Moody v. Muscogee Manufacturing Co.

68 S.E. 604, 134 Ga. 721, 1910 Ga. LEXIS 340

• Court: Supreme Court of Georgia
• Decided: July 13, 1910
• Status: Published

Opinion

Evans, P. J.

(After stating the foregoing facts.)

1. In reaching its decision and in granting its judgment sustaining the demurrers to the defendant’s answer to the scire facias, the court considered and treated as a part of the record in the case the entire proceedings, orders, and decrees, including the final report of the receiver and the orders thereon, in the ease of Park Woolen Mills et al. v. Moody & Brewster, over the objection that they were not a part of the record in the scire facias proceeding. The defendant'filed no demurrer to the various petitions, complaining that the exhibits were not attached. Scire facias to revive a dormant judgment is not an original action, but a continuation of the suit in which the judgment was obtained. Civil Code, § 5380. The defendant may plead nul tiel record in bar of the relief sought, in which ease plaintiff must produce the record, and the court will try that issue on an inspection of the record. But in each of the scire facias petitions in this ease the plaintiff alleged that the Park Woolen Mills et al. filed their petition against Moody & Brewster, in the same court to the March term, 1898, in. "which ease each applicant intervened, and that on June 30, 1900, a final decree and verdict were rendered in favor of intervenor for a stated amount and “full reference to the case above mentioned is made.” In his answer to the petition for scire facias the defendant admitted the filing of the petition of the Park Woolen Mills et al. v. Moody & Brewster, service thereof on him, that applicant intervened in the cause, and “that on June 30, 1900, a final verdict and decree was rendered in said cause.” But defendant denied that applicant was given a judgment for any-amount. He also further averred that the judgment was void for uncertainty and vagueness. By amendment the defendant averred that the decree of June 30, 1900, referred to in the petition for scire facias, did not contain a final judgment against the defendant, but that the judgment was interlocutory merely, and loft the rights of the parties to be finally determined at some future day, the cause being retained for that purpose; he also demanded a trial by jury on this issue. Tt is not the province of a jury to declare upon the legal effect of a judgment. Stewart v. Sholl, 99 Ga. 539 (26 S. E. 757). So that, even if the defendant’s answer had been strictly a plea of nul tiel record, the fact as to whether a given judgment had been rendered is determinable by the court only on inspection of the record. Ibid. Under the pleadings in this ease there was no necessity for the production of the-reeord as evidence, because it was before the court as part of the pleadings. The petition for scire facias prayed reference to the record, and the defendant invoiced a ruling in his behalf upon that record. The record was not attached as an exhibit, but was a record of the court which was trying the scire facias proceeding. The third equity rule (Civil Code, § 5694) requires that all. exhibits shall be filed with'tlie petition or answer. But where the exhibits referred to are voluminous pleadings and records of the court where the ease is pending, the court may consider such records as if they were attached as exhibits. Graham v. Dahlonega Gold Mining Company, 71 Ga. 296; Millbank v. Penniman, 73 Ga. 136. It was said in Lyons v. Planters Loan and Savings Bank, 86 Ga. 485 (12 S. E. 882, 12 L. R. A. 155), that it is doubtful whether the equity rule touching exhibits to pleadings is applicable in its full force since the act of 1887, establishing uniformity in pleadings, but that in all events, where there is no probability that the defendant was unacquainted with the contents of the record, and has suffered no substantial disadvantage in the omission to set it out as an exhibit, a judgment otherwise correct will not be reversed for this lack of formality. To which we may add, that where the record was referred to as on file, and the defendant by his pleadings invoked a.construct]on of the record, he can not complain that the court considered such record in determining whether the judgment was void for vagueness, or because it was only interlocutory.

2. The general practice under our system of pleading is to enter only one final decree on the merits of an equity cause. The practical advantage of concluding all issues in a single comprehensive decree is the prevention of a review of litigated cases by piecemeal. However desirable it may be to conclude a litigation with one judgment, the law does not require it, nor is it always possible to dispose of complicated equitable causes in one final decree. As said by Judge Lewis in Booth v. State, 131 Ga. 756 (63 S. E. 505), “It is difficult sometimes in actions on the equity side of the court, especially in cases of receivership, to determine whether an order is administrative in its character, resting in the sound discretion of the chancellor, or final in its nature. To be final it does not necessarily mean that the judgment disposes of the entire case. A judgment. may be rendered separable from a judgment disposing of the entire case, and yet be a judgment that is final as to some of the substantial rights of the parties as contended for in their pleadings. It is final when, as to the subject-matter of the judgment, any of the substantial rights of the parties litigant are finally settled by the judgment.” A decree which settles all of the substantial equities in a case must be regarded as a finality upon such questions. A decree may be partly final and party interlocutory; final as to its determination of all issues of fact and law, and interlocutory as to its mode of execution. Adams v. Sayre, 76 Ala. 509; Merle v. Andrews, 4 Texas, 200; Gray v. Cook, 24 How. Pr. 432. The original action which eventuated in the decree of June 30, 1900, was an equitable petition by creditors against alleged fraudulent and insolvent debtors, to rescind their sales of goods on account' of fraud, to reclaim all goods which they could identify, and to recover judgment for whatever goods they could not claim, and for other relief, special and general. From time to time various creditors intervened, and in their respective interventions set forth a gigantic scheme of the debtors to defraud every one they could induce to extend them credit. The debtors had sold some of the goods and hypothecated the accounts and notes representing such sales with other creditors, and just before the filing of the petition the debtors had executed several mortgages. There were conflicting equities between the creditors. The whole matter was referred to an auditor, who filed his report, which as to conflicting equities of the creditors was modified by a verdict on exceptions thereto. This was the general aspect of the case when the court entered the decree of June 30, 1900. Every substantial equity had been established and adjusted between the parties. The fraud of the defendants was adjudicated; the value of the goods which were fraudulently procured was found; the value of the goods reclaimed by each creditor was found; and finally it was adjudicated that each of the various creditors was to have judgment for the difference between the value of the goods out of which each was defrauded and the sum named in the decree as having been received by each from reclamation of goods, and for which sum — easily ascertained by the arithmetical process of subtraction — the clerk was directed to issue execution upon application of the several creditors. This is our interpretation of the decree, — an interpretation which seems so clear to us that neither judicial precedent nor an elaborate analysis of all of its terms would be profitable or necessary to prove its accuracy.

But it is urged that the concluding paragraph of the decree, wherein “the right is reserved to make such further orders, judgments, and decrees as may be necessary to carry into effect the true intent and meaning of this decree,” renders it a mere decretal or interlocutory order. We do not think so. Every substantial equity and all the rights of the parties had been finally adjudicated,, and in the administration of such a large estate, with so many parties with overlapping equities, it was more than likely that minor, matters might arise respecting its mode of execution; and this reservation was intended to cover such. All subsequent orders, including that which finally discharged the receiver, related simply to the mode of executing the decree, and demonstrate that our construction is not only correct, but was the one acted upon by the court. The rule is well established that a final decree disposing of the substantial equities of the ease is not made interlocutory by the mere reservation of the right to direct the mode of its execution. 23 Cyc. 673; Campbell v. Crutcher, 3 Tenn. Chan. 253; Mead v. Christian, 50 Ala. 561; Jones v. Wilson, 54 Ala. 50.

3. Nor is the decree of June 30, 1900, void for vagueness, indefiniteness, -and uncertainty, in that judgment is awarded for no definite sum. It is fundamental that a judgment should be certain and definite, or be capable of being made so by proper construction. 23 Cyc. 671. The action was a creditor’s bill; the parties who intervened as creditors were numerous; the overlapping equities of the creditors, and the multitude of issues, necessarily required considerable space in the statement of the various adjudications of the equities. It was stated in one paragraph of the decree that each creditor was entitled to a general judgment for the gross amount opposite his name, to be credited with any sums received under the decree and from collateral securities awarded to them. Other paragraphs stated the amount which each creditor received from reclamations and from collateral securities. So that the calculation as to the amount of the judgment awarded to each creditor was but the simple process of subtraction, and a palpable illustration of the maxim id certum est quod certum reddi potest. Whether the decree was constructed with a view to condensation, or to tabular classification, or to conform to the peculiar literary style of the draughtsman, is mere conjecture. The mode of ascertaining the amount is given with precision; the mathematical process is simple and accurate, and the result is 'just as intelligible and certain as if the calculation had been made and the result incorporated in-the decree. A verdict or judgment for a given sum as principal with interest thereon from a given date, has always been regarded as not wanting in certainty. The problem of ascertaining difference between two numbers is by no means as complex as that of the calculation of interest.

We have carefully gone over the calculations of the amount awarded to each defendant in error. We find the several amounts correctly stated in the petition for scire facias of the following partics; Abegg & Ruscli; Guiterman Brothers, Glens Falls Shirt CompanyMechanics National Bank; Liebig Manufacturing Company; Laurel Mills Manufacturing Company; Muscogee Manufacturing Company; Old Kentucky Woolen Mills; Owensboro Woolen MillsE. T. Steele & Company; Silverstein, Iiecht & Conrpany; Berkeley-Chemical Company; Porter Brothers & Company; Third National Bank of Atlanta. With respect to the other petitions for scire facias, the amount awarded by the decree is incorrectly stated. To the Roaring Springs Blank Book Company judgment was awarded for $-196.31, less $384.61, to wit $111.67; to Strauss, Sach & Company judgment was awarded for $345.23, less $209.81, to wit $135.42; to the Tennessee Woolen Mills judgment was awarded for $1,917.51, less $1,394.59, to wit $522.92; to Schcuer Brothers judgment was awarded for $700.62, less $374.38, to wit $226.24. In the decree it was provided,, inasmuch as some of the goods reclaimed by the Atlanta Woolen Mills had been manufactured into the finished product, that the cost of manufacturing, to wit $598.69, should first be paid; after deducting this sum from the proceeds of the reclaimed goods, $3,276.14, the net credit of $2,677.45, and the $1,822.04, the amount of collaterals turned over, both credits aggregating $4,499.49, should be deducted from the-gross amount, $5,675.52, leaving $1,176.03 as the amount for which-judgment was rendered. The Cleveland Woolen Mills was awarded a judgment for $2,589.94, less the amount of their accounts representing $2,174.22 of their goods, which had been sold by the .defendants, leaving a net recovery of $315.72. The amounts wbich'liave been thus erroneously calculated should be corrected by these figures.

4. Was the defendant Moody acquitted of the judgments of the defendants in error by his discharge in bankruptcy ? The original bankruptcy act of 1898 permitted a discharge from all provable débts,-with.certain exceptions, one of which was from a “judgment in an action for fraud or obtaining property by false pretenses' or false - representations.” Section 17, subdivision 2, bankruptcy act of 1898 (30 Stat. 544, 550, U. S. Comp. Stat. 1901, p. 3428). This provision, of the bankrupt act was amended in 1903; but as the bankrupt’s discharge was obtained prior to the amendment, the question for decision is not affected by the amendment, but must be determined by the provisions of the original act. The authorities seem to be uniform in holding that in order to constitute a judgment as recovered for fraud, so as to prevent its release by section 17, subdivision 2, of the bankruptcy act of 1898, the fraud and deceit must have been the gist of the action. The authorities further hold that the fraud must be positive fraud or fraud in fact, involving moral turpitude or intentional wrong, and not implied fraud, which may exist without an imputation of bad faith. The bankruptcy act of 1867 did not require claims for fraud to be reduced to judgment, as does the act of 1898, as a condition to prevent their release by a discharge in bankruptcy. “The reason for this change,” as suggested by Mr. Justice Brown, in delivering the opinion in Crawford v. Burke [195 IT. S. 176, 25 Sup. Ct. 9, 49 L. ed. 147], “may be that Congress did not intend to offer any inducement to change unliquidated claims into actions for fraud, and therefore limited the exception from the operation of the discharge to such cases only as had been litigated and reduced to actual judgment. When such is the case, we think a correct interpretation of the law does not require a close examination into the form of the action to determine whether technically it is one ex delicto or otherwise, but the real question is, was the relief granted in the judgment based upon actual, as distinguished from constructive, fraud of the bankrupt. If the judgment is thus founded, whatever is the form of the action, it is the intent and purpose of the law that the bankrupt shall not be discharged from it, but shall still rest under its obligation, so far as the bankrupt law is concerned.” Bullis v. O’Beirne, 195 U. S. 620 (25 Sup. Ct. 123, 49 L. ed. 340). We will now proceed to analyze the proceedings and decree in the case of Park Woolen Mills et al. v. Moody & Brewster, to ascertain if the judgments of the various defendants in error are predicated upon the actual fraud of Moody & Brewster. The original petition was in the nature of a creditor’s bill, broader in scope than the statutory proceeding under the insolvent trader’s act. At the time the action was commenced the insolvent trader’s act (Civil Code, § 2716 et seq.) permitted the administration of the assets of an insolvent trader by a court of equity upon the application of one or more creditors representing one third in amount of the unsecured debts of the insolvent trader. The absence of the jurisdictional averment that the moving creditors represented one third in amount of the unsecured indebtedness, together with charges of positive fraud by the debtors (which is not required in the statutory action) strongly tends to characterize and classify the proceeding as a creditor’s bill under the old established chancery practice. Creditor’s bills are very generally, employed to settle up the estates of insolvent debtors, to prevent a multiplicity of suits by creditors, to set aside fraudulent conveyances, to marshal the assets of the debtor, and to administer them according to equitable principles. In the original petition it was alleged that the goods of the petitioners were fraudulently purchased by Moody & Brewster, with no intention of paying therefor, and inter alia the plaintiffs prayed that they be allowed to reclaim their goods and have judgment for whatever goods tliey could not claim. In the subsequent amendments, and in the interventions of all creditors who had sold merchandise to the defendants, a general, scheme to defraud all creditors, and a specific scheme to defraud the particular creditor, were averred. In all of them reclamation of goods sold was claimed on the ground that the title did not pass on account of the debtors’ fraud, and judgment was asked in some for the value of the goods, in others “for whatever goods they can not claim,” that is to say the value of the goods fraudulently converted. The dominant note in every intervention, as well as in the original petition, was for the rescission of the sales on the ground of fraud. The creditors’ right to reclaim their goods depended upon their right to a rescission of the sale. The pleadings, the auditor’s report, and the decree show the point of pressure to have been the effort of each creditor to identify and retake his goods, and keep them out of the general fund. Indeed, the general fund obtained from other sources was a negligible quantity. The fight on this line was between the creditors, Moody being hardly an interested spectator. After filing an answer he became passive and inactive; not even excepting to the auditor’s finding that he had perpetrated such a colossal fraud. 'The attitude of the parties to the various issues is referred to as illustrating that the contending parties in the heat of the conflict regarded the defendants’ fraud as the gravamen of the suit. It is wholly inconsistent that the jfiaintiffs should ho entitled' to reclaim such of their goods as could be identified, and also have a judgment for the contract price, less the goods reclaimed. A sale' can not be affirmed in part and repudiated in part. The primary relief sought being the reclamation of the goods, we must construe that the excess judgment was for damages sustained from failure to recapture the balance of the’goods which had been fraudulently converted. The cost of the goods may be considered in connection with other facts, in estimating the damages sustained; though evidence of cost alone may lie insufficient to prove market value. Watson v. Loughran, 112 Ga. 837 (38 S. E. 82). The coincidence between the judgment rendered and the invoice price demonstrates neither that the court treated the recovery as based on the contract, nor that the decree was without evidential support other than the invoice value of the goods. The decree suggests at least three very strong indications that the recovery was based on the fraud of the defendants: first, the court took pains to especially adjudge the defendants’ fraud; second, reclamations based on rescission were allowed; third, no notice was taken of any interest prior to the decree. We therefore reach the conclusion that the gravamen of the action, was the fraud of the defendants. Was that fraud positive or actual fraud? It would be idle to again repeat the character of the fraud, so inadequately summarized in general terms in the statement of facts. Such fraud is actual, and not constructive. Ames v. Moir, 138 U. S. 306 (11 Sup. Ct. 311, 34 L. ed. 951); Forsyth v. Vehmeyer, 177 U. S. 177 (20 Sup. Ct. 623, 44 L. ed. 723).

It appears from the intervention of the Liebig Manufacturing Company that whatever fraud may have been perpetrated upon it by Moody & Brewster was waived, and the judgment rendered upon its intervention was simply for the balance due on its notes. ' It appears that on the day before the filing of the creditors’ bill Moody & Brewster executed a mortgage to secure one of the notes due the Liebig Company. This mortgage covered fertilizers which it had sold Moody & Brewster, and also embraced other fertilizers which were purchased by Moody & Brewster elsewhere. The Liebig Manufacturing Company originally intervened for the purpose of protesting against the temporary receiver’s taking possession of the fertilizers covered by its mortgage. Tt was allowed to proceed with the foreclosure, and amended its intervention by showing the not amount it had received from the proceeds of the foreclosure sale. It also further amended its intervention, asking judgment upon another note, adopting only so much of the allegations of the original petition as was necessary for the relief for which it prayed. Thus it appears that at the very time of the failure of Moody & Brewster the Liebig Manufacturing Company took a mortgage upon goods including some sold by it; and, when tile creditors filed their petition alleging the fraudulent scheme of Moody & Brewster, instead of disaffirming the sale it ratified the sale by insisting upon proceeding with the foreclosure of the mortgage, and received the proceeds thereof. If the original transaction between it and Moody & Brewster was infected with fraud, it was waived by its subsequent conduct. We therefore think that the judgment as to it was not based on fraud, as that fraud, if any, had been purged by the voluntary action of this intervenor.

It also affirmatively appears from the intervention of the Third National Bank of Atlanta that its debt was created by a loan made in the usual course of business, secured by certain collaterals, supposed at the time that the loan was made to be sufficient; but, on account of the decline in the price of cotton, it was not able to collect from the collaterals a sufficient amount to discharge its loan; and judgment was asked for the balance due on the note, including the principal and interest. No fraud was alleged to have entered into this transaction; and therefore this debt was released by the discharge in bankruptcy.

The judgments in all the cases, except the two wherein the Lie-big Manufacturing Company and the Third National Bank of Atlanta are defendants in error, are affirmed; and as to these two the judgments are reversed.

All the Justices concur.