Opinion
14108.
MAY 20, 1942. REHEARING DENIED JUNE 15, 1942.
Equitable petition. Before Judge Moore. Fulton superior court. December 5, 1941.
W. L. Bryan, Bennett Wimberly, and Poole, Pearce Graham, for plaintiff in error.
Roy S. Drennan, Haas, Gardner, Lyons Hurt, Mitchell Mitchell, Moise Post, and Tye, Thomson Tye, contra.
An answer in the nature of a cross-action, which merely seeks to introduce new and distinct matter not germane to the original suit, is properly stricken on demurrer.
No. 14108. MAY 20, 1942. REHEARING DENIED JUNE 15, 1942.
A petition was filed by DeJarnette Supply Company et al., owners of what was called preferred stock of a corporation known as Mayflower Apartments Inc., against said corporation and its officers, and against Anjaco Inc., another corporation, and all of its stockholders, one of whom specially named as a defendant being Andrew J. Collier, the plaintiff in error. Anjaco Inc. was the holder of a second security deed on the apartment-house property. Originally the petition prayed for various relief, and on demurrer it was held by the trial court to be multifarious. Several amendments to the petition were filed, and as finally amended it became a suit praying for an accounting from the officers of Mayflower Apartments Inc., and for a money judgment against them on account of the alleged acts charged in the petition as amended. Andrew J. Collier, a stockholder of Anjaco Inc., filed his answer denying that the petitioners were entitled to any of the relief prayed for, except that H. A. Minor, who was president of Mayflower Apartments Inc. should be required to file an accounting. His amended answer alleged that the Mayflower Apartments' security deed, held by Anjaco Inc., should have been in the sum of $16,000 instead of $15,000, as alleged by him; that the officers and directors of Anjaco Inc. had refused to take any action to enforce the security deed; that they were acting against the best interests of the company; that he made a personal demand on them, and on the attorney for the directors, for a change in the recited amount of the security deed and for its foreclosure, but to no effect; and he prayed that the security deed be foreclosed as an equitable mortgage, and that the money derived from such foreclosure be paid into the registry of the court, subject to its orders. On November 15, 1941, the petitioners dismissed their action. On December 4, 1941, Andrew J. Collier filed a second amendment to his answer, alleging that the dismissal of the suit was due to a conspiracy on the part of the petitioners, all of whom owned stock in Mayflower Apartments Inc., and on the part of all of the stockholders of Anjaco Inc., except himself, a minority stockholder. He charged that Anjaco Inc. canceled its security deed which it held on Mayflower Apartments Inc. for $12,500, when it knew that the amount due thereon was nearly $15,000; and that although this was ratified by a majority vote of the Anjaco stockholders, it was illegal and invalid because contrary to the best interest of that corporation, and resulted in damage to himself, "who was present and protested." To Collier's amended answer the defendants in error demurred. On the hearing on December 5, 1941, the court sustained the demurrer and dismissed the amended answer, reciting in its judgment the previous dismissal of the case in which the answer was filed, and holding that the plaintiff in error was not entitled to have the security deed foreclosed as prayed.
Several parties demurred to the answer of Andrew J. Collier as amended, and the same was stricken. The brief in support of the ruling of the trial court challenges the contention of the plaintiff in error that his answer as amended was in fact a cross-action, and denies that it was a proceeding as a minority stockholder in behalf of himself and other stockholders against the corporation and its officers; and contends that if it was, no case is made to authorize him so to proceed. It is unnecessary to consider any of the grounds of demurrer except the one which takes the position that the answer as amended can not be sustained as an action in the nature of a cross-bill. The petition was dismissed on November 14, 1941; and the amendment to the answer of the present plaintiff in error, which it is insisted by his counsel constitutes a cross-action, was filed on October 15, 1941. The original petition, though naming many defendants and seeking much relief, was so amended that it had become in effect a mere suit against Mayflower Apartments Inc., H. A. Minor, its president, and Annie Lou Minor; and it was prayed that the three defendants last named be required to have an accounting in order to determine the amount due to the plaintiffs, and for judgment against said three defendants. As thus amended, while neither Anjaco Inc. nor Andrew J. Collier was stricken as a defendant, no accounting was asked against them, nor was relief prayed against either Anjaco Inc. or Andrew J. Collier, except that it was prayed that the deed given by Mayflower Apartments Incorporated to Anjaco Inc. be decreed of no force and effect as to its part of the property covered thereby, and that Anjaco Inc. be enjoined from changing the present status of the notes and deed given to secure the payment thereof, and that it be perpetually restrained and enjoined from enforcing or attempting to enforce the same by a foreclosure or otherwise. Under the Code, § 3-510, while a plaintiff may dismiss his action if he shall not thereby prejudice any right of the defendant, he may not dismiss his action after a plea of set-off or otherwise shall have been filed, so as to interfere with said plea, unless by leave of the court on sufficient cause shown, and on terms prescribed by the court. It has several times been ruled that the dismissal of the action will not have the effect of dismissing what was called under our former practice a cross-bill, if in such cross-action the defendant asks for affirmative relief on matters germane to the original petition. Ryan v. Fulghum, 96 Ga. 234 ( 22 S.E. 940). Where the relief sought by the cross-petition is not germane to the main action, the dismissal of the main action carries the cross-action with it. Atlanta Northern Railway Co. v. Harris, 147 Ga. 214 ( 93 S.E. 210). If the cross-action merely seeks to introduce new and distinct matter not embraced in the original action, it is properly stricken on demurrer. Peterson v. Lott, 137 Ga. 179 ( 73 S.E. 15). A cross-bill should not introduce new and distinct matters not embraced in the original suit. Josey v. Rogers, 13 Ga. 478; Ray v. Home Foreign Investment c. Co., 106 Ga. 492, 495-6 ( 32 S.E. 603). To same effect see Johnson v. Stancliff, 113 Ga. 886 ( 39 S.E. 296); Wood v. Hayes, 189 Ga. 658 ( 7 S.E.2d 256); Usry v. Hines-Yelton Lumber Co., 176 Ga. 660 ( 168 S.E. 249). The amended answer as stricken, which sought foreclosure of a security deed given by Mayflower Apartments Inc. to Anjaco Inc., was foreign to any issue in the suit brought by petitioners for an accounting against Mayflower Apartments and the Minors. It is true that in the cross-action it was prayed that "an account be taken by and under the direction of this honorable court of the amounts now due for principal and interest on said security deed;" but this reference is to a different accounting and between parties different from the accounting referred to in the prayer for an accounting in the petition as amended. There the prayer was for an accounting that would determine how much was due to the original plaintiffs on a matter entirely foreign to that referred to in the prayer for an accounting contained in the cross-action. The petition as amended raised no issue as between petitioners and Anjaco Inc., or as between them and Mayflower Apartments Inc., or as between Anjaco Inc. and Mayflower, except as hereinbefore indicated. The attempt of Collier to foreclose Anjaco's security deed against Mayflower Apartments Inc. bears no relation whatever to the cause of action set out in the amended petition. The decisions in Ray v. Home Foreign Investment c. Co., supra, and Byrd v. Equitable Life Assurance Society, 185 Ga. 628 ( 196 S.E. 63), ruled nothing to the contrary. They merely held, when a grantor in a security deed filed suit seeking to enjoin the grantee from foreclosing or selling under the power of sale, that a cross-action by the grantee against the grantor, seeking judgment on the note and setting up a special lien on the land, was germane. No such case as that is before us. In both the Ray and the Byrd cases the cross-action covered the same subject-matters as did the petition — the same controversy. Here, Collier by his cross-action seeks to inject new matter entirely independent of that set out in the amended petition. The answer of the plaintiff in error as amended sought new and distinct matters not involved in the suit as amended, which had been dismissed. The amended answer in the nature of a cross-bill, setting up only matters which were not germane to the case made by the petition as amended, was not maintainable; and it was not erroneous to sustain the demurrer thereto. Other reasons urged in support of the ruling of the trial court need not be considered.
Judgment affirmed. All the Justices concur.