Carolina Agency Co. v. Garlington

• Decision Date: 05 March 1910
• Citation: Carolina Agency Co. v. Garlington, 85 S.C. 114, 67 S.E. 225 (S.C. 1910)
• Parties: CAROLINA AGENCY CO. v. GARLINGTON.
• Court: South Carolina Supreme Court

67 S.E. 225

85 S.C. 114

CAROLINA AGENCY CO. v. GARLINGTON.

Supreme Court of South Carolina

March 5, 1910

Appeal from Common Pleas Circuit Court of Richland County; D. E Hydrick, Judge.

Action by the Carolina Agency Company against John Y. Garlington. From an order denying defendant's motion to vacate an attachment, defendant appeals. Affirmed.

The following is the decision of the circuit court on which the judgment is affirmed:

"This action was commenced January 5, 1909. The allegations of the complaint are, in substance, as follows, except the seventh and eighth paragraphs, which are copied in full:

"(1) That plaintiff is a corporation, chartered under the laws of this state on March 26, 1907, with a capital stock of 15,000 shares of the par value of $10 each, and with authority to act as general agent for insurance companies.

"(2) That it became the general agent of the State Mutual Life Insurance Company of Rome, Ga., and solicited and sold policies for that company in this state.

"(3) That defendant subscribed for 7,500 shares of the stock of the plaintiff company, and was its treasurer and general manager from April 1, 1907, until June 5, 1908, and, among other things, his duties were to receive and care for the funds of the company derived from the sale of its stock, from premiums of insurance collected, and from other sources, and to keep the books of account.

"(4) That on April 25, 1907, the directors of the plaintiff company authorized the defendant to sell so much of the capital stock as had not been subscribed for (which was practically all of it, except his own), as follows: 3,000 shares in 1907, at not less than par, 3,000 shares in 1908, at such premiums as the board should fix, and the balance at such time and such premium as the board should direct; that he was not authorized to sell any of the stock at less than par, and was to turn the proceeds of sale into the treasury.

"(5) That between the 25th April, 1907, and the 15th May, 1908, the defendant sold about 5,000 shares of the stock at par, and received therefor $50,000.

"(6) That he received for plaintiff, up to 1st May, 1908, premiums of insurance, on policies issued by the State Mutual Life Insurance Company, of Rome, Ga., amounting to $70,000.

"'(7) That although frequently called upon by plaintiff to account for his actings and doings as general manager and treasurer, and to account to it for the moneys received by him, less the sum authorized to be paid out by him, the defendant has never done so, but, on the contrary, he has recently departed from the state of South Carolina, and had continued to absent himself therefrom for the purpose of defeating and defrauding this plaintiff, his creditor, and other creditors of their rights, and that, at the time of his departure from this state, the defendant was a resident of the county and state aforesaid.

"'(8) That the defendant, John Y. Garlington, is indebted to the plaintiff in the sum of $25,000 on account of moneys received and collected by him, aforesaid, as general manager and treasurer, which amount plaintiff alleges is the least sum that will be due it

after crediting the said defendant with all moneys properly expended and paid by him, as general manager and treasurer as aforesaid, and that said amount is now due and owing by the defendant to the plaintiff.'

"The prayer is that defendant account to plaintiff for all moneys received for it, and for judgment for the amount found to be due on such accounting; and, in default of such accounting, for judgment for $25,000, and for such other relief as may be just.

"The complaint is verified by the president of the plaintiff company as 'true of his knowledge, which knowledge is derived from personal acquaintance with the defendant, and from the records of the Carolina Agency Company.' Attached to the complaint is the following affidavit: 'Personally comes W. A. Clark, president of the plaintiff company, who, being first duly sworn, deposes and says: That in addition to the facts and circumstances set forth in the complaint in this action, verified by this deponent, and which deponent reavers are true, he knows of his knowledge that defendant is indebted to the plaintiff in the form, manner, and for the amount set forth in the said complaint; that the defendant was informed by deponent that he must pay the amount due the plaintiff company, or suit would be instituted for the recovery of the same; that soon thereafter the said defendant departed from the state of South Carolina, and, although informed of the claim of plaintiff and claim of others, defendant has kept himself without the state, so that he cannot be served with a summons and complaint, and to avoid the service thereof. Deponent further says that defendant has property within the state of South Carolina; that the matters and things stated in the complaint in this action, and in this affidavit, as aforesaid, are derived from the personal knowledge of deponent, and from the statements current in this city, representing that the said defendant is keeping himself without the limits of this state to avoid the service of a summons and other process that may be issued by this and other creditors.' Upon the verified complaint and the foregoing affidavit the clerk issued a warrant of attachment, which this motion seeks to vacate on the grounds that it was irregularly and improvidently issued. The grounds of the motion are too numerous to set them out in full, but I shall endeavor to cover them all in what I shall say hereafter.

"In support of this motion the defendant makes affidavit that he removed his residence from Columbia to Chattanooga, Tenn., in November, 1908; that it was not done clandestinely, but openly and notoriously, and with the knowledge and approval of the president of the plaintiff company. He denies that he left the state or remained without its limits with the intent to defeat or defraud his creditors, or to avoid service of process, and says that after he first removed to Tennessee, he made frequent visits back to Columbia, and frequently saw and talked with the president of the plaintiff company, with which his connection was severed in June, 1908. He denied any indebtedness to the plaintiff. The affidavit is long, and, with the exhibits attached, goes into the details of what was said and done at some of the meetings of the board of directors of the plaintiff company as to his management of its affairs, and some other matters which are not relevant to the questions to be decided on this motion, except that he does say that he is informed and believes, without stating the source of his information, or the grounds of his belief, that this suit was instituted without the authority of the board of directors of the plaintiff company.

"Notwithstanding the able and exhaustive arguments of counsel, which have been helpful and suggestive, my conclusion on the principal point made has not been reached without difficulty and doubt. It will be seen from the complaint that this is primarily and principally an action for an accounting, which is one of equitable cognizance. The question whether an attachment can be obtained in an equitable action is one that has been raised several times, but has never yet been decided by our Supreme Court. The courts of other states give directly conflicting answers to that question; and, as the attachment acts vary more or less in their phraseology, the decisions of the courts upon them do not afford much assistance. One of my chief difficulties has been in trying to reconcile some of our own decisions, and I think I shall be able to show that some of them are irreconcilable.

" The remedy by attachment is purely statutory, and being a harsh remedy, and in derogation of the common law, the rule of strict construction has been adopted by the courts of this state. This does not mean that language shall not have its full meaning, but merely that everything not clearly within the letter, as well as the spirit, and reason of the statute, shall be excluded. A cursory glance at the attachment acts of this state, and the manner in which they have been amended and extended, shows clearly an increasing tendency on the part of the Legislature to extend the remedy to new kinds of actions, as well as new classes of defendants. Prior to the Code, the remedy was limited to suits on a few specified contracts against absent or nonresident debtors. It was next extended to absconding debtors, and, by the act of 1744, it was extended to 'any tort, trespass or injury actually done to real or personal property.' The reason assigned by the Legislature for the writ is because the ordinary process could not be served upon nonresident or absconding debtors or tort-feasors. When the Code was adopted, the remedy was 'given in an action arising on contract for the recovery of money only, or in an action for the wrongful conversion of personal property,' and the class of defendants against whom the remedy might be obtained was increased considerably. 14 St. at Large, p. 475. By the act of 1879 (17 St. at Large, p. 23) the language above quoted from the first Code, was amended to read as follows: 'In any action arising for the recovery of money, or for the recovery of property, whether real or personal, and damages for the wrongful conversion and detention of personal property, or any action for the recovery of damages for injury done to either person or property.'

"What is the proper inference to be drawn as to the intent of the Legislature in striking out the word 'an' and inserting in its place the word 'any,' and in striking out the words 'on contract' and the word 'only'? The conclusion is, to my mind irresistible that the intent is...