Stewart et al. vs. Rutherford.

be paid to him, with the interest thereon from the date of the advance, or such other relief as equity would give him.

Such is the cream of this bill, not in its language or order of recitals, but the essence of it drawn from the bill and the amendment.

It was demurred to because there is no equity in it, because it is multifarious, because the company is solvent from its allegations, and because the complainant, being a stockholder and the president, had sought no redress from the company.

1. The bill is full of equity. It is a bill filed by one man against some five or six other men, who have, by the grossest fraud on the part of most of them, known to all of them, induced the other to put ten thousand dollars into a corporation to be created in West Virginia and to go to work in Georgia upon mineral lands in the latter state, who made him president to get his money, and turned him out because he naturally desired to see what had become of it, and who, as the complainant in equity, asks that he may get his money back out of the land in which he was fraudulently induced to put that money, by virtue of a corporation into membership in which complainant was inveigled The fraud is not a fraud of certain existing stockholders committed upon another, also already a me aber, nor is it a fraud by a corporation in existence upon one of its stockholders; but it antedates the existence of the corporation. It attacks the very contract which made the corporation, put into operation, and furnished the means to buy the thing to be operated upon, and the tools by which that thing, the mineral lots of land, was to be worked by the corporation to be afterwards created. One man, or set of several men, can no more swindle and cheat another out of his money in order to make a corporation and set it to work, than he or they could cheat and swindle him into any other contract or about any other thing. There is no such sanctity about a corporation that a natural person should

Stewart et al. vs. Rutherford:

be induced fraudulently by certain other natural persons to apply for this artificial person with them to be created by the state, and yet have no relief against those who thus cheated him, because the result of the cheating was success in creating the entity called an artificial person or a corporation. Nor does it matter one iota that the fraud made him a stockholder therein, or even the president thereof, to sweeten the pill with ambition gratified by putting him at the head of the corporation to be made. That some of the facts showing fraud in the antecedent contract transpired after the contract bore the fruit which its procurers by fraud intended, to-wit, ripened into a corporation, can make no difference. If they throw light on the contract, and the conduct of those making it, and the motives leading to that conduct, it pours light upon the original transaction just as full as if it were contemporaneous or antecedent facts. The evening sun is as luminous. with its backward rays upon the earth's productions as the morning beams it casts forward upon tree or flower. Often the character of the tree is unknown until it bears. fruit. Indeed, it is "by their fruits ye shall know them." Therefore it is right that the equity of this be considered by all its facts bearing upon the entire transaction, as well as the representations made before the contract; the events subsequent thereto are elements that exhibit the case. Indeed, the best mode of showing the falsehood of the representation is to show wherein afterwards its promises failed.

Fraud will set aside a contract to make a corporation and run it, as well as any other contract; and equity will draw its sting from this sort of contract just as quickly and thoroughly as it will heal the wounds it makes in other dealings of men with men. That it will relieve in all contracts, see the Code, sections 2751, 3172, 3173, 3174, 3175, 3176, 3178. Even a solemn judgment of a court, as well as all conveyances obtained by fraud, fall before the blows of a court of equity. Fraud in procuring one to put his

Stewart et al. 18. Rutherford.

money into a corporation, venture or speculation is no exception to the universal rule. Therefore, inasmuch as the demurrer admits the truth of the allegations made in this bill and amendment, and as those allegations make a clear case of fraud, there is equity, and plenty of it, in the bill. Of course if innocent parties have been affected by the corporation during its operation, the court will protect them, and the complainant alleges that creditors thereof should be paid, if there be such. As he united with the defendants in creating this wildcat sort of adventure, all the way from West Virginia to Georgia, though deluded and decoyed into it, the equity of people who had no part or lot in making it and bringing it to Georgia is superior to his own.

2. As the legal title to the mineral lots is in the corporation, and the only way to get back complainant's money is through those lots into which his money went by the fraud of the other defendants, the corporation is a necessary party, and the bill is not multifarious.

3. The bill alleges the insolvency of all the defendants, as well the corporation as the others, and so the third ground of demurrer is not good. But outside of thatinasmuch as complainant was cheated into it, he can break the bonds that tied him to it, and leave with what he put in by the fraud of the others, whether the corporation be insolvent or not.

4. The complainant seeks no redress from the company as a corporation in the character of stockholder and presi-. dent or either. Not as president, because he is no longer that officer; nor as stockholder, because he was defrauded into becoming a stockholder, and because that fraud annuls the contract which made him a stockholder. His prayer is to get out; not to be relieved, or reinstated in the office of president, or otherwise redressed inside, but to wash his hands of the whole concern, because he was badly cheated, he says, to get him in. So that the question is, if a man has been fraudulently made a stockholder,

The Central Railroad ts. Whitehead et al.

will equity force him to ask leave of an entity composed altogether of the men who defrauded him, or connived at, or were cognizant of it, or will it annul this, as it would any other contract founded in fraud? Of course it will annul it. So there is nothing in the 4th ground of demurrer. See Hendrix vs. Academy of Music, 73 Ga., 437; also 57 Ga., 240.

5. In respect to the jurisdiction, we think the general manager, who is individually a party, had a residence in Georgia sufficient to be served here, though absent at the time. Besides, the land being in this state, and the party complainant having no redress but in it, would make the jurisdiction good in rem. under the ruling in Harris, trustee, vs. Palmore, ante, 273.

Judgment affirmed.

THE CENTRAL RAILROAD vs. WHITEHEAD et al.

HALL, J., dissenting from the views of a majority of the court: 1. Suit was brought against one railroad for an injury occurring on the line of another; service was perfected by serving the agent of the first road, at the station on the line of the second where the accident occurred, and the defendant appeared and pleaded to the merits; afterwards an amendment to the declaration was filed, alleging that the road on which the injury occurred was held and operated under lease by the defendant; no surprise was claimed, no continuance asked, and no plea to the sufficiency of the service of the declaration, as amended, filed, but at the trial objection was made to the amendment and the service:

Held, that appearance and pleading to the merits waived service, and estopped the defendant from denying it; and as defendant has received notice and come into court, the object of service has been accomplished.

(a.) Independently of this, the service was sufficient.

2. An amendment alleging that the railroad, on the line of which an injury was received, was held under a lease, and operated by another railroad company, against which suit was brought, was properly allowed.

3. While it might have been sufficient to have alleged that the defendant controlled and operated the road where the injury occur.

74 441 118 230

74 441 120 226

74 441 125 518

The Central Railroad vs. Whitehead et al.

red, without specifying the particular character of the agreement under which this was done, yet where the plaintiff alleged with needless particularity or unnecessary circumstances what was material and necessary, and what might have been stated more generally, plaintiff was required to prove the fact as alleged; and therefore, having alleged that one railroad operated another under a lease, it was necessary to prove the same.

(a.) If incompetent testimony was admitted over objection, and without it the plaintiff could not recover, a non-suit should be granted on motion, and if improperly refused, and a verdict was rende: ed for the plaintiff, a new trial should have been granted. (b.) Where it was alleged that one railroad was leased by another, and the evidence showed that the contract between them was in writing, it was not competent to show by parol that it was a lease. 4. It was error to charge that, if one purchased a ticket from one point on the line of a railroad to another, "when the company issued that ticket, it undertook to safely transport the plaintiff to this point of destination, and it was incumbent upon it to exercise ordinary care and diligence, and that duty did not end until the plaintiff was safely landed on the ground at McBean" (the point of destination. Such a charge was calculated to mislead the jury, and to lead them to think that, in addition to having called the station in the usual manner, and having stopped a sufficient length of time to enable the passenger to leave the train with safety, it would also be incumbent on the conductor to assist her in landing. (a.) Ordinary care is not the measure of diligence required of a railroad company towards passengers, but extraordinary care.

5. The court should have charged, as requested, that "if the conductor went through the car and called the name of the station at the usual time and in the usual way, he had the right to expect that the passengers would act with the judgment and intelligence of human beings in moving out and taking care of themselves," and should not have added the qualification, "provided the agents of the company were in full discharge of their duty." The request stated the law correctly, but the qualification greatly impaired, if it did not destroy, its effect.

(a.) The newly discovered evidence in this case renders the propriety of a new trial more apparent.

(b.) The majority of the court differ from these views.

JACKSON, C. J., concurring, and stating the views of a majority of the court:

1. The fact of the lease could be proved without producing the writing. Nothing in the writing could prevent the liability of the actual carrier, holding itself out to the public as such, if it were negligent, whatever might be its effect as to ultimate liability between the parties thereto.