Ophuls & Hill, Inc. v. Carolina Ice & Fuel Co.

• Decision Date: 16 April 1931
• Docket Number: 13123.
• Parties: OPHULS & HILL, Inc., v. CAROLINA ICE & FUEL CO.
• Court: South Carolina Supreme Court

158 S.E. 824

160 S.C. 441

OPHULS & HILL, Inc., v. CAROLINA ICE & FUEL CO.

No. 13123.

Supreme Court of South Carolina

April 16, 1931

Appeal from Common Pleas Circuit Court of Darlington County; William H. Grimball, Judge.

Action by Ophuls & Hill, Incorporated, against the Carolina Ice & Fuel Company. From an order denying a motion to vacate attachments procured by plaintiff upon properties of defendant, and overruling a demurrer to the complaint defendant appeals.

Appeal dismissed, and order affirmed.

Samuel Want and Jerome F. Pate, both of Darlington, for appellant.

Dargan & Paulling, of Darlington, and Buist & Buist, of Charleston for respondent.

BONHAM J.

This is an action by a New York corporation against a Delaware corporation brought in a court of South Carolina. Whilst the defendant is incorporated under and by the laws of the state of Delaware, it has places of business in Darlington and Marlboro counties, S. C., and possibly elsewhere in this state.

The complaint alleges, in substance, the facts above stated, and these further facts: That on April 30, 1929, the plaintiff acting through its agent, E. R. Bagnoli, entered into a contract with W. E. Vogelback & Company, acting through its authorized representative, Fred D. Ellis, which contract provided for certain payments to the plaintiff in connection with the acquisition of certain ice manufacturing properties in South and North Carolina: Plaintiff is informed and believes that W. E. Vogelback & Company, in executing this contract, acted as agents for the defendant, or, by some other arrangement between W. E. Vogelback & Company and the defendant, the latter became substituted for Vogelback & Company in the contract, received its benefits, and undertook the performance of the duties imposed upon W. E. Vogelback & Company by the terms of the contract. Plaintiff alleges of its own knowledge that under and by virtue of said arrangement, defendant became the purchaser of certain ice manufacturing properties in North and South Carolina and was the recipient of the benefit of the services of the plaintiff in respect thereto. That, further, on the 1st day of July, 1929, the defendant, for valuable consideration, made and delivered to the plaintiff, its three promissory notes as follows: (1) For $6,850, due April 30, 1930; (1) for $5,000, due November 1, 1929; (1) for $1,000, due December 1, 1929. Each of these notes bears interest at the rate of 7 per cent. The complaint sets out certain payments on one of the notes and demands judgment for the aggregate amount due on the three. Attached to the complaint as exhibits as a part thereof are the contract Exhibit A, and the notes Exhibits B, C, and D. The complaint styles the contract "the Darlington contract," and for convenience we will adopt that designation of it.

At the time of the commencement of the action by the service of the summons and complaint, plaintiff procured to be issued warrants of attachment upon properties of the defendant at Darlington, S. C., and some point in Marlboro county, S.C. Presumably these are the ice plant properties with the acquisition of which the plaintiff was connected. Defendant moved to vacate the attachments, and at the same time demurred to the complaint. The action taken and the grounds therefor are thus concisely and clearly stated by appellant in its brief for the hearing of this appeal: "The Appellant appeared specially in the Circuit Court for the sole purpose of challenging the jurisdiction of the Court. This challenge was expressed in a motion to vacate and dissolve the warrant of attachment on the ground that the same was improvidently issued, in that the cause of action was not one that had arisen in the State of South Carolina, and that it did not relate to subject matter situated within the said State. At the same time, and under the same special appearance, the Appellant demurred to the complaint, raising the same jurisdictional issues."

The motion and demurrer were heard by Judge Grimball, then presiding in the Fourth circuit, who, in a short order, denied the Motion and overruled the demurrer.

The appeal is from that order. It is essential to the intelligent consideration and determination of the issues involved in the appeal that certain primary facts be stated and kept in mind.

The contract, attached to the complaint as Exhibit A, shows that it was signed by plaintiff in this wise: "Ophuls & Hill, Inc., by E. R. Bagnoli, authorized representative," and the other party in this way: "W. E. Vogelback and Company, by Fred D. Ellis." Fred D. Ellis is the president of the defendant company-- appellant here--and it appears from his affidavit set out in the record that he handled the transaction referred to in the complaint on the part of Carolina Ice & Fuel Company. It is admitted that the contract (the Darlington contract) is a South Carolina contract. It is admitted, in argument, that the notes attached to the complaint were executed either in New York, or Illinois, and are made payable at Chicago, in the lastnamed state. For convenience of reference, one of them is here set out.

"Amount Six Thousand Eight Hundred and fifty & no/100 Dollars, ($6,850.00). On or before April 30, 1930, we promise to pay at the Central Trust Company of Chicago, Illinois, to the order of Ophuls & Hill, Inc., Six Thousand Eight Hundred fifty & no/100 Dollars ($6,850.00), subject to the terms and conditions of that certain contract dated April 30, 1929, between Ophuls & Hill, Inc., by E. R. Bagnoli and W. E. Vogelback & Company by Fred D. Ellis, said W. E. Vogelback & Company acting as agents for Carolina Ice & Fuel Company, payable at Chicago, Illinois, to the order of Ophuls & Hill, Inc., Value Received. With interest at rate of 7 per cent. per annum."

"Carolina Ice & Fuel Company,

"By Fred D. Ellis."

"Dated July 1, 1929.

This appeal is from the order of Judge Grimball denying the motion to vacate the attachment, and overruling the demurrer to the complaint. It is grounded upon four exceptions, which charge error to the circuit judge, because: It appears upon the face of the complaint, the exhibits, and the affidavit upon which the warrant of attachment was issued that the court is without jurisdiction to entertain the case; that it affirmatively appears that this is a suit by a foreign corporation, against a foreign corporation brought in the circuit court of this state; and that it does not affirmatively appear from the complaint and the exhibits that the court has jurisdiction. In short, that the cause of action set forth in the complaint and the affidavit upon which the warrant of attachment was issued is not one brought by a resident of the state, or upon a cause of action that has arisen in this state, or in respect to a subject matter situate within this state. Stated in another way, appellant's contention is that the cause of action is the notes, which admittedly were made in a foreign state and are payable in a foreign state; that the cause of action is not the contract because there are no appropriate allegations in the complaint upon which to predicate such action. But, if it be claimed that the action is founded on the contract, it cannot be maintained for the reason that there has been a novation by the substitution of the notes for the contract. On the same grounds the attachment is attacked. If the complaint cannot stand, necessarily the attachment must fall.

The questions for consideration then are: Cause of action; subject of action; novation.

The section of the Code under which the action is brought is in this language:

Section 774, Code Civil Procedure: "Where And By Whom Action Brought.--An action against a corporation created by or under the laws of any other State, Government, or Country may be brought in the Circuit Court:

"1. By any resident of this State, for any cause of action.

"2. By a plaintiff not a resident of this State when the cause of action shall have arisen, or the subject of the action shall be situated, within this State."

The appellant's burden of contention is that the cause of action sought to be set up in the complaint is the notes. It argues its contention with ability and ingenuity. With equal ability and plausibility the respondent contends that the contract is the cause of action. Each of them cites many authorities. It appears to the court that the question is determined by a few leading cases of our own courts, and it seems a work of supererogation to encumber the opinion with a great number of citations.

For the purpose of the demurrer the allegations of the complaint are admitted to be true.

In our own reports is a case the facts and legal principles of which are in striking analogy with the case at bar, and the conclusions therein announced bear directly upon the question here involved, viz.: Are the notes or the contract the cause of action?

It is the case of Central Railroad & Banking Co. v. Georgia, etc., Co., 32 S.C. 319, 11 S.E. 192, 203. The opinion is by Mr. Associate Justice, afterwards Chief Justice, McIver, a jurist of such eminent ability and with such profound knowledge of the law that his opinions are everywhere accepted with confidence. They carry conviction. There were in that case several cases against the same defendant consolidated for hearing. One of the actions was by Correll & Emonson. The extract from the opinion clearly states their cause of complaint, and the facts involved which show the similarity in principle between that case and this, quoting:

"In the third case, however, that of Correll & Emonson, it is contended that a part, at least, of the cause of action arose in this state, and the circuit judge has so found; and therefore the next question to be considered is

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