Summary
In Ocean Forest, the agent was hired for the specific and sole task of collecting a sum of money and his compensation was on a contingent fee basis.
Summary of this case from Futch v. McAllister TowingOpinion
14526
August 10, 1937.
Before BELLINGER, J., Greenville, September, 1936. Affirmed.
Action by the Ocean-Forest Company against John T. Woodside and others, wherein named defendant filed two counterclaims. Judgment for plaintiff, and defendants appeal.
The decree of Judge Bellinger follows:
This case was heard by me at the September term of the Court of Common Pleas at Greenville. Able oral arguments were made by counsel on both sides. The case was then marked heard on the calendar and was taken by me under advisement.
The case involves the collection by John T. Woodside, as agent for the plaintiff under a written contract of agency in the form of a letter signed by Woodside and made a part of the complaint, of the sum of $34,915.33 from the State Highway Department of South Carolina, which sum represented reimbursement determined to be due for a section of paved roadway at Myrtle Beach, S.C. taken over by the Highway Department and made a part of the State highway system, and his alleged misappropriation and diversion to his own use of such funds in violation of his duty to the principal whom he had undertaken to serve. The act pursuant to which reimbursement payment was made was approved April 23, 1935 (Acts 1935, p. 260), and provides for reimbursement to Myrtle Beach Estates, Inc., a corporation to which had been transferred title to the properties at Myrtle Beach originally taken by John T. Woodside in his own name, to the rights of which corporation plaintiff claims to have succeeded.
The matter comes before me on three motions: First, a motion of the defendants John T. Woodside and Mortgage Loan Securities Company for an order making the State Highway Department of South Carolina a party defendant in this action; second, a motion of these defendants for the Court to frame issues for submission to the jury; and, third, a motion of the plaintiff to dismiss and strike the answer of John T. Woodside and Mortgage Loan Securities Company for insufficiency, irrelevancy, and as sham, and for judgment on the pleadings.
The matter was heard on the pleadings and on affidavits filed by both sides. The complaint alleged, in substance, that the defendant John T. Woodside contracted with the plaintiff to collect a claim belonging to the plaintiff, as assignee of Myrtle Beach Estates, Inc., from the State Highway Department, which contract is attached to the complaint; that this claim was collected by John T. Woodside, the amount paid being $34,915.33, and the money deposited by him in the First National Bank of Columbia to the credit of Mortgage Loan Securities Company, of which corporation Woodside is the largest, if not the sole, stockholder; that Woodside drew one check in the name of Mortgage Loan Securities Company for $5,000.00 against the fund, which check was paid; that Woodside secured from the First National Bank of Columbia six cashier's checks on the Central Hanover Bank Trust Company of New York, payable to the order of Mortgage Loan Securities Company, for the balance of the fund, $29,915.33; that these checks have not yet been cashed; that the checks represent money belonging to the plaintiff; and that both Woodside and Mortgage Loan Securities Company are insolvent. The plaintiff prays an injunction against the cashing of the checks or the use by the defendants of the proceeds thereof, and prays that the First National Bank of Columbia be ordered to stop payment and for such other and further relief as to the Court may seem proper.
The answer of the defendant the First National Bank of Columbia denied all interest in the matter and asked that it be permitted to pay the funds now on deposit with it, being the amount represented by the checks, to the Clerk of Court.
The answer of the defendants John T. Woodside and the Mortgage Loan Securities Company contains a general denial. The answer then admits the contract by which John T. Woodside agreed to collect the claim for the plaintiff and the acceptance by Woodside of advances from the plaintiff for expenses, but alleges that the contract was procured from John T. Woodside by false and fraudulent representations of the plaintiff. It further alleges that none of the funds of Myrtle Beach Estates, Inc., were used for the building of the road at Myrtle Beach, and that Myrtle Beach Estates, Inc., never had a claim against the State Highway Department, and that the plaintiff holds no assignment from Myrtle Beach Estates, Inc. The answer further alleges that the contract of agency was procured from John T. Woodside under a mutual mistake of fact. The answer then alleges that the act authorizing the reimbursement of Myrtle Beach Estates, Inc., is void and unconstitutional on the ground that Myrtle Beach Estates, Inc., had ceased to exist as a corporate entity, the charter having been canceled, and that the passage of the act was procured through a mistake of fact. The answer alleges that the reimbursement agreement signed by John T. Woodside and the State Highway Department, which agreement is attached to the answer, was obtained by John T. Woodside while acting under a misapprehension as to the facts relating to the claim, and alleges that the claim in truth belongs to John T. Woodside, inasmuch as he held the legal title to the land at the time the road was built. The answer then contains a counterclaim for services rendered as president of Myrtle Beach Estates, Inc., from June, 1928, and a further counterclaim for compensation on a contingent fee basis for procuring the claim to be paid by the State Highway Department in accordance with the contract of agency.
On behalf of the plaintiff affidavits were filed by Mr. Ellis M. Johnston, chairman of the board of directors of Woodside Cotton Mills Company and president of Ocean-Forest Company, in which it is stated that the money used to build the road at Myrtle Beach was taken by John T. Woodside from Woodside Cotton Mills Company and its affiliate Easley Cotton Mills, and used by him, without authority, for the construction of the road; that these acts were done on behalf of Myrtle Beach Estates, Inc., though the charter of Myrtle Beach Estates, Inc., had not then actually been issued; that later, Myrtle Beach Estates, Inc., was chartered by the Secretary of State of South Carolina and all the properties transferred to it by John T. Woodside; that John T. Woodside and his brothers thereafter recognized the claim of the mills because of the wrongful use by John T. Woodside of the mills' money, which recognition is set forth in detail; that Myrtle Beach Estates, Inc., and the Woodsides agreed to reimburse the mills, and, to this end, gave their note pledging as security all the stock of Myrtle Beach Estates, Inc.; that a mortgage was foreclosed against Myrtle Beach Estates, Inc., and, for the purpose of salvaging some of the investments of the cotton mills in the Myrtle Beach properties, the plaintiff, Ocean-Forest Company, was organized; that the plaintiff bought at the master's sale certain of the properties of the Myrtle Beach Estates, Inc.; that that deed transferred such real estate and all personal property, "together with all the estate, right, title, interest, possession, property, benefit, claim and demand whatsoever, both at law and in equity, of said John T. Woodside and of all the parties to said suit, and of all other persons rightfully claiming or to claim same, or any part thereof, by, from or under them or either of them"; that the said John T. Woodside was a party to that suit. The affidavit further states that, on learning that reimbursement for the road might be had from the State Highway Department, John T. Woodside agreed to collect the claim for the plaintiff for a contingent fee of 15 per cent., plus expenses, not to exceed $200.00; that certain advances, amounting to $1,112.34, were made to him; that John T. Woodside was urged to make collection and he promised to continue to devote his efforts to that end when, in fact, he had already collected the claim and deposited the check to the account of Mortgage Loan Securities Company, as alleged in the complaint. The affidavit further states that none of the funds of John T. Woodside were used for the building of the road; that John T. Woodside was not induced to act for the plaintiff in the collection of the claim by any statements of the plaintiff; and that John T. Woodside had greater knowledge of the facts that any other person, he having handled the Myrtle Beach affairs personally, and having been president of Woodside Cotton Mills Company up until January 23, 1930; and that Woodside Cotton Mills Company owned 90 per cent. of the stock of Easley Cotton Mills, which latter corporation had been officered by the brothers of John T. Woodside.
The plaintiff offered also the affidavit of J.B. Ricketts, who said that he was secretary and treasurer of Myrtle Beach Estates, Inc., and still is the treasurer of that concern, in which affidavit it is stated that the plaintiff, Ocean-Forest Company, was organized by Woodside Cotton Mills Company solely for the purpose of conserving the interests of that mill and its affiliate, Easley Cotton Mills, in the Myrtle Beach properties, and that Woodside Cotton Mills Company owns all of the stock of the plaintiff, Ocean-Forest Company; that the agreement between John T. Woodside and the plaintiff for the collection of the claim was made with full concurrence of the officers of the Woodside Cotton Mills Company and moneys advanced to John T. Woodside for expenses represented moneys of the Woodside Cotton Mills Company; that the deponent believes that Mortgage Loan Securities Company has no interest in the fund and that John T. Woodside is using the name of that corporation for the purpose of appropriating the fund to his own use. The deponent affirms generally the statements made in the affidavit of Ellis M. Johnston.
The plaintiff also offered the affidavits of J.E. Sirrine, George Norwood, and Alester G. Furman, Jr., confirming the affidavit of Ellis M. Johnston as to the recognition by the Woodsides of the claim against the Woodsides and Myrtle Beach Estates, Inc., which the mills had because of John T. Woodside's diversion of mill funds.
The defendants John T. Woodside and Mortgage Loan Securities Company offered the affidavit of John T. Woodside stating that the matters alleged in the answer are true, and stating that he (Woodside) owns none of the stock of Mortgage Loan Securities Company. They offered the affidavit of Hon. Olin D. Johnston, Governor of South Carolina, stating that the act authorizing the reimbursement of Myrtle Beach Estates, Inc., was passed, and approved by him, with the understanding that the money was to go to John T. Woodside personally; that without that understanding the act would not have been approved. They offered, also, the affidavit of S.M. Ward, State Senator from Georgetown County, and chairman of the Senate Finance Committee, agreeing in substance with the affidavit of the Governor.
Offered also by these defendants was the affidavit of W. T. Henderson stating that, at the time of the purchase by John T. Woodside of the Myrtle Beach properties, he received as his commission the personal note of John T. Woodside for $50,000 which note was paid.
The motion of the defendant to make the State Highway Department a party is denied. It is conceded that the road has been turned over to the State Highway Department and that it was reasonably worth to the State, at the time it took it over, the money paid as reimbursement. It thus appears that the Highway Department has no interest in this controversy.
The motion of the defendant to frame issues for submission to the jury is denied. There are no issues to be framed, as shall appear hereafter.
The motion of the plaintiff to strike and dismiss the answer of the defendants John T. Woodside and Mortgage Loan Securities Company, and for judgment on the pleadings, is granted.
It becomes the duty of the Court to strike out an answer as sham when it appears to the Court that the pleading is manifestly sham and irrelevant or false, and is filed merely for the purpose of delay or without good faith.
Section 470 of the Code of 1932 provides: "§ 470. Sham and Irrelevant Defenses to be Stricken Out. — Sham and irrelevant answers and defenses may be stricken out on motion, and upon such terms as the Court may, in its discretion, impose."
In Simmons Manufacturing Company v. Whitton Automotive Parts Company, 143 S.C. 152, 141 S.E., 363, 364, the cause of action was based on a draft drawn by the plaintiff on the defendant and accepted by the defendant. The answer denied the corporate capacity of the plaintiff, admitted the acceptance of the draft, alleged payment, and denied indebtedness to the plaintiff. Upon the hearing of the motion to strike out the answer as sham and frivolous, the plaintiff presented the affidavit of its attorney to the effect that, after the action was commenced, the defendant claimed to have paid the draft, but, nevertheless, transmitted to him in payment a bank check for the amount of the draft; that the check was presented and payment refused for insufficient funds; and that the defendant, repeatedly thereafter, promised to take up the check but never did so. The motion was granted, the answer stricken, and judgment rendered for the amount sued for. On appeal the Supreme Court said: "Under these circumstances the question was one of fact for the presiding Judge, and we agree with his conclusions."
In the case of Union Guano Company v. Garrison, 130 S.C. 404, at page 407, 126 S.E., 133, 134, the Court struck out an answer as sham and rendered judgment for the plaintiff on the pleadings. The Court said: "Again, the motion to strike out as sham presented a question of fact to be determined by the Court upon affidavits, or in such other manner as the Court may direct."
It is the duty of the Court to strike out an answer as sham, notwithstanding the fact that the answer contains a general denial, if admissions in the remainder of the answer disclose the fact that there is no defense. In the case of Blake v. Southern Railway Company, 126 S.C. 407, 120 S.E., 360, 361, it was held that admissions in one part of the answer were not negatived by a general denial. In that case the Court said: "The defendant, however, insists that the admission which occurs in the second defense, cannot be held to have destroyed the general denial in the first defense. There are two reasons why this position cannot save the defendant: (1) It is not simply an admission but a specific and positive affirmation, inserted for the protection of the defendant. The defendant cannot limit its beneficial effects to its own purposes. (2) The so-called general denial in the first defense is limited by its terms to such allegations as may not `hereinafter be admitted'; those that are admitted, including the allegations of interstate employment, are excepted from the force of the general denial by its terms."
The general denial in this case could have no greater effect. It expressly excepts from the denial each allegation "hereinafter specifically admitted."
In this answer the defendants admit the employment of John T. Woodside, as agent for the plaintiff for the collection of this claim. They admit the passage of the Act authorizing payment to Myrtle Beach Estates, Inc., the collection of the money from the State Highway Department by John T. Woodside, the deposit of the check, and the attempted withdrawals as alleged, in the complaint. The answer further admits that John T. Woodside was president of Myrtle Beach Estates, Inc., prior to February 1, 1931, and did substantially all the work connected with the operation of said corporation.
It thus appears from the answer that plaintiff's cause of action is complete unless the answer sets up a sufficient affirmative defense.
In addition to those admissions, the answer alleges that the contract of agency for the collection of the claim was procured by the false representations of the plaintiff. No specific allegation or false statement is there contained, and the general allegation of fraud is insufficient under the cases of Gem Chemical Company v. Youngblood, 58 S.C. 56, 59, 36 S.E., 437, and Donaldson v. Temple, 96 S.C. 240, 242, 80 S.E., 437. Furthermore, the answer discloses that John T. Woodside was the principal actor in all the events connected with these properties, and that he thus knew more than any one else could have known about the matters herein involved. Under such circumstances, where there was full knowledge, and opportunity to know of fraud, if there was fraud, an action based upon fraud cannot be maintained. See Whitman v. Seaboard Air Line Railroad, 107 S.C. 200, 92 S.E., 861, L.R.A., 1917-F, 717; Frierson v. Inter-Ocean Casualty Co., 168 S.C. 178, 167 S.E., 232; J.B. Colt Co. v. Britt, 129 S.C. 226, 123 S.E., 845; Hood v. Life Casualty Ins. Co., 173 S.C. 139, 175 S.E., 76.
The defendants then allege that none of the funds of Myrtle Beach Estates, Inc., were used in the building of the road, but that the personal funds of John T. Woodside were used. It is apparent that these allegations are untrue, particularly in view of the recognition by the Woodside brothers of their indebtedness to the cotton mills because of their diversion of funds to Myrtle Beach, which recognition and acknowledgment is not denied.
Furthermore, it is a well-settled principle of law that an agent cannot deny his principal's title. In Mecham on Agency, § 525, it is said: "It is a general principle in the law of agency that the agent may not dispute his principal's title. Having assumed the performance of the agency by virtue of which he has received the property or money of his principal, he will not be permitted, when called upon by his principal to account for the property or money so received, to deny his principal's title to it. This general principle, however, is subject to certain exceptions as well settled as the principle itself. It is always competent for the agent to show in his own defense that he has been divested of the property by a title paramount to that of his principal. He may also show that since delivery to him the title of his principal has been terminated or that the principal has transferred his interest or title to another under whom the agent claims."
An agent employed to sell property and remit the proceeds may not refuse to account on the plea that the transaction by which the money came into his hands was illegal. Andersons v. Moncrieff, 3 S.C. Eq. (3 Desaus. Eq.), 124. The same doctrine is announced in Gist v. Telegraph Co., 45 S.C. 344, 372, 23 S.E., 143, 55 Am. St. Rep., 763, and in Saunders v. A.C. Phelps Co., 53 S.C. 173, 31 S.E., 54.
The allegation that the contract of agency was procured from John T. Woodside, under a mutual mistake of fact is insufficient, for it states only a conclusion.
The allegation that the Act authorizing the reimbursement of Myrtle Beach Estates, Inc., is unconstitutional and void because of the fact that the charter of Myrtle Beach Estates, Inc., had been canceled, is without merit. It is well settled in this State that a corporation, after its charter is canceled, continues a body corporate for the purpose of winding up its affairs. Section 7709, Code 1932. See Henry Mercantile Co. v. Georgetown W.R. Co., 104 S.C. 478, 89 S.E., 480; Equitable Trust Co. v. Columbia National Bank, 145 S.C. 91, 142 S.E., 811. The claim had been assigned to the plaintiff, but might validly be paid in the name of the assignor, though the assignor's charter had been canceled. Moreover, John T. Woodside had undertaken, as the agent of this plaintiff, to collect this particular claim, and it appears that as a result of his activities, and those whom he associated in the matter, the Act in question was passed. Certainly he, of all people, cannot be heard to question its validity.
The allegations that the Act was passed through mistake of facts relative to the existence of Myrtle Beach Estates, Inc., and to the facts relating to the construction of the road, are insufficient to constitute a defense. The Act is clear and unambiguous and needs no construction. Even if ambiguous, it would not be permissible to show the intent of the Legislature by affidavits of individual legislators or of the Governor. In the case of Tallevast v. Kaminski, 146 S.C. 225, at pages 234, 235, 143 S.E., 796, 799, Judge Shipp, whose opinion was adopted by the Supreme Court, said: "The Act of 1927 must be read in the light of all cognate legislation, and whatever the views of individual members of the Legislature may have been or may be as to the precise purpose or scope of the statute, they and the Court are bound by the language used and the reasonable interpretation of such language in the light of the manifest purpose of the Legislature as disclosed by the Act of 1926, and other applicable statutes."
Again on page 236 of 146 S.C. 143 S.E., 796, 799, he said: "It is a settled principle in the interpretation of statutes that even where there is some ambiguity or uncertainty in the language used, resort cannot be had to the opinions of legislators or of others concerned in the enactment of the law for the purpose of ascertaining the intent of the Legislature. To resort to the views of individuals, even of Legislators, after the legislation has been enacted, would involve the interpretation of the law in endless confusion and uncertainty. The rule is thus expressed in 25 R.C.L., 1037, 1038."
And again he said: "The law as it is passed is the will of the majority of both houses, and the only mode in which that will is spoken is in the Act itself, and the rule that the intention of the Legislature is the primary consideration in the construction of a statute does not permit the Courts to consider statements made by the author of a bill or by those interested in its passage, or by members of the Legislature adopting the bill, showing the meaning or effect of the language used in the bill as understood by the person or persons making such statements."
In the case of Wilbur v. United States ex rel., etc., 284 U.S. 231, 52 S.Ct., 113, 76 L.Ed., 261, the Supreme Court of the United States held that the statute authorizing the reimbursement of persons who had suffered loss in producing minerals during the war at the request of the government was plain and unambiguous and that no resort could be had to legislative reports to show that the Congress intended to exclude claims for certain losses coming within the terms of the Act.
The allegations in the answer that the reimbursement agreement signed by John T. Woodside and the State Highway Department, and passage of the Act, were procured by John T. Woodside while under a misapprehension as to the facts, is either obviously false or insufficient by reason of John T. Woodside's obvious knowledge and admitted opportunities for knowledge.
The first counterclaim contained in the defense based on the claim by John T. Woodside for salary alleged to have been payable to him by Myrtle Beach Estates, Inc., may constitute a claim against Myrtle Beach Estates, Inc., but it is insufficient as a counterclaim in this action. It arose out of an entirely separate transaction unconnected with the one in question. And the claim, if any there be, is against Myrtle Beach Estates, Inc., and not against this plaintiff, nor was such claim, if any, a lien upon any assets transferred to Ocean-Forest Company.
The counterclaim for commissions under the contract of agency for the collection of this claim is insufficient in law. An agent, guilty of disloyalty to his principal, forfeits all commissions.
In 2 Am. Jur. p. 235, § 299, it is said: "Effect of Fraud or Misconduct of Agent. — As a general rule, if an agent is guilty of fraud or dishonesty in the transaction of his agency, or wilfully disregards an obligation owing his principal which, by reason of his agency, the law devolves upon him, as by withholding information from his principal which it is his duty to disclose, he loses his right to compensation. As stated by the American Law Institute, an agent is entitled to no compensation for conduct which is disobedient or is a breach of his duty of loyalty; such conduct, if constituting a wilful and deliberate breach of his contract of service, disentitles him to compensation for even properly performed services for which no compensation is apportioned."
In Wadsworth v. Adams, 138 U.S. 380, at page 388, 11 S.Ct., 303, 305, 34 L.Ed., 984, the Court said: "We cannot agree that such conduct upon the part of Adams was consistent with the duty he owed to his principal in virtue of his agency for the sale of the notes. He abused the confidence reposed in him, and thereby lost the right to claim the stipulated compensation of $10,000 or any other sum."
In Backus v. Finkelstein (D.C.), 23 F.2d 357, 361, it is said: "Any person acting in a fiduciary capacity is entitled to compensation for his services, when he acts in good faith and for the best interests of his beneficiary in diligently guarding and advancing the interests of the latter. Any variation from this necessary requirement carries with it a forfeiture of all compensation which otherwise might be due. This rule applies to fiduciaries acting as managing officers of a corporation, as well as to all others."
It was held in Quirk v. Quirk (C.C.), 155 F., 199 and in Dudley v. Colonial Lumber Company, 223 Ala., 533, 137 So., 429, that an agent employed to collect money or to sell property, who attempts to appropriate the proceeds to his own uses, forfeits his right to compensation.
In this case, John T. Woodside, having contracted to collect this claim as agent for the plaintiff, attempted to appropriate the money to his own use, or to the use of a corporation which had no shadow of right to it, denying the right of the plaintiff to the money, setting up his own right thereto in opposition. Such action is gross disloyalty to his principal, a palpable breach of trust, necessitating the forfeiture of all commissions.
I have endeavored to be as moderate as possible in the discussion of this case. But I cannot refrain from stating that this whole thing is rather astounding to this Court.
Here we have a man, the trusted head of a textile manufacturing corporation, in which other people also were interested, unlawfully abstracting from the treasury of the concern which he headed fabulous sums and sinking them into the sands of a seaside pleasure proposition. The corporation which he had headed, in its effort to salvage what pitiful little might be saved, turns in its desperation to him, the one man who had full knowledge of the facts. In order to procure his assistance, the plaintiff here, the subsidiary which Woodside Cotton Mills Company had organized to save what it could, agrees to pay him a percentage of the amount of such refund as he may secure from the State Highway Department on account of a road which the State of South Carolina had taken over, and the benefit of which the State was then enjoying. He accepts the trust. He undertakes to do the work. He recognizes and acknowledges the ownership by his principal, the plaintiff herein, of the claim, and its right to receive such amount as might be refundable. He calls upon his principal for, and accepts from his principal, substantial sums on account of alleged expenses. Time passes. Representatives of his principal, upon inquiry, are told by him of the difficulties of getting payment from the Highway Commission. And then, finally, it is discovered that he had received payment in full many months before, and, by a devious route, though a Columbia bank and a corporation of some sort in Greenville, had, in effect, put it into his own pocket. At least, he had diverted it and withheld it secretly from the principal to whom, in common honesty, he was bound to account. And when, at last, the facts come to light and he is discovered, he claims it for his own.
This Court is convinced, and it so finds, that the defendants, John T. Woodside and Mortgage Loan Securities Company, have no defense to this action, that the matters set up in their answer are either false or insufficient, and that the whole answer was filed merely for the purpose of delay and not in good faith.
The plaintiff does not expressly ask in this action for any judgment based upon the item of $5,000.00, representing the proceeds of the check cashed by John T. Woodside through the name of Mortgage Loan Securities Company and actually withdrawn from the deposits in the Columbia bank, but seeks relief and protection, primarily and expressly, with reference to the balance of the funds admittedly now remaining in the Columbia bank corresponding to the checks which have been issued but not yet cashed. Therefore, in this order the Court will not pass upon anything with reference to said item of $5,000.00 already withdrawn.
Now, therefore, it is ordered, adjudged, and decreed that the motion of the defendants, John T. Woodside and Mortgage Loan Securities Company, for an order making the State Highway Department of South Carolina a party defendant, and their motion to frame issues, be, and they hereby are, refused.
It is further ordered, adjudged and decreed that the motion of the plaintiff to strike and dismiss the answer of John T. Woodside and Mortgage Loan Securities Company be, and the same hereby is, granted.
It is further ordered, adjudged and decreed that the plaintiff have judgment as prayed in the complaint:
(1) That the defendants, John T. Woodside and the Mortgage Loan Securities Company, be, and they hereby are, permanently restrained and enjoined from cashing, negotiating, or in any way disposing of, the checks referred to in the complaint, or making use of the proceeds thereof, except as hereinafter provided, and it is hereby adjudged and determined that said checks and the proceeds thereof and the claims or choses in action represented thereby are the property of the plaintiff herein, and that the plaintiff is entitled to payment thereof.
(2) That the First National Bank of Columbia, S.C. be, and it hereby is, ordered and directed to stop payment on the cashier's checks described in Paragraph V of the complaint, except in so far as payment will be made to the plaintiff herein, in conformity with the terms of this order.
(3) That the defendants, John T. Woodside and Mortgage Loan Securities Company, do cause said checks to be delivered to the plaintiff forthwith.
(4) That the First National Bank of Columbia, S.C. be, and it hereby is, ordered and directed, upon presentation to it of a certified copy of this order, to pay over to the plaintiff the funds on deposit with it, as admitted in its answer, being the sum of $29,915.33, and that, upon such payment being made either with or without the presentation of the checks described in the complaint, the said bank be discharged from any other or further liability to any person, a party to this action, on account of the funds so paid over.
After the filing of the decree of October 17, 1936, the six checks were deposited with the Clerk of Court for Greenville County. The order of his Honor, G. Duncan Bellinger, Judge presiding in the Thirteenth Circuit, is as follows:
ORDERThis matter comes before me upon the petition of Ocean-Forest Company and a rule issued on said petition by this Court, bearing date October 27, 1936, and requiring the defendants, John T. Woodside and Mortgage Loan Securities Company, to show cause why they should not be required forthwith to deliver to the plaintiff the six cashier's checks issued by the First National Bank of Columbia on Central Hanover Bank Trust Company, in the aggregate sum of $29,915.33. The said John T. Woodside and Mortgage Loan Securities Company have served notice of intention to appeal to the Supreme Court from the decree of this Court, bearing date October 17, 1936, and desire to secure a stay of the execution pending said appeal, and in connection therewith have brought into Court an offer to surrender to this Court, under Section 786 of the Code, the said six cashier's checks.
It is therefore ordered that the said John T. Woodside and Mortgage Loan Securities Company do forthwith deliver to the Clerk of this Court the said checks, which shall be held by the Clerk of Court pending said appeal, and to be disposed of under order of the Court hereafter to be rendered. On compliance herewith the said rule shall be discharged. But, should said defendants fail to comply with the terms hereof the plaintiff may apply for such further order as it may be advised.
Mr. C. Granville Wyche, for appellants, John T. Woodside and Mortgage Loan Securities Company, cites: Striking out answer as sham and irrelevant: 139 S.C. 324; 138 S.E., 34; 130 S.C. 404; 126 S.E., 133; 97 S.C. 389; 81 S.E., 665; 101 S.C. 185; 85 S.E., 1070; 100 S.C. 196; 84 S.E., 710; 9 S.C. 438; 31 Cyc., 628; 50 S.C. 54; 27 S.E., 545. Demurrer: 172 S.C. 549; 174 S.E., 590; 139 S.C. 324; 138 S.E., 34; 106 S.C. 544; 91 S.E., 863; 97 S.C. 399; 81 S.E., 665; 6 S.C. 113; 9 S.C. 438; 43 S.C. 17; 20 S.E., 790; 31 Cyc., 623; 44 S.C. 143; 21 S.E., 615; 69 S.C. 559; 48 S.E., 625; 8 Rich. Eq., 67; 29 S.C. Eq., 22.
Messrs. Haynsworth Haynsworth, for respondent, cite: As to defense: 126 S.C. 407; 161 S.C. 122; 89 S.C. 122. Fraud: 107 S.C. 200; 168 S.C. 178; 129 S.C. 226; 173 S.C. 139. Power and duty of Court to strike answers: 5 C.J., 983; 2 McC., 373; 11 Rich., 376; 5 Strob., 210; 174 S.C. 497; 54 S.C. 100; 101 S.C. 185.
August 10, 1937.
The opinion of the Court was delivered by
This action by Ocean-Forest Company, a corporation, as plaintiff, against the defendants, John T. Woodside, First National Bank of Columbia, S.C. and Mortgage Loan Securities Company, a corporation, was commenced in the Court of Common Pleas for Greenville County, and the case comes before this Court on appeal by the defendants from the decree and order issued by his Honor, Judge G. Duncan Bellinger.
The agreed statement of counsel is as follows:
"This action was commenced on the 11th day of August, 1936, by the service of summons and complaint, together with order of Hon. G. Dewey Oxner, Judge of the Thirteenth Judicial Circuit, requiring the defendants, John T. Woodside and the Mortgage Loan Securities Company, to show cause why they should not be permanently restrained and enjoined from disposing of certain funds described in the complaint and why said funds should not be declared to be the property of plaintiff. The defendants filed a return and, after hearing the matter, the Court enjoined said defendants from disposing of the checks and funds described in the complaint pendente lite. Thereafter, the defendants, John T. Woodside and the Mortgage Loan Securities Company, and the First National Bank of Columbia, S.C. filed their answers to the complaint. The defendants, John T. Woodside and the Mortgage Loan Securities Company, served notice of motion to submit all issues of fact raised by the pleadings to a jury for determination and also served notice of motion to make the State Highway Department of South Carolina a party-defendant. The plaintiff then served notice of motion to dismiss the answer of the defendants, John T. Woodside and the Mortgage Loan Securities Company, upon the grounds set forth in the notice. The plaintiff also gave notice of certain affidavits to be used upon defendants' motion to submit the issues of fact to a jury for determination. All of the motions pending were heard by Judge G. Duncan Bellinger, presiding Judge of the Thirteenth Judicial Circuit, at the September, 1936, term of the Court of Common Pleas, marked heard, and he thereafter, on October 17, 1936, filed his decree, hereinbefore set forth, giving judgment in favor of the plaintiff. Within due time, the defendants, John T. Woodside and the Mortgage Loan Securities Company, gave notice of intention to appeal to the Supreme Court of South Carolina from the judgment and decree of his Honor, Judge G. Duncan Bellinger, upon exceptions hereinafter set forth. The defendant, First National Bank of Columbia, S.C. has no material interest in this appeal since, under its answer, it only asked that it be permitted to pay the funds involved over to the party entitled thereto."
Upon due consideration of the record in the case we are satisfied that his Honor, Judge G. Duncan Bellinger, reached the proper conclusion in the case. The exceptions are therefore overruled, and the judgment and decree of the lower Court affirmed.
MR. CHIEF JUSTICE STABLER and MESSRS. JUSTICES BONHAM, BAKER and FISHBURNE concur.