Court Opinion

ID: 6675979
Source: CourtListenerOpinion
Date Created: 2022-07-20 21:15:56.791877+00
Date Added: 2024-06-11T16:00:42.443475
License: Public Domain

The opinion of the court was delivered by
Mr. Chief Justiob Simpson.
The plaintiff brought the action below on a note for $8',008.27, dated October 16, 1876, and bearing interest at 10 per cent, per annum. The note was under seal and was given by the defendant company. Judgment was demanded on this note against the company, and the plaintiff also sought’judgment thereon against the defendants, directors of *345said company, under certain provisions of a certain act of the legislature, which it was alleged in the complaint made the directors liable. The plaintiff also prayed that the corporation be dissolved, that a receiver be appointed, and that an assignment made by the company be set aside as fraudulent and void. These latter prayers, however, are not now involved, having been adjudicated and disposed of on a previous appeal from a decree of Judge Hudson. Sullivan v. Sullivan Manufacturing Co., 17 S. C., 588. After this the case came before his honor, Judge Pressley, who, considering the matters left open by Judge Hudson, gave judgment against the company for the note and interest mentioned above, and also for an open account amounting to $1,432.-98, claimed in the complaint. He also authorized judgment against the defendants, 6. W. Sullivan, sr., and G-. W. Sullivan, jr., for the amount of the account, it being in proof that these defendants were directors during the year this account was contracted. As to the liability of the directors for the large note, supra, he found as matter, of fact, that this note was made up by the consolidation of previous notes and indebtedness of the company combined into one, which was the note in question, .and that the liability of the directors was not upon the note, but attached to the different items embraced in the consolidation, the directors for the years in which the original items respectively were contracted being liable, subject to the statute of limitation, which was plead, and he referred it to the master as to what items óf debt and their respective dates were consolidated in said note, and who were the directors at the time each item of debt was contracted. This decree on appeal was affirmed by this court, 20 S. O., 92.
The case was then remanded, and the master proceeded to make the inquiry ordered, and having reported the various items, amounts, and dates embraced in the consolidated note, with the names of the directors in office when these several items were consolidated, Judge Hudson, after eliminating such debts as were barred by the statute, ordered and adjudged that the plaintiff have judgment against the defendants, Geo. W. Sullivan, sr., Geo. W. Sullivan, jr., and Dunklin Moore, for $3,500.85, and against Geo. W. Sullivan, sr., and Geo. W. Sullivan, jr., $2,676.22.
From this decree both parties have appealed: the plaintiff, “I. *346Because his honor erred in ruling that, under the Circuit decree of Judge Pressley, as affirmed by the Supreme Court, all the points involved in plaintiff’s position were res adjudícala. II. Because his honor erred in ruling that even if the matters in plaintiff’s position was an open question, under the evidence, the note for $3,852.52 was a renewal of pre-existing debts, rather than a payment thereof, and a new debt of the said company for which the directors then in office were liable, according to the terms of said note.” The defendants (Sullivans) appealed: “Because his honor allows interest against them as directors at the rate of 10 per cent, from the maturity of the large note sued on; whereas they claim that the interest should have been computed in accordance with the terms of the several demands for which they were found liable.”
The first exception of plaintiff is very general and fails to raise in itself any separate and distinct legal proposition applicable to the case. It complains that his honor ruled that all of the points involved in plaintiff’s position were res adjudícala, but it is not stated what legal points were involved. We suppose, however, from the terms of the second exception, and from what is said by Judge Hudson in his decree, that the error alleged, and complained of, is in reference mainly, if not altogether, to the $3,-852.52 note, and we have directed our attention to that. The plaintiff’s counsel contended before his honor, Judge Hudson, that whether that note was a payment of pre-existing notes consolidated constituting a new debt, or simply a renewal, was an open question, which they urged should be determined in favor of payment, and therefore that the directors were liable upon it as a new debt. The judge ruled to the contrary: first, because he held that the question was res adjudieaia by the former decree of Judge Pressley, affirmed by this court (20 S. Q., supra)) and secondly, because upon the evidence it was intended as a renewal.
There is no doubt but that this court in the previous appeal (20 S. Q., 93) affirmed the decree of Judge Pressley. What was that decree? What was its proper construction? is the real question before us. The plaintiff had sued upon a large note, amounting to $8,008.27, given by the company, upon which he prayed judgment, not only against the company,, but against the *347directors. Judge Pressley found and held that this note was a consolidation of previous indebtedness of the company, as'a renewal and not the creation of a new debt, and therefore that the direc-' tors could not be liable on the note; but he held further, that the directors who were in office at the time of the creation of the debts which made up the large note sued on by the consolidation, were respectively liable therefor, subject to the plea of the statute, and he ordered the master to report as to said items, their dates, and the names of the directors then in office. All this this court affirmed, and all- this, therefore, is res adjudieata.
It is contended, however, that the note of $3,857.52, now under consideration, which was consolidated into the $8,008.27 note, was itself a consolidation of other and previous notes, and that such being the. fact, that plaintiff was not precluded by the decree of Judge Pressley from showing that, as to that note, its consolidation was not renewal, but payment of the previous notes consolidated, and therefore a new debt for which the directors then in office were liable. The principle laid down by Judge Pressley, and upon which his decree was based, was that where consolidation was intended as a renewal of the notes consolidated and not payment, that the previous notes were not extinguished, and in a case of this kind, that the liability of the directors, which existed on the consolidated items, at the time of the consolidation, would still remain, without regard to the renewal note. No doubt he supposed that the items in the large note were made up of original indebtedness, and therefore the master -would not go behind these items.
He knew nothing of the fact that some of these items might themselves be consolidations. He did not in his order, therefore, direct the master to inquire whether one or more of these items consolidated into the large note, were themselves made up of previous indebtedness, and if so, whether such consolidation was intended as payment or renewal. Nor did this court, in affirming his judgment, make any ruling on that precise point. We affirmed the principle, to wit, that a mere renewal consolidation did not create a new liability on the directors, and impliedly, that a consolidation intended as payment, and amounting to payment of the previous debts, would be the creation of a new debt, *348for which the directors then in office might be held responsible. Under this principle, we think that either party had the right to make the question of payment or renewal as to the $3,852.52 note, below. In other words, that note, not having been before the court previously, nor any inquix-y made in reference to its basis, the question of the application thereto of the pi'inciple laid down had not been detei’mined so as to be res adjudicóla.
But we do not see at last how this can benefit the plaintiff, because we concur in the judgment of the Cii’cuit Court upon the other ground. We think with the Circuit Judge, that 'the preponderance of the evidence sustains the finding that.the note in question was a renewal and not payment, and therefore that defendants, directors, had the right to go back to its several items. This disposes of the plaintiff’s appeal.
As to the defendants, we think it was error to chai'ge them with interest on each note not barred up to the maturity of the lai-ge note, and the interest on the amount thus ascertained up to date at 10 per cent, per annum. The dii*ectors, in our view, were not liable for any portion of the large note, principal or interest. Their liability, under the decree of Judge Pressley, had been determined to rest on the notes consolidated, and the plaintiff was thrown back upon them, and his recovery against the directors must be upon them according to their tei’ms.
It is the judgment of this court, that the judgment of the Circuit Court be affirmed, except as to the interest mentioned. Let the case be remanded so that the judgments rendered may be corrected accordingly.