Union Circulation Co., Inc. v. Trust Co. Bank

• Decision Date: 03 October 1977
• Docket Number: No. 54477,No. 2,54477,2
• Citation: 240 S.E.2d 100,143 Ga.App. 715
• Parties: UNION CIRCULATION COMPANY, INC. v. TRUST COMPANY BANK et al
• Court: Georgia Court of Appeals

Page 100

240 S.E.2d 100

143 Ga.App. 715

UNION CIRCULATION COMPANY, INC. v. TRUST COMPANY BANK et al.

No. 54477.

Court of Appeals of Georgia, Division No. 2.

Oct. 3, 1977.

Rehearing Denied Nov. 3, 1977.

Strother, Weiner & Dwyer, Beryl H. Weiner, John C. Yancey, Atlanta, for appellant.

King & Spalding, George S. Branch, A. Felton Jenkins, Jr., Atlanta, J. L. Eisenberg, Columbus, Ohio, for appellees.

QUILLIAN, Presiding Judge.

This is an appeal by the plaintiff from the grant of a partial summary judgment for defendant. Plaintiff's executive vice-president, David Crawford, diverted incoming checks made out to Union Circulation Company, Inc., to his wife. Mrs. Crawford opened up an account in the Trust Company Bank of DeKalb in the name of Union Circulation Company. Indorsements were made by using the Union Circulation Company, Inc. rubber stamp after the "Inc." had been removed from the stamp. Thereafter, Mrs. Crawford withdrew those funds. Mr. Crawford continued his embezzling from December, 1970 to April, 1975. Mr. and Mrs. Crawford have consented to judgment against them for $100,000, but that judgment remains unsatisfied.

Plaintiff brought this action against Trust Company Bank, the successor bank to the Trust Company Bank of DeKalb. Plaintiff charged that defendant was guilty of negligence, failed to follow reasonable commercial standards, and was liable in conversion to plaintiff. Defendant bank moved for partial summary judgment on the basis that all claims asserted by plaintiff prior to four years before the filing of the present action was barred by the statute of limitation, Code § 3-1003. This motion was denied on April 29, 1977. In the next term of court, May 2, 1977, defendant moved "for reconsideration and rehearing on its motion for partial summary judgment." Defendant did not change the basis for the motion but did add legal reasons why they contended the statute of limitations had run. Plaintiff argued that the court could not entertain such motion as it was not filed within the term in which the order was entered, and the motion to reconsider was nothing more than a second motion for summary judgment. The court granted the motion and vacated the prior order. Plaintiff appeals. Held:

1. Both sides have presented cogent and persuasive law and reasoning why each should prevail but neither has presented a Georgia case on point. We are familiar with the general law concerning the authority of the trial court to revise, amend or revoke orders and judgments. But, because there may be some confusion as to inexact terminology in some opinions, we would like to reexamine the basis for the general rule that we follow: "A trial judge has the power during the same term of court at which a judgment is rendered to revise, correct, revoke, modify, or vacate such judgment, even upon his own motion, for the purpose of promoting justice and in the exercise of a sound legal discretion." Tyler v. Eubanks, 207 Ga. 46(1), 60 S.E.2d 130. This "rule was never intended to authorize the judge to set aside a judgment duly and regularly entered unless some meritorious reason is given therefor." Hicks v. Hicks, 226 Ga. 798, 799, 177 S.E.2d 690, 691. "This inherent power of the court extends to all orders and judgments save those which are founded upon verdicts." East Side Lumber etc. Co. v. Barfield, 193 Ga. 273, 277, 18 S.E.2d 492, 495. "It is not too late for the judge to exercise this power if the proceeding for that purpose was begun during the term." Pekor v. Clark, 236 Ga. 457(1), 224 S.E.2d 30.

At common law a court had complete control over its orders and judgments during the term at which they were made and could, on sufficient cause being shown, amend, correct, or vacate such judgments. See 49 C.J.S. Judgments § 229, p. 436. Generally, in the absence of statutory authority, we adhere to the common law and find that a court has no inherent authority to correct, amend, open or vacate a judgment after expiration of the term. See 46 Am.Jur.2d, Judgments, 849, § 699; 49 C.J.S. Judgments § 230, p. 438.

Black, in his Law of Judgments, explains the reason for the rules just stated. "During the whole of the term in which any judicial act was done the proceedings were considered to continue in fiere, and even after a judgment was rendered, the record was said to remain 'in the breast of the judges of the court and in their remembrance,' and therefore the judgment was subject to such amendment or alteration as they might direct. But after the term had passed, the record no longer remained in this nebulous condition. It was then spread at large on the judgment-roll, and thereupon acquired an inalterable and indisputable character, passed beyond the control of the court, and admitted of no alteration, modification, or contradiction. (Id. at 218) . . . Thus, where a court makes an erroneous order under a mistaken view of the law, it may, during the term, of its own motion, correct the mistake by expunging such order and entering an order in accordance with the law of the case. (Id. at 220) But after the expiration of the term, unless the cause is still depending and the parties are in court, their power over the record is confined to errors and mistakes of their officers . . . (Id. at 221) . . . (A)fter the term, the power of the court to amend its own record is limited to such corrections or changes as are in affirmance of the judgment originally rendered; it has no authority to strike out the judgment, to enlarge or diminish it, to change its whole nature, or to render another and different judgment upon the same record." (Id. at 222). Accord: 1 Freeman on Judgments (5th Ed) §§ 140, 141; 49 C.J.S. Judgments §§ 229, 230; 46 Am.Jur.2d, Judgments, § 699.

"The rule limiting the power of courts over their judgments to the term at which they were rendered applies only to final judgments. An interlocutory decree does not pass out of control of the court with the end of the term. Until the pronouncement of the judge has assumed the form of a final judgment by being entered or otherwise properly made a matter of record, it is subject to modification, change or amendment even after the term in which it was made." 1 Freeman on Judgments 279. Black states it slightly differently, but with the same meaning: "The rule that the court has no power over its judgments after the expiration of the term, applies only to final judgments, not to judgments which are still in fieri . . ." 1 Black, Law on Judgments (2d Ed) 223, § 154. Black's Law Dictionary defines "in fieri" as: "Legal proceedings are described in fieri until judgment is entered."

Accordingly we find that the rule against amending or revoking a judgment after the expiration of the term in which it was entered has no application to interlocutory rulings so long as the case continues from term to term, until final judgment. Until rendition of a final judgment, an interlocutory order remains within the control of the court. 49 C.J.S. Judgments § 230, p. 443; 46 Am.Jur.2d, Judgments, 851, § 700; 1 Black, Law on Judgments (2d Ed) 221-223, §§ 154-155; 1 Freeman on Judgments (5th Ed) 279.

As the ruling in the instant case was an interlocutory one, the term of the court ending had no effect upon the authority of the trial court to reconsider his ruling. We note that Code Ann. § 81A-106(c) (CPA § 6(c); Ga.L.1966, pp. 609, 617; 1967, pp. 226, 229, 230) states: "The continued existence or expiration of a term of court in no way affects the power of a court to do any act or take any proceeding in any civil action which had been pending before it." Our holding in this case explains the background for this statute and is in consonance with it. See Van Keuren v. Loomis, 128 Ga.App. 136, 137, 195 S.E.2d 776. The trial court did not err in reconsidering his earlier interlocutory ruling, even though the term had passed, so long as the case remained pending before him and final judgment had not been entered. This enumeration is without merit.

2. Plaintiff brought this action on April 30, 1976. The court judgment barred claims arising "prior to April 30, 1972." Code § 3-1003 provides that all suits for recovery of personal property, "or for damages for the conversion . . . of the same, shall be brought within four years after the right of action accrues and not after." The court applied this section and dismissed more than one-half of plaintiff's cause of action. Plaintiff argues that Code § 3-807 applies. That section states: "If the defendant, or those under whom he claims, shall have been guilty of a fraud by which the plaintiff shall have been debarred or deterred from his action, the period of limitation shall run only from the time of the discovery of the fraud."

The fraud cited in this statute "which is necessary to toll the statute of limitations until the discovery of the fraud which gives rise to the cause of action, must be actual fraud, involving moral turpitude, which 'debars and deters' the plaintiff from his action . . . yet the establishment of the fraud that gives rise to the cause of action does not necessarily establish the fraud that 'debars or deters' the plaintiff from his action mentioned in the Code . . ." Middleton v. Pruden, 57 Ga.App. 555(1), 196 S.E. 259. In determining whether such alleged fraud is of the type that "debarred or deterred" plaintiff from his action "we should look only to the facts . . . and it should be borne in mind that constructive fraud as well as actual fraud might give rise to a cause of action, whereas the only kind of fraud which would toll the statute of limitations is actual fraud." Id. at 557, 196 S.E. at 261.

Generally, it has been held that the statute of limitations runs from the discovery of the fraud when fraudulent conversion of money or other property has been concealed by a guilty party who occupies a fiduciary relation toward the person defrauded. See generally 54 C.J.S. Limitations of Actions §§ 188(2), p....