Thew v. Southern Porcelain Mfg. Co.
| Decision Date | 09 November 1874 |
| Citation | 5 S.C. 415 |
| Parties | THEW v. PORCELAIN MANUFACTURING COMPANY. |
| Court | South Carolina Supreme Court |
A confession of judgment by a manufacturing corporation, given by its President, for money borrowed, set aside. it not appearing that power to give it was expressly conferred, or was to be inferred from the acts, declarations and course of dealing of the corporation, or that the confession had been ratified and confirmed by acquiescence or otherwise.
The President of a manufacturing corporation has no power, merely as President, to give a confession of judgment.
A judgment dismissing a complaint, not upon the merits, but upon some technical ground, as that neither the complaint nor the evidence showed a cause of action sufficient to give the Court jurisdiction by action under the Code, is no estoppel.
There was no Statute of Limitations in 1868 barring the right to move to set aside a judgment for irregularity.
A confession of judgment by a corporation need not be under its corporate seal.- Ob. dic.
A confession of judgment by a corporation, through its officer duly authorized, is the direct act of the corporation, and not its act by agent or attorney, within the Act of 1785.- Ob. dic.
BEFORE CARPENTER, J., AT EDGEFIELD, MARCH TERM, 1873.
This was a special proceeding, commenced by rule to show cause, to obtain an order setting aside a judgment for irregularity.
R. B BULLOCK, President and Treasurer," [L. S.]
and immediately below the signature was a note, or memorandum, in these words: " The company having no common seal, R. B. B.," and it was written or endorsed upon a declaration in assumpsit, in which Thew, as Cashier, was plaintiff, and the corporation was defendant, and which counted upon a promissory note for the same sum as that of the confession. This note was given in consolidation of two other notes, dated the 24th March, 1868, one for $35,185.86, signed by G. Schaub, as the General Agent of the corporation, and the other for $20,615.75, signed by Bullock, as its President. The confession was given at Augusta, and on the 19th day of the same month and year judgment thereon was duly entered in the Clerk's office of the Court of Common Pleas for Edgefield County.
The consideration of the two notes, dated the 24th March, 1868, was money previously and at different times loaned by the bank for the use of the corporation. The last loan was one made in August, 1867, for $5,000, at which time it was agreed between Bullock and the officers of the bank that, in consideration of the loan then made, the whole debt due to the bank should be secured by a confession of judgment with stay of execution for one year. The consolidation note and confession of the 15th May thereafter was given in pursuance of that agreement.
Shortly after the confession was given Bullock resigned his office of President, and James Hope succeeded him.
In February, 1871, the corporation commenced an action, by summons and complaint under the Code, against Thew, to set aside the judgment for irregularity. This action was tried at Aiken, May Term, 1873, before His Honor Judge Maher, who decided the case upon its merits, and, on the 5th August, filed his judgment, whereby he dismissed the complaint, on the ground that the judgment by confession was valid and binding upon the corporation. An appeal was taken to the Supreme Court by the corporation, and, at November Term, 1873, the appeal was heard. The Supreme Court declined to consider the case upon its merits, holding that neither the complaint nor the evidence stated or established a cause entitling the plaintiff to relief in the form of proceeding it had adopted, that is, by action under the Code; that, in that form of proceeding, the Court was without jurisdiction; and, on the 22d December, 1873, the judgment of the Court was filed dismissing the appeal. See the case as reported, 5 S.C. 5.
Thew, being about to enforce his execution upon the judgment by confession, by levy and sale of the property of the corporation, on the 1st January, 1874, a notice was served upon him, that, upon the evidence and affidavits used at the trial of the action above mentioned, a motion would be made before Judge Maher, on the 5th, for an order requiring him to show cause before the Court for Edgefield why the judgment should not be set aside and vacated, upon the grounds taken on the appeal from Judge Maher's decision; and also on the further ground that the confession was made in Augusta, in the State of Georgia, and in fraud and collusion between Bullock and the bank; and also to set aside wholly, or to suspend until the final decision in this proceeding, the execution on the judgment.
The motion was made before His Honor Judge Maher, who granted an order, by which, after reciting that the Judge of the Fifth Judicial Circuit was absent from the State, he ordered that the execution be stayed until further order therein shall be made by the Court of Common Pleas for the County of Edgefield. This order was dated January 5th, 1874.
Thew, the plaintiff in the judgment, gave notice that he appealed from the above order, and would move the Supreme Court to revoke the same, on the ground that it is contrary to law; that the Judge of the Fifth Judicial Circuit has no jurisdiction of the case, and, if he had, that it is res adjudicata .
On the 23d January, 1874, a second notice was served upon Thew, in nearly the same terms as the notice of the 1st January, above mentioned, that a motion would be made before Judge Carpenter for an order to show cause why the judgment should not be set aside and vacated upon the same grounds set forth in the first notice; and on the 21st February, Judge Carpenter made an order to show cause, as applied for, and also an order to suspend all proceedings upon the execution until the final determination of the proceeding.
Thew made return to the rule, wherein he showed, for cause, why the judgment should not be set aside and vacated-
1. That the judgment was confessed and entered in May, 1868, and the acquiescence therein for near six years, even had there been fraud in the same, constitutes an implied ratification, three years being sufficient to raise such an implication, even against an infant.
2. Because the confession was made in good faith, to secure a bona fide debt, which was discounted by the bank in the regular course of business, and used by the company for the improvement of their property.
3. Because, if there be fraud in the confession, it was committed by R. B. Bullock and George Schaub, who the company held out to the commercial community, the one as their President and Treasurer, sole Director and accredited Commercial Agent, the other as their General Agent, thus enabling them to practice a fraud on the bank, who is an innocent creditor.
4. Because, on the 24th of March, 1868, George Schaub, the General Agent aforesaid, the active mover in this proceeding, made his note for $35,185.86 to the bank, at thirty days, which is signed " G. Schaub, General Agent Southern Porcelain Manufacturing Company," which note is endorsed by R. B. Bullock and J. Jefferson Thomas, the then partner of Schaub, and a stockholder in the company; and on the same day R. B. Bullock made another note for $20,615.75, signed by him as President, and endorsed by him, which two notes, with the interest, make the note on which the confession was made; so that if there be fraud in the transaction, it was a fraud committed on the bank by the accredited agents of the company.
5. Because the case is res adjudicata .
6. Because the Statute of Limitations is a complete bar, and which is now pleaded.
7. Because the Court has no jurisdiction.
The return was supported by affidavits of W. E. Jackson, President of the Bank, Thew, its Cashier, and Judge Gould, its Solicitor at the time the confession was given.
On the 10th March, 1874, the rule was heard, and His Honor made the following order:
Upon hearing the return of the plaintiff, George M. Thew, to the order requiring him to shew cause why the judgment in this case should not be vacated and set aside, and after due consideration of the same, and of the argument thereupon by the counsel of the respective parties, it is ordered that the defendants, the Southern Porcelain Manufacturing Company, have leave to file their suggestion, setting forth the grounds upon which they seek to vacate and set aside the judgment by confession in this case; that the said plaintiff, George M. Thew, do plead to the said suggestion so to be filed; and that the said defendants be the actors in the said suggestion.
And it is further ordered, that after the filing of such suggestion a copy of the same be served upon the attorneys of the said plaintiff, and that, within thirty days thereafter, a copy of the pleading of said plaintiff to the said suggestion be served upon the attorneys of the said defendants; and that, thereupon, the issue so made up be entered by the Clerk upon the proper...
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