COMMERCIAL BANK OF LIBERIA, Appellant, v. TIP TOP TOOLS, INC., Appellee.

APPEAL FROM THE DEBT COURT, MONTSERRADO COUNTY. Argued December 8, 1975. Decided December 31, 1975. 1. A judgment by confession is more than an admission of a debt by defendant ; it is the consent of the defendant to entry of a judgment. 2. A defendant remains under the jurisdiction of a court which has been properly obtained, until discharged by a judgment rendered for or against him. 3. A stipulation is an agreement made in a judicial proceeding by the parties, in respect of some matter incident thereto, for the purpose of avoiding delay, trouble, or expense. Appellant commenced an action in debt against appellee, in which the amount sued for appeared to be the total of the account of appellee corporation and another corporation, seemingly a subsidiary of the defendant. At the urging of the appellee a stipulation was entered into during the pendency of the action, in which appellee agreed to the correctness of the total sued for, which was to be paid in the manner set forth in the stipulation. The judge of the Debt Court approved the stipulation and payment was made for a while by the appellee. However, after having satisfied part of the debt, the appellee moved to set aside the stipulation, contending primarily that the accounts of two distinct entities had been improperly joined in one account sued for. The judge agreed with the argument and appointed a board of arbitrators to determine the amount owed in light of the …Intention supported by the court. The board also agreed with the position of the appellee and the court and computed the amount owed by the defendant corporation. Judgment was entered upon the findings of the board and an appeal was taken therefrom by the plaintiff. , 397 398 LIBERIAN LAW REPORTS The Supreme Court took the position that no opinion could conceivably embrace the confusion and contradictions in the record certified to it. Consequently, it reversed the judgment of the lower court and remanded the case for a new trial. Joseph P. H. Findley for appellant. for appellee. J. K. Burphy MR. CHIEF JUSTICE PIERRE delivered the opinion of the Court. On May I, 1972, the Commercial Bank of Liberia brought an action of debt by attachment against Tip Top Tools, Inc., claiming that the defendant owed $103,369.51. Annexed to the complaint were two exhibits, which are statements of account in the sums mentioned in the complaint. According to the certified record before us, Elie Vandevoorde was at the time of the filing of suit the manager of two companies : Tip Top Tools, Inc., and Liberia Guinea Export Import Agencies Corporation ; both . companies carrying accounts with the Commercial Bank. It seems that the plaintiff bank blended balances of these two accounts to make up the total sum sued for in the complaint. The record also shows that no answer was filed to deny or admit the debt. On May 3, two days after the service of process, defendant filed a motion to dissolve, on the grounds that attachment had not been issued in conformity with law in that the attachment bond carried only one surety, also in violation of law. This was not passed upon by the court. Notwithstanding this position, the following day, May 4, 1972, defendant wrote the bank’s lawyer a letter. “Attention : Honorable Joseph Findley. “Sir: “Following our discussion of today’s date re : Corn- LIBERIAN LAW REPORTS 399 merical Bank of Liberia vs. Tip Top Tools, Inc., by and through Elie Vandevoorde, debt, we accept and propose the following conditions: ” (a) Attached to this letter is a list of debts for $25,429.05. The total account can be collected and paid to the Commercial Bank of Liberia between today and the loth of May 1972. Each of these collections will be paid immediately upon the receipt of check or cash to the Commercial Bank of Liberia. And we also hereby assign and guarantee payment of the accounts to the Commercial Bank of Liberia. “(b) A check of $4,000.00 is in the hands of the Commercial Bank of Liberia payable on the 30th of May, 1972, by the same person who paid $4,000 at the end of April. “(c) We agree to pay regularly at the end of each month the amount of $2,000 against our account regularly, plus interest on the balance of the account. “(d) 5o% of all accounts receivable will be paid to the Commercial Bank of Liberia on such collections as they are paid. A complete list of the debtors will be delivered to the Commercial Bank of Liberia on the 5th of May, 1972. “If the above proposals are accepted, which we hope will be, then in an endeavor to settle amicably, the action may be withdrawn or abated, and thereby be amicably settled short of a court contest, and that the cordial relationship which obtained heretofore be maintained. “Very truly yours, [Sgd] ELIE VANDEVOORDE, General Manager.” Although the action was not withdrawn, and perhaps wisely, too, the proposals mentioned in the above quoted letter must have been acceptable to the parties, because on May 6, 1972, the following document was prepared and signed : 400 LIBERIAN LAW REPORTS “Commercial Bank of Liberia, by and through its General Manager, “ACTION OF Gamel Eddin Elleissi, Plaintiff DEBT BY “Versus ATTACH”Tip Top Tools, Inc. by and MENT through its General Manager, Elie Vandevoorde, Defendant “STIPULATIONS “Tip Top Tools, Inc., by and through its General Manager, Elie Vandevoorde, of the City of Monrovia, and the Commercial Bank of Liberia, by and through its General Manager, Gamel Eddin Elleissi, having arrived at mutually acceptable terms for the settlement of this case out of court hereby agree to the following stipulations for the purpose, namely, to wit : ” ( a) That Tip Top Tools agrees to make and by these presents has made an assignment to the Commercial Bank of Liberia of accounts receivable amounting to $26,429.05 which is to become due on May 20, 1972, against its indebtedness of $103,369.51, in favor of Commercial Bank. “(b) That a check of $4,000 in favor of Tip Top Tools, now in the possession of CBL and due for payment on May 3o, 1972, is also being assigned by Tip Top Tools to the CBL when its maturity date is up, subject to verification. “(c) That Tip Top Tools agrees to make a monthly payment of $2,000 to be applied against the aforesaid indebtedness. “(d) That in addition, so% of all other accounts receivable will be paid to the Commercial Bank of Liberia, commencing as of the end of May 1972 (see attached list). Tip Top Tool agrees that upon failure to make good these obligations as specified in this stipulation of understanding, then the entire balance shall become LIBERIAN LAW REPORTS 401 due and payable, otherwise this stipulation shall remain in full force. Tip Top Tool further agrees to pay 2% of the to% counsel fees to the Commercial Bank of Liberia, which has already contracted to pay counsel to% on these collections. Tip Top Tool further agrees to pay costs of court up to the time of the filing of these stipulations. This stipulation of understanding shall be binding upon Tip Top Tools and the Commercial Bank of Liberia as well as their assigns and/or their successors in office. “Witness hereunto, I have hereunto set my hand, affixed this 6th day of May, 1972. “[Sgd.] ELIE VANDEVOORDE, General Manager, Tip Top Tools, Inc. “ACCEPTED: Signature not legible Commercial Bank of Liberia “APPROVED: [Sgd] D. CAESAR HARRIS Debt Court Judge.” Upon the signing of this document the case might have ended with judgment rendered upon the stipulations, but this did not happen; and a series of novel events followed payments in conformity with the terms proposed and accepted by the parties. Following this letter and the signing of the stipulation, defendant made several payments against its admitted indebtedness to the Bank, as evidence of which we will quote another letter written to Counsellor Findley on May to, 1972. “Dear Sir: “Please find enclosed copies of letters and photo copy of receipts for payments made up to date to the 402 LIBERIAN LAW REPORTS Commercial Bank of Liberia, as per stipulations entered between the Bank and Tip Top Tools. “We also join a photo copy of the receipt of the check for $4,000 discussed by the manager last Saturday. “Furthermore, we did ask the Bank to credit us with $219.33, which is an amount which they suppose to pay us long overdue. The total amount at the Bank up to date against stipulations is $9,801.21. “We will send you regularly photo copy of all payments we shall make to the Commercial Bank of Liberia, and in meantime, we remain, “Yours faithfully, [Sgd.] ELIE VANDEVOORDE.” After this the record is silent until August 31, 1972, when Tip Top Tools wrote Counsellor Findley, the bank’s lawyer, the following letter: “Dear Mr. Findley: “Following our telephone conversation yesterday regarding total payments against the stipulation entered into between the Commercial Bank and ourselves, we are pleased to enclose a detailed statement of A/C showing the summary of payments made. “Very truly yours, “For Tip Top Tools, Inc. “[Sgd.] P. WEAH WELEH, SR., Accountant.” To this letter was attached a list of amounts showing the accounts receivable mentioned in the stipulations and in Vandevoorde’s letter of May 4, 1972, totaling $26,429.05. Added to this amount were several cash payments and assignments which brought the grand total of payments made following the filing of the suit and signing of the stipulations up to $36,808.06. Another period of silence followed, and then on February 26, 1973, defendant filed in court the following submission : LIBERIAN LAW REPORTS 403 “SUBMISSION “Tip Top Tools, Inc., by and through its General Manager, Eli Vandevoorde, defendant in the abovenamed cause, most respectfully shows Your Honor as follows, to wit: “1. That in his absence a writ of attachment was served on his business premises, and his whole business closed down by virtue of said writ. “2. That because he could not procure bail for the re-opening of his store immediately, he was compelled and induced by counsel for plaintiff to enter stipulations for the total amount sued for, which he did, simply because he did not want his business premises to remain closed because he had orders and requests from customers to be served immediately and his failure to serve said customers because of the attachment would have worked hardship on him and loss of his customers. Defendant requests the court to take judicial notice of the date of the writ of attachment and the date of the stipulations. The writ of attachment is dated for the 5th of May, 1972, and the stipulations for the 6th of May, 1972. “3. Defendant further says that after checking through his records and accounts, he has come to find out that included in the amount sued for, which is $103,369.51, is the account of Liberia Guinea Export Import Agencies, a separate and distinct corporation from that of Tip Top Tools, Inc. The shareholders of said Corporation being: Elie Vandevoorde, Adil S. Kiblawi, and Ibrahim E. Khoury. Defendant maintains and strongly contends that the account of said corporation could and should not be included in the account of Tip Top Tools, Inc., since they are two separate and distinct entities both in law and in fact. Copy of the articles of said corporation is hereto attached and marked exhibit ‘A.’ “4. That shareholders Adil S. Kiblawi and Ibra- 404 LIBERIAN LAW REPORTS him E. Khoury, were general manager and assistant manager of the Commercial Bank of Liberia, plaintiff, at the time the corporation was organized and the account of Liberia Guinea Export Import Agencies was duly opened and operated, and the account of Tip Top Tools, Inc. was also duly opened and operated. Defendant requests the court to take judicial notice of the date of the opening of the accounts of the two corporations, and original accounts and letters of appointment of these shareholders as General Manager and Assistant Manager of plaintiff. s. That the said shareholders by virtue of their positions as general manager and assistant manager of plaintiff did withdraw from the said Bank the amount of $23,000 each, as will more fully appear from copies of vouchers showing that the said shareholders did operate the account of Liberia Guinea Export Import Agencies, debiting and crediting, the total of which the plaintiff has included in the amount. “6. Defendant further says that another amount of $13,000, included in the amount sued for are all accounts of Liberia Guinea Export Import Agencies. “7. That in keeping with the stipulations and the actual account of Tip Top Tools, Inc., defendant has almost completely paid the account of the company. “8. That in keeping with law, one company cannot be sued for another except it holds a Power of Attorney as agent of said corporation, nor can one corporation’s account be merged into another except by stipulations or consent of the two corporations. The accounts of Kiblawi and Khoury and the Liberia Guinea Export Import Agencies cannot be merged or included in the account of Tip Top Tools, Inc., since they are two separate and distinct entities as corporations, nor was there any merger stipulations or consent for operation of joint account. ” LIBERIAN LAW REPORTS 405 “Wherefore, in view of the foregoing, defendant prays that Your Honor will deduct the amount of $1.6,0o0, representing the personal account of Liberia Guinea Export Import Agencies from said amount of $103,369.51, being the amount sued for in keeping with law, and be made to only completely and fully pay the account of Tip Top Tools, Inc., and grant him such other and further relief in the premises as impartial justice, fair play, and good conscience will demand. “Respectfully submitted, “Tip Top Tools, Inc. “[Sgd.] J. K. BURPHY, Counsellor-at-Law.” A strange document, in view of the position already taken by the defendant in the stipulations which it had signed May 6, 1972. Was this an intentional repudiation for its own benefit, or its previous admission of the debt sued for in the complaint? If this was the case, should it be allowed to do so in view of our law which makes admissions of parties evidence against them? See our Civil Procedure Law, Rev. Code 1:25.8 (t ). Was this being fair to its creditor in view of the existing circumstances? But the court below did not pass upon this phase of the matter, although it had been raised in the plaintiff’s resistance. This submission was also strange in view of the fact that no answer had been filed when the defendant submitted to the jurisdiction of the court, in which it might have raised the issues it sought to raise in its belated defense. Now, more than ten months after service of the writ of attachment, and after considerable compliance with the terms of the stipulations which the defendant proposed, he now raises issues to deny the full indebtedness of the amount shown in the complaint. The Debt Court did 406 LIBERIAN LAW REPORTS not pass on this aspect of the matter either. However, because of the position we have taken in this case, we will make no further comment at this time. The bank prepared and filed its resistance to the submission, in which it asked the judge to deny the relief sought on the ground that the submission sought to besmear the good name of plaintiff’s counsel when it alleged that said counsel had “induced” defendant to “enter into stipulations to settle the total amount.” Resisting the submission, the ,bank also said that the defendant had appeared and filed a motion to dissolve the attachment, and then made a written proposal to settle the debt sued for “short of court contest,” and followed up the proposal by stipulations which were accepted by the bank, approved by the judge, and filed in court. That from May 8, 1972, defendant began to comply with the stipulations and lived up to it until August, 1972, as can be shown by copies of letters filed with and made part of the resistance, already quoted in this opinion. The judge of the Debt Court in Monrovia in passing upon the submission and resistance, made the following ruling. “The court holds, therefore, that in the absence of merger or consolidation of the Liberia Guinea Export Import Agencies and Tip Top Tools, Inc., both being separate and distinct corporations, there is no legal justification for the inclusion of the account of the former in the account of the latter. . . . In the interest of transparent justice, influenced by the fundamental principles of law cited, supra, and in the light of the evidence shown regarding the inclusion of the account of the Liberia Guinea Export Import Agencies and the personal accounts of Messrs Kiblawi and Khoury in the account of the defendant corporation, it is found legally necessary to set aside the instrument of stipulation signed by the defendant and accepted by LIBERIAN LAW REPORTS 407 the plaintiff for the payment of the total sum of $103,369.51, claimed by the plaintiff against which payment in the amount of $41,538.00 has already been made by the defendant.” Thus, more than one year after the judge had approved the stipulations proposed by the defendant and accepted by the plaintiff, he now reversed his decision by setting the document aside. Moreover, the submission had introduced a new phase into the case ; the accounts of two strangers to the proceedings, Messrs. Kiblawi and Khoury, for the judge had accepted their inclusion in his ruling on the submission. This placed three accounts in issue, whereas the complaint had called for only two. The plaintiff referred to this in its motion for judgment on the arbitrator’s award, but the court did not pass upon it. But the defendant’s bringing of these two strangers into the case introduces a peculiar situation, because according ti) its own submission and the corporation’s articles of incorporation, these two persons were partners with the general manager in the Liberia Guinea Export Import Agencies, which is one of the accounts of Tip Top Tools mentioned by the bank, as shown by the complaint. The articles of incorporation of the Liberia Guinea Export Import Agencies also show that Elie Vandevoorde owns 50% of the shares of the corporation. But this phase of the matter might be looked into later, so we will say no more about it. According to the position of the Debt Court judge, it seemed that judgment had been rendered, in which a mistake had been discovered, and upon request of one of the parties the judgment was opened and set aside. But this is not so according to the record in the case, because no judgment is found to have been rendered. All that had happened up to now was that a submission had been filed pointing out an alleged mistake in the stipulations which 408 LIBERIAN LAW REPORTS the defendant had proposed, had signed, and which had been accepted by the plaintiff and approved by the court. This is not a judgment by confession. “Judgment by Confession. A judgment may be rendered upon confession of the defendant, either in an action regularly commenced against him by the issuance and service of process, in which case the confession may be made by his attorney or record, or without the institution of a suit, upon a confession by defendant in person or by his attorney in fact. It implies something more than a mere admission of a debt to plaintiff; in addition, it is defendant’s consent that a judgment shall be entered against him therefor.” 23 CYC. 699 (i906). According to this, there must be a confession by the defendant, and upon it a judgment must be rendered ; but as we have said earlier, no judgment was rendered even if we allowed that the stipulations proposed and signed by the defendant were a confession. From everything the judge said in his ruling on the submission and the resistance, it does seem that he took the stipulations prepared and signed by the defendant as a judgment. It might be necessary then that we find out what is a judgment. According to BOUVIER’S LAW DICTIONARY, a judgment in practice is “the conclusion of law upon facts found or admitted by the parties, or upon their default in the course of the suit . . . the decision or sentence of the law, given by the court of justice or other competent tribunal, as the result of proceedings instituted therein for the redress of an injury.” It is clear that no judgment has been rendered in this case. We would like to observe, in passing, that the case before the court was not only the stipulations signed by and between the parties as the judge seemed to think, but also the complaint filed by the plaintiff which occasioned issuance of the precept which brought the defendant under the jurisdiction of the court, and which has not LIBERIAN LAW REPORTS 409 been disposed of, its submission to the jurisdiction of the court by appearing and the filing of a motion to dissolve the attachment. All of these, together with the stipulations, make up the case. According to law and procedure in our courts the defendant remains under the jurisdiction of the court until discharge by a judgment rendered for or against him. Before a judgment can be rendered for or against him, there must be a trial whereat witnesses must testify and evidence must be received for and against the facts set forth in the complaint, even when the defendant elects not to defend, as in this case. In this case there was no trial and no judgment rendered. Instead, the parties agreed at the instance of the defendant to settle the case out of court. Although the judge approved the terms and conditions of the settlement his approval did not amount to a judgment, nor make the stipulations a judgment, because the terms upon which the parties agreed to settle was not an act of the court. “A stipulation . . . is an agreement, admission or confession made in a judicial proceeding by the parties thereto or their attorneys, in respect of some matter incident thereto, for the purpose, ordinarily, of avoiding delay, trouble, and expense.” so AM. JuR., Stipulations, � 2 ( 1 944) � Having differentiated between judgment and stipulation, let us now go back to the ruling of the judge. After definitely determining that the stipulations were set aside, and the accounts of Tip Top Tools and Liberia Guinea Export Import Agencies separated, the judge continued : “In order that the true and correct status of the defendant’s account, as well as the extent of its indebtedness to plaintiff may be established, and in keeping with defendant’s request, it is deemed legally necessary to appoint a board of arbitrators to review and reconcile the accounts of Tip Top Tools, Inc., and the Liberia 410 LIBERIAN LAW REPORTS Guinea Export Import Agencies, including the personal accounts of Messrs Kiblawi and Khoury. The board shall consist of three qualified accountants, two of whom shall be selected by the parties, and the other appointed by the court. . . . The report of the board when submitted and accepted by the court shall become effective immediately and be binding on the parties and their legal representatives or successors in business.” Having said all of this in his ruling, why was it necessary to appoint arbitrators? The judge had already decided what amount Tip Top Tools, Inc., was responsible for, and had already deducted it from the amount sued for; he had also said that Tip Top Tools, Inc., had already paid this amount in full. But the bank did not except to this puzzling ruling. The arbitrators were appointed and they returned an award that was in accord with the judge’s ruling insofar as it sought to separate the accounts of Tip Top Tools and Liberia Guinea Export Import Agencies. Whether this was mere coincidence, or the judge’s ruling had influenced their award, is not known, but the judge’s position was fully upheld by the arbitrators. At this stage plaintiff filed a motion praying for judgment on the award. Had it filed a similar motion for judgment on the stipulation, perhaps all of the subsequent novelties in procedure might have been averted. It was from this judgment that the plaintiff appealed and brought the case before us. Everything about this case is so confused that we do not see how we could be fair to the parties without remanding it for better judicial handling. The judgment of the Debt Court is, therefore, reversed and the case is remanded for a new trial. Costs are to abide final determination. It is so ordered. Reversed and remanded.