Court Opinion

ID: 3877773
Source: CourtListenerOpinion
Date Created: 2016-07-06 09:10:16.544212+00
Date Added: 2024-06-11T14:15:14.796053
License: Public Domain

This action, by the National Bank of Honea Path and the Bank of Ware Shoals against Thomas J. Barrett, Jr.,  Co., John F. Clark  Co., and Mary E. Swetenburg and Bank of Ware Shoals, as administrators of the estate of G.C. Swetenburg, was commenced in the Court of Common Pleas for Greenwood County, September, 1930, for recovery of the sum of $79,368.50, the value of the property and funds of the said National Bank of Honea Path, alleged to have been unlawfully abstracted from said bank by G.C. Swetenburg, cashier of such bank, in the years 1928 and 1929, and delivered to the defendants Thomas J. Barrett, Jr.,  Co., and John F. Clark Co., by the said G.C. Swetenburg in alleged gambling transactions, involving cotton futures. The defendants Thomas J. Barrett, Jr.,  Co. and John F. Clark  Co. denied liability. No answer was filed by the administrators of the estate of G.C. Swetenburg. Issues being joined, the case was tried before his Honor, Judge C.J. Ramage, and a jury, at the November, 1931, term of said Court, resulting in a verdict of $24,000.00 against John F. Clark  Co. and $35,000.00 against the estate of G.C. Swetenburg. A motion of the defendant John F. Clark  Co. for a new trial being refused, from judgment entered on the verdict, this defendant, pursuant to due notice, appealed to this Court.
The pertinent allegations of the complaint, necessary for an understanding of the case, briefly stated, are as follows: *Page 12 
The National Bank of Honea Path, incorporated under the laws of the United States, with its principal place of business at Honea Path, County of Anderson, State of South Carolina, on the 21st day of February, 1930, sold its assets and resources, including its claims and demands herein involved, unto the Bank of Ware Shoals, a banking institution incorporated and existing under the laws of this State, with its principal place of business at Ware Shoals, Greenwood County, this State, the said sale and purchase being duly ratified and approved as required under the laws of this State, and thereafter the National Bank of Honea Path was placed in voluntary liquidation. It is, further, alleged by the plaintiffs that Thomas J. Barrett, Jr.,  Co., a partnership, hereinafter referred to as Barrett,  Co., maintained its principal place of business in the City of Augusta, State of Georgia, but, also, operated an office in the City of Greenwood, S.C. and one at Anderson, S.C. which offices, according to the allegations of the complaint, were operated for the sale and purchase of cotton for future delivery; that John F. Clark  Co., a partnership composed of the several parties named in the complaint, hereinafter referred to as Clark  Co., maintained offices in the City of New York and the City of New Orleans for the purchase and sale of cotton for future delivery, as well as other commodities, and own and operate what is known as a system of private wires running to different places in the United States, including the Town of Anderson, S.C. and the Town of Greenwood, S.C. and other places in this State; that the wires of the defendants John F. Clark  Co., at the time mentioned in the complaint, ran into the office of the defendant Barrett  Co., in the City of Anderson, which office one J.C. Jones had charge of, as well as the wires of the defendant Clark  Co., and used the same for the sale and purchase of cotton for future delivery; that the defendants Barrett  Co., and Clark  Co., according to the allegations of the complaint, were jointly interested in the said *Page 13 
office, at the time in question, at Anderson, S.C.,; it being contended by the plaintiffs that the said Barrett  Co., and the said Clark  Co. were at the time in question jointly interested in the said office at Anderson, S.C. and in this connection the plaintiffs alleged in their complaint: "That the commission from such office transactions had therein from time to time with various persons were for the benefit of all of said defendants and were shared, participated in and divided by and between them, and the said Thos. J. Barrett, Jr.,  Co. and John F. Clark  Co., held out to the public that they were together, interested or connected in business, and that persons dealing with the office of said defendant would be protected by all of them and the said J.C. Jones, acting for Thos. J. Barrett, Jr.,  Co., and Jno. F. Clark 
Co., bought and sold cotton for future delivery over the wires of the said Jno. F. Clark  Co., and they acted in such transactions for and on behalf of each other."
It is further alleged by the plaintiffs that the said G.C. Swetenburg died intestate, October, 1929, and his estate was duly administered upon by the Bank of Ware Shoals and Mrs. Mary M. Swetenburg, widow of the said deceased, and they are in charge of the settlement of said estate. On account of the pertinence of the same we quote in full the following allegations of the complaint:
"9. That heretofore and up to the .... day of ........., 1929, one G.C. Swetenburg, a citizen and resident of the County of Anderson, in said State, of limited means but receiving a salary of $2,700.00 per year, was cashier of the plaintiff, the National Bank of Honea Path, and principal officer and agent of said bank in charge of all its affairs and business, and his duties were those usually imposed upon a cashier of a country bank, to pay out the funds of the bank on the presentation of checks and drafts drawn upon the bank by its customers, for which purpose the cash money of the bank and its credits with other banks, and all of its assets were in his possession and under his control; that the said G.C. Swetenburg was well known in the community to *Page 14 
be in extremely modest financial circumstances and that all of the above stated facts were well known to the defendants, Thos. J. Barrett, Jr.,  Co., and Jno. F. Clark  Co., and especially their common agent, J.C. Jones.
"10. That heretofore, to wit, on or about the first day of January, 1928, and probably before that time, the said G.C. Swetenburg began a series of very large speculations of gambling transactions in cotton future covering many thousands of bales, and the said large speculations or gambling transactions were carried on through the office of the said Thos. J. Barrett, Jr.,  Co., and over the wires of the said John F. Clark  Co., and it was arranged and understood by and between the parties that all of the trades and transactions in respect thereto should be carried on in the name of one F.B. Swetenburg, who at the time resided at Abbeville, in the County of Abbeville, in said State, and who was in very modest circumstances and utterly unable to handle the large speculations, which fact was known to or ought to have been known to the said John F. Clark  Co., and the said Thos. J. Barrett, Jr.,  Co., and the said series of speculations or gambling transactions was conducted by the said G.C. Swetenburg through the office above named up until the time of his death in October, 1929.
"11. That during the said period of time the said G.C. Swetenburg abstracted from time to time on divers and sundry dates from the said the National Bank of Honea Path large sums of money belonging to the said bank approximating Seventy-nine Thousand Three Hundred Sixty-eight and 50/100 ($79,368.50) Dollars, and during said period on divers and sundry dates transferred and delivered by draft or otherwise said large sums of money to the amount of Seventy-nine Thousand Three Hundred Sixty-eight and 50/100 ($79,368.50) Dollars to the said Jno. F. Clark 
Co., who received the same from the said G.C. Swetenburg for the benefit of themselves and the other defendants herein in the purchase and sale of cotton for future delivery, the said defendants well knowing or ought to have known that *Page 15 
the said funds belonged to The National Bank of Honea Path and not to the said G.C. Swetenburg or his brother, the said F.B. Swetenburg, and that the said G.C. Swetenburg and F.B. Swetenburg could neither of them have accepted or received the actual cotton contracted for, which fact was well known to the said J.C. Jones and the defendants, Jno. F. Clark  Co., and Thos. J. Barrett, Jr.,  Co.; that the funds or moneys of the said The National Bank of Honea Path so abstracted, paid over to and received by the said Jno. F. Clark  Co., was for the benefit of themselves and their codefendants."
I, also, call special attention to the following allegations of the complaint:
"12. That heretofore, on or about the .... day of August, 1930, the offices maintained by the said Thos. J. Barrett, Jr.,  Co., and Jno. F. Clark  Co., in Anderson, as aforesaid, were discontinued and closed; that the said J.C. Jones, Thomas J. Barrett, Jr.,  Co., and Jno. F. Clark Co., at the time stated were acting for each other and that the said office at Anderson, S.C. was operated as aforesaid for the benefit of the said Thos. J. Barrett, Jr.,  Co., and Jno. F. Clark  Co., and was in law and fact the office of the said Thos. J. Barrett, Jr.,  Co., and Jno. F. Clark 
Co., the said J.C. Jones being in charge thereof for them and for their benefit and interest therein.
"13. That it was not the bona fide intention of the said Thos. J. Barrett, Jr.,  Co., or of Jno. F. Clark  Co., and the said G.C. Swetenburg or his brother, F.B. Swetenburg, to actually make deliveries or receive and accept the actual cotton traded in as aforesaid, but the differences were to be and were from time to time settled by and between the parties by the payment of money, which money was unlawfully abstracted from the National Bank of Honea Path and it was known or should have been known to the said Thos. J. Barrett, Jr.,  Co., and Jno. F. Clark  Co., that the said G.C. Swetenburg could not possibly handle, receive or accept actual deliveries of the said cotton, or that his brother, *Page 16 
F.B. Swetenburg, could not handle, receive or accept actual deliveries of same.
"14. That by and under the laws of the State of South Carolina defendants are liable to the plaintiffs for the amount of the money so unlawfully abstracted from the National Bank of Honea Path and the loss sustained by it on account of the actual amounts abstracted and embezzled from it and transmitted and received by the said Jno. F. Clark  Co., in which the said Jno. F. Clark  Co., and Thos. J. Barrett, Jr.,  Co., were at all times jointly interested."
It is the contention of appellant, as set forth in brief filed in the cause, that the trial Judge erred in the following particulars: In refusing motion for nonsuit; refusing motion for directed verdict; refusing motion for new trial based on the ground that the verdict in the case is illogical and unlawful, in that the jury relieved the defendants Thomas J. Barrett, Jr.,  Co. of any liability, when, on any theory, they were liable if John F. Clark  Co. were liable. It is also the contention that the Judge further erred in charging on the law of agency; in charging on the facts in the case; in not charging, at the request of the defendant, facts as to which were not in dispute; and, also, erred in not construing the verdict rendered. Appellant also contends that his Honor erred in charging "that a contract made in an assumed name, or in the name of a party not authorizing it, is an unlawful contract; the error being that party executing a contract under an assumed or fictitious name can still be bound thereby and make said contract lawful."
In passing upon the allegations of error imputed to the trial Judge, I consider it unnecessary to quote or discuss, at length, the testimony in the case. The testimony adduced at the trial covers over three hundred pages of the transcript, and a full discussion of the same would make this opinion unnecessarily lengthy and serve no useful purpose. I deem it sufficient to state that, after a careful study of the record, it is my opinion that the testimony given at the trial, when *Page 17 
considered in the light of all the surrounding facts and circumstances appearing in the case, tended to establish the material allegations of the complaint. The trial Judge, therefore, committed no error in overruling appellants' motion for a nonsuit and direction of a verdict, based, briefly stated (as set forth in Appellants' Brief), upon the grounds: "(a) That no direct knowledge by Clark  Co., had been shown of any facts sufficient to put it on notice of any illegal act on the part of F.B. Swetenburg or G.C. Swetenburg; (b) even if the knowledge of J.C. Jones be imputed to Clark 
Co., as their agent, which is denied, such knowledge as J.C. Jones had was insufficient to put them on notice as to any illegal acts; (c) that there was nothing illegal in the transactions between Clark  Co., and F.B. Swetenburg and (d) that the National Bank of Honea Path by its course of action is estopped from seeking to recover from Clark 
Co." In this connection I wish to state, further, that under my view of the testimony and the surrounding circumstances appearing in the case it may be reasonably inferred that Clark  Co. had knowledge of facts (not necessarily known to Barrett  Co.), sufficient to put the company on notice of illegal acts on the part of F.B. Swetenburg or G.C. Swetenburg concerning the matters involved herein; and, further, that not only was knowledge of J.C. Jones imputed to Clark  Co. as their agent, but such knowledge as Jones had was sufficient to put Clark  Co. on notice as to the alleged illegal acts; also, a reasonable inference could be drawn from the testimony and the facts and circumstances in the case that illegal transactions between Clark  Co. and the Swetenburgs existed, though the same may not have been known to Barrett  Co. Further, in my opinion, the trial Judge committed no error in overruling the motion for nonsuit and direction of a verdict upon the ground of estoppel.
In my opinion, there is no merit in the contention that the judgment should be reversed upon the ground that the trial Judge erred in not granting a new trial because the jury did not find a verdict against Barrett  Co. The plaintiffs, in *Page 18 
their complaint, demanded judgment against all of the defendants, but failure of the jury to find against one of the defendants, Barrett  Co., furnished no legal ground for setting the verdict aside as to the other defendants, on motion of one of the others, Clark  Co., for under the testimony and surrounding facts and circumstances of the case the jury could reasonably find against Clark  Co. and not against Barrett  Co. The plaintiffs only, under the facts and circumstances of the case, had a legal right to complain as to this, and they are not complaining. The exceptions charging error in this respect must be overruled.
Another allegation of error urged by the appellant is under the fourth exception, reading as follows: "That his Honor erred, it is respectfully submitted, in charging at the request of the plaintiff that a contract made in an assumed name, or in the name of a party not authorizing it, is an unlawful contract; the error being that party executing a contract under an assumed or fictitious name can still be bound thereby and make said contract lawful."
It will be observed that the appellant does not, under this exception, quote any portion of the trial Judge's charge wherein it is contended his Honor gave erroneous and prejudicial instruction to the jury, and it is clear that the exception does not comply with the rule as to definiteness, but is too general to require the Court's consideration. However, a reading of the charge as a whole convinces me that the jury was not misled in respect to the matter complained of.
Under the fifth exception error is charged as follows: "5. That his Honor erred in charging the ninth request of the plaintiff in leaving it to the jury to say whether the agent of John F. Clark 'knew or ought to have known' that the funds used in the cotton transaction with Clark  Co., were the bank's, without further defining to the jury what facts would be sufficient to charge an agent with notice that the funds were the property of the bank."
The following is the request of the plaintiffs which his Honor charged: "9th. If you find as facts in this case that *Page 19 
G.C. Swetenburg was the cashier of the National Bank of Honea Path, and that he unlawfully used the funds of the bank in the execution of contracts for the future sale of cotton with John F. Clark  Co., and had the said contracts executed in the name of F.B. Swetenburg, and John F. Clark  Co., through one of its agents, knew that the said contracts were made by the said G.C. Swetenburg in the name of F.B. Swetenburg, and knew or ought to have known that such funds were the bank's, it is for you to say whether the said John F. Clark  Co. would be liable to plaintiffs for such funds. The cashier of a bank has no right to use its funds unlawfully abstracted for his own purposes, and cannot convey title to such funds to any other party who knows, or ought to have known, that the funds so used by him did not belong to him."
Considering this request in connection with the entire charge, it is my opinion that the jury was sufficiently instructed on the question raised, but if the appellant desired a fuller charge on this phase of the case a request to that effect should have been made, which appellant did not do.
Appellant, under the sixth exception, imputes error to the trial Judge in regard to charging another of plaintiffs' requests, alleging: "6. That his Honor erred in charging the eleventh request of the plaintiff: `I charge you if one man trades in the name of another man the man who trades with him will have the burden of proof cast upon him to show authorization for the trade,' the error being that this was a charge on the facts and assumed as a fact that Clark  Co. knew that G.C. Swetenburg was trading in the name of F.B. Swetenburg, which was an issue of fact in the case."
The request of the plaintiffs complained of by the appellant appears in this language: "11th. I charge you that when one man trades in the name of another man, the man who trades with him will have the burden of proof cast upon him to show the authorization for the trade; and, it is for you to say, if he does not show to your satisfaction that the name *Page 20 
was authorized or ratified, the contract for future delivery of cotton would be outlawed by the Cotton Futures Act, for it outlaws all contracts for future delivery not bona fide
made between real purchasers or real sellers. Assumed purchasers or sellers of cotton for future delivery, or those whose names are not authorized are illegal and gambling contracts, if known to the broker or his agents."
When this language is taken in connection with the entire charge, it will be seen that no prejudicial error appears.
The seventh exception also imputes error to the trial Judge in charging on the facts. We are unable to agree with appellant in this contention. The language complained of by appellant must, of course, be viewed in the light of the entire charge, and when this is considered, no error appears.
The appellant's eighth exception imputes error to the trial Judge in charging the following request of the plaintiffs: "19th. If A receives money for B and deposits the money to B's account in a bank, and B draws down the money so deposited, and the money was deposited for a specific purpose and A communicates that purpose to B and B uses the money for that purpose, then A becomes an agent of B for that purpose. If such matters continue over a long course of dealing, B will be estopped to disclaim the agency with any person dealing with A as such agent."
It is contended by appellant that this charge was not applicable. In my opinion, the charge was applicable but certainly was not prejudicial.
Under Exception 9 error is imputed as follows: "9. That his Honor erred in refusing to charge the seventh request of the defendant, which was as follows: The undisputed evidence shows that all of the amounts purported to have been deposited in the National Bank of Honea Path by F.B. Swetenburg to the account of John F. Clark  Co., were so reported to John F. Clark  Co., by the National Bank of Honea Path by Western Union telegrams and that none of such funds were received by John F. Clark  Co., from or *Page 21 
through Thomas Barrett, Jr.,  Co., or any of their agents', the error being that such request embodied a correct statement of uncontradicted facts as proven in the case."
In my opinion, more than one reasonable inference can be drawn from the testimony touching the facts referred to in the request presented by the appellant and, therefore, his Honor properly refused to charge the request and submitted the issues involved to the jury.
The appellant also charges error because of his Honor's refusal to charge the following request of the defendant: "Of the funds transmitted by the National Bank of Honea Path to John F. Clark  Co., sought to be recovered in this action, the uncontradicted proof shows that the sum of Twenty Thousand One Hundred Forty-Two ($20,142.00) Dollars repaid by John F. Clark  Co., in the name of F.B. Swetenburg became co-mingled after such repayment in the bank funds of the National Bank of Honea Path, and if such amount was subsequently illegally extracted from said bank, John F. Clark  Co., would not be liable for such subsequent extraction and is entitled to credit for said amount."
Under my view of the testimony in the case, more than one reasonable inference could be drawn from the testimony as to whether the bank received the money referred to in this request and, therefore, it was for the jury to determine that issue, and his Honor properly refused to charge the request.
The appellant also imputes error to the trial Judge in not construing the verdict in the case, as requested in the motion for a new trial. In my opinion, it was not incumbent upon the trial Judge to construe the verdict, and I do not think the appellant was prejudiced in any way by his Honor's failing to construe the verdict as requested.
In my opinion, the issues in the case were properly, fairly, and impartially submitted to the jury. I think that the exceptions should be, therefore, overruled and the judgment of the lower Court affirmed. *Page 22