April 17, 1934. The opinion of the Court was delivered by This action is brought by the named plaintiffs to recover of the named defendants a sum of approximately $80,000.00, which it is alleged G.C. Swetenburg embezzled from the National Bank of Honea Path, of which he was cashier. The case was tried at Greenwood before Judge Ramage and a jury, and resulted in a verdict against John F. Clark Co., for $24,000.00, and against the estate of G.C. Swetenburg for $35,000.00. No verdict was rendered against Barrett Co.
John F. Clark Co. alone appeal.
In the trial motion were made by the appellant for nonsuit, for directed verdict, and for new trial; all of which motions were refused.
On the rendition of the verdict it first appeared in this guise: "We find for the plaintiff twenty-four thousand dollars."
Before the jury left their seats the foreman made the statement: "It is against Clark Co., we didn't find anything against Barrett Co." *Page 4
After a colloquy between the Court and the attorneys, the jury, over the objection of attorneys for John F. Clark Co., were sent back to reform that verdict and returned with the following verdict: "We find for the plaintiff against John F. Clark Co., Twenty-four Thousand Dollars."
The attention of the Court was called, by plaintiff's attorneys, to the fact that the estate of G.C. Swetenburg was in default. Again a colloquy ensued between the Court and the attorneys; whereupon the Court said to the jury: "You go out and find whatever amount against the estate of Swetenburg as you think is right. You find that in addition to the other verdict."
Attorneys for John F. Clark Co. noted an objection.
The history of this litigation, as it appears in the record, shows many anomalous things.
It appears that the Bank of Ware Shoals and the National Bank of Honea Path were closely allied. The majority of the stock of each of the corporations was owned by the same persons; they were interlocking institutions and had some directors and officers in common. When the defalcation of G.C. Swetenburg, the cashier of the National Bank of Honea Path, was divulged, the Bank of Ware Shoals through its duly appointed officers, took charge of the bank building, the bank books, the cash, the assets and securities of the National Bank of Honea Path. It made to the depositors and general creditors of the Honea Path Bank a proposition to pay them 50 per cent. of their claims against the Bank of Honea Path, which was accepted, and they took over to themselves all the assets and resources of the National Bank of Honea Path, they to assign their claims to the Ware Shoals Bank. (See complaint, Paragraphs 3 and 4, page 1 of the transcript of record.) The Bank of Ware Shoals then put its officer, F.M. Washington, in control of the affairs of the Honea Path Bank as liquidating agent.
When G.C. Swetenburg died the Bank of Ware Shoals and Mrs. Mary E. Swetenburg, the widow of G.C. Swetenburg, were appointed administrators of his estate. The evidence *Page 5 is overwhelming — practically uncontradicted — that the Bank of Ware Shoals has had sole and absolute control of this estate, which to this date remains unsettled. It received and holds the assets of the estate save the small sum of between $3,000.00 and $4,000.00 paid in settlement of all claims against the estate, except the matter here in liquidation. Yet, the estate of G.C. Swetenburg of which the Bank of Ware Shoals was the controlling, practically the sole administrator, is sued by the Bank of Ware Shoals, its administrator, and puts up no defense. And yet, in the first instance, the jury found only against John F. Clark Co.; and in the last instance, found against the estate of Swetenburg only when specifically instructed to do so by the Court.
It is contended that there was proof of the fact that John F. Clark Co. knew, or are legally held to have know, that G.C. Swetenburg was speculating with the money of theNational Bank of Honea Path.
This contention is founded upon the assumption: First, that J.C. Jones was the agent of John F. Clark Co., and the further assumption that J.C. Jones knew that G.C. Swetenburg was speculating with the bank's money, and that his use of the name F.B. Swetenburg was without authority, and therefore John F. Clark Co. knew it.
If it be conceded that there may be deduced by a process of unusual finesse of reasoning that there is a scintilla of evidence that John C. Jones was the agent of John F. Clark Co. in relation to the transactions of G.C. Swetenburg, nevertheless there is another rule, more founded upon common sense and reason, to the effect that when only one reasonable inference, not just one inference, but one reasonable inference, can be deduced from the evidence, it becomes a question of law for the Court, and not a question of fact for the jury.
I have studied this voluminous record of testimony from every angle, and I find it impossible to arrive at any other conclusion than that all of the cotton speculations in which Swetenburg engaged with the money of *Page 6 the bank were conducted through Thomas J. Barrett Co. It is argued that Barrett Co. got nothing out of these transactions but its share of the commissions. That is all these cotton brokerage concerns get out of any of their transactions. That is what they are in business for, to charge and receive commissions for forwarding the business of those desiring to deal on cotton exchanges. And by the same token that is all that John F. Clark Co. got. The moneys spent by Swetenburg were to replace moneys which had been advanced by Clark Co., to pay for cotton bought for Swetenburg on the market on orders sent through Barrett Co.
When, therefore, the jury exonerated Barrett Co., they were legally bound to exonerate Clark Co., who operated only through Barrett Co. The plaintiffs themselves assert these facts. They assert in Paragraph 7 of their complaint, on information and belief: "That the defendants, Thomas J. Barrett, Jr., Co., and John F. Clark Co. are jointly interested in the office at Anderson, S.C. That the commissionsfrom such office transactions had therein from time totime with various persons were for the benefit of all of saiddefendants and were shared, participated in and divided byand between them; and the said Thos. J. Barrett, Jr., Co.and John F. Clark Co. held out to the public that theywere together, interested or connected in business, and thatpersons dealing with the office of said defendant would beprotected by all of them and the said J.C. Jones, acting forThos. J. Barrett, Jr., Co. and Jno. F. Clark Co., boughtand sold cotton for future delivery over the wires of the saidJno. F. Clark Co. AND THEY ACTED IN SUCHTRANSACTIONS FOR AND ON BEHALF OF EACHOTHER." (Emphasis added.)
Despite the substantiation of this broadside charge that the two firms, or corporations, were in partnership in their cotton transactions, it is proposed to allow to stand a verdict which completely exonerates Barrett Co., and holds Clark Co. responsible. Clark Co's office is in New York, all of Jones' communications with that office went *Page 7 through Barrett Co., and the plaintiffs assert, and their own testimony shows it to be true, "that Jones, acting forThos. J. Barrett, Jr., Co. and Jno. F. Clark Co. boughtand sold cotton for future delivery over the wires of Jno.F. Clark Co. and they acted in such transactions for andin behalf of each other." (Italics added.)
If it be conceded, however — which is not done — that Jones was the agent of Clark Co., that Jones knew that G.C. Swetenburg was speculating with the money of the bank, and using the name of his brother without the knowledge and consent of his brother, and that, therefore, Clark Co. are responsible and must make good the money used by Swetenburg in his speculating, by the same process of reasoning it must be held that Thos. J. Barrett, Jr., Co. had such knowledge and are equally liable. No other position is compatible with law and justice.
The estate of Swetenburg went into the hands of the Bank of Ware Shoals, the associate and confidante of the National Bank of Honea Path. The shareholders, officers, and agents of these two concerns are inseparable in interests and differentiated only in functions. F.M. Washington, the cashier of the Bank of Ware Shoals, was made the liquidating agent of the National Bank of Honea Path. He testified that the defalcation of Swetenburg amounted to, in round numbers, the sum of $80,000.00. The complaint fixed the amount at the sum of $79,368.50, and sought judgment for that amount.
F.M. Washington testified in this case that the bank had recovered in cash on the bond of G.C. Swetenburg the sum of $10,000.00; on the bond of Griffin, assistant cashier, $10,000.00; from securities on notes of Swetenburg $9,500.00, — making a total of cash of $29,500.00, not a dollar of which is credited to the liquidation of the defalcation. The same witness fixes the net assets of Swetenburg's estate at $35,000.00, of which $19,000.00, or thereabout, was in cash in the hands of the Bank of Ware Shoals as administrator *Page 8 of the estate of G.C. Swetenburg. Here there are $59,500.00 actual cash and assets in the hands of the bank applicable to the claimed amount of the defalcation, to wit, $79,368.50, not so applied. In addition, it is uncontradicted that the Bank of Ware Shoals has taken to itself title to 199 acres of land owned by G.C. Swetenburg of which no mention is made in any account thereof. Again, F.M. Washington testified that the year in which this tragedy developed and resulted in the death of G.C. Swetenburg, he made between 130 and 140 bales of cotton. What became of them? The record is as silent as the grave thereabout.
Again, John F. Clark Co. remitted to the National Bank of Honea Path the sum of $20,142.00 arising from the cotton transactions, to the credit of the account of F.B. Swetenburg. He denies that he ever got it. There is not a scintilla of evidence that it ever went out of the Bank of Honea Path. The inevitable conclusion is that it was mingled with the funds of the bank. Surely if John F. Clark Co. are responsible for the funds abstracted from the bank, they ought in common justice to have credit for the funds returned by them. The Circuit Court denied this right.
It appears, then, that the plaintiffs have in hand in cash from the bonds of Swetenburg and Griffin the amount of $20,000.00; and from securities on notes of Swetenburg $9,5000.00; cash from estate of Swetenburg (about) $19,000.00; other assets of the estate of Swetenburg $16,000.00 — amounting in the aggregate to $64,500.00; not one dollar has been credited on the indebtedness of Swetenburg's defalcation in so far as the record shows. These are visible and tangible things the value of which is fixed. In addition, the plaintiffs have taken title to the Bank of Ware Shoals to 199 acres of land of the estate of Swetenburg, the value of which is not fixed. It also appears they received 130 to 140 bales of cotton the year of Swetenburg's death for which no accounting is made.
All of these things are applicable to make good the defalcation before recourse can be had against Jno. F. Clark *Page 9 Co., if it should be admitted that they are liable. The case of Allen v. Watson, 2 Hill, 319, upon which the Circuit Judge relied in refusing the motion for new trial, is not authority for the proposition that one may recover his money from one who has unlawfully abstracted it and also from him who received it. For another reason it is doubted that that case is authority here; that case distinctly holds that the laws of the State where the conversion took place must govern: "and if there be any thing in them which legalizes the transaction, the defendants are to be protected by it." The cotton brokerage business in which Clark Co. are engaged is legal under the laws of the State of New York.
It is manifest that the bank has received from various sources funds and assets of the estate of G.C. Swetenburg enough to make good the loss it alleges it sustained by reason of the defalcation.
A curious situation has arisen in connection with the receiving of the verdict. The jury returned a general verdict of $24,000.00. That meant a verdict against all of the defendants, and necessarily it meant that in the opinion of the jury that was all the plaintiffs were entitled to receive from any or all of the defendants. Apparently the foreman of the jury volunteered the information that the verdict was against Jno. F. Clark Co. alone; nothing was found against Barrett Co. They were sent back to their room to reform their verdict in accordance with that statement. When they returned to the courtroom with the amended verdict, counsel for plaintiff brought to the attention of the Court that the estate of G.C. Swetenburg was in default. They evidently wanted a judgment against the estate which would enable them to apply the assets of the estate in their hands to the debt due the bank on account of the defalcation. The trial Judge sent the jury again to their room with this instruction: "You go out and find whatever amount against the estate of Swetenburg as you think is right. You find that in addition to the other verdict." They found against the estate *Page 10 $35,000.00, the sum the evidence showed was in the hands of the administrators.
The trial Judge was asked to construe the verdicts, but declined to do so. Some one must do it; because the two verdicts are irreconcilable, and if left standing, create a state of confusion when it comes to enforcing the judgments by execution which will assuredly lead to further litigation.
It is undisputed that the administrators have in their hands the sum of $20,000.00, recovered from the sureties on the bonds of Swetenburg and Griffin, and the sum of $9,500.00 received from sureties of certain obligations of Swetenburg to the bank. The jury fixes the liability of the estate at $35,000.00, and the estate has that in hand. Here then is a sum of $64,500.00 to be applied to the amount of the shortage fixed by the complaint at $79,368.50. When this application is made, there remains due of the defalcation the sum of $14,868.50. Can the plaintiff enforce the judgment against Jno. F. Clark Co. for more than this amount? I do not think so. To do so would be to give to the bank nearly $9,000.00 more than it had lost. This was not an action for damages, but one in the nature of the old action of trover.
I think, further, that it was error not to have given Jno. F. Clark Co. credit for the sum of $20,142.00 which it remitted to the National Bank of Honea Path to the credit of the account of F.B. Swetenburg, in whose name the transactions in cotton were had. These funds went into and were mingled with the funds of the bank, and arose out of the cotton transaction. As has been said, the administrators (the Bank of Ware Shoals practically alone), have had this estate in hand for nearly two years and have not settled it. How is it possible to determine the liability of others to make good this defalcation — if there be such liability — until the estate is settled and its value is finally determined. What has become of all the land Swetenburg owned? What has become of the spot cotton he had? *Page 11
This opinion, written as a dissent, being concurred in by a majority of the Justices, becomes the judgment of the Court, which is: (1) That the judgment of the lower Court against Mrs. Mary E. Swetenburg and Bank of Ware Shoals, as administrators of the estate of G.C. Swetenburg, be affirmed. (2) That the judgment against John F. Clark Co. be reversed, and the case remanded, with instructions that judgment be entered up for that defendant under Rule 27 of this Court.
MR. CHIEF JUSTICE BLEASE and MR. JUSTICE STABLER concur.