Hardie v. Bulger

Cooper, J., delivered the opinion of the court. The demurrer of the appellant to the amendment was properly overruled. Appellant is trustee in a deed executed by the hotel company, to secure the payment of a series of bonds, some of which are owned by the appellant, and some by Howard, who was one of the directors when the resolution of the board of directors was passed authorizing the execution of the mortgage and the sale of the [581] bonds thereby secured. The original bill assailed the validity of the mortgage (or deed of trust), and the good faith of the directors and holders of the bonds in reference to their issuance and sale. This bill, after it was once amended, was answered by the defendants, and testimony was taken upon the issues thus presented. In the course of this investigation, facts were disclosed showing that the company had not been legally organized under its charter at the time of the election of the board of directors, by which the mortgage was authorized to be made, and thereupon the complainants obtained leave to exhibit an amendment attacking the validity of the mortgage, upon the ground that the board of directors so elected had no power to authorize the mortgage to be made. To so much of the amendment as sought relief on this ground, objection was made by the demurrer that the amendment changed the nature and character of the bill, and, further, that complainants were estopped to allege the irregularity of the organization of the company without offering to refund the price received for the bonds. Neither position is maintainable. The object and purpose of the original bill was to vacate the mortgage for certain reasons therein stated. On this bill an issue of.fact was made, and is yet pending and undetermined. The amendment sets up another and a different state of facts, upon which relief of the same character is sought. The new facts may be inconsistent with the facts stated in the original bill, but they are not inconsistent with the general purpose of the original bill, nor with the relief originally sought. They are facts which might have been consistently averred in the original bill, since they are only inconsistent with the collateral or incidental fact therein stated of the proper organization of the company under its charter. The objection that the complainants are estopped to deny the validity of the organization of the company depends upon circumstances. They may be estopped as to Hardie, as owner of a portion of the bonds, and not as to him as trustee in the deed for the benefit of Howard, one of the directors and holder of other of the same series of bonds. The rights of Hardie, a stranger to the company, dealing with it as legally organized, and purchasing its bonds in [582] good faith, would be determinable by different rules and principles than those which would apply to Howard, one of the incorporators and directors chargeable with notice of the irregular organization. Whether complainants are estopped to deny the validity of the mortgage and bonds as to Hardie because of his good faith in buying them, and are also estopped as against Howard because of their acquiescence and participation, are questions ujmn which we express no opinion. We cannot look to the testimony taken, on the issue joined on the original bill in determining the validity of the cause of demurrer under consideration. Since Hardie, as trustee, stands as the representative of himself as an individual and also of Howard, holder of some of the mortgage bonds, and since Howard is also the owner of some of the bonds secured by the second deed of trust, it was competent for complainants, who claim to be interested as stockholders in the • property covered by the two mortgages to proceed in one suit for the cancellation of both incumbrances. When a bill is or is not multifarious is difficult of determination. Indeed the decisions upon the subject are so inharmonious that no rule upon the subject can be said to be clearly announced. The rule, if there be a rule, is that the court will on the one hand refuse to permit distinct and disconnected matters to be combined in one suit to the vexation- and delay of defendants, and on the other will avoid the necessity of a multiplicity of suits, if the general objects of the bill may bead vanced by combining the subjects of controversy; provided there be a common duty in the defendants (not necessarily coextensive with complainant’s right), and a common interest in the complainants. Story’s Eq. PL, §§ 530, 539. The complainants claim as -stockholders in the hotel company against distinct conveyances of the corporate property made under what they claim to be invalid resolutions of its directors. There seems to us to be a close analogy in this to cases in which creditors of a fraudulent grantor proceed against his grantees holding under' distinct conveyances ; and it is well settled in this state that such defendants may be joined in one suit. Waller v. Shannon, 53 Miss. 500. See also Butler v. Spann, 27 Ib. 234 ; Delafield v. Anderson, [583] 7 S. & M. 630; Gaines v. Chew, 2 How. (U. S.) 602; McGowan v. McGowan, 48 Miss. 553. The other causes of demurrer assigned might be disposed of upon the rule that where the demurrer is to the whole bill and is bad as to any part thereof, it should be overruled. But there is another reason why appellant cannot now object by demurrer to the relief sought by complainants against the directors of the hotel company, which is that he has answered instead of demurring to the original bill in relation to such matters. The decree is therefore affirmed and cause remanded, with leave to appellants to answer within sixty days after the mandate shall have been filed in the court below.