Standard Sewing Machine Co. v. Henry

The opinion of the court was delivered by Mr. Chiee Justice MoIyer. This was an action to recover the amount alleged to be due on a negotiable promissory note. The allegations in the complaint are substantially as follows: that on the 10th day of August, 1893, the defendants made their promissory note in writing, whereby they promised to pay-to the plaintiffs, or order, at the Merchants’ and Farmers’ Bank, of Marion, four months after the date thereof, the sum [22] of $1,226.06, together with a stipulation that if the note has to be collected by suit, the defendants would pay all costs, including ten per cent, attorney’s fee; that although the said note became due and payable before the commencement of this action, yet the defendants have not paid the same; that plaintiffs are now the lawful owners and holders of the said note; that the plaintiffs have been duly incorporated under the laws of the State of Ohio, and that defendants are copartners in trade under the name of J. E. Henry & Co. The defendants answered, admitting the execution of the note sued on, but denying each and every other material allegation in the complaint. Hpon the service of the answer the plaintiffs, on the 7th day of March, 1894, served a notice on defendants’ counsel of a motion “to strike out the defendants’ answer in the above case as sham and irrelevant;” and, failing in that, plaintiffs will move for judgment, on the ground that “the answer is frivolous, and intended merely for delay.” This motion came on to be heard by his honor, Judge Aldrich, at the April term of the court; but when the fact was developed that copies of certain papers — letter and affidavit — had not been served upon the defendants, Judge Aldrich continued the case on the docket, without, however, refusing the motion. Subsequently, to wit, on the 14th day of June, 1894, plaintiffs served a further notice on defendants, that plaintiffs “will not only rely upon what appears on the face of defendants’ answer, in support of plaintiffs’ motion, of which notice was given you on the 7th March, 1894, but will rely further on an original letter of defendants to S. B. Lucy, plaintiff’s manager, in the handwriting of defendant, J. E. Henry, dated Latta, S- C., July 22d, 1892, and also on affidavit of W. W. Sellers, of our firm, copies of both of which are herewith furnished.” The letter thus referred to, a copy of which is set out in the “Case,” purports to be a letter of the date mentioned, addressed to Mr. S. B. Lucy, Richmond, Va., without anything.in it to •show that said Lucy was in any way connected with plaintiffs, in which it is claimed that the defendants, referring to a note, “which falls due on the 26th inst.” (July, 1892), ask that the [23] bank be instructed to hold said note for ten days after maturity, when defendants would pay it. The affidavit of Mr. Sellers, a copy of which is likewise set out in the “Case,” is to the effect that on the day upon which his firm received for collection the note mentioned in the complaint, he wrote the defendant, J. E. Henry, informing him of the same; that two days thereafter, both of the defendants appeared at the office of Messrs. Sellers & Sellers to see about the matter; that they both admitted the execution of the note, and that it was unpaid; “that it was a renewal note (think he said it was a second or third renewal); that he offered to plaintiffs to return the property purchased for which the note was given, and to pay one hundred dollars besides the return of the property; said he did not intend to pay a dollar of it if he could help it; that he had no property that could be made liable to it; that he owed other debts, that he had secured them, and then had the papers in his pocket.” Hpon these papers the motion came on to be heard by his honor, Judge Benet, who filed his decree 5th of July, 1894, in which he held that the answer was both sham and frivolous, and that plaintiffs “have judgment, as in cases by default, in accordance with the terms of the note sued on,” and also for ten dollars, costs of this motion. Defendants having been served with notice of the filing of this decree, gave due notice of appeal therefrom. After the service of this notice of appeal, the original summons and complaint were returned to Judge Benet, who, on the 2d day of August, 1894, made the following endorsement on the complaint: “The answer of defendants having been stricken out as sham and frivolous, it is ordered, that plaintiff have leave to enter up judgment against defendants for twelve hundred and eighty 89-100 dollars, debt and interest, and ten per cent., one hundred and twenty-eight 08-100 dollars, fees for collections by suit, according to the terms of the note sued on, and ten ($10) dollars attorney’s fees for the motion, aggregating fourteen hundred and eighteen dollars and ninety-seven cents ($1,418.97), and for all other legal costs.” In pursuance of this order, judgment was entered in accordance with the terms thereof, on the 8th of August, 1894, and [24] the defendants gave due notice of appeal from the order for judgment above set out, as well as from the judgment entered in pursuance thereof. We do not deem it necessary to set out in extenso the several exceptions upon which the appeal is based, as we propose only to consider the questions which they present, which we regard material; but we think the decree of the Circuit Judge as well as the exceptions should be incorporated with the report of the case. 1 We agree with the Circuit Judge, that the notice of the 14th June, 1894, was but supplementary to the original notice of the motion served on the 7th of March, 1894, and simply designed to indicate to defendants what papers, in addition to the answer, v/ould be relied upon to sustain the motion, which had been continued at the previous term. 2 It seems to us, however, that the Circuit Judge erred in receiving and considering the letter purporting to have been written by defendant to S. B. Lucy, without some evidence of its genuineness, which we are unable to find in the “Case.” In addition to this, that letter could not possibly have referred to the note which constituted the basis of the present action, for that letter bears date on the 22d July, 1892, and, by its terms, refers to a note which fell due on the 26th of that month, more than a year before the note mentioned in the complaint was given. Moreover, that letter was addressed to S. B. Lucy, who is not shown by any competent evidence to have had any connection of any kind with the plaintiffs. It is true that, it it stated in the notice of the 14th of June, 1894, that Lucy was plaintiff’s business manager, but that is a mere statement of counsel, and certainly constitutes no legal evidence of the fact. In the affidavit of Mr. Sellers, which is evidence, there is no statement to that effect, and nothing to show any connection between the note referred to in the letter and the note mentioned, except the general statement that the note mentioned in the complaint was a renewal; but of what note it was a renewal there is no evidence. It seems to us, therefore, that the Circuit Judge erred in receiving and considering the alleged letter of the defendants to the said S. B. Lucy. [24] We think, also, that the Circuit Judge erred in holding that [25] the answer should be stricken out as sham and frivolous. The rule, as we understand it, is that an answer which denies any material allegation in the complaint cannot be stricken out, on motion, as either sham or frivolous. If the defendant by his answer to an action on a money demand puts in issue any material allegation in the complaint, he has a right to have such issue tried by a jury. See Ransom v. Anderson, 9 S. C., 438; American Co. v. Hill, 27 Id., 164. Now in this case the defendants, by their answer, did put in issue at least one of the material allegations of the complaint, to wit: that the plaintiffs were the legal owners and holders of the note. 4 While we agree with the Circuit Judge that the cases which he cites do show that the corporate capacity of the plaintiffs was not put in the issue by the general denial in defendants’ answer, yet we are not prepared to admit that the same rule would apply to the allegation that the defendants were copartners. But as it is alleged in the complaint that the defendants, who are named as copartners in the title of the complaint, “made their promissory note in writing,” &c., and the defendants, in their answer, “admit the execution of the note sued on,” this, we suppose, might be regarded as an admission that the note was executed by them as copartners. Walter v. Godshall, 32 S. C., 187. 5 Under this view of the case it becomes unnecessary to consider those of the exceptions which impute error to the Circuit Judge in endorsing the order for judgment on the complaint after the filing of his decree, and after notice of appeal therefrom, and the entry of judgment in accordance with such order; for if, as we have seen, there was error in striking out the answer as sham and frivolous, no judgment could properly be ordered or entered until the issue presented by the pleadings had been tried by the jury. It may be as well, however, to notice that both in order for judgment endorsed on the complaint and in-the judgment entered in pursuance of such order, ten dollars are awarded to plaintiffs’ attorneys as their fees for the motion to strike out the answer, in disregard of the act of 1892, entitled “an act to repeal all acts in relation to attorneys’ costs.” 21 Stat., 30. [26] The judgment of this court is, that the order and judgment of the Circuit Court be reversed, and that the case be remanded to that court for trial.