Tri-County Ice and Fuel Co. v. Palmetto Ice Co.

• Decision Date: 22 October 1990
• Docket Number: TRI-COUNTY,No. 23300,23300
• Citation: 303 S.C. 237,399 S.E.2d 779
• Court: South Carolina Supreme Court
• Parties: ICE AND FUEL COMPANY, Respondent, v. PALMETTO ICE COMPANY and P & H Company, Inc., doing business as Palmetto Ice Company, Appellants. . Heard

Page 779

399 S.E.2d 779

303 S.C. 237

TRI-COUNTY ICE AND FUEL COMPANY, Respondent, v. PALMETTO ICE COMPANY and P & H Company, Inc., doing business as Palmetto Ice Company, Appellants.

No. 23300.

Supreme Court of South Carolina.

Heard Oct. 22, 1990.

Decided Dec. 10, 1990.

Charles E. Carpenter, Jr. and Deborah L. Harrison, both of Richardson, Plowden, Grier & Howser, Columbia, for appellants.

Fleet Freeman, of Bernstein and Freeman, P.A., Charleston, for respondent.

HARWELL, Justice:

This case arises out of an action for conversion. The issues involved are whether a default judgment entered against a trade name can be amended to substitute the name of the corporation who owns and operates the business operating under the trade name, and whether there are grounds to vacate the default judgment.

I. FACTS

On August 14, 1986, respondent Tri-County Ice & Fuel Company (Tri-County) filed a summons and complaint against Palmetto Ice Company asserting a cause of action for conversion of an ice box. On August 27, 1986, the summons and complaint were served on George Helmly as president of Palmetto Ice Company. No response was made to the summons and complaint. Tri-County motioned for default and on October 30, 1986 received a default order. On December 2, 1986, George Helmly was served with the default order. On July 15, 1987, an Order of Reference to the master-in-equity and a letter advising Helmly of the time, date, and place of the damages hearing, were served on Helmly. At the damages hearing, the master-in-equity awarded Tri-County actual damages in the sum of $8,415.60, and punitive damages in the sum of $25,246.80.

After Tri-County attempted to execute its judgment, Palmetto Ice Company filed a motion to vacate the judgment on the grounds that Palmetto Ice Company was not capable of being sued and any judgment against it was void, as Palmetto Ice Company was not a legal entity, but merely a trade name. For the first time, Tri- County was informed that Palmetto Ice Company was a business owned and operated by P & H Company , Inc., which was the actual corporate entity. Palmetto Ice Company also alleged that the default judgment was entered through mistake, inadvertence, surprise, or excusable neglect, in that Helmly, also the principal shareholder and president of P & H Company, Inc., was ill and incapable of handling his business affairs. Tri-County moved to amend the default judgment to substitute P & H Company, Inc. for Palmetto Ice Company as the defendant. In March, 1989, a hearing was held before a trial judge on Tri-County's motion to amend the judgment and P & H Company, Inc.'s motion to vacate the default judgment. The trial judge issued an order granting Tri-County's motion to amend and denying P & H Company's motion to vacate the judgment. We affirm.

II. DISCUSSION

Palmetto Ice Company first argues that a default judgment entered against a business operating under a trade name cannot be amended to substitute as the defendant the name of the corporation who owns and operates the business. Tri-County moved to amend the judgment pursuant to Rule 60(a), SCRCP, which provides, in part:

Clerical mistakes in judgments, orders or other parts of the record and errors therein arising from oversight or omission may be corrected by the court at any time of its own initiative or on the motion of any party and after such notice, if any, as the court orders.

The trial judge granted Tri-County's motion to amend pursuant to Rule 60(a), finding that Helmly had been properly served with the summons and complaint and with notice of all proceedings, but that Helmly had ignored them. The trial judge held that Palmetto Ice Company and P & H Company, Inc. were one in the same for the purposes of this action.

This Court has been faced with this issue in a number of cases and has allowed amendment of the record to substitute one name for another. In Waldrop v. Leonard, 22 S.C. 118 (1885), we addressed the issue of whether a judgment could be amended to change the name of an individual when the writ was served on the correct person. In Waldrop we considered whether such an error "should be considered a mere misnomer, or as going deeper and touching the very jurisdiction of the Court." Id. at 120. We concluded that we agreed with the jurisdictions which held that:

"where a party is served by a wrong name, and the writ is served on the party intended to be served and he fails to appear and plead the misnomer in abatement, and suffers judgment to be obtained by default against him in the erronerous name, he is concluded, and execution may be issued on the judgment in that name and levied upon the property and effects of the real defendant."

Id. at 127.

In Tunstall v. The Lerner Shops, Inc., 160 S.C. 557, 159 S.E. 386 (1931), the plaintiff obtained a default judgment against "The Lerner Shops, Incorporated". As best as the attorneys could discover, this was the name of the business. After judgment, the plaintiff discovered that the correct name of the business was "Lerner Stores Corporation", and motioned to amend the judgment to insert this name. The defendant resisted this motion, denying this Court had authority to allow such amendment. In deciding that the motion to amend should have been granted, we noted that:

a mere misnomer of a corporation defendant in words and syllables is immaterial, and a judgment in the action will bind it if it is duly served with process or appears and does not plead the misnomer in abatement. As a general rule the misnomer of a corporation in a notice, summons, notice by publication, garnishment citation, writ of certiorari, or other step in a judicial proceeding is immaterial if it appears that it could not have been, or was not misled.

Id. at 160 S.C. 563, 159 S.E. 388. See also Olschesky v. Houston, 84 N.C.App. 415, 352 S.E.2d 884 (1987) (where service of process is made on party intended to be sued, a misnomer may be corrected by amendment); Cunningham, Tallman, Pennington, Inc. v. Case-Hoyte Color Printers, 174 Ga.App. 488, 330 S.E.2d 598 (1985) (where real defendant is properly served, plaintiff can amend to correct misnomer).

Helmly, who is the principal shareholder and president of P & H Company Inc., was served with the summons and complaint and all other notices. ¹ Helmly clearly knew that Tri-County intended to sue the corporation, P & H Company, Inc., but that Tri-County was under a misapprehension as to the identity of Palmetto Ice Company. Helmly was also aware that Tri-County had no way of ascertaining that Palmetto Ice Company was a trade name, as P & H Company, Inc. had not registered this assumed name with the Secretary of State. Yet, Helmly did not come forward to correct the misnomer, but chose to ignore it and rely on it to attack the validity of the judgment. As we stated in Waldrop, "where a defendant sued by a wrong name omits to plead in abatement and suffers the plaintiff to proceed to judgment, though he has never appeared to the wrong name, this Court will not interfere to set aside the proceedings." Id. at 123.

Under these circumstances, we find that the amendment was not so extensive as to substitute a new defendant, but was merely a correction of a clerical mistake in the name of the corporation. It is clear that P & H Company, Inc. and its president,...