Sayer et al. v. Bennett, superintendent of banks, et al.

Supreme Court of Georgia1924-12-13No. No. 4537

159 Ga. 369

Summary · law.co

Holding. The judgment of the trial court denying the injunction was affirmed because the petition was multifarious through misjoinder of parties and causes of action, and the court lacked jurisdiction over the superintendent of banks as a non-resident defendant.

Stockholders of the Planters Bank of Carlton sought equitable relief to prevent the superintendent of banks from collecting a 50 percent assessment against them. They challenged the constitutional validity of the statute authorizing the assessment and sought damages against the bank's directors for mismanagement. The trial court refused to grant an injunction, and the stockholders appealed. The appellate court addressed three independent defects in the stockholders' case: first, the court was evenly divided on whether the assessment statute was constitutional, so the lower court's decision on that point was affirmed by operation of law; second, the petition improperly joined the superintendent of banks and the bank directors as defendants because they had no common interest in the subject matter and the claims against them were separate and distinct; and third, the court lacked jurisdiction over the superintendent of banks because he was legally required to reside at the State Capitol rather than in Madison County, where the lawsuit was brought.

Summary generated by law.co from the public-domain opinion. The opinion text itself is public domain.

Key issues

Whether the banking assessment statute was constitutional
Whether the superintendent of banks and bank directors were properly joined as defendants
Whether the court had jurisdiction over a non-resident defendant whose statutory residence was elsewhere

Procedural posture

The stockholders appealed from the trial court's denial of their application for an interlocutory injunction in an equitable petition.

Authorities cited

No cited authorities resolved to law.co cases yet.

Opinion · public domain

majority opinion

Hines, J.

The plaintiffs filed their equitable petition against the Planters Bank of Carlton, the directors of said bank, and T. R. Bennett as superintendent of banks. Thc-y alleged, that said superintendent of banks has and maintains an office for the transaction of business in the County of Fulton, State of Georgia, and that the other defendants are residents of the County of Madison; that said superintendent of banks has taken charge of said bank for the purpose of liquidation and has levied an assessment of 50 per cent, against them and other stockholders of said bank; that said levy is illegal because section 20, article 7, of the act creating the Department of Banking, under which said levy was made, is unconstitutional and void, because it violates the due-process clauses of the State and Federal constitutions, in that it does not provide for notice to stockholders and an opportunity to be heard before assessments are levied thereunder; that, if said b.anlr is insolvent and if they are liable for said assessments, they are entitled to recover from said directors a sum equal to double the amount of their stock, by virtue of the fact that said bank had sustained losses amounting to $38,030.23, due to their mismanagement of its affairs, growing out of their failure to exercise ordinary care and diligence in the supervision of the business of said bank. They prayed that the superintendent of banks be restrained from issuing executions against them for said assessments, and from making any further assessments against them; and for judgment against said directors for the amount of the face value of their stock, and for any assessments for which they might be found liable after a hearing. The superintendent of banks demurred to said petition upon the grounds: (1) that no cause of action is set out; (2) that there is no equity in said petition; (3) that before the plaintiffs can invoke the aid of a court of equity they must do equity by tendering to the superintendent of banks the amounts for which they are liable as stockholders to depositors; (4) that the superior court of Madison County has no jurisdiction of this defendant; (5) that tlie petition is multifarious, in that there is a misjoinder of parties defendant and of causes of action; and (6) that it is not shown how, in what manner, or for what reason plaintiffs have the «right to ask this court to enjoin this defendant from issuing executions and levying the same upon the stockholders of this bank. The superintendent answered the petition; but the averments of the answer are not necessary to a decision of the points raised in this case. The other defendants neither demurred nor answered. On the hearing of the application for injunction the trial judge held that said section of the act creating the Banking Department of this State was constitutional; that the petition was multifarious, in that there was a misjoinder of parties defendant and of causes of action; and that the superior court of Madison County had no jurisdiction of the superintendent of banks. The court denied an interlocutory injunction; to which judgment plaintiffs excepted. Held:

1. One of the questions for decision by a full bench of six Justices being whether section 20 of article 7 of the act creating the Department of Banking of this State (Acts 1919, p. 160) is unconstitutional, and the Justices being evenly divided in opinion, Russell, C. J., and Hill and Gilbert, JJ., being of the opinion that said section of said act is unconstitutional, .and Beck, P. J., and Atkinson and Hines, JJ., being of the opinion that the same is constitutional, the judgment of the court below upon this point stands affirmed by operation of law.

No. 4537.

December 13, 1924.

Petition for injunction. Before Judge Hodges. Madison superior court. September 12, 1924.

John J. Strickland and Rupert A. Brown, for plaintiffs.

Clarence E. Adams and C. N. Davie, for defendants.

2. The petition is multifarious, because there is a misjoinder of parties defendant and of causes of action, the superintendent of banks and the directors of the Planters Bank of Carlton being improperly joined; and the cause of action against the superintendent of banks and the cause of action against these directors being separate and distinct causes of action, for which reason they could not be joined. Civil Code (1910), § 5515; Hawkins v. Georgia & Alabama Railway, 108 Ga. 784 (33 S. E. 682). There is no matter in the suit which is common to all the defendants, and With which each defendant is connected with the others. Blaisdell v. Bohr, 68 Ga. 56. The principle that, though there may be a misjoinder of parties defendant in equity, a defendant against whom there is a sufficient complaint can not object that others who have no interest in the subject-matter of the suit are made defendants, unless his interests are affected thereby (Lowery Look Co. v. Wright, 154 Ga. 867, 115 S. E. 801), is inapplicable, because there is no sufficient complaint set out against the objecting defendant.

3. The residence of the superintendent of banks is fixed by law at the State Capitol. 8 Park’s Code, § 2263(h); Acts 1919, p. 140. Suits in equity must be brought in the county of the residence of a defendant against whom substantial relief is prayed. Civil Code (1910), § 6540. To give a court of equity jurisdiction of a non-resident defendant, such substantial relief must be such as can be jointly enforced against the resident defendant and the non-resident defendant. A separate and distinct equitable cause of action against the resident defendant will not give the superior court of the county of his residence jurisdiction of a non-resident defendant against whom the plaintiff has another, independent, separate and distinct equitable cause of action. See Bird v. Trapnell, 147 Ga. 50 (5) (92 S. E. 872); A., B. & A. R. Co. v. Smith, 148 Ga. 282 (2) (96 S. E. 562); Fourth National Bank v. Mooty, 143 Ga. 137 (84 S. E. 546). So the superior court of Madison County had no jurisdiction of the superintendent of banks, who did not reside in that county.

(a) There is nothing to the contrary of what we here hold in Berrien County Bank v. Alexander, 154 Ga. 775 (115 S. E. 648), in which ease we were dealing only with the venue of a suit under section 8 of article 7 of the act creating- the State Banking Department.

4. Applying the above principles, the court did not err in refusing to grant an injunction.

Judgment affirmed.

All the Justices concur, except Russell, O. J., and Hill, J., dissenting.