Case ID: sc-eq_28/html/0395-01.html
Source: Caselaw Access Project
Author: {"author": "DARGAN, Ch.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Nelson, Carleton & Co., et al., vs. Edmund J. Felder, et al.
    A creditor by judgment recovered in a foreign court, who comes in under a creditors’ bill and proves his demand, is entitled to interest on the amount of the judgment from the time it was rendered, although it does not appear whether the judgment bears interest by the law of the country where it was rendered, or not.
    The question reserved, whether the foreign rate of interest, or what rate of interest, shall be allowed.
    BE]?ORE DUNKIN', OH., AT ORANGEBURG, FEBRUARY, 1855.
    Dunkin, Ch. John M. Felder died intestate on 1st September, 1851. On 1st June, 1852, proceedings were instituted between the distributees, (some of whom administered) for a partition and account of the estate. Edmund J. Felder, was a brother of the half blood of the intestate, and entitled to one-fourth of the estate, real and personal. Pending the proceedings thus instituted, to wit., on 7th July, 1852, the plaintiffs, Nelson, Carlton & Co., and Bright & Ledyard, filed this bill, which has been declared to be “ only subsidiary and incidental to the previous bill.” They state that prior to 1837, Edmund J. Felder and James Bradford, were trading in Alabama under the name and style of Felder & Bradford; that they failed in business and became insolvent; that in April, 1838, Bright & Ledyard obtained a judgment against them in the County of Autauga, in the State of Alabama, for six hundred and forty-two dollars and twenty-nine cents, together with the costs of the suit, and that in April, 1839, Nelson, Carleton, & Co.,, recovered judgment for the sum of four thousand three hundred and seventy-five dollars and fifty-three cents, with costs of said suit. The plaintiffs allege that these judgments are wholly unsatisfied, and pray payment of their demands from the distributive share of Edmund J. Eelder in the estate of John M. Eelder, deceased.
    Chancellor Wardlaw, who heard the cause, retained the bill and granted relief to the plaintiffs to a certain extent, “restricting their remedy however, to Edmund J. Felder’s distributive portion of the lands and chattels, or the proceeds of the sales thereof, and declaring that they had no right to call upon the administrators of the intestate for a general account of their transactions.” The commissioner was directed to publish a notice for three months to the creditors of Edmund J. Felder, to present and prove their demands on or before a day to be fixed by the commissioner; and that he should report upon said debts. The cause was heard upon the report presented under this decretal order and the exceptions thereto.
    Before proceeding to consider the exceptions, it may be well to remark, that the rule prescribed in exparte Sanies, Dud. Eq. 23.0, seems peculiarly proper, when this Court undertakes to administer the estate of an absent debtor, and for that purpose to call in all who may have claims against him. Especially does it seem proper, when persons coming in under the notice, present demands under foreign judgments of long standing. Yindicating the caution of the Court in requiring the suppletory oath of the creditor, Sir James Wigram says in a note to Owens v. Siekinson, 18 Eng. C. C. R. 57, — “the affidavit is required to extend to the consideration of a simple contract debt, but not to the consideration of a bond or other specialty debt. The affidavit is not required, or, received as evidence of the demand, but only to repel the possible implication that the creditor may be demanding that which he know's is not due.” There are some thirty-five or thirty-six Alabama judgments of very long standing, embraced in the report, and it would have' been far more satisfactory to the Court if the evidence had been accompanied by the suppletory affidavit.
    The several judgments against Edmund J. Felder, reported bj the commissioner, amount in the aggregate, as taken from transcripts, to about the sum of thirty-three thousand dollars. Some of these judgments were obtained upon demands bearing interest, and some upon demands which did not bear interest. But the judgment, in each ease, is for the aggregate sum of 'debt, interest and costs, or debt and costs, as the case may be, and the execution is for the aggregate sum, and no more. But the commissioner has made up his report by adding to the amount of the several judgments, the interest from the time of the rendition of the same, and calculating the interest at eight per cent, which is the rate allowed by the laws of Alabama, Instead of thirty-three thousand dollars, the amount reported to be due is about eighty thousand dollars.
    The principal question involved in the case, is in relation to the allowance of interest. It is conceded, that by the laws of Alabama, as at common law, and according to the law of South Carolina, anterior to 1815, judgments do not carry interest. If the original cause of action bore interest, so soon as the judgment was rendered, the original cause of action ceased to exist — transit in rem judicatam, and no interest accrued thereon from that time. It seems a misapplication of terms to speak of a judgment as a contract. The contract is merged in the judgment; and if the judgment had been kept alive for twenty years, by successive renewals of execution, the plaintiff could collect no interest. To remedy this, the Act of 1815, declaring by the preamble the existing law, provided that after judgment rendered in any Court of this State, &c., on an interest bearing demand, interest should continue on the principal sum until satisfaction of the execution. But anterior to the passage of this law, if a judgment on a note of hand had remained for ten years, the defendant on a tender of the amount of the judgment as rendered, was entitled to have satisfaction entered thereon. And such is the law now where the judgment is entered on an open account or other demand not bearing interest. If the plaintiff in such judgment had commenced an action by scire facias, to revive the judgment, he could recover no interest or damages, nor was he entitled to costs until Stat. 8-9, Will. 3, C. 3. But if the plaintiff resorted to the remedy of a new action against the defendant, of debt upon the judgment, it has been settled that he could recover interest. But this stands upon the law. For if, as the Court say in Pinchney v. Singleton, 2 Hill, 344, the defendant tenders the amount due on the original judgment, without interest, on the day before the writ in debt is issued, he is entitled as of right to have satisfaction entered; but if the tender is made the day after the writ in debt is issued, in order to be effectual the interest on the judgment must.also be tendered. “By bringing the action the plaintiff had obtained an inchoate right to the interest which could not be defeated by the subsequent payment.” “ Whether,” says Mr. Justice Harper, delivering the judgment of the Court, “this diversity was conformable to good reason, is not for us to determine.” It is quite clear from this that a judgment is not an interest bearing demand in the sense in which a note or bond, bears interest. The holder of a note or bond, may require the interest to be paid before he gives up his instrument or cause of action. It is a part of his debt. The plaintiff in the judgment may be compelled to enter satisfaction on payment of the principal sum without the interest. Notwithstanding some looseness of expression in some of the opinions, the law of the Courts both in England and South Carolina is accurately stated in Pinchney v. Singleton. So long as the plaintiff can sue out his execution, he is not entitled to bring a new action of debt upon his judgment. But this does not prevent him from resorting to a Court of equity, to subject a particular fund to the satisfaction of his demand, which fund he could not reach by an execution at law. Equity would afford him the relief to which the Law Court was inadequate, and for which he had a right to ask the aid of this Court, but no further. Because he could not collect interest under his execution at law, he would not be entitled to come into this Court, nor would this Court enlarge his legal demand, although it afforded the means to satisfy it. In the case of Pinckney v. Singleton, the judgment was entered against Richard Singleton, executor, February, 1830. Immediately afterwards, the plaintiff filed a bill in equity, against the representatives of Isham Moore, to subject that estate to the payment of the debt, on some special equity. This failing, the plaintiff in November, 1831, brought debt on judgment against Richard Singleton, suggesting a devastavit. “If,” says the Court, “the amount of the judgment with interest on the principal sum, (under A. A. 1815,) and costs had been paid, before the bringing of the action of 1831, suggesting a devastavit, the defendant would have been entitled to his motion to have satisfaction of the judgment entered.” And again, “No doubt if the payment had been made before the action commenced, the action could not have been maintained.” But suppose the plaintiff, Pinck-ney, had obtained a decree in 1830, on his bill against the estate of Isham Moore, no action of debt on the judgment having been then instituted, on what principle could he have interest calculated on the judgment ? If prior to November, 1831, he had been paid from Isham Moore’s estate, the principal of the judgment and costs, “ the defendant would be entitled” (say the Court, in the case cited,) “ to his motion to have satisfaction on -the judgment entered.” His bill against the estate of Moore successful or unsuccessful, would have given the plaintiff no title to interest on his judgment. By the Statute Law of Alabama, a plaintiff may renew his execution at any time within ten years from the entry of his judgment. Nearly all the judgments against Edmund J. Felder, were obtained about the year 1837. At any time within the ten years, it cannot be doubted, or afterwards, the defendant in the judgments might have demanded satisfaction by a tender of the principal without interest. .If John M. Felder had died in 1844, and these proceedings had been then instituted in this State, to subject Edmund J. Felder’s interest to the payment of the Alabama judgments, it is not perceived on what ground the plaintiffs could claim more than the amount of their judgments and costs. If they sued out execution in Alabama against their debtor, as they might then have done, they could collect no interest. But because their execution at law would be fruitless for want of a subject of levy, and they seek the aid of the Court to supply as a subject, a fund within the reach of this Court, to payment of their execution, the relief would be restricted to the satisfaction which the plaintiff might have demanded at law if his legal process could have reached the fund. It is true, there are very special cases in which equity allows interest, which could not be collected at law, as in a judgment on bond. If the defendant at law, has availed himself of the process of this Court to enjoin the collection of the debt, and has ultimately failed to sustain his equity, and in the mean time the accruing interest has exceeded the penalty of the bond, this Court in the final decree, will allow the excess of interest which could not be collected under the execution. But this and the like are exceptional cases. Then can it make any difference that the bill was not preferred in 1847, but was deferred until 1851 ? The plaintiffs have done nothing to entitle themselves to more than the amount of their respective judgments. By their judicious inactivity, they perhaps prevented their debtor in 1837, from availing himself of an insolvent law, and they are entitled to the benefit of it. They now ask that his interest in John M. Felder’s estate shall be subjected to the payment of their demand, and they have obtained a decree to a certain extent. They have instituted no action of debt on the judgment either here or elsewhere, and their debtor has never availed himself of the process of this Court to interpose any obstruction to their legal proceedings. The Court has treated this exception as if the case were on the part of the original plaintiffs in the judgments, and this is probably the true aspect in which the question should be regarded, to wit., as judgment creditors seeking the aid of the Court to subject a specific fund to the payment of their demands. In that point of view, the Court is of opinion, that as by the laws of Alabama, judgments do not hear interest, this Court in ordering satisfaction, will give them the same force and effect as they would have in Alabama, and no further. But a large amount of these judgments is not in the hands of the original parties. They are held by assignees, some of whose assignments are of very recent date. One claimant became the purchaser of a judgment to a very considerable amount, since the rendition of the decree of the Appeal Court in this ease. Out of more than thirty judgment creditors, two only had filed a hill. All the others were called in under the notice given by this Court. When the claim of the parties to interest on their judgments stands inter apices juris — upon the fact that they had instituted an action of debt on judgment — all these circumstances may he properly taken into consideration.
    The Court is of opinion, that the first, exceptions to the commissioner’s report should he sustained.
    Let the report he recommitted, for thjj amended according to the principles of thiJfdecfee.
    The complainants appealed.
    
      Sutson, De Treville, for appellants.
    
      Bellinger, Aldrich, contra.
   The opinion of the Court was delivered by

DARGAN, Ch.

The defendant, Edmund J. Felder, is one of the distributees of the late John M. Felder. And this is a creditors’ bill filed by the plaintiffs in behalf of themselves and other creditors of the said Edmund J. Felder for the purpose of subjecting his share of the estate of the intestate to the payment of their claims. On the first hearing of the cause, the Court adjudged, that the creditors had no right to call the admistrators of John M. Felder to an account; but decreed, that the share of Edmund J. Felder in the lands and chattels of the intestate should he subject to the payment of his debts. And, thereupon, an order was made, that the Commissioner of the Court should publish a notice for creditors to present and prove their demands, and that the Commissioner should report thereon. The Commissioner has discharged this duty, and has submitted his report. In the Circuit Court the case came on for trial on this report, and exceptions thereto.

The debts reported by the Commissioner consist entirely of claims founded on judgments rendered in Autauga' County in the State of Alabama; principally in the years 1837 and 1888 ; one in the year 1839, and one in the year 1845. These judgments were for the most part against Felder and Bradford, (a mercantile firm doing business in Autauga County, in the State of Alabama, of which the said Edmund J. Felder was a member,) and some of them were against Edmund J. Felder individually.

The aggregate of the judgments without interest,- is about thirty-seven thousand dollars, and with interest it is about eighty thousand dollars. The Commissioner reported in favor of the allowance of interest at.the Alabama rate, which is eight per cent. The defendant, Edmund J. Felder, excepted to the report on various grounds, among which is the following, being his fourth: “ For that in and by the said report, the Commissioner has charged interest on the various judgments reported; whereas it is submitted that the said judgments do not bear interest at all; at least, not at the rate of eight per cent.” This exception was sustained by the Chancellor who tried the cause on the Circuit, to the extent that no interest whatever was recoverable on the judgments. This is an appeal from the Circuit decree on several grounds, of which it will only be necessary for me to consider the first, which imputes error to the Circuit decree for the disallowance of interest.

At common law by the concurrence of all the authorities, interest was recoverable on a judgment im an action of debt in a Court of Law; though it is equally clear, that its payment could not be enforced except by an action. By our Act of Assembly of 1816, 6 Stat. 4, the interest which should accrue upon all judgments at law and decrees in equity, rendered upon interest bearing demands, from the time of the rendition of such judgments and decrees to the time of the payment of the same, was made recoverable by the execution issued in such cases, without judgment being rendered for such accruing interest, and w'ithout further suit or action. This is in derogation of the common law, and does not extend to cases where the judgments are not founded upon interest bearing demands. As all the judgments against Edmund J. Eelder presented and proved by his creditors^ are founded upon interest bearing demands, the question in this case would have been divested of all its difficulties, if the judgments had been rendered in the Courts of South Carolina. But they were rendered by the Courts of Alabama, in the County of Autauga, as I have before stated; and I apprehend, must ■ be regarded in our Court as foreign judgments. The States of this confederacy ■being sovereign and independent, the judgments and other judicial proceedings of one must be regarded in the sister States as the judgments and judicial proceedings of a foreign country. The provision in the Federal Constitution upon this subject, relates merely to the mode of authentication and proof.

But the comity of States, and a just regard to the rights of contracting parties, in many instances require that our Courts in adjudicating upon contracts made in foreign countries, should have regard to the laws of the country where the contracts were made, so far as said laws have a bearing upon such contracts. The lex loci contractus is often necessary to be considered as incorporated in the contract by implication, and thus becomes “part and parcel” of the contract. Among cases falling within this category, are claims of interest arising by implication or express contract. It is clearly settled that our Courts will enforce the payment of interest according to the laws of the country where the contract was made. This principle has been invoked in favor of the plaintiffs; for it is said, that interest on judgments is recoverable in Alabama by a statute law of that State, similar to our Act of 1815; but still more favourable to the creditor ; for the Alabama Statute makes no distinction between judgments rendered on interest bearing, and non-interest bearing demands. From a collection of the Statutes of Alabama that was exhibited on the trial of this appeal, though I may not doubt that there is a law of Alabama giving interest on judgments; the difficulty of allowing to plaintiffs the benefit of this law arises from the fact that there was no proof on the Circuit trial, that such a statute of Alabama existed. When a party to any issue before our Courts, is desirous of availing himself of the benefit of any law or statute of a sister State, or of a foreign country, he must prove it as a matter of evidence, and as any other matter of fact is proved. The Court will take notice of no foreign law or custom that is'not brought to its notice and judicially established. There is no principle on which this case will depend, better established than this. The plaintiffs in this case can therefore have no benefit of the Alabama statute, allowing interest to be collected on judgments. The case must be adjudged by the laws of South Carolina — in other words, by the principles of the common law, there being no statute law of this State applicable to this circumstance of the ease.

Judgments upon non-interest bearing demands rendered in our own Courts, and foreign judgments, remain in South Carolina, as to this question of interest, as they did at common law. And the question may now be reduced to the form of an abstract proposition: is interest recoverable on such judgments according to the rules of the common law ?

I have already shown that interest cannot be recovered on judgments 'without the institution of a new suit, except in the case provided for by the statute law. And I have shown that at common law interest may be recovered on judgments in an action of debt in a Court of law. And there is no difference in such a proceeding, whether the original cause of action hear interest or not. When it is said that interest on a judgment may be recovered in an action of debt on the judgment in a Court of law, I apprehend that the form of the expression apparently restricting the proceeding to the action of debt, arises from the fact that there is no other form of action in a Court of law, but the action of debt, in which a suit on a judgment may be maintained. But in that form of expression, I think a principle was intended to be asserted; and the right to recover interest is not to depend upon the form of the proceeding, but that it can be recovered in any form of judicial proceeding, upon which the principal of the judgment may be recovered. It has already been decided in this very case, that these judgment creditors of Edmund J. Felder are properly parties before the Court in this suit, for the recovery of their claims on these judgments. And the Court has awarded to them the principal sums due upon their judgments ; and I see no satisfactory reason why interest should be withheld.

Interest is recoverable upon all liquidated demands; upon bonds, notes, bills of exchange, and accounts stated. A judgment is a liquidated demand, though it be rendered in a foreign Court. A sum certain, a fixed time of payment, and the parties by whom, and to whom, payment is to-be made — these are the essentials of a liquidated demand; all of which belong to a judgment. Is there an exception to the rule,, that interest is recoverable on a liquidated demand?.

The order of the Court in this case called in all the creditors of Edmund J. Felder. If a creditor, whose demand was in a note of hand, or bill of exchange, had proved his claim, he doubtless would have been entitled to interest. None would have disputed it. Yet it would be inconsistent and absurd to allow interest on a bill of exchange or promissory note, and not upon a judgment. Such a distinction would have no rational grounds of support.

The conclusion at which I arrive is, that the Circuit decree is erroneous in not allowing interest on the judgments of the plaintiffs. The opinion of the Court is, that the Circuit decree be modified, so that the plaintiffs be allowed to recover interest on the amounts for which their judgments were rendered, from the dates of their rendition respectively. And it is so ordered and decreed. The Court will not, at the present, determine the rate of interest. With some of the members of the Court, there is a doubt as to the rate of interest to be allowed.

It is ordered and decreed, that the case be referred back to the Commissioner, that he conform his report to this decree, and that he inquire and report whether the Alabama rate of interest, or if not the Alabama rate, what rate of interest is to be allowed on the claims of the judgment creditors against the said Edmund J. Eelder.

Johnston and WARDLAW, CC., concurred.

Decree modified.