Opinion
13281
November 27, 1931.
Before WILSON, J., Greenville, March, 1931. Affirmed.
Action by W.S. Manning and Nina H. Manning against Brandon Corporation. From judgment for plaintiff the defendant appeals.
STATEMENT OF FACTSThis is the second appeal in this case. To avoid confusion, W.S. Manning and Nina H. Manning are referred to as petitioners, and Brandon Corporation is referred to as defendant; these being their respective designations in the original proceedings. In this appeal, the defendant is the appellant, and the petitioners are the respondents.
The case arose out of the consolidation of three corporations. Brandon Mills, Poinsett Mills, and Woodruff Cotton Mills, into one corporation under the name of Brandon corporation. The original proceeding was instituted by the petitioners for the evaluation of, and payment for their stock in Brandon Mills. The case first came before the Supreme Court upon an appeal of the petitioners from the judgment of the Circuit Court fixing the value of petitioners' stock and providing for payment therefor. After a hearing before this Court, that appeal was abandoned.
The present appeal involves only questions (1) as to the amount of interest to which petitioners are entitled, and (2) as to additional attorney's fees.
On March 8, 1928, Brandon Mills, Woodruff Cotton Mills, and Poinsett Mills, entered into an agreement for the consolidation of these three corporations into one corporation under the name of Brandon Corporation, pursuant to the terms of the Act of April 14, 1925 (34 Stat., 246). This agreement of consolidation was ratified by the stockholders of the three corporations, and became effective on June 1, 1928.
W.S. Manning was the owner of sixty (60) shares of the common stock of Brandon Mills, and Nina H. Manning was the owner of (15) shares of that stock. They demanded payment in cash of the value of their stock, and filed a petition in the Court of Common Pleas for Greenville County to have the value thereof determined, and the amount paid. After the preliminary proceedings, as outlined in the act, the case came on to be heard in December, 1928, before Special Presiding Judge Mendel L. Smith and a jury. The jury rendered a verdict finding the value of each share of petitioners' stock to be $253.31.
On March 1, 1929, Judge Smith filed his order for judgment approving the verdict of the jury, and ordering that the petitioners should forthwith transfer their stock to Brandon Corporation, and that Brandon Corporation should pay to them the amounts found to be due them (to W.S. Manning, $40,529.60, and to Nina H. Manning, $3, 799.65), with interest at 7 per cent. from July 6, 1928. The order furthered directed that Brandon Corporation should pay to the attorneys for petitioners a fee of $2,000, and should pay to the Clerk of Court the costs of the proceedings.
On March 4, 1929, the defendant wrote to each of the petitioners directing attention to the filing of Judge Smith's order and to the provisions thereof, and notifying the petitioners that Brandon Corporation was ready to made immediate payment and "hereby offers to make payments in accordance with the terms of said order," and demanding the delivery of petitioner's stock as provided in the order. The defendant, in the same letter, gave notive to the petitioners that, should they refuse to deliver their stock and accept payment as ordered by the Court, Brandon Corporation would take the position that the petitioners would not be entitled to further interest. To this, the petitioners, through their attorneys, replied by letter, under date of March 6, 1929, stating that it was their intention to appeal to the Supreme Court and that they could not consent to transfer their stock at that time, but added that "if you desire to stop interest, we will be glad to accept payment on account and give you credit accordingly."
On the same date, March 6, 1929, the petitioners served upon attorneys for defendant notice of intention to appeal to the Supreme Court from the judgment of the Circuit Court. The appeal was argued in the Supreme Court at the October term, 1930. In January, 1931, the petitioners gave notice that they intended to abandon their appeal, and, accordingly, an order was taken dismissing the appeal.
The petitioners thereafter notified the defendant that they were ready to deliver their stock, but they demanded payment of them of interest from July 6, 1928, to the date of payment. The defendant, on the other hand, offered to pay the principal sum, with interest from July 6, 1928, to March 6, 1929 (the date of petitioners' refusal to comply with Judge Smith's order and to accept payment in accordance with the terms thereof), with costs and attorneys' fees, and on January 22, 1931, the defendant served upon petitioners' attorneys a formal notice reciting, in brief, the facts above stated and notifying the petitioners that the defendant was ready to comply with the terms of the order and to pay the full amount due the petitioners, with interest from July 6, 1928, to March 6, 1929, and demanding that the stock be delivered and that the defendant be permitted to make payment in accordance with the terms of the order. The petitioners refused to accept such payment, and insisted that they had the right to enter judgment for the full amounts claimed by them, with interest thereon to the date of the entry of such judgment. The defendant then offered to pay, without prejudice to either side, the principal sum with interest from July 6, 1928, to March 6, 1929, with costs and attorneys' fees. This offer being accepted, the defendants, on January 23, 1931, paid to W.S. Manning $42,421.37, being the principal and interest from July 6, 1928, to March 6, 1929, and to Nina H. Manning $3,976.96, being principal and interest from July 6, 1928, to March 6, 1929, and paid to the attorneys for petitioners the sum of $2,000 fixed by Judge Smith's order.
On January 27, 1931, a certified copy of the order dismissing the appeal was filed in the office of the Clerk of the Circuit Court, by way of remittitur. The attorneys for petitioners thereupon threatened to enter judgment for the full amounts claimed, including interest to the date of the entry of such judgment, and to issue execution thereon.
On January 27, 1931, the defendant filed its verified petition, setting forth the above facts, praying for a rule requiring petitioners to show cause why satisfaction should not be entered upon the record, and why the Clerk of Court should not be restrained from entering judgment for the full amounts demanded by petitioners, and from issuing executions thereon. A rule being issued, the petitioners made their return setting forth, among other things, the claims above stated.
Upon the issues thus joined, the matter came on to be heard before Judge Wilson, who, on March 27, 1931, filed his order sustaining the claims of the petitioners, dismissing the rule, and ordering that judgment be entered for the full amounts claimed, including interest to date of the entry of the judgment, and allowing an additional attorney's fee of 10 per cent. of the amount involved in this controversy. On the same date, petitioners entered judgment against the defendant in the sum of $6,765.98, with costs, being the full amount claimed by the petitioners, after crediting the amounts paid by the defendant on January 23, 1931, as above stated.
The matter now comes before this Court upon appeal by the defendant from the order of Judge Wilson and the judgment entered thereon.
ORDER OF JUDGE WILSONThe above-stated matter comes before me on a rule to show cause which I issued in this case on January 27, 1931, upon a petition by the Brandon Corporation.
Petitioners filed a return to the rule, and certain affidavits were introduced by the defendant in reply.
I heard the matter in open Court on February 12, 1931, and, after full argument, took the matter under advisement.
The main issue in the case is one of an alleged tender which the defendant claims to have made to the petitioners on March 4, 1929, after the petition had been filed, an appraisal made by the appraisers under the statute, and after judgment rendered in the Court of Common Pleas, and pending an appeal by the petitioners to the Supreme Court.
I have considered the statute under which this proceeding is brought, and I am satisfied that Mr. and Mrs. Manning, the petitioners, have the right to pursue every remedy, provided for by the statute. They not only had the right to have a jury assess the value of their stock, but, if dissatisfied, the statute expressly gives them the right of appeal, and therefore during the pendency of an appeal no tender of any kind would be available to deprive petitioners of one of the remedies provided for by the statute. If the simple offer to pay the judgment rendered by the Circuit Court, accompanied by a demand for the surrender of the certificates of stock, could be regarded as anything in the nature of a tender, it would have at once deprived petitioners of the right to appeal, which is not only guaranteed to them by the general laws of the State, but expressly by this statute. I therefore hold that under this statute no tender could be made which would deprive the petitioners of one of the remedies provided for by the statute.
I am also satisfied that, if a tender could have been made under this statute, no tender was actually made. That defendant's offer to pay the judgment was nothing more than a threat to the plaintiffs, that, unless they accepted it, the defendant would claim that plaintiffs were entitled to no interest on the fund. Petitioners' answer to the letter clearly shows that it was petitioners' intention to appeal the case to the Supreme Court as they had the right to do, and as they afterwards did. The petitioners also offered to accept whatever money defendant desired to pay if its purpose was simply to stop interest, and no one could have been hurt by such payment. The stock was transferred only on the books of the corporation, and the statute specifically provides that a stockholder, after a consolidation, shall have no further right than to receive payment for his stock.
This in my judgment has no element of a tender. This is well settled by a number of cases, some of which are: Doty v. Crawford, 39 S.C. 4, 17 S.E., 377; Smith v. Keels, 15 Rich., 318; Siter v. Robinson, 2 Bailey, 274; Reynolds v. Price, 88 S.C. 539, 71 S.E., 51; Smith v. Stinson, I Brev., 1, 38 Cyc., 158 and 162.
As a matter of fact, this letter was nothing more than an offer of compromise, or an attempt to have petitioners agree that the order was correct.
Another reason why I cannot hold that the letter was a tender is that a tender cannot be made during the pendency of an action without paying the sum tendered into Court, under an order of the Court, preserving the rights of the litigants. Parties cannot by mere threats, or offers to pay, stop interest, unless they go further and pay the money so offered into Court. This, as I understand, has been the law as to tender, after suit brought, from the earliest decisions down to this time. It is just, equitable, and no one can be harmed by so doing. In this case, the mill had the use of the money pending the litigation, and petitioners were held out of it, although they offered to take it and apply it on account.
See Fishburne v. Sanders, 1 Nott McC. (10 S.C. Law), 242; Doty v. Crawford, 39 S.C. 5, 17 S.E., 377; Salinas v. Ellis, 26 S.C. 345, 2 S.E., 121; Reynolds v. Price, 88 S.C. 533, 71 S.E., 51; Porter v. Dixie Fire Ins. Co., 107 S.C. 393, 93 S.E., 141; Tolbert v. Fouche, 129 S.C. 338, 123 S.E. 859. Keese v. Parnell, 134 S.C. 207, 132 S.E., 620.
Petitioners ask for costs of the action which have not yet been taxed, costs of the appeal to the Supreme Court, and also an additional attorneys' fee brought about by defendant's contentions in this matter.
Ordinarily petitioners under this statute are to have all the remedies provided for by the statute at the expense of the consolidated corporation. Their stock is taken away from them by the corporation, and the scheme of the statute is that all costs of every kind shall be paid by the corporation, so as to save the stockholder harmless in pursuing those remedies which the statute gives. But in this case the petitioners withdrew their appeal, and because of that I do not think they can tax the costs of appeal in the Supreme Court, although the statute expressly provides for an appeal. The withdrawal waives their right to tax these costs.
They are, of course, entitled to tax the costs in the Circuit Court, as well as the costs of this motion.
As to attorneys' fees, petitioners ask for 15 per cent. of the amount now involved. I think this is too much, and, after consideration, will allow an additional fee of 10 per cent. of the amount now involved, which is the three items of interest withheld by the defendant. Certainly the former fee could not have covered a matter of this kind, for no one could even have anticipated that the corporation would take a position of this kind. The work involved has been considerable, as set out in the return, and not denied. Long briefs have been submitted, and extended arguments have been made by counsel.
Certainly this statute which gives the consolidated corporation one of the highest rights known to the law, that of taking the property of a stockholder over his objection, never intended that the consolidation should take place without the payment to such stockholder of the value of his stock, and all costs and attorneys fees which he has incurred in the proceedings. The corporation in this case decided that for some reason, called a tender, which has not a single element of tender about it, that it could defeat petitioners of a large sum by way of interest on the amount fixed as the value of their shares of stock, when the statute expressly provides for interest from thirty days after the merger or consolidation. Certainly justice and equity require the payment of fees to counsel to defend a contention of this kind
This statute should be construed liberally in favor of the stockholder, so as to carry out the manifest theory of the act, and to save harmless the stockholder from all costs and expenses in obtaining the value of his stock at the time of the consolidation, and interest thereon from thirty days thereafter.
It is therefore ordered:
(1) That the rule in this case be, and is hereby, dismissed, with costs.
(2) That the Clerk of Court be and he hereby is directed to enter judgment against the defendant, the Brandon Corporation, for the full amount, in accordance with the order of his Honor, Judge Smith, with interest thereon as provided by the said order, and with interest on the attorney's fees from the date of that order.
(3) That the costs of this motion and the costs in the Circuit Court be taxed by the Clerk of the Court and included in the said judgment.
(4) That an additional attorneys' fee of ten per cent. of the amount now involved, to wit, the three items of interest heretofore allowed, shall also be taxed and included in the said judgment.
(5) That after entry of the said judgment the petitioners shall credit thereon the amounts heretofore paid.
(6) That the Clerk of the Court shall turn over to the Brandon Corporation the certificates of stock, indorsed by the present holders, and the corporation, if it desires so to do.
Messrs. Haynsworth Haynsworth, for appellant, cite: Tender of amount due stops interest: 26 R.C.L., 652; 38 Cyc., 152; 33 C.J., 241; 1 Brev., 1. Offer to pay coupled with refusal to accept excuses formal tender: 26 R.C.L., 625; 133 S.C. 256; 109 S.C. 352; 138 S.C. 435; 113 S.C. 10; 33 C.J., 243; 85 S.C. 109. Tender after judgment: 58 Pac., 308. In absence of contract Court cannot require payment of attorney's fees: 81 S.C. 495; 113 S.C. 99.
Messrs. Park, McDonald Todd, C.G. Wyche and Andrew A. Manning, for respondent, cite: Merger of corporations regulated: 34 Stat., 246. Conditional tender not 224; 38 Cyc., 158, 162; 1 Brev., 1. During pendency of action money should be paid into Court: 10 S.C.L., 242; 39 S.C. 5; 26 S.C. 345; 88 S.C. 533; 107 S.C. 395; 26 39 S.C. 5; 26 S.C. 345; 88 S.C. 533; 107 S.C. 395; 26 R.C.L., 532; 38 Cyc., 162-171; 15 Rich. L., 318; 1 N. McC., 194; 2 Rich. L., 64; 129 S.C. 342. Offer to pay part and litigate balance is not tender: 38 Cyc., 138; 3 McC., 428; 134 S.C. 212; 111 S.C. 344. Attorney's fees: 34 Stat., 249.
November 27, 1931. The opinion of the Court was delivered by
The appellant's "Statement of Facts," found in the brief of its counsel, sets forth fairly, clearly, and concisely the facts necessary for an understanding of the issues involved in this cause. It and the order of his Honor, the late Circuit Judge John S. Wilson, appealed from, will be reported. The order is entirely satisfactory to this Court, and the same is hereby affirmed.
MESSRS. JUSTICES STABLER, CARTER and BONHAM concur.
MR. JUSTICE COTHRAN disqualified.