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Josey et al. v. Reynolds

Supreme Court of South Carolina
Oct 17, 1929
152 S.C. 339 (S.C. 1929)

Opinion

12747

October 17, 1929.

Before DENNIS, J., Darlington, April, 1929. Orders reversed, with direction that warrant of attachment be vacated.

Action by B.S. Josey and others, as liquidating committee of the Merchants' Planters' Bank of Lamar, S.C. against C.L. Reynolds. From orders on defendant's motions respecting plaintiffs' second warrant of attachment, defendant appeals.

The following portions of the record in the case are, by direction of the Court, included in this report:

COMPLAINT

The plaintiffs above named bring this action against the defendant herein, and allege as follows:

1. That by an order heretofore granted by the Court of Common Pleas of Darlington County the said B.S. Josey, C.B. Windham, J.M. Dowling, R.R. Oates, and L.J. Beasley were duly appointed as a liquidating committee of Merchants' Planters' Bank, of Lamar, S.C.; that they have duly qualified in that capacity, and that at all times pertinent herein they were, and are engaged, in the performance of their duties as such liquidating committee; that at all times pertinent herein, the defendant, C.L. Reynolds, was, and still is, a resident of the County of Darlington, South Carolina.

2. That on or about the 3rd day of November, 1928, the said defendant, C.L. Reynolds, made, executed and delivered to Merchants' Planters' Bank, of Lamar, S.C. his promissory note in writing, as follows:

$852.00 Lamar, S.C. Nov. 3, 1928.

Jan. 15th, 1929, after date, I promise to pay to the order of Merchants' and Planters' Bank, Lamar, S.C.

Eight hundred fifty-two and 00/100 dollars, at Merchants' Planters' Bank, Lamar, S.C. without offset, with discount before and interest after maturity at the rate of eight per cent. per annum, payable annually, until paid, and in case said debt is not paid at maturity I promise to pay all expenses incurred in collecting same, including ten per cent. attorney's fees for collection and attorney's fee for any litigation concerning said debt.

No. 4612. [Signed] C.L. REYNOLDS.

3. That the plaintiffs in their capacity as liquidating committee of said Merchants' Planters' Bank are now the legal owners and the holders of said note, and, although all of the conditions thereof on the part of said bank, and on the part of said plaintiffs, have been fully complied with, and, although the said note is long since past due and owing, and demand has been made upon the defendant for payment of the same, he has failed and neglected to pay the same, or any part thereof; and that plaintiffs have, therefore, placed the said note in the hands of Samuel Want, their attorney, for collection.

4. Upon information and belief, that the said defendant has recently disposed of and encumbered all of his real estate, making some transfers without valuable consideration to members of his family, and others, by way of mortgage to reduce his assets to cash, with the purpose of hindering, delaying, and defrauding the plaintiff and his other creditors by putting his resources beyond their reach, and that with such intent he has attempted to secrete his personal assets, and particularly the funds raised by him as aforesaid.

Wherefore, the plaintiff prays judgment against the defendant as follows:

1. For the sum of eight hundred fifty-two dollars ($852.00) with interest and attorney's fees as set forth in the note hereinabove set out.

2. That a writ of attachment do issue out of this Court directed to the Sheriff of Darlington County, requiring him to levy the same upon any personal property of the defendant which has been secreted or removed by him in the manner or with the intent above set forth.

3. For the costs of this action, and for such other and further relief as to the Court may seem proper.

SAMUEL WANT, Attorney for Plaintiffs.

Darlington, S.C. January 24th, 1929.

State of South Carolina, County of Darlington.

Personally appeared before me R.C. Huggins, who, being duly sworn, says that he is the agent of the liquidating committee of Merchants' Planters' Bank, of Lamar, S.C. duly authorized in the premises, and with personal knowledge of the facts set forth in the foregoing complaint; that he has read the said complaint, and knows the contents thereof, and that the same is true of his own knowledge, except as to those matters and things therein stated on information and belief, and, as to those, he believes the said complaint to be true; further, that L.J. Beasley, one of the plaintiffs, is physically incapacitated, and is out of the State of South Carolina, and that in accordance with the order of the Court appointing the plaintiffs, the remaining four plaintiffs are acting in the premises.

R.C. HUGGINS.

Sworn to before me this 24th day of January, 1929. Florence M. Jacobs [L.S.] Notary Public for S.C.

AFFIDAVIT FOR ATTACHMENT

At Lamar, in the County of Darlington, and State of South Carolina, personally appears before me, R.C. Huggins, and who, being by me duly sworn, says:

(1) That he is the agent of the liquidating committee of Merchants' Planters' Bank, of Lamar, S.C. duly authorized in the premises, and with personal knowledge of the facts set forth in this affidavit and in the annexed complaint; that a cause of action exists against the defendant, C.L. Reynolds, and that the facts in relation thereto, and the amount of the claim, and the grounds thereof, are as set forth in the annexed complaint and the affidavit of R.C. Huggins annexed thereto; and further, that the defendant, with the intent to defraud the plaintiff as his creditor, has assigned, disposed of, and secreted funds in excess of the amount of the plaintiff's claim and of his homestead exemption, through deposit of the said funds, his own absolute property, in the name of C.L. Reynolds, trustee, and/or in the name of Mrs. L.M. Reynolds, his wife, in various banking institutions.

(2) That an action has been commenced in the Court above stated, upon the cause of action aforesaid, by issuing the summons therein.

R.C. HUGGINS.

Subscribed and sworn to before me at Darlington, S.C. this 24th day of January, A.D. 1929. Florence M. Jacobs [L.S.], Notary Public for S.C.

ANSWER

The answer of the defendant respectfully shows:

I. Defendant admits so much of paragraph 1 of the complaint as alleges that this defendant is a resident of Darlington County, this State, and the allegations of paragraph two of said complaint, but denies each and every the remaining allegations in said complaint contained.

II. Further answering the complaint and by way of defense, defendant adopts the allegations next hereinbefore set forth as a part hereof, and alleges that, when he shall have been given credit for payments made by him on the note mentioned in the second paragraph of the complaint, and when he shall have received credit for deposits by defendant in the Merchants' Planters' Bank of Lamar, S.C. applicable to the payment of said note, the same will have been discharged by payment, and defendant therefore pleads payment of said note in bar of this action.

III. Further answering the complaint and by way of counterclaim, defendant adopts the allegations set forth in the first paragraph of this answer as a part hereof, and further alleges:

(1) At all the times herein mentioned the Merchants' Planters' Bank of Lamar, S.C. was a banking corporation chartered and existing under and by the laws of the State of South Carolina, with its principal place of business at Lamar, S.C.

(2) Heretofore defendant became and was a depositor in said bank in the sum of $. . . . . . . . , and was such depositor in said amount when the note mentioned in the second paragraph of the complaint became due. At the maturity of said note, it became the duty of said bank to apply said deposit in satisfaction of the note held by it, and, because of the failure and refusal of said bank to make said application, defendant has been injured and damaged in at least the sum of $1,000.

(3) The Merchants' Planters' Bank acted as aforesaid in wanton, willful, and reckless disregard of defendant's rights in the premises.

(4) Plaintiffs are the successors in interest of the said Merchants' Planters' Bank of Lamar, S.C. and, in consequence, are liable to defendant for the injury and damage aforesaid.

Wherefore defendant prays judgment that the complaint be dismissed, with costs; for judgment on the counterclaim in the sum of $1,000; and for all other proper relief.

MILLER LAWSON, Defendant's Attorneys.

AFFIDAVIT FOR SECOND ATTACHMENT

At Lamar, in the County of Darlington and State of South Carolina, personally appears before me, R.C. Huggins, and who, being by me duly sworn, says:

That he is the agent of the liquidating committee of Merchants' Planters' Bank of Lamar, S.C. duly authorized in the premises, and with personal knowledge of the facts set forth in this affidavit and in the annexed complaint, except as therein and hereinafter set forth, and that the facts in relation thereto, and the amount of the claim and the grounds thereof, are as set forth in the complaint and the affidavit of R.C. Huggins, annexed thereto, which is made a part hereof; and, further, that the defendant, with the intent to defraud the plaintiffs as his creditors, has assigned, disposed of, and secreted his property in such manner as to and for the purpose of preventing the plaintiffs from enforcing payment of their claim as set forth in the inclosed complaint through the ordinary processes of law; that in this regard affiant further sets forth:

That the defendant with the purpose and intent, and with the effect aforesaid, has put his real estate beyond the reach of creditors; that such of the real estate owned by the defendant as remains in his control, beyond his homestead, he has mortgaged for an amount exceeding the present market value thereof; that in so mortgaging the said real estate he recently obtained the sum of $5,500; that the said mortgage was placed upon the said real estate at the suggestion and instance of affiant, and that the mortgage loan was obtained through the vigorous co-operation of the affiant; that the activities of affiant in this regard were based upon negotiations between the affiant and the defendant for the payment of the plaintiffs' claim and of another claim held by McSween Mercantile Company, which affiant was interested in collecting or securing on behalf of the said creditor; that it was distinctly stipulated and agreed between affiant and defendant that, in consideration of the co-operation of affiant in effecting the said mortgage loan, the defendant would use the proceeds of said loan for the payment of the debt due the plaintiffs as set forth in the complaint in this cause, and the additional debt due the McSween Mercantile Company; that, as aforesaid, as a result of affiant's activities in the premises, the defendant obtained a mortgage loan from which he received net proceeds of approximately $5,500; that practically until the moment the defendant received such funds he continuously reiterated his assurance and agreements to pay the aforesaid debts; that, however, when the defendant did receive the said sum of approximately $5,500, he paid the McSween Mercantile Company $100 on account of its claim of a very much larger amount, and has failed and refused to make any additional payments thereon, and has failed and refused to make any payment on account of the claim of the plaintiffs; that there is no dispute between the plaintiffs and the defendant as to the amount due by the defendant to them, and that the defendant has no offset by way of deposit or otherwise against the plaintiffs' claim except a deposit of $40, which plaintiffs have offered to allow; that the defendant received the aforesaid sum of approximately $5,500 in the form of a check drawn on Lamar People's Bank; that he indorsed the said check to his wife, to whom he was not indebted for that or any other amount, and that his wife indorsed the said check to "C.L. Reynolds, Trustee," and that the deposit of the proceeds of the said check in the Bank of Hartsville is in the name of C.L. Reynolds, trustee; that, having in said manner, in his opinion, effectually secreted the said moneys, the defendant, since the making of the said deposit, has defied the plaintiffs to collect their said debt if they can; that the aforesaid transaction whereby the defendant obtained the sum of approximately $5,500 occurred within a few days prior to January 24, 1929; that through the actions of the defendant above described no sources of collection of the plaintiffs' debt exist, except through the impounding of the deposit above referred to; that such deposit, according to the information and belief of affiant, founded on his inspection of the check deposited by the defendant, and of the indorsements thereon, which are in the form above set forth, is in Bank of Hartsville; that affiant states also that, since the above-stated mortgage was made, the defendant has stated publicly that he got the value of the property, and was not going to pay anybody, and, when the loan came due, he was going to let the mortgagee have the property, such statements having been made to H.A. Stuckey and others; that the defendant is likewise indebted to other creditors whom he has refused to pay; that, if the defendant has any defense against the plaintiffs' claim, the plaintiffs and affiant have never heard of the same, but that the plaintiffs have always been and are willing to adjust in a spirit of fairness and amity any disputes that might arise by reason of any contentions of the defendant in respect to the plaintiffs' claim.

R.C. HUGGINS.

Sworn to before me this 29th day of January, 1929. Florence M. Jacobs [L.S.] Notary Public for S.C.

NOTICE OF MOTION TO VACATE SECOND WARRANT OF ATTACHMENT

To Samuel Want, Esquire, plaintiffs' attorney:

You will please take notice that on the annexed affidavit and on all the pleadings and proceedings herein the undersigned will move before Hon. E.C. Dennis, Judge of the Fourth Judicial Circuit, at his chambers, in Darlington, S.C. on Saturday, the 9th instant, at 11 o'clock, a.m., or as soon thereafter as counsel can be heard, for an order vacating the warrant of attachment issued by the clerk of Court herein, on the grounds that the same was irregularly and improvidently issued in the following particulars, to wit:

I. Because no facts are stated warranting the issuance of the warrant of attachment.

II. Because no facts are stated showing that the defendant, with the intent to defraud the plaintiffs as his creditors, has assigned, disposed of and secreted funds.

III. Because it is not true that the defendant has assigned, disposed of, and secreted funds with intent to defraud the plaintiffs, but, on the contrary, the defendant has acted in the premises with the utmost good faith.

IV. Because the complaint has not been verified.

V. Because the plaintiffs have no legal or moral claim to the property attached.

VI. Because the order vacating the first warrant of attachment herein is res adjudicata, it being submitted that Rule 61 of this Court has been violated, in that the subsequent application for a warrant of attachment is made on the same state of facts, and in that the affidavit for the second warrant of attachment does not state that no previous application for said warrant has been made.

MILLER LAWSON, Defendants' Attorneys.

Hartsville, S.C. February 1, 1929.

ORDER REFUSING TO VACATE SECOND WARRANT OF ATTACHMENT

This matter comes before me on a motion to dissolve a writ of attachment heretofore issued by the Clerk of this Court. The ground of the attachment is that "the defendant, with intent to defraud the plaintiffs as his creditors, has assigned, disposed of, and secreted certain funds, his absolute property."

A previous writ of attachment had been issued on the same ground, and was dissolved by me without any contest on the part of the plaintiffs. The present attachment was issued and levied before the order dissolving the first writ became effective.

The writ is founded upon affidavits which show, with a number of surrounding facts and circumstances, the transfer by the defendant to his wife of a substantial deposit of money in a bank, and the immediate retransfer of the said fund by the wife to the defendant as trustee, and it is charged by the plaintiffs that this was, and is, a fraudulent transfer, made for the purpose of secreting the said funds in fraud of the rights of the plaintiffs and of the other creditors of the defendant. The defendant's motion is supported by counter affidavits, to which reply affidavits were filed by the plaintiffs.

The motion is based upon six grounds, which may be reduced to three, as follows: (1) That the papers do not make out the case above indicated; (2) that the complaint is not properly verified; (3) that the order vacating the first attachment is res adjudicata.

As to the first ground, I have carefully considered the long list of cases, including the recent case of Munn v. Munn, 146 S.C. 290, 143 S.E., 879, in which our Supreme Court has held that the attachment affidavits involved therein were insufficient, and, in the light of those cases, I recognize the requirement that the plaintiffs make a specific showing of the alleged fraud, either by direct evidence or by a statement of facts and circumstances justifying the charge. The present case, it seems to me, is clearly distinguishable. The affidavit here charges a specific transfer of funds under facts and circumstances which create a strong presumption of fraudulent intent on the part of the defendant. And the affidavits of the plaintiffs present most of the essential facts as a matter of personal knowledge, and, where information and belief are relied on, the sources are sufficiently stated. Roddey v. Erwin, 31 S.C. 36, 9 S.E., 729.

I have considered all of the affidavits of both plaintiffs and defendant, and think that on the facts the plaintiffs have sufficiently made out their charge for the purpose of sustaining the attachment writ.

It is not necessary for me to consider whether the verification of the complaint complies with Section 418 of the Code of Civil Procedure 1922 relied upon by moving counsel, for I am satisfied that there is no requirement in our law that the complaint be verified at all. In an attachment case, it is sufficient that the complaint and/or affidavit set out a cause of action. The writ is not founded on the formal complaint, but on the plaintiffs' affidavit as to the facts upon which the writ is prayed.

I am satisfied that my order vacating the first attachment is not res adjudicata. This seems to me to be explicitly decided in the case of Munn v. Munn, 146 S.C. 290, 143 S.E., 879. Nor does Circuit Court Rule No. 61 apply to the situation.

Accordingly, it is ordered and adjudged that the motion to vacate the warrant of attachment be, and the same hereby is, refused.

E.C. DENNIS, Judge Fourth Circuit.

ORDER

This matter comes before me on motion of the defendant to dissolve the warrant of attachment heretofore issued. A previous motion to dissolve had been refused by me. The present motion is on the same grounds as the former motion. The affidavits attached to the moving papers are practically identical with those attached to the moving papers on the first motion, except that there are additional affidavits setting forth the good character of the defendant, and relating to the value of a certain residence property alleged to be owned by the defendant. Both of these matters were covered in the affidavits on the first motion, though in less detail.

As the matter thus comes before me on the same state of facts it was presented on the first motion, it would seem clear that the matter is res adjudicata, and that on this ground the motion should be refused. Counsel for the defendant does not question the rule that successive motions will not lie on the same state of facts, but alleges that on the present motion additional and new facts in contravention of the truth of the allegations upon which the warrant was obtained are presented. As already indicated, I do not so regard the affidavits attached to the second motion. To the extent that they differ from the affidavits attached to the first motion, I regard them as altogether cumulative.

There is also before me a motion of the defendant to rescind my previous order wherein I refused to dissolve the attachment. This motion is upon the ground that the order was granted by mistake, takes the defendant by surprise, and results from excusable neglect on the part of the defendant. I have carefully considered the argument of defendant's counsel on this motion. As he relies, however, solely upon the affidavits to which reference is above made, it does not seem to me that a case has been made out within the terms of this motion, or under Section 437 of the Code of Civil Procedure 1922 upon which it is based.

My views being as above expressed, it is ordered and adjudged that the two motions above referred to be, and the same hereby are, refused.

E.C. DENNIS, Judge of the Fourth Circuit.

EXCEPTIONS

I. Because no facts are stated warranting the issuance of the warrant of attachment, and the trial Judge erred in not so holding.

II. Because no facts are stated showing that the defendant, with the intent to defraud the plaintiffs as his creditors, assigned, disposed of, or secreted funds, it being respectfully submitted that the defendant had and has other property unincumbered and ample to satisfy any just demand against him. In the absence of any judgments against the defendant, and in view of his financial ability to meet any just demand, the Court erred in refusing to vacate the warrant of attachment.

III. Because the Court erred in holding that the defendant had assigned, disposed of, and secreted funds with intent to defraud the plaintiffs, whereas his Honor should have held that the defendant acted in the premises with the utmost good faith, and he erred in not so holding.

IV. Because the warrant of attachment was procured on an affidavit referring to the complaint as a part thereof, which was not properly verified, and his Honor erred in refusing so to hold and in refusing to vacate the warrant of attachment on said ground.

V. Because his Honor should have held that plaintiffs had no legal or moral claim to the property attached, and he erred in not so finding.

VI. Because his Honor erred in refusing to rescind the order theretofore issued by him, in which he refused to vacate the second warrant of attachment on the ground that said order was granted by mistake, took the defendant by surprise, and resulted from excusable neglect on the part of the defendant. It is respectfully submitted that new and additional facts were brought to the attention of the Court conclusively showing that there was no fraud, and that, if his Honor was correct in vacating the warrant of attachment in two cases against the defendant, it followed logically and necessarily that the warrant of attachment in this case should have been vacated.

VII. Because his Honor erred in refusing to vacate the second warrant of attachment on the ground that the same was irregularly and improvidently issued, it being respectfully submitted that the plaintiffs, the McSween Mercantile Company, B.C. Keefe, as Receiver, and Federal Reserve Bank of Richmond, on precisely the same factual situation, conspired to harass appellant with warrants of attachment for which no warrant of law existed. Having held the warrants groundless as to two of said litigants, his Honor erred in refusing so to hold as to the other two; there being no differentiating circumstance of law or of fact.

VIII. Because his Honor erred in his refusal by order of March 23, 1929, to hold that the order vacating the first warrant of attachment was res adjudicata, it being respectfully submitted that Rule 61 of the Circuit Court had been violated, in that the subsequent application for a warrant of attachment was made on the same state of facts, and in that the affidavit for the second warrant of attachment did not state that no previous application for said warrant had been made, and his Honor likewise erred in his refusal to rescind the order of March 23, 1929, on said ground, it being respectfully submitted that said order was thus obtained by mistake.

Messrs. Miller Lawson, for appellant, cite: "Fraud": 52 S.C. 472; 146 S.C. 290; 132 S.C. 304; 131 S.C. 136; 124 S.C. 64; 105 S.C. 29; 107 S.C. 441; 6 S.C. 167; 10 S.C. 467; 24 S.C. 196; 31 S.C. 307; 31 S.C. 444; 38 S.C. 491. As to warrant of attachment: 50 S.C. 200; Sec. 418, 437, Code Proc.; 63 S.C. 182; 28 S.C. 181; 146 S.C. 292; 71 S.C. 95. Circuit Court Rule No. 61. Mr. Samuel Want, for respondents, cites: As to attachment: 6 C.J., 57; Secs. 500, 502, Code Proc.; 143 S.E., 879; 131 S.C. 136; 105 S.C. 291; 16 S.C. 467. Decision of Circuit Judge on question of fact is final unless wholly unsupported by evidence, or influenced or controlled by error of law: 128 S.C. 392; 146 S.E., 605; 103 S.C. 177; 31 S.C. 444; 6 C.J., 469; 81 S.C. 36. "Fraud": 31 S.C. 361. Cases distinguished: 50 S.C. 192.


October 17, 1929. The opinion of the Court was delivered by


This action by B.S. Josey, C.B. Windham, J.M. Dowling, R.R. Oates, and L.J. Beasley, as liquidating committee of Merchants' Planters' Bank, of Lamar, S.C. against the defendant, C.L. Reynolds, commenced in the Court of Common Pleas for Darlington County, January 24, 1924, is an action on a promissory note executed and delivered by the defendant unto the said Merchants' Planters' Bank, in the sum of $852, together with provision for the payment of interest and attorney's fees, dated November 3, 1928, and payable January 15, 1929, in which action a warrant of attachment was sought and procured against the defendant. The first warrant of attachment procured was, on motion of the defendant, vacated by order of his Honor, Judge E.C. Dennis, dated January 29, 1929. Subsequently the plaintiff procured another warrant of attachment on new or additional affidavits. The defendant made a motion before Judge Dennis to vacate this second warrant of attachment, but the motion was refused. Later the defendant on additional affidavits made another motion before his Honor, Judge Dennis, in which motion the defendant asked for an order to vacate the second warrant of attachment and to rescind the order theretofore made refusing the motion to vacate the said second warrant of attachment. This motion was also refused. From the aforesaid orders of the Circuit Judge pertaining to the second warrant of attachment the defendant has appealed to this Court upon exceptions which will be reported.

The question raised by the fourth exception, which should be considered at the threshold of the case, is whether or not an affidavit which does not state a cause of action against the defendant can be augmented by an unverified complaint, which states a cause of action, for the purpose of issuing a warrant of attachment based upon such insufficient affidavit, which affidavit makes reference to such complaint.

One of the conditions upon which a warrant of attachment may be issued is that it shall appear by affidavit that a cause of action exists against the defendant, specifying the amount of the claim and the grounds thereof. Section 502, Vol. 1, Code 1922. Respondents concede that the affidavit upon which the warrant of attachment was issued does not comply with this requirement, but it is their contention that the defect is cured because the affidavit makes reference to the complaint which states a cause of action. This Court has held that a verified complaint attached to the affidavit may be used to augment the affidavit for the purpose of furnishing grounds for issuing the warrant of attachment, but an unverified complaint cannot be used for such purpose. While the respondents do not specifically admit the insufficiency of the verification of the complaint, they do not seem to controvert that position.

The verification to the complaint was made by an agent, and it is not stated by him that the note sued on is in his possession, nor is it stated by him why the verification is not made by a party plaintiff. We think it clearly appears from the record that the attempted verification of the complaint is not a compliance with the requirement, but that it is defective, and therefore the complaint cannot be used in connection with the affidavit for the purpose of issuing a warrant of attachment based thereon, even though the complaint be annexed to the affidavit. Respondent contends that this point was not sufficiently raised in the motions before the circuit Judge, and for that reason contends that it should not be raised at this time. We do not agree with respondent, but think that the grounds stated by the defendant before the circuit Judge upon which the several motions were based clearly raised this question, and that, under the appellants' exceptions, the question is properly before this Court.

It is the contention also of respondent that the appellant waived any defect in the verification by filing a verified answer to the complaint. Such action on the part of the appellant could in no way change the statutory requirement for issuing the warrant of attachment. The warrant of attachment was not issued on the answer, but was issued on an insufficient supporting affidavit which made reference to an unverified complaint attached, which paper could not augment such insufficient supporting affidavit. The position of respondent is untenable.

The further contention of the respondent, that the defective verification in question should in any event be regarded as an affidavit for the purpose of augmenting the defective supporting affidavit upon which the warrant of attachment was issued, is also untenable.

The fourth exception is therefore sustained. We shall not pass upon the other exceptions.

It is the judgment of this Court that the orders issued by his Honor, Judge Dennis, appealed from herein, be reversed, and that the warrant of attachment issued in the cause be vacated.

MR. CHIEF JUSTICE WATTS and MESSRS. JUSTICES BLEASE and STABLER concur.


This is an appeal from an order of his Honor, Judge Dennis, refusing a motion of the defendant to vacate an attachment. The motion was made upon grounds that suggest that the attachment was both irregularly and improvidently issued. As far back as the case of Monday v. Elmore, 27 S.C. 126, 3 S.E., 65, 66, the late Chief Justice Simpson very clearly explained the difference between an attachment irregularly, and one improvidently, issued: "An attachment is irregularly issued when it appears upon the face of the proceedings that there is no ground for the attachment; in other words, where the affidavit fails to contain the conditions upon which the law authorizes such a proceeding, to-wit, that a cause of action exists, that a certain sum is due, and that the defendant has assigned, disposed of, or secreted, or is about to assign, dispose of, or secrete, any of his property, with intent to defraud his creditors. It is improvidently issued when the conditions necessary are stated, but they are untrue. * * *"

The basis of the charge that the attachment was irregularly issued is that there are no facts stated (in the affidavit?) warranting the issuance of the attachment, and that there are no facts stated (in the affidavit?) showing that the defendant, with the intent to defraud the plaintiffs as his creditors, has assigned, disposed of, and secreted funds. (It will be observed that these objections go to the substance, and not to the form, of the affidavit.)

The basis of the charge that the attachment was improvidently issued is that as a matter of fact it is not true, as alleged, that the defendant has assigned, disposed of, and secreted funds, with the intent to defraud his creditors. (It will be observed, of course, that this objection also does not go to the form of the affidavit.)

In addition to these objections as grounds of the motion to vacate the attachment, it is urged that the complaint is not verified; that an order vacating a previous attachment upon the same grounds is res adjudicata; and that the second attachment is in violation of Rule 61 of the Circuit Court.

These last three objections may be summarily disposed of: I know of no law which requires the complaint in an action to which an attachment is ancillary to be verified, so long as the affidavit upon which the attachment is issued conforms to the requirements of the statute; and I know of no law which would prevent the issuing of a second attachment, based upon an affidavit which cures a defect in the first; clearly Rule 61 applies to orders of Court, and not to warrants of attachment.

It will be observed that there is quite a difference between an objection to an attachment upon the ground that the complaint is not verified and the objection now urged by counsel for the defendant that the affidavit is insufficient in form, in that it contains no statement of an existing cause of action in favor of the plaintiffs against the defendant, nor of the amount and grounds of the claim upon which a cause of action may be based. The objection that the complaint is not verified may be an excuse of the defendant to omit the verification of his answer, but it certainly is no objection to the validity of the attachment or to the form of the affidavit which purports to support it.

The point is that the defendant is now seeking to take advantage of the insufficiency of the affidavit, upon the grounds stated, under an objection to the verification of the complaint, when he did not move to vacate the attachment upon the ground of insufficiency of the affidavit.

I do not think, therefore, that the defendant is now in a position to attack the attachment upon the ground of the insufficiency of the affidavit in the particulars named, as they were not made the grounds of his motion on circuit to vacate the attachment.

It might be conceded that the affidavit for the attachment is, of itself, insufficient in form, by reason of the omission of the statement that a cause of action existed, with the amount and grounds thereof as required by the statute; the attack, however, of the defendant is upon the verification, not upon the affidavit. He may shatter the verification into fragments, and the cataclysm will not have affected the affidavit in the slightest particular, as the assault will not have been directed against it.

But let us see whether the assault upon the verification is successful:

The objections urged to its sufficiency are that it purports to have been made by an agent of the plaintiffs; that it contains no statement that the note sued upon was in the possession of the affiant agent, and no statement of the reasons why it was not made by the plaintiffs or by some one of them; objections that do not appear to have appeared to counsel when the verified answer to the complaint was served. I find nothing in Section 418 of the Code which requires an agent, under such circumstances, to incorporate in his affidavit of verification a statement that the written instrument upon which suit was being instituted was at the time in his possession. It authorizes him under these circumstances to make the verification, and, if it should so appear as a fact, the verification is good; there is nothing which requires that fact to appear in the verification. But, if there was, I think that his possession would necessarily be implied from the situation which was developed. The bank had closed its doors; had been taken over by the bank examiner; an order of Court had been passed appointing the plaintiffs (I assume the directors) a liquidating committee, and the affiant had been appointed agent of the committee. I do not think it a violent assumption that under these circumstances he was put into possession of the entire assets of the bank for the purpose, under the direction of the committee and the examiner, to assemble the assets, convert them into cash, pay the debts, and distribute what salvage of the wreck may have been rescued.

The section of the Code appears to make it mandatory (which is not true of the matter just discussed), that, in the event that the verification is made by one not a party, the affidavit shall state the reasons why. When the situation above referred to is considered, and also the fact that the agent occupied the position of a trustee, who himself could have brought the suit, a sufficient explanation of why the plaintiffs did not verify the complaint appears. It certainly was not necessary to repeat the facts creating the situation.

If the agent had attempted to detail the reasons why the plaintiffs had not executed the verification, what possible facts could he have stated in addition to those which already appeared by explicit expression or legitimate inference? If these reasons already so appeared, surely the law would not require an unnecessary repetition of them.

Besides, the verification contains a statement that the agent had personal knowledge of the facts set out in the complaint; which brings the case squarely under Section 418: " * * * or if all the material allegations of the pleading be within the personal knowledge of the agent."

If the assault upon the verification has failed, as I think it has, the discussion might end here, for it is thoroughly settled by the cases of Addison v. Sujette, 50 S.C. 192, 27 S.E., 631, and Chitty v. Co., 62 S.C. 526, 40 S.E., 944, that, where the affidavit in attachment purports to incorporate a verified complaint, which is attached to and made a part of it, the complaint may be resorted to for the purpose of supplying any omissions in the affidavit; and in Ferst v. Powers, 58 S.C. 398, 36 S.E., 744, it is held that, where there is a verified complaint stating all of the facts necessary, it may take the place of an affidavit.

But, regardless of the fact that the complaint may not be verified, it is sworn to in the affidavit and by reference incorporated into and made a part of it, and the matter contained in it is as completely incorporated in the affidavit as if it had been inserted in it. I can see no reason in requiring that that which is intended to be incorporated in an affidavit, annexed to and made a part of it, should itself be sworn to. Suppose that an affidavit, instead of setting forth the amount and grounds of an obligation, specifically refers to a copy of such obligation and attaches it to the affidavit, as a part of it, would it be essential that that copy be sworn to? Should every exhibit to a complaint annexed to and made a part of the complaint be sworn to? If so, the known practice of a half a century has been all wrong.

In 6 C.J., 118, it is said:

"If the declaration or complaint is required to be presented, or may be considered on the application, it may supply or remedy the omission of the affidavit to set out the cause of action or state the nature of the claim, or its insufficiency in that respect, or it will be sufficient to refer to the pleading to show the ground upon which the action is brought."

In La Force v. Wear-Boogher Co., 8 Tex. Civ. App. 572, 29 S.W. 75, it was held that an affidavit in attachment, filed simultaneously with the original petition, in which the affiant stated that the defendant was indebted to the plaintiff in a certain sum "as set forth in plaintiff's petition filed in this cause," sufficiently described by such reference the demand under which the attachment was levied. The Court said: " * * * The petition removes any uncertainty in the description of the demand as contained in the affidavit." In that case the defendant contended that the affidavit failed to state the amount and nature of the claim, and was insufficient, unless the description thereof could be aided by the averments of the petition, which the Court held entirely proper.

"An affidavit for attachment sufficiently states the amount due if it refers to the petition wherein the amount is specifically set forth." Boone v. Savage, 14 La., 169; Souberian v. Renaux, 6 La. Ann., 201.

"Averments in the complaint may be referred to in order to sustain an attachment sued out in the action." Grotte v. Nagle, 50 Neb. 363, 69 N.W., 973; Germantown Co. v. Whitney, 19 S.D., 108, 102 N.W., 304; White Day Co. v. Bank (Tex.Civ.App.), 114 S.W. 1159.

In Conan v. Fenn, 159 Mo. App. 664, 140 S.W. 82, it was held permissible to determine the sufficiency of an affidavit in attachment by reference to the complaint.

In Drake, Attachment (5th Ed.), 79, it is said:

"And it is not essential that the amount should be set forth in terms in the affidavit, if the form of the pleading be such as to require it to be stated in the petition, and it be there stated and be referred to in the affidavit as the sum for which the attachment is obtained."

In Germantown Co. v. Whitney, 19 S.D., 108, 102 N.W., 304, 305, it is said:

"While not stated in terms in the affidavit for the attachment that the plaintiff was duly authorized by the laws of Pennsylvania to act as administrator, it is so stated therein in effect, and it is so specifically stated in the complaint, which, for the purpose of this motion, may be referred to for the purpose of sustaining the attachment proceedings."

In Hart v. Barnes, 24 Neb. 782, 40 N.W., 322, 324, the Court said:

"The cause of action is not stated as fully in the affidavit for an attachment as is desirable, perhaps, but sufficient appears to show that the cause of action arises upon contract. It is not necessary, in the affidavit for an attachment, to set forth at length the cause of action. It is sufficient to state `the nature of the plaintiff's claim.' This must appear to arise ex contractu, but where the statement is not as full as may be desired, reference may be had to the petition."

In U.S. Capsule Co. v. Isaacs, 23 Ind. App. 533, 55 N.E. 832, it was held, quoting syllabus:

"An attachment affidavit, stating that the plaintiff's claim in the action was `a balance of a judgment in favor of plaintiff, described in the complaint,' and was `on account of goods sold and delivered, described in the complaint,' sufficiently showed the nature of plaintiff's claim as founded on goods sold and delivered."

In Simon v. Temple Co. (Tex.Civ.App.), 146 S.W., 592, 593, the Court said:

"The Court did not err in overruling appellant's motion to quash the attachment, as set out in the first assignment of error. The affidavit for the attachment describes the debt sued on as follows: `That Phil Simon, the defendant, is justly indebted to the plaintiff on certain customer's draft in the sum of $564.82; that said customer's draft is dated October 14, 1910, and was due and payable at sight, and is now and has been long since due; that said customer's draft is fully set out in plaintiff's original petition above, and reference is here made to the petition for a full and complete description of said customer's draft.' The affidavit followed the petition which was not sworn to."

In Matthai v. Conway, 2 App. D.C., 45, it was held, quoting syllabus:

"Affidavits for an attachment in assumpsit by a firm for goods sold are sufficient where they show that plaintiffs are entitled to recover the amount claimed in the declaration, which, with the particulars of the demand, consisting of an itemized statement, is referred to in the affidavits."

In Belden v. Read, 27 La. Ann., 103, it was held, quoting syllabus:

"Where a petition stated that defendants were withholding from plaintiff, as the proceeds of the sale of his goods, at least $3,500, and asked judgment for that sum, or such amount as shall be found due, the attachment affidavit, alleging that all the allegations of the petition were true, sufficiently alleged a debt due to plaintiff in a certain sum."

In Miller v. Chandler, 29 La. Ann., 88, it was held, quoting syllabus:

"Where the affidavit for an attachment attests the truth of all the allegations of the petition, and the petition sets forth the non-residence of the defendant, and a cause of action, the affidavit is sufficient."

In Crandall v. McKaye, 6 Hun. (N.Y.), 483, it was held, quoting syllabus:

"An attachment was issued upon a defendant stating that a cause of action existed in favor of the plaintiff against the defendant, arising out of a contract made and executed by the defendant, which was `more particularly set forth in the copy of complaint hereto annexed.' A copy of a verified complaint setting forth the contract was annexed to the affidavit. Held, that the affidavit was sufficient."

In Stifel v. Bank (Super. Ct. Cin.), 16 Wkly. Law Bul. 398, it was held, quoting syllabus:

"An affidavit for attachment may be enlarged by incorporating the allegations of the petition in it by express reference."

In Cleveland v. Boden, 63 Tex., 103, it was held, quoting syllabus:

"Where an affidavit in attachment is defective in not stating the amount of the debt with certainty, reference may be had to the petition to ascertain the amount thereof."

I admit that there is a declaration in the opinion of the Court in the case of Addison v. Sujette, 50 S.C. 192, 27 S.E., 631, 634, which is apparently opposed to the conclusion which I have reached. It is this:

"Now, it may be true that a duly verified complaint, if attached to the affidavit upon which an attachment is applied for, and therein referred to as a part thereof, may be regarded as a part of such affidavit, yet, in this case, the essential condition that the complaint has been duly verified is wanting."

Following this case is that of Chitty v. Company, 62 S.C. 526, 40 S.E., 944, where the same declaration is made. I fail to see the reason or justice of this doctrine. The affidavit, not the complaint, is the basis of an attachment, and, if the affiant should incorporate under oath the allegations of the complaint in his affidavit by reference, what possible strength would be added to the affidavit by the verification of the complaint?

Another consideration strongly appeals to my judgment. While the affidavit of the agent may have been insufficient as a verification to the complaint by reason of the omissions pointed out, it is nevertheless an affidavit, and was before his Honor, Judge Dennis, in passing upon the motion to vacate. It is essentially different from the verification in the Addison v. Sujette case. The verification in that case was insufficient both as a verification and an affidavit, for the reason that the affiant deposed to the truth of the allegations of the complaint except as to such matters as were stated upon information and belief, when there was no separation in the complaint which gave evidence of what was directly alleged and what on information and belief. This vice does not adhere in the present verification, as the complaint will show. It is a perfectly sound affidavit, and was entitled to be resorted to in passing upon the motion to vacate.

The only objection now urged by the defendant to the form of the affidavit is that it does not contain a statement, in itself, that a cause of action exists in favor of the plaintiffs against the defendant, with a further statement of the amount and grounds of the claim upon which it is based. I think that it would be carrying technicalities to the limit to dismiss the attachment upon this ground, in view of the fact that the answer of the defendant admits all that he claims to have been omitted from the affidavit. See paragraph 1 of the answer and paragraph 2 of the complaint. I think that under these circumstances the Court might well assume or order that the affidavit be amended.

Upon the merits of the issue as to the truth of the charges made against the defendant, supporting the attachment, I think that the order appealed from is a sufficient justification of its correctness.

I think, therefore, that the order of his Honor, Judge Dennis, should be affirmed.


Summaries of

Josey et al. v. Reynolds

Supreme Court of South Carolina
Oct 17, 1929
152 S.C. 339 (S.C. 1929)
Case details for

Josey et al. v. Reynolds

Case Details

Full title:JOSEY ET AL. v. REYNOLDS

Court:Supreme Court of South Carolina

Date published: Oct 17, 1929

Citations

152 S.C. 339 (S.C. 1929)
150 S.E. 67

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