Opinion
13933
November 1, 1934.
Before DENNIS, J., Spartanburg, December, 1931. Affirmed.
Action by Claude R. Dunbar as receiver of the Cowpens-Security Bank against Albert S. Fant and another. From an order denying plaintiff's motion to amend the complaint and granting defendants' motion to dismiss the complaint and an order denying plaintiff's motion to plead over in the original cause of action, the plaintiff appeals.
The orders of Circuit Judge E.C. Dennis directed to be incorporated in the report of the case follow:
This action was brought in December, 1931, by the receiver of a defunct State bank against Albert S. Fant, State Bank Examiner, and the surety on his official bond, to recover damages alleged to have been sustained by the depositors and other creditors of the bank by reason of the alleged failure of the examiner to perform the duties of that office, as required by the statutory provisions now incorporated in Sections 7844 and 7852 of the 1932 Code. The complaint alleged that Fant "failed to perform his duties, in that he failed to remedy or discontinue" certain violations of the banking laws, and that "after the said bank became insolvent and the dishonest conduct of the bank continued, he failed to take and retain possession of the assets of said bank, and place the affairs of same in the hands of a receiver"; and that "said nonfeasance on the part of the defendant, Albert S. Fant, and failure to well and truly perform his duties as required by law constitute a breach of the condition of his bond."
This cause was tried before Hon. W.H. Grimball in December, 1931. At the close of plaintiff's testimony, the trial Judge directed a verdict in favor of both defendants, upon the following grounds: First, the bank examiner was not required by Section 7844 to remedy or discontinue violations of the banking laws discovered by him; second, the examiner, under Section 7852, was given discretionary power in the matter of taking over the assets of a bank found to be insolvent or so dishonestly or fraudulently conducted as to jeopardize the interests of creditors, depositors, and stockholders; third, that the examiner was not liable for damages except upon proof of bad faith or corruption, evidence of which was lacking.
Upon appeal to the Supreme Court, an opinion was rendered herein on August 24, 1933 ( Dunbar v. Fant, 170 S.C. 414, 170 S.E., 460, 90 A.L.R., 1412), in which the trial Judge's construction of the bank examiner's statutory duties was sustained. The trial Judge's order directing a verdict for the defendants was reversed, however, on the ground that a motion for a directed verdict cannot be properly made until all the evidence on both sides has been introduced. A motion for a rehearing was denied by the Supreme Court.
The remittitur was duly sent down to the Circuit Court, and the case set down for trial at the January, 1934, term of Court. More than four days before the opening day of the term, the defendant Fidelity Deposit Company of Maryland served upon the plaintiff notice that upon call of the case it would move for an order dismissing the complaint upon the ground that it failed to allege facts sufficient to constitute a cause of action, in that no corruption, bad faith, malicious motives, or other breach of duty on the part of the bank examiner was alleged. Likewise, more than four days before the opening day of the term, the plaintiff served upon the defendants notice that upon call of the case for trial he would move for leave of the Court to amend his original complaint by alleging that the acts therein complained of were done "willfully, intentionally, corruptly, maliciously, in bad faith, in a wanton, reckless and grossly negligent manner." This matter came on before me to be heard upon both motions, simultaneously made.
The motion for leave to amend is made under Section 494 of the 1932 Code, and counsel for the plaintiff so stated at the hearing upon the motion. Any right which he may have had to amend as of course under Section 493 was waived by his motion for leave of the Court to amend, and he thereby submitted himself to the discretion of the Judge. Hamilton v. Carrington, 41 S.C. 385, 19 S.E., 616.
I am of the opinion that the proposed amendment is improper. The allowance of amendments under Section 494 is within the sound discretion of the trial Judge. Metts v. Wenberg, 158 S.C. 411, 155 S.E., 734. In the exercise of that discretion, I am constrained to disallow the amendment proposed.
The Supreme Court, in a number of decisions, has undertaken to expound the meaning of Section 494. An amendment is proper, under this section, only to cure a defectively stated case, and not to substitute a new cause of action. Knight, Yancey Co. v. AEtna Cotton Mills, 80 S.C. 213, 61 S.E., 396. This section was intended to be used only to perfect a proceeding in which the amending party has been successful, and not for the purpose of obtaining a new trial on a new cause of action after the case has been lost on the original cause of action. Clayton v. Mitchell, 31 S.C. 199, 9 S.E., 814, 10 S.E., 390; Martin v. Fowler, 51 S.C. 164, 28 S.E., 312.
It appears to me that to allow the proposed amendment would be to permit an unsuccessful party to substitute a substantially new cause of action, after he has lost on the original one. The two-fold gravamen of the plaintiff's original cause of action is (1) failure of the examiner to remedy or discontinue violations of the banking laws, and (2) failure of the examiner to close a bank found to be insolvent. In other words, the plaintiff is complaining of statutory nonfeasance. The Supreme Court has held that the examiner's supposed duties of remedying or discontinuing banking law violations and closing insolvent banks are nonexistent. Hence, there could be no nonfeasance in failing to perform those supposed duties. Now the plaintiff seeks to amend by alleging the common-law delict of malfeasance. I am of the opinion that the purpose of the proposed amendment is to obtain for the plaintiff a new trial on a substantially new and different cause of action, after he has been unsuccessful on his original cause of action. Such an amendment, in my opinion, is improper.
Section 494 places one condition upon the exercise of the trial Judge's discretion in the matter of allowing amendments. That condition is that the proposed amendment must be in furtherance of justice, and I am called upon to exercise my discretion in determining whether or not that condition has been met here. Knight, Yancey Co. v. AEtna Cotton Mills, supra. I cannot see that this amendment would be "in furtherance of justice." The plaintiff would not be prejudiced by being required to begin a new cause of action for malfeasance, if he wishes to pursue the defendants further upon that theory. It appears that service upon both defendants can still be effected within this State, and it further appears that the plaintiff has permitted two terms of Court to pass since the Supreme Court decision herein, without any move to bring the case up for trial again. The case was set for trial at the January term upon motion of the defendants. I hardly see how the plaintiff can now complain of the delay incident to bringing a new action.
What has been said practically disposes of the defendant's motion to dismiss the complaint. The defendant has moved, in effect, to dismiss on the ground that the complaint fails to allege that which the Supreme Court has said is essential to the plaintiff's right to recover against these defendants. The plaintiff has moved, in effect, to amend his complaint by inserting those very allegations. I have decided that the plaintiff is not entitled to amend, one ground being that the proposed amendment, incorporating what the Supreme Court has said is essential to his right of recovery, would substitute a new and different cause of action. If that is true, then that cause of action cannot be proved under the allegations of the original complaint. I think that the complaint as it stands fails to set forth facts sufficient to constitute a cause of action under the Supreme Court decision herein, in that it fails to allege corruption, but faith or malicious motives on the part of the State Bank Examiner.
Whereupon, it is ordered, decreed, and adjudged that the plaintiff's motion for leave of the Court to amend be, and it is hereby, denied and refused.
It is further ordered, decreed, and adjudged that the complaint herein be, and the same is hereby, dismissed at the cost of the plaintiff.
This matter came on before me at Spartanburg, S.C. upon motion duly made by the plaintiff's counsel, for leave to plead over in the original cause of action under Section 493, Code of Laws of South Carolina 1932.
Heretofore the said counsel moved before me for leave to amend the original complaint by alleging fraud, bad faith, and malicious motives. I refused that motion upon the ground that the plaintiff was thereby attempting to set up an entirely new and different cause of action, and an order has been duly entered incorporating my views therein. For the same reasons as set forth in the previous order, I am of the opinion that the plaintiff's motion should be denied.
Whereupon it is ordered, decreed, and adjudged that the plaintiff's motion for leave to plead over under Section 493, Code of Laws of South Carolina 1932, be and the same is hereby denied and refused.
Messrs. Johnson Johnson, for appellant, cite: As to amendment of pleadings: 80 S.C. 213; 80 S.C. 1; 54 S.C. 109; 51 S.C. 209; 84 S.C. 117; 74 S.C. 236; 54 S.E., 375; 29 S.C. 328; 7 S.E., 502; 20 S.C. 460; 21 S.C. 226; 53 Am. Rep., 669; 54 S.C. 98; 32 S.E., 75; 171 S.C. 235; 171 S.E., 804; 160 S.C. 307; 158 S.E., 258; 154 S.C. 138; 151 S.E., 274.
Messrs. Evans, Galbraith Holcombe, for respondent, Fidelity Deposit Co. of Maryland, cite: Amendment of pleadings: 80 S.C. 213; 43 S.C. 225; 64 S.C. 491; 31 S.C. 199; 21 S.C. 221; 51 S.C. 164; 54 S.C. 109; 83 S.C. 575; 81 S.C. 24; 62 S.E., 1113; 32 S.C. 57; 11 S.E., 634; 81 S.C. 574. Abuse of discretion: 85 S.C. 259; 84 S.C. 117; 103 S.C. 214; 87 S.C. 999; 131 S.C. 78; 126 S.E., 520; 158 S.C. 411; 155 S.E., 734; 18 S.C. 305; 31 S.C. 588; 74 S.C. 296. Messrs. Nicholls, Wyche Russell and R.E. Whiting, for respondent, Albert S. Fant.
November 1, 1934. The opinion of the Court was delivered by
This action, commenced in the Court of Common Pleas for Spartanburg County, December 5, 1931, by Claude R. Dunbar, as receiver of the Cowpens-Security Bank, as plaintiff, against the defendants, Albert S. Fant, State Bank Examiner, and the Fidelity Deposit Company of Maryland, is an action against the said public officer and the surety on his official bond for damages alleged to have been sustained by the parties in interest by reason of an alleged failure on the part of the said bank examiner to well and truly perform the duties of his office as required by law. The case was tried at the April, 1932, term of said Court before Judge William H. Grimball and a jury, resulting in a verdict directed by his Honor, Judge Grimball, in favor of the defendants. Thereafter, the plaintiff appealed to this Court from the judgment of the lower Court and this Court, for reasons set forth in the opinion filed in the case, written by Chief Justice Eugene S. Blease, reversed the lower Court and remanded the case for further action, which case is reported in 170 S.C. 414, 170 S.E., 460, 90 A.L.R., 1412, and for the purpose of a full statement of the case and a clear understanding of the holding and ruling of this Court in the case, attention is called thereto. It appears from the record before us that the case was again set for trial at the January, 1934, term of said Court and the matter came up before Hon. E.C. Dennis, at which time his Honor, Judge Dennis, considered and acted upon a motion of the defendants, duly noticed, to dismiss the complaint on the grounds that the facts alleged therein were insufficient to constitute a cause of action; and, also, at said time considered and acted upon a motion on the part of the plaintiff, duly noticed, to amend the complaint in certain particulars. His Honor, Judge Dennis, after hearing argument on these motions and upon full consideration, denied the plaintiff's motion to amend and granted the defendant's motion to dismiss and issued an order accordingly. Thereupon the plaintiff made a motion before Judge Dennis to be allowed to amend and to plead over in the original cause of action under Section 493 of the Code of Laws of South Carolina, 1932. This motion of the plaintiff, his Honor, Judge Dennis, also refused and issued an order to that effect. From the said rulings and orders, the plaintiff, pursuant to due notice, has appealed to this Court, imputing error to Judge Dennis.
The questions raised in the several motions referred to are fully considered in the said orders of his Honor, Judge Dennis. We agree with the conclusion of Judge Dennis. The exceptions are, therefore, overruled and the orders and judgment of the lower Court affirmed.
MESSRS. JUSTICES STABLER and BONHAM and MR. ACTING ASSOCIATE JUSTICE C.T. GRAYDON concur.