the court any other bid or bids, offer or offers, which may have been submitted or may have been available and which in their or his opinion should be accepted by the corporation. It was further provided: "This order is not, and shall not be construed to be, a final determination of the questions either of receivership or of injunction, and is not, and shall not be construed to be, such a final disposition of these questions as shall permit or require a tender or signing of a bill of exceptions to such ruling within twenty days as required by statute. The court retains jurisdiction for the purpose of entering such other and further orders in said case as the court may deem necessary or proper, and in the event no sale is consummated to give such further direction as may be meet and proper in the circumstances of this case."

On September 23, 1943, Charles L. Gowen and L. J. Bennet filed with the court a report of their attendance at a meeting of the directors of the corporation on September 21, 1943, at which four bids for the properties and assets of the corporation were received, the highest bid being made by J. W. Wells on behalf of a partnership, of which he was a member, operating as J. W. Wells Lumber Company, of Montgomery, Alabama, and in the amount of $338,500. It was also reported that a resolution was unanimously adopted accepting such highest bid, and the president and the assistant secretary of the corporation were authorized to have prepared a contract of sale to be executed by them on behalf of the corporation and to seek a confirmation by the court of such sale.

On September 23, 1943, the corporation filed with the court a petition for confirmation of the sale, reciting that 71 persons, firms, and corporations had been invited to bid, and that only four bids had been received, that of J. W. Wells Lumber Company being the highest and in the amount of $338,500; that the court's representatives had attended the meeting of the directors at which the bids were received, and a copy of the proposed sales contract was submitted with the petition. On September 24, 1943, the court by appropriate order confirmed the proposed sale.

On October 12, 1943, the court passed an order restraining and enjoining the defendants from paying out any funds of the corporation other than the payment of the salaries of its president, its watchman, its stenographer, and any incidental expense in connection with the liquidation of the corporation's properties, from making settlement or paying any claims against the corporation or from making any distribution of its funds without the approval and order of the court.

On October 23, 1943, upon a petition by the corporation, the court authorized a sale to J. W. Wells Lumber Company by the corporation of thirty described acres of land which had not been included in the sale hereinbefore mentioned.

On November 8, 1943, the corporation filed a supplemental answer, designated as a cross-action, seeking to recover from the petitioners in their representative capacity and individually, jointly, and severally, damages alleged to have been sustained because of the alleged evil and wrongful conduct on their part in filing and prosecuting the action which they instituted on August 10, 1943. The petition sets out wherein and whereby the damages were sustained as follows: "(a) By being delayed, restricted, hampered, and deprived of liberty of action in negotiating for a sale of defendant's properties with J. W. Wells and other prospective purchasers. Such acts of plaintiffs, said Goodman and their attorneys, resulted, as hereinbefore set out, in the aforesaid sales for a total sum of $350,000, when the fair and reasonable value of the properties sold was $400,000, and defendants would have been able to make a sale of these same properties for the sum of $400,000 if plaintiffs' petition had not been presented and the ex parte restraining order of August 10, 1943, had not been granted thereon. Defendant's damage here is the sum of $50,000. (b) Defendant has suffered and sustained further injury and damage in an amount equal to interest on said sum of $50,000 at the legal rate from September 10, 1943, until paid. The date from which this interest damage is claimed is fixed thirty days later than August 11, 1943, because defendant recognized it would have been necessary to grant said Wells or other purchaser thirty days from the date on which a binding contract, subject to approval of defendant's title, would have been entered into, within which to have its titles to its lands and timber holdings examined and approved, just as this was necessary in the contract of sale and purchase entered into with said J. W. Wells and Ruth A. Wells following the acceptance of their sealed bid on September 21, 1943. (c) In addition to the sums mentioned, defendant has been further injured and damaged in an amount equal to interest at the legal rate on the sum of $350,000 from September 10, 1943, until October 22, 1943, when this sum was collected from the aforesaid purchasers as the purchase-price of defendant's properties sold. (d) Defendant has been further injured and damaged by the order put in this cause on October 12, 1943, at the instance of plaintiffs and their attorneys, and by their imposition upon the court, in that defendant has been and is now deprived of the right and opportunity of using money in the amount of $392,000 belonging to defendant and which would be available for its use in paying its debts and making distribution among its stockholders when and as defendant's board of directors may deem it wise and prudent so to do except for the unlawful and unauthorized order of October 12, 1943. The damages sustained on this account are equal to interest at the legal rate from October 22, 1943, on the amount of $392,000, or the balance thereof which may remain from time to time after defendant shall have made the extremely limited disbursements therefrom permitted under the terms of said order, until said order shall have been annulled, revoked, and set aside, and defendant shall be free to use its own funds as its governing authorities may authorize and direct. (e) The evil, malicious, and wrongful acts of plaintiffs, said Goodman and their attorneys hereinbefore set out, necessarily will extend and prolong defendant's period of liquidation. The expenses to which defendant will be put during its period of liquidation will amount at least to $650 per month, and defendant is entitled to recover of and from plaintiffs the sum by which such expenses will be enlarged by their evil, malicious, and wrongful acts, which will not be less than $650 per month for a period of six months and perhaps more. (f) Defendant has been forced to incur wholly unnecessary, useless, and inexcusable expenses in the defense of plaintiffs' suit, including liability to Reese, Scarlett, Bennet Gilbert, its attorneys at law, for fair and reasonable compensation for services rendered and to be rendered by them in this litigation. Said attorneys are unable and unwilling to fix the amount of their charge until it develops how much more time and effort they will have to expend in the representation of defendant's rights, but on a basis of their normal charges in a case involving the values involved in this case and requiring the great amount of time and effort that have been required and the preferred attention which has had to be given to it commencing with August 11, 1943, fair and reasonable compensation for services rendered to November 1, 1943, will amount to $10,000 or other large sum, plus fair and reasonable compensation for future services." The amendment also alleged that the evil, malicious, and wrongful acts and conduct of the Florida National Bank of Jacksonville, through its vice-president and trust officer, W. H. Goodman, and the attorneys he retained to represent the petitioners in the case, show wanton and reckless disregard of the rights of the defendant and the great majority of its stockholders, and irresponsibility in its management of an estate entrusted to its charge, and a willingness and even a desire to persecute the defendant and to continue to hound it after all of its properties except of minor value have been reduced to cash, and the defendant is ready and anxious to complete its liquidation as promptly as possible. In view of these facts, the defendants, it was alleged, should be awarded punitive or exemplary damages in the sum of $10,000, or such other sum as the jury trying the case may see fit to award, to deter said bank and its aforesaid vice-president and trust officer from such acts and conduct in the future. The prayer was that the defendant be awarded judgment for its proved damages against the petitioners, not only in their representative capacity as executors of the will of Jay G. Carver, deceased, but personally and individually, jointly and severally, and that judgment be awarded against Florida National Bank of Jacksonville in the sum of $10,000, or such other sum as the jury trying the case may see fit to award as punitive or exemplary damages.

On November 10, 1943, the petitioners filed an amendment to their petition, alleging in substance that, due to the institution of the suit and its prosecution by them, they had benefited the corporation and its stockholders to the extent of more than $200,000 above the amount at which the managing officers and directors of the defendant corporation proposed to sell the entire property to the chairman of its board of directors, reciting what had been done by them with the aid of their attorneys. The amendment alleged expenses in the amount of $917.66 to have been incurred in their efforts on behalf of the corporation and its stockholders, a detailed statement being attached to the amendment and made a part thereof. The prayers were: that the amendment be allowed; that the court issue a rule nisi requiring the defendants to show cause why the prayers hereinafter set forth should not be granted; that the court set a convenient date on which the matters and things set forth in the amendment may be inquired of by the court and determined; and that, after a hearing, the court order and direct the payment of attorney's fees in an amount found reasonable, and reimbursement of the petitioners for the expenses incurred in the institution and prosecution of the suit, all of said sums to be paid out of the funds of the corporation; petitioners further praying for the ascertainment and payment of any claims against the corporation, and the distribution to the stockholders at the time of the filing of the amendment of such amount as the court may deem meet and proper.

On November 23, 1943, the court, on a petition filed by the defendant corporation, authorized a sale by it to J. W. Wells and John Rogers of certain described land, not included in the sale to J. W. Wells Lumber Company, for a total amount of $10,067.

On December 1, 1943, the petitioners demurred to the supplemental answer and cross-action filed by the defendants on November 8, 1943, on the grounds that no cause of action was set forth and that the matters therein set out were not germane, material, or relevant to the suit.

To the amendment filed by the petitioners on November 10, 1943, seeking to be reimbursed for expenses incurred and for allowance of attorney's fees, the defendants demurred generally on December 1, 1943, on the grounds: 1. The facts alleged in the petitioners' original petition and amendment show that the court is without authority to award them their attorney's fees and the expenses incurred in the case, or to take charge of, superintend, and supervise the defendant corporation's liquidation as prayed in their amendment. 2. No sufficient facts are alleged to authorize the court to grant the prayers or any of the prayers of the amendment. 3. Petitioners have a plenary suit pending, but seek in their amendment and the order of November 10, 1943, granted thereon, to proceed in a summary manner to recover against the defendant corporation a money award equivalent to a money judgment, and the court is without jurisdiction to grant such an award in the manner sought. 4. The petitioners' suit was not and is not a representative suit, and by their amendment it now appears to have been and to be a joint enterprise upon the part of the petitioners and their attorneys to recover fees and expenses incurred in an unauthorized and illegal effort upon their part to institute and maintain a suit they had no right to institute or maintain, and in which it does not appear that the court appointed a receiver or took other action seizing the defendant corporation's property or any of it. 5. If the petitioners are entitled to recover at all against the corporation their attorney's fees and expenses, it will be only after the issue of fact raised by their petition and the defendant corporation's original and supplemental answer shall have been decided in the petitioners' favor by the verdict of a jury. 6. The court, having failed and refused to appoint a receiver as prayed, has possession of no res out of which to order the defendant corporation to make any payment of any kind to the petitioners or anyone else. 7. The court, having failed and refused to take charge of the defendant corporation's liquidation, to reduce its properties to liquid form, and to make distribution thereof among those entitled, as prayed by petitioners in their original petition, has no right or authority to ascertain and pay claims against the defendant corporation and make distribution to stockholders at this or any other time, as prayed by petitioners in their amendment. The defendants also specially demurred to various allegations of the amendment on numerous grounds.

On the same day, the defendants filed a response and answer to the petitioners' amendment of November 10, 1943, in which they denied that the petitioners were entitled to the relief sought, and contended that the court was without authority to grant such relief under the facts of the case.

On the same day, the defendants filed a written motion to set aside and vacate as improvidently granted the order of October 12, 1943, restraining, on an ex parte application of the petitioners, the defendants from paying out any funds except as therein authorized. The court overruled the motion as made, but modified the original order so as to permit the corporation to pay all of its debts and to make a distribution among its stockholders of $120 per share out of funds in its hands, and to handle the remaining funds under and pursuant to the terms of the order of October 12, 1943. It was recited in the order that, "Counsel for the respective parties have agreed upon the form of this order in accordance with the ruling of the court on said motion, but without prejudice to the rights or contentions of the respective parties or any of them."

On February 16, 1944, the court sustained the defendants' demurrer to the petitioners' amendment seeking reimbursement for expenses and also counsel fees. The court also sustained the petitioners' demurrer to the defendants' supplemental answer and cross-action filed on November 8, 1943.

Thereupon the defendants filed an amendment to their supplemental answer and cross-action of November 8, 1943, and set out that since the filing of the first amendment the following proceedings had occurred in the case: (a) The petitioners' amendment, seeking reimbursement of expenses and also attorney's fees, had been dismissed on demurrer. (b) The court had announced that it would sustain the petitioners' demurrer to the defendants' supplemental answer and cross-action, but before entering an order would allow five days in which to amend, and the present amendment was filed in accordance with that permission. (c) The ex parte order of October 12, 1943, had been modified as hereinbefore set out, and on December 7, 1943, a dividend of $120 per share had been declared and the full amount paid over to the National Bank of Brunswick as disbursing agent. The defendant corporation had paid all of its debts except certain charges and expenses incurred in connection with the present litigation. It had on deposit with the said bank about $73,000. Its current expenses were running about $550 a month, and its liability for income taxes had not been determined. The amendment also set up that the court had announced that with the demurrers sustained nothing was left in the case, in the opinion of the court, but moot questions, and the defendants had suggested that with the demurrers sustained they would be willing to have the defendant corporation placed upon terms that would afford the petitioners fair and reasonable protection in their right to have the Supreme Court review the judgment sustaining the defendants' demurrer to the petitioners' amendment, and in the collection of any amount or amounts the petitioners might recover from the defendant corporation, in the event the Supreme Court should reverse that judgment, the suggestion of the defendants having been made without prejudice to their rights. The defendants conceded that in the situation existing it was right and proper that the court dismiss the petitioners' suit as involving nothing but moot questions, but asserted that, since that disposition was to be given the case, it would be a legal impossibility for them to get a trial of the petitioners' case on its merits, and hence impossible for the defendants to comply with the rule laid down in certain decisions of the Supreme Court to the effect that, before a defendant can recover damages such as sought in the defendants' supplemental answer and cross-action, it would be necessary for the defendants to have prevailed upon a trial of the merits of the issues in the main action. The defendants show and urge that these decisions do not apply to the peculiar facts of this case, and it would be unfair, inequitable, and even unconscionable to defeat the defendants' right to recover the damages alleged to have been sustained by the wrongful and malicious acts of the petitioners and their representatives, simply because there has not been and never can be an adjudication on the merits of the main action in the circumstances existing. Even if the decisions of the Supreme Court should be held to apply to the facts of this case with respect to the other elements of damages alleged to have been sustained by the corporation, they do not apply to its right to recover its fair and reasonable attorney's fees on account of the bad faith and stubborn litigiousness of the petitioners, and the defendant corporation is entitled in any event to have these questions decided by a jury and the amount of damage fixed by it.

On February 22, 1944, the petitioners filed, duly certified, their exceptions pendente lite to the judgment sustaining the demurrer to their amendment of November 10, 1943.

On March 4, 1944, the defendants filed, duly certified, their exceptions pendente lite to the judgment sustaining the petitioners' demurrer to their supplemental answer and cross-action filed on November 8, 1943.

On March 17, 1944, the petitioners filed a motion to have the court reconsider and set aside its judgment sustaining the defendants' demurrer to their amendment seeking reimbursement for expenses and to have allowed attorney's fees, which motion the court overruled. On April 3, 1944, the petitioners filed, duly certified, their exceptions pendente lite to the judgment overruling the motion.

On April 3, 1944, the defendants filed a motion to dismiss the case as moot, reciting the status of the litigation and what had been done by the defendant corporation under the supervision of the court.

On April 7, 1944, the petitioners filed a response to the motion to dismiss the case as moot, setting up that there still remained certain funds and assets of the defendant corporation which should be disposed of under the supervision of the court, and that a dismissal without an adjudication of their right to reimbursement for expenses and attorney's fees would result in incomplete and partial justice, contrary to the well-established rule that equity does not do things by halves. They prayed that the motion be denied and that the court order an immediate sale, under its supervision and control, of the remaining assets of the corporation, and that the court order the corporation to report to it any claims against the corporation and to pay into the registry of the court all funds remaining for distribution, to be disbursed under order of the court; that the court order a discontinuance of salaries and expenses incident to the continued possession of these funds; and that the court take such other and additional steps as may be deemed proper to effectuate full and complete equity.

On April 14, 1944, the court modified, upon motion of defendants' counsel, its order of October 12, 1943, as modified on December 2, 1943, so as to permit a further distribution of $10 per share to stockholders out of funds on hand with the defendant corporation, it being recited in the order that, "Counsel for the respective parties have agreed upon the form of this order, but without prejudice to the rights and contentions of the respective parties or any of them."

On May 10, 1944, the defendants amended their motion to dismiss the case as moot, setting up that, in addition to the $120 per share paid to the National Bank of Brunswick for distribution to stockholders, the corporation had also paid to the bank $26,650 as the total of dividends of $10 per share as declared under the permission of the court by its order of April 14, 1944, and that after paying such dividend the corporation had on deposit with the bank $49,558.25.

On the same day, the defendants filed a motion to strike and a demurrer to the petitioners' response to their motion to dismiss the case as moot, which motion to dismiss was filed on April 3, 1944. The court overruled the defendants' motion to strike and demurrer.

At the same time the court dismissed the case as moot, but passed an order of supersedeas allowing the petitioners a sufficient time "to be heard on the validity of the order in the appellate courts of this State," and in the meantime and pending the presentation of a bill of exceptions by the petitioners continuing in force the restraining order against the defendants, the order reciting that upon presentation of a bill of exceptions the court would grant a supersedeas without requiring the petitioners to give bond.

The defendants sued out a direct bill of exceptions to this court, being case No. 14957, assigning error on their exceptions pendente lite on the judgment of the trial court on February 17, 1944, sustaining the petitioners' demurrer to their supplemental answer and cross-action as amended, and also assigning error on the judgment of the court on May 10, 1944, dismissing the case as moot, because of the antecedent error aforesaid, which entered into and affected the final order dismissing the case, and which could not and would not have been granted except for the antecedent error.

The petitioners sued out a direct bill of exceptions to this court, being case No. 14964, assigning error on their exceptions pendente lite to the judgment of February 16, 1944, sustaining the defendants' demurrer to their amendment seeking reimbursement for expenses and to be allowed attorney's fees; and also assigning error on their exceptions pendente lite to the judgment of March 16, 1944, overruling their motion to reconsider and set aside the judgment of February 16, 1944, on which error is assigned as above stated; and assigning error on the judgment dismissing the case as moot.

The defendants sued out a cross-bill of exceptions to this court, being case No. 14968, in which error is assigned on the judgment of May 10, 1944, overruling their demurrer to the petitioners' response to their motion to dismiss the case as moot, except as to the first six paragraphs of the response; it being recited that preserved exceptions pendente lite are not specified as a part of the record since the court convened on May 8, 1944, and had not adjourned at the time of the presentation and certification of the cross-bill of exceptions (signed on June 29, 1944), and that the cross-bill was presented within sixty days from the date of the rendition of the judgment complained of and within thirty days from the date upon which the main bill of exceptions was filed (June 24, 1944).

In this court, the defendants in error in case No. 14957 filed a motion to dismiss the writ of error and to docket the bill of exceptions as a cross-bill in case No. 14964, brought to this court by the petitioners in the trial court, on the ground that the ruling complained of, the sustaining of the petitioners' demurrer to the defendants' amendment and cross-action seeking to recover expenses and attorney's fees, is not a final judgment; and that, although error is attempted to be assigned also on the final judgment dismissing the case as moot, such dismissal was at the instance of the defendants and, therefore, can not be excepted to. 1. 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. 14964 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 judgment 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, night properly have been made in a cross-bill, but we must consider the motion to dismiss as if the losing party had not excepted, 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. GeorgiaRailway 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 case 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. For 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.

2. 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 inflexible 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 FertilizerWorks, 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 overruleShort 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 the 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 HillMining 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.

3. 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 by 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 the 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 property, or who has created at his own expense, or brought into court, a fund in which others may share with him." (Italics ours.) Supporting this rule, seePrice 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); Hobbsv. 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 benefiting 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 cases 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 upon 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 other interested 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. 14957 andcross-bill of exceptions in case No. 14968; and judgment reversedon main bill of exceptions in case NO. 14964. All the Justicesconcur, except

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Dissenting Opinion

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.

Case Details

Case Name: Georgia Veneer & Package Co. v. Florida National Bank

Court Name: Supreme Court of Georgia

Date Published: Oct 13, 1944

Citation: 32 S.E.2d 465

Docket Number: 14957, 14964, 14968.

Court Abbreviation: Ga.