Greene v. Harris

This suit was again heard before the full court on February 9 and 10. The complainant has made a motion to be reheard on so much of the decree entered July 15, 1873, as sustains the demurrer as to partnership or interest in profits. *Page 9 On full consideration we cannot find any agreement for any definite or indefinite share in the profits sufficiently alleged. It is nowhere alleged that there was any agreement for any share or interest in profits in consequence of which the complainant contracted in the commencement to do the work, or that there was any such agreement at any time afterwards under which any portion of the work was done. The respondent has filed a regular formal plea of stated accounts, with the oath thereto required by the rules, that the matters therein alleged are true in point of fact. The complainant's counsel object to this plea that it is defective in this: that it does not deny the fraud and errors charged in the bill, and therefore is not a complete plea, and that it is not supported by an answer. When the bill was filed, the respondent, instead of resorting to formal pleas, set forth all his defences by answer. He distinctly set up the defence of stated accounts (among others), and claimed the same benefit as if pleaded; and in other parts of his answer he fully denied the charges of fraud and error which were made in anticipation of and in order to meet his plea. It was formerly held that the plea (if a formal plea) must be complete in itself, and must in itself by proper averments deny the charges of fraud, c., introduced in the bill to meet and avoid it. But since all defences are allowed to be made by answer, there seems to be very little of precedent or settled practice to guide us. We find but few cases where question has arisen about defences made wholly by answer. But there is no reason on principle, or from analogy of decided cases, why the court should not deal with such defences substantially in the same manner as if made by a formal plea. Although not in form it may in effect be equivalent to a plea supported by an answer. When Lord Eldon's commission in 1826 — in order to remedy the mischiefs growing out of the technicalities and conflicting decisions in the old system — recommended the allowing all defences to be made by answer, while they allow that the proposed change is not free from difficulty, they go on to say that no injury can arise to the plaintiff if care be taken that such an *Page 10 answer be treated as a plea, with respect to its bearing on the subsequent stages of the cause. In the case of Gunn v. Prior (referred to in Dolder v.Lord Huntingfield, 11 Ves. Jun. 291), a person claimed as heir. A plea of not heir was disallowed. An answer was then put in insisting that complainant was not heir. Lord Kenyon, M.R., sitting for Lord Thurlow, held that if he was not heir he was not entitled to discovery, and that this was a preliminary fact to be ascertained, and he directed an issue to try it. That an allegation of a fact which destroyed plaintiff's title, whether made by plea or answer, must be first decided. Such seems the reasonable course. It is the object of all systems of pleading to endeavor to make the issues of law and fact as distinct as possible; and that all points of law, or matters which might be a complete bar to the further prosecution of the suit, should be decided before going into the case at large; and it is obvious that if the complainant was restricted to the old mode of excepting to an answer, it would in many cases cause great delay and expense. And in the present case the court, with the assent of counsel, took the same course with the defences set up as if they had been formally pleaded and set down for argument. The court decided on the validity of these defences. The same objection was then made that the portion of the answer which alleged stated accounts as a defence, and claimed the benefit of it as if pleaded, did not deny the charges of fraud and error made in the bill. But the court held, that the plea being part of an answer, which answer did contain averments denying the fraud and errors, was to be construed in connection with those denials. The question was stated in the opinion to be, "Is the defence of stated accounts set up in the answer, and in connection with the aforesaid negative averments, sufficient?". And the conclusion the court arrived at, and the decision made, was, that "this plea therefore (connected with the aforesaid averments) must be sustained." And the decision in effect was that the defence was a good defence, unless the complainant sustained the charges he had made in his bill in anticipation of it, and the decree was intended to carry out this decision. *Page 11 After this decision the complainant filed a long amendment to his bill, and the respondent filled a demurrer to certain parts of the bill, namely allegations of partnership or joint interest, alleged contract to pay certain prices, withdrawal of goods before contract completed; and as to the prayer to open the accounts, on three grounds, multifariousness, statute of limitations, and that no case for relief was stated. And he also filed an answer: 1st. As to so much of the bill as alleges that the accounts rendered were not intended as final statements, and claiming to correct them according to an alleged agreement; he denied that any demand had been made for payment, but alleged that the interest had been regularly carried into the accounts and payments made, and that complainant kept the mill insured for a large amount payable to complainant, and that H.L. Greene's accounts were all carried into these accounts. 2d. As to the residue of said bill, alleging stated accounts, averring that they are just and true, and claiming the same benefit as if pleaded. On this being decided sustaining the demurrer on one point made, the bill was amended so as to assert distinctly Harris's knowledge of the Saunders prices, which Greene alleges he agreed to pay, and to the bill so amended the respondent filed a demurrer and answer substantially like the last ones referred to. Although both these last answers have been spoken of as pleas supported by answers, they are not strictly so, but are merely answers setting up in defence matter which might have been pleaded. See Beames's Pleas, New York edition, 1824, p. 53, end of cap. 1; Story's Eq. Plead. § 695; Willis's Pleadings (Law Library, vol. 35), *556-8, *567-70. The last demurrer having been decided, the respondent Harris, on the 29th November, 1873, filed a formal plea to specified parts of the bill, which was heard by the full court on February 9 and 10, 1874. There is no accompanying answer, but the plea has the oath required by our equity rules, that it is true in point of fact. The complainant objects, as we have before stated, that the plea is defective: 1st. Because it does not contain averments to negative the charges which are made in the bill to meet the anticipated defence. While in an anonymous case, 3 Atk. 70, case 24, A.D. 1743 *Page 12 (which, so far as can be gathered from the report, was a case of alleged mistake), it seems to have been held by Lord Hardwicke that it would have made the plea in that case complete if it had alleged that the accounts were "just and true," and that that averment would have been sufficient to meet the charge of error; and while in Bayley v. Adams, 6 Ves. Jun. 586, Lord Eldon doubted, it seems now to be considered as settled, that charges of fraud or mistake must not only be denied by the answer in support, but must be denied by proper averments in the plea itself, and that a mere averment that the accounts are just andtrue may not be enough. Story's Equity Plead. § 802; Adams's Equity, *338-340; Jeremy's Mitford, 259, 260; Phelps v.Sproule, 1 Myl. K. 231; Ferguson v. O'Hara, Pet. C.C. 493; Allen v. Randolph, 4 Johns. Ch. 693. See Rocke v.Morgell, 2 Sch. Lef. 721-727; and in Bogardus v. TrinityChurch, 4 Paige, 178-194, Chancellor Walworth said it was strange Lord Eldon had ever entertained any doubts on this subject, and gave his reasons for his decisions in that case. The reason given for this rule is that the plea must be complete in itself, so that issue may be taken on it; and that everything not denied in it is to be taken as true; Wigram, § 260, p. 186; Mitford, *243; 1 Daniel Chanc. Prac. 637, 639;Fisk v. Miller, 5 Paige, 26, 29; and that in case of a plea and answer in support of it, the answer is no part of the defence. 1 Daniel Chanc. Prac. 647, 707; Rhode Island v.Massachusetts, 14 Pet. 210, 271; Wellford, 389; Wigram, 1st Amer. ed. § 261, p. 187, Jeremy's Mitford, *244. If the complainant replies, the only question is the truth of the plea; and if set down for argument, everything which it does not deny is for the argument to be taken as true; therefore, in a case like this, it would not be safe for the complainant to reply, as he would thereby admit its sufficiency, if true. The plea now in controversy does not conform to the rules established by these authorities, and must therefore be overruled unless amended. A second objection is made that the plea is not supported by an answer. The bill prays for an account and for the balance found due to be paid by whichever party shall be found in debt to the other, *Page 13 and for the mortgage to be cancelled. The plea is only to certain specified portions of the bill. If the plea was a good plea, would any answer in support of it be necessary in the present state of the pleadings? All the defences heretofore made have been by answer; and three different answers have been put in. To determine whether an answer in support of the plea now offered is necessary, we must consider the reason why it is necessary in any case. And one reason given is because a plea cannot be excepted to; Wigram, 1st Amer. ed. § 262, p. 189;Ferguson v. O'Hara, Pet. C.C. 493; Beames's Elements, pp. 34, 35; Willis's Pleadings, 250, note E.; and therefore the respondent is required to deny the fraud or mistake by answer, which, if insufficient, may be excepted to. Wigram (§ 261, p. 189) considers it an arbitrary rule, established for the sake of convenience; but it is established. But it is also settled that all the answers filed in a suit constitute but one answer; Mitford, *318; Allfrey v. Allfrey, 14 Beav. 235; 2 Daniel Ch. Prac. *909; Story, § 868; Adams's Eq. *347; and this has been carried so far as to hold that what has been once alleged must not be repeated. Adams's Eq. *343, n., *347; Allfrey v. Allfrey, 14 Beav. 235; Bowen v. Idley, 6 Paige, 46; Trust Insurance Co. v. Jenkins, 8 Paige, 590. And this not only on the ground of avoiding useless repetition, but as adding to the cost, which latter reason is not of so much force in our practice as in England. Three answers having been put in in the different stages of this suit, another should not be put in merely to repeat former denials. And if the complainant thinks that they do not contain enough to support the plea, we think he ought to have the right now to except in the same manner as if this plea and those answers had all been put in at the commencement of the suit;i.e. if he would have had the right then, which we do not now decide. After the foregoing opinion the respondent Harris, by permission of the court, granted June 29, 1874, amended his plea by adding an averment that he never agreed nor stated that the prices named by him were and should be one eighth of one *Page 14 cent per yard more than Saunders received, and also that he did not know until the bill of compliant was filed what Saunders's prices were. This amendment was filed July 2, 1874. Harris, in addition to this, on July 11, 1874, by permission of the court, also granted June 29th, filed an answer to those parts of the bill as amended, to which the demurrer was not sustained.10 R.I. 393. This answer contained a plea of stated accounts, and of the statute of limitations as to all causes of action which accrued more than six years prior, respectively, to the filing of the bill and of its several amendments. The plea as amended was set down for argument.