National Exchange Bank v. Stelling

9 S.E. 1028, 31 S.C. 360, 1889 S.C. LEXIS 42

• Court: Supreme Court of South Carolina
• Decided: July 19, 1889
• Status: Published

Opinions

The opinion of the court was delivered by

Mr. Justice McIver.

These three cases being practically identical in their facts and circumstances, and in the legal principles applicable, were heard and will be considered together. In each of the cases, the plaintiffs are foreign corporations, having their places of business in the State of Georgia, and the defendants are citizens of that State; but the actions were commenced in the Court of Common Picas for the County of Aiken, in the State of South Carolina. The foundation of the actions in the two cases first named are unsatisfied judgments recovered in the State of Georgia by the plaintiffs therein against the defendant, Stelling. and in the last named case the action is ba^ed upon certain notes of the defendant, Stelling, in favor of the plaintiff therein.

The complaints, after alleging these causes of action in the usual form, proceeded to allege that the defendant, Stelling, some time before the recovery of said judgments, made an assignment of all of his property in the State of Georgia, preferring certain of his creditors, other than these plaintiffs, whereby the plaintiffs have been unable to realize, there, anything upon their claims, the assigned estate being insufficient to reach the same ; that on the 15th of February, 1884, the defendant, Stelling, being then insolvent, and with intent to give preference to his co-defendant, Bredenberg, for money which he then owed said Bredenberg, in fraud of the rights of the plaintiff, and against the provisions of chapter 72 of the General Statutes of this State, conveyed to the said Bredenberg certain tracts of land, describing the same, situate in the Counties of Edgefield and Aiken in this State, the same being all of the property in this State then owned by said Stelling; that the defendant, Bredenberg, having reasonable cause to believe that said Stelling was insolvent, accepted the conveyance of said lands in payment of the debt then due him by said Stelling, thereby intending to be preferred as a creditor of said Stelling, and also to defraud the plaintiffs of their debts against said Stelling, in violation of the provisions of the 7.2nd chapter of the General Statutes of this State; that the defendant, Stelling, owns no other property out of which the plaintiffs can recover their debts; that the said Stelling was insolvent, and that fact was well known to said Bredenberg at the time of the conveyance to him as aforesaid, which was made for the purpose of delaying, hindering, and defeating the claims of these plaintiffs. Wherefore the plaintiffs demand judgment against the defendants as follows : 1st. For judgment against Stelling for the amounts due by him to the plaintiffs respectively. 2nd. That the conveyance to Bredenberg be declared fraudulent and set aside. 3rd. For such other relief as may be just and equitable.

An order that the summons be served by publication was granted by the master upon an affidavit to the following effect: 1st. That a cause of action exists in favor of the plaintiffs against the defendants, stating the same in general tenbs, and referring to the complaint for a more full statement. 2nd. That defendants are non-residents of this State, but reside in the city of Augusta, Georgia, and that they cannot, after due diligence, be found in this State. 3rd. That defendant, Stelling, has property in this State. It is stated in the “Case,” “that no publication of the summons was actually made in a newspaper, but the summons in each case was actually served personally upon the defendants, F. II. Stelling and J. J. Bredenberg, in the city of Augusta, Georgia.” It appears, however, that the proof of service of the summons was made by an affidavit taken before a person styling himself “notary public, Richmond County, Georgia,” but there was no certificate then appended thereto, from the clerk of a court of record, that such person is such notary, as required by the act of 1884 (18 Stat., 745), though such certificate has subsequently been obtained, since the service of the notice of motion to set aside the service of the summons, and is set out in the “Case.” It also appears in the “Case,” “that F. H. Stelling, in his sworn affidavits used at the hearing before Judge Norton, admitted that he had been personally served with the summons and complaint in each case at Augusta, Georgia, and that h.e was a resident of said city at time of service.”

At the same time, warrants of attachment were applied for and obtained from the clerk in each of the three cases, based upon affidavits to the following effect: 1st. That Stelling is indebted to the plaintiffs in the amounts stated on the several causes of action. 2nd. That Stelling is not a resident of this State. 3rd. That the plaintiffs have commenced action upon the several causes of action. The undertakings required by section 251 of the Code, copies of which are set out in the “Case,” are in the form of ordinary bonds, but are not signed by the plaintiffs in either case, though the copy in the case first named, as set out in the “Case,” does appear to be signed by “The National Exchange Bank, by Alfred Baker, president” ; but it is conceded that this was written in pencil by one of the counsel, and is not claimed to be an execution of the bond by the bank. All these undertakings or bonds have been treated in the argument, and must be so regarded, as not executed by the plaintiffs themselves or by any duly authorized agent, but simply as bonds or undertakings executed by third persons, that the plaintiffs in each of the cases, respectively, “shall pay, or cause to be paid, to the said E. H. Stelling, his certain attorneys, &e., * * * all costs that may be awarded to the said defendant, and all damages which the said defendant may sustain by reason of the attachment about to be issued,” &c. These bonds, as set out in the “Case,” contain no endorsement showing that they had been accepted and approved by the clerk and filed by him, but we find in the “Case” a certificate of the clerk in the following words: “I hereby certify that I had approved of sufficiency of the bonds or undertakings in each of the foregoing cases before I issued the writs of attachment therein.”

The defendant, Stelling, appearing for this purpose only, gave notice of two motions: 1st, to set aside the service of the summons ; 2d, to discharge the attachments upon the several grounds stated in the notice. These motions not having been heard at the next succeeding .term of the court, the plaintiffs applied for and obtained judgments by default against Stelling (his co-defendant, Bredenberg, having put in an answer), and upon a return of nulla bona of the executions issued to enforce said judgments, gave notices of motions for leave to file supplemental complaints, setting forth the recovery of such judgments, together with the executions returned nulla bona, in addition to what appeared in the original complaints. Thereupon defendant Stelling gave notice of a motion to set aside the judgments obtained by default as improvidently granted. These four motions were heard by his honor, Judge Norton, who rendered judgment, refusing the motions of Stelling to set aside the service of the summons and to discharge the attachments, granting his motion to set aside the judgments obtained against him by default, with leave to answer, and refusing the motion of plaintiffs for leave to file supplemental complaints.

From this judgment the defendant, Stelling, alone appeals, imputing error to the Circuit Judge in refusing his motions to set aside the service of the summons and to discharge the attachments, upon the several grounds hereinafter considered. There being no appeal from any other portion of the judgment, it will, as a matter of course, stand affirmed in all other respects.

We will first consider his honor’s ruling as to the sufficiency of the service of the summons. The Code (section 156) provides that where the person on whom the service of the summons is to be made cannot, after duo diligence, be found within the State, and that fact appears by affidavit to the satisfaction of the master or other officer therein named, and it in like manner appears that a cause of action exists against such person, or that he is a proper party to afi action relating to real property in this State, such master, or other officer, may grant an order that service may be made by publication in either of the following cases. * * * ‘'3d. Where he is not a resident of this State, but has property therein, and the court has jurisdiction of the subject of the action.” And it further provides that “where publication is ordered, personal service of the summons out of the State is equivalent to publication and deposit in the post office.”

It seems to us quite clear that every fact required was made to appear by the affidavit submitted upon the application for the order of publication, that the defendant is not a resident of this State, and cannot, after due diligence, be found therein, that a cause of action exists against him, and that he is a proper party to the action which relates to real property in this State; and it is equally clear that these are cases in which the service by publication is authorized, for the defendant is a non-resident, and if the allegations of the complaint are true, of which we must assume that the officer granting the order ivas satisfied, it is quite certain that defendant has property in this State, and that the court has jurisdiction of the subject of the action.

It is contended, however, that as all the parties are non-resi-' dents, and it does not appear that any citizen of this State has any interest in the controversy, that the court below had no jurisdiction of a proceeding to set aside an alleged fraudulent assignment made in another State, even though the real property conveyed was situate in this State; but this position is disposed of by the recent decision in the case of Ex parte Dickinson in re Sheldon v. Blauvelt, 29 S. C., 453.

It is also urged that the proof of personal service of the summons on the defendant in the State of Georgia was fatally defective, in that the notary public before whom the affidavit of such service was made failed to append thereto the certificate of a clerk of a court of record that he was such notary, in accordance with the provisions of the act of 1884 (18 Stat., 745), supplementing the provisions of section 159 of the Code in regard to the proof of service of a summons. It will be observed that this act does not require that such certificate shall be appended to the affidavit at the time it is taken, and, therefore, when it is considered that the only purpose of such certificate is to authenticate the official character of the person before whom the affidavit is made, and when we find that such certificate has been furnished to the court called upon to pass upon the sufficiency of the service, and when, in addition to this, we find that the defendant who raises this question has admitted under oath the fact that he was personally served, and has applied for and obtained leave to come in and answer; and when it is stated in the “Case,” as one of the facts upon which this appeal is to be heard, that “the summons in each case was actually served personally upon the defendants, F. H. Stelling and J. J. Bredenberg, in the city of Augusta, Ga;” we cannot hold that the Circuit Judge committed any error of law in refusing to set aside the service of the summons, upon the ground that the affidavit of such service did not have appended to it, at the time it was taken, the required certificate. We are, therefore, of opinion that there was no error in refusing the motion to set aside the service of the summons.

We are next to inquire whether there was any error in refusing the motion to discharge the attachments. First, it is urged that an attachment cannot be obtained in cases like these, because they are actions, not for the recovery of money only, but for the purpose of setting aside a fraudulent deed. In section 248 of the Code it is declared that the plaintiff, at the time of issuing his summons, or at any time afterwards, may have the property of the defendant attached: “In any action arising for the recovery of money, or for the recovery of property, whether real or personal, * * * or against a defendant who is not a resident of this State,” &e. So that it is not necessary that, in order to obtain an attachment, the action must be for the recovery of money only, but may be obtained in many other, eases. Indeed, the language of that section would seem to imply that where, as in this case, the defendant is a non-resident, the remedy by attachment is obtainable in an action for any purpose. But be that as it rnay, it is quite clear, that so far as the appellant is concerned, the actions are for the recovery of money, and hence the first position taken cannot be sustained.

Next it is contended that the affidavits upon which the warrants of attachment were obtained were insufficient, because it does not appear therein that the plaintiffs have any cause of action. So far as the appellant is concerned, it is quite certain that a cause of action upon a plain money demand is alleged against him in each of the complaints, and therefore, even if it should be admitted that the facts stated are not sufficient to sustain an action to set aside the deed to his co-defendant, Bredenberg (which we by no means admit), this would constitute no ground upon which the appeal of Stelling could be sustained. The objection to the want of jurisdiction has already been disposed of in considering the motion to set aside the service of the summons.

We come next to the objections raised to the undertakings, first, that they were not approved or filed by the clerk ; second, that they were not executed by the plaintiffs, or by any authorized agent. The first objection is disposed of by the statement in the appendix to the “Case,” that they were marked “filed” by the clerk, and by that officer’s certificate set out in the “Case” that he had approved the sufficiency of the several bonds or undertakings before the writs of attachment were issued.

The second objection, however, to the undertakings presents a question-of much greater difficulty, and is, in fact, the only serious question in this branch of the case. The Code, in section 251, requires, as a condition precedent to the issuing of a writ of attachment, that the officer issuing “shall require a written undertaking on the part of the plaintiff, with sufficient surety, to the effect that if the defendant recover judgment or the attachment be set aside by order of the court, the plaintiff will pay all costs,” &c. As the remedy by attachment is a summary and somewhat harsh proceeding, whereby a person may be deprived of the possession or control of his property before the claim upon which it is based has been adjudicated, the rule is well settled that one who seeks to avail himself of such a remedy must be careful to comply strictly with the conditions upon which it is allowed. The only condition with which we are at present concerned, is the giving of the required undertaking ; and that word, as used in the section above quoted from, manifestly means engagement or obligation. It seems to us that the language used in that section plainly implies that to comply with the condition precedent required, three things are necessary: 1st. That the obligation or undertaking shall be in writing. 2d. That it shall be on the part of the plaintiff. 3d. That it shall be with sufficient surety; and if either one of these three things is lacking, then it cannot be said that the condition precedent has been complied with.

It may be true that a plaintiff who procured the issue of a warrant of attachment illegally under which the defendant’s property was unlawfully seized would be liable, even in the absence of any statutory provision upon general principles of law, for all damages which the defendant may thereby sustain. But in such case it would be necessary to offer parol evidence, perhaps, to show that the plaintiff had procured the issuance of the warrant of attachment, which might lead to tedious and expensive litigation. Hence the statute very properly provides that the undertaking or obligation shall be in writing. The next essential, very naturally, is that this undertaking or obligation in writing shall be on the part of the plaintiff, as it is manifestly proper that he who seeks to avail himself of the remedy should assume in writing the liability for any damages sustained by reason of any illegality in obtaining it. And the third and remaining essential is, that this written obligation on the part of the plaintiff shall be “with sufficient surety.” It is quite clear that giving of an undertaking or obligation without any surety would not be a compliance with the statute, and it seems to us equally clear that where there is no written undertaking or obligation “on the part of the plaintiff,” there is no compliance with the statute.

What, then, do the words “on the part of the plaintiff,” as used in this section, mean? Do they signify an obligation whereby a third person binds himself that the plaintiff will pay, or do they signify an obligation whereby the plaintiff, either in person or by his authorized agent, binds himself to pay? We are compelled to conclude that the latter is the proper signification. The statute unquestionably requires that the obligation shall be in writing, and we do not see how it is possible for such obligation to be “on the part of the plaintiff,” where there is nothing in writing whereby the plaintiff binds himself to pay; and when to this is added the further requirement that the undertaking and obligation must be with sufficient surety, the necessary inference is, that there must be some one else bound besides the surety, as otherwise it could not properly be said to be an obligation with sufficient surety.

It is urged, however, that the words “on the part of the plaintiff” simply mean an obligation on the side of the plaintiff.; and this is the view taken by the Circuit Judge. Besides the objections above indicated to this view, it seems to us it disregards the plain meaning of the words used in the statute, for we cannot doubt that where a written obligation on the part of a person is spoken of, every one at once understands that such person has, either in person or by his agent, bound himself in writing to perform the condition of such obligation. According to our construction of the statute, it plainly provides that before a person can obtain a warrant of attachment he must, either in person or by his duly authorized agent, enter into a written obligation, with sufficient surety, to pay all damages, not exceeding the amount specified, which may be sustained by the defendant by reason of any illegality in obtaining the attachment, so that the defendant may be afforded a speedy and easy means of enforcing against the plaintiff, as well as his sureties, his claim for damages.

We do not undertake to say, as was intimated in one of the older cases hereinafter referred to, that it would be necessary for the plaintiff to execute a formal power of attorney authorizing his agent to execute the required undertaking, but we do think that the record should afford some evidence in writing that the agent had authority to sign the name of the plaintiff. This would be no burdensome requirement, for the plaintiff when he lodges his claim for suit in the hands of an attorney could very easily, at the same time, authorize him in writing to sign his name to any bond or other paper required in the prosecution of the suit, which, being attached to the record, would afford the defendant the ready means of prosecuting any claim for damages, as well against the plaintiff as his sureties; and surely it is nothing but right that the defendant should be afforded every facility for that purpose.

We are not aware of any case in this State which decides the point we have been considering, but the remarks of O’Neall, J., in Myers v. Lewis (1 McMull., 54), seem so pertinent to the view which we have taken, that we have been induced to quote them at length. In that case the question was as to the sufficiency of a bond given by the plaintiff’s son, though not in her name, and it arose under the act of 1799, which provided “that no writ of attachment shall issue before the plaintiff has given bond,” &c., and the court held that “none but the plaintiff, or his attorney in fact, acting in his name and stead can execute the bond. We have no right to do more than to say, ita lex seripta.” That distinguished judge proceeds to say: “If we were, however, at liberty to reason about it, we should arrive at the same conclusion. The plaintiff suing can just as easily constitute an attorney in fact to execute the bond as he can appoint an attorney at law to sue. The defendant, too, is entitled to the security of the party professing to be his creditor to be answerable for all damages for any illegal conduct attending the suing out his attachment. If this were not so, persons absent from the State, and having property in it, might be. harrassed by attachments on unfounded claims; and the persons setting them on foot might shelter themselves behind the bond of irresponsible third persons. So, too, it is for the plaintiff's interest that he, in person or by attorney, should execute the bond. He might not be willing to incur the responsibilities of an attachment, if informed that that was his mode of redress. It is the right and duty of a party in court to be informed correctly of the consequences likely to result from the proceeding set on foot in his name. The attachment act operating in rem, and divesting the alleged debtor of his power of controlling his own property before the debt is ascertained by the judgment of a court, ought to be strictly construed. And hence, therefore, we should not be at liberty to seek for an interpretation beyond the plain meaning of the words. ”

It is true that in the subsequent cases of Dillon v. Watkins (2 Speer, 445), and Byne v. Byne (1 Rich., 441), which arose under the act of 1839, it was held that the attachment bond might be given either by the plaintiff or his agent, but those decisions rested upon the terms of that act, which required the clerk, before issuing the writ of attachment, “to take from the plaintiff, or his or her agent, a bond,” and as this language was plainly alternative in its chai’acter — “take from the plaintiff, or his or her agent, a bond” — it was very properly held that if the bond in question was either a bond of the plaintiff or a bond of his agent, the requirement of the statute was satisfied. But the language of the statute which we are called upon to construe is not alternative in its character, and hence the undertaking now required must be an undertaking on the part of the plaintiff with sufficient surety, and nothing else will meet the requirements of the statute.

The obligations in the cases now before us do not even purport to be obligations on the part of the plaintiffs, for there is not a word in them purporting to bind the plaintiffs, but they simply purport to bind the persons who signed them to see to it that the plaintiffs will pay the damages sustained by defendant by reason of any illegality in obtaining the attachments, and therefore while they might furnish grounds of action by the defendant against the persons who signed, they certainly do not furnish any ground for an action against the plaintiffs. But in addition to this, as the undertakings in two of the cases are signed only by a single person, we do not see how it is possible to regard them as written undertakings on the part of the plaintiffs zvith sufficient surety, and it has been held, even under the act of 1839, in the case of Ford v. Rogers (12 Rich., 385), that the want of a surety on an attachment bond is fatal. It is true that in the other case the so-called undertaking appears to be signed by two persons, but so far as appears they are entire strangers, who do not even profess to be the agents of the plaintiffs, and who have volunteered to guaranty that the plaintiffs will pay to the defendants such ■costs as may be awarded to him, and such damages as he may sustain by reason of the attachment to the amount specified. This cannot be regarded as a complicance with the terms of the statute. It is simply an original obligation which, so far as appears, these two persons have voluntarily assumed that the plaintiffs in that case will, under certain contingencies, pay a sum of money not exceeding the amount specified.

It seems to us, therefore, that the attachments in each of the three cases above stated should have been discharged, upon the ground that the required undertakings had not been given before the warrants of attachment were issued.

The judgment of this court is, that the judgment of the Circuit Court, in so far as it refused to discharge the attachments on the ground indicated, be reversed, and that in all other respects it stand affirmed.

Mu.. Chief Justice Simpson concurred.