Duncan v. Richardson , 64 S.C. 301 ( 1902 )

June 21, 1902. The opinion of the Court was delivered by On the 8th day of February, 1900, D.M. Richardson purchased of R.E. Burris his interest in the business of Berry Burris, copartners in trade in the city of Columbia, S.C. under the firm name of Berry Burris, which said interest consisted of one-half of the assets, stock and business of said concern. In payment of the said purchase Richardson gave to Burris a note under seal as follows: "$475. Columbia, S.C. February 8, 1900. On November 1st after date, I promise to pay to the order of R.E. Burris four hundred and seventy-five dollars, value received. Payable at Farmers and Merchants Bank, Columbia, S.C. If not paid at maturity to bear interest thereafter at the rate of eight per cent. per annum. D.M. Richardson. (Seal.) Witness: W.T. Aycock. (On back of note:) R.E. Burris without recourse. J.T. Duncan. May 9th, credit by rent account $30." 10 cts. revenue stamp attached and cancelled.

On the 9th day of April, 1900, for valuable consideration, R.E. Burris sold, indorsed and delivered this note to the plaintiffs, who after its maturity commenced this action against the maker, D.M. Richardson. Among the allegations of the complaint is the following:

"Fifth. That the plaintiff herein agreed, previously to the maturity, to allow the defendant a credit of $30 for equities claimed by him against said note, and that no other payment or credit has ever been made thereon." This allegation of the complaint is admitted by the defendant, as are also paragraphs 1, 2 and 6, leaving only the third and fourth paragraphs denied. The defendant sets up against the note two defenses, which are in substance as follows, viz: First. That at the time the note was given, it was agreed that the same should not be paid, and should be null and void unless the defendant's share of the profits of the firm of Berry Richardson should be sufficient for that purpose, and that he has from said business realized nothing. Second. And as a counter-claim, that the defendant, in buying the interest of R.E. Burris in the partnership of Berry Burris, acted upon a statement of the affairs of said firm which afterwards proved to be erroneous, and that he has had to pay debts of said firm to an amount greater than the amount of said note, so that the consideration has entirely failed. The plaintiffs demurred to the answer of the defendant, which demurrer was sustained by the Circuit Judge, who submitted the case to the jury upon testimony bearing only upon the third and fourth allegations of the complaint, which alone were not admitted in the answer, and which raise but two questions, to wit: was the note sold and delivered for value before maturity by Burris to the plaintiffs, and has it been paid. The jury found for the plaintiffs, and the appeal comes up on exceptions by appellant, as follows:

"1. For that his Honor erred in sustaining the demurrer and holding, `More particularly because of the fifth allegation in the complaint, which is admitted: That the plaintiffs herein agreed previously to the maturity to allow the defendant a credit of $30 for equities claimed by him against said note, and that no other payment or credit has been made thereon.' Now, the plaintiffs allege that and the defendant admits it. Your answer does not set up a failure of consideration sufficiently and does not allege fraud, then by your admission of the fifth paragraph of the complaint, and your man claiming a credit of $30, he is now estopped from questioning anything that took place up to that time. There is no controversy now except as to paragraph 3 and whatever is in paragraph 4.' In other words, holding that the admission in the answer of the fifth paragraph in the complaint constituted the allegation of an account stated.

"2. For that his Honor erred in refusing to allow the defendant to amend his answer by striking out the admission therein of the fifth paragraph of the complaint and inserting, `The plaintiffs allowed the defendant a credit of $30 as an equity claimed by him against said note and not in satisfaction of his claim against the same.'

"3. For that his Honor erred in refusing to allow the defendant when on the witness stand to answer the question propounded by his attorney: `It is alleged in the complaint that the plaintiff herein agreed previous to maturity to allow the defendant a credit of $30 for equities claimed by him against said note, and that no other payment or credit has ever been made thereon; was that the only credit which you claimed on that note?' (Objection made and sustained.)

"4. For that his Honor erred in refusing to allow the defendant when on the witness stand to answer the question propounded to him by his attorney: `In paragraph 3 of the answer it is admitted that the note therein referred to was presented to you for payment and you refused the same, and that you denied said note had matured or become due and payable; under your understanding with the payee of this note, had it become due and payable at that time?' (Objection made and sustained.)"

We do not deem it necessary to consider and pass upon these exceptions in detail, nor to follow the learned counsel for the appellant in his argument as to what is an account stated, as we do not think the question of what is or what is not an account stated is involved in the case. The Circuit Judge in sustaining the plaintiffs' demurrer did so because he regarded the admission by the defendant of the fifth paragraph of the plaintiffs' complaint as fatal to the other defenses attempted to be set up, not because it showed that an account had been stated between the plaintiffs and the defendant, but because the admission of such an agreement as is therein alleged estopped the defendant from setting up the equities or defenses to said note interposed in his answer. He then had the opportunity, and it was his duty to make known to the plaintiffs the real consideration of the note and the conditions as to maturity and payment, if such existed. But instead of doing so, he, on the day of the transfer, claimed as against the note a credit of $30 and nothing more in the way of an equity, and this was allowed by the plaintiffs and indorsed on the note. This was a distinct admission that the note had been given, that it had been duly transferred to the plaintiffs, and that it was in their hands, a valid claim to the amount of the note less the $30. The Circuit Judge so held, and in this we think he was correct.

It is, therefore, the judgment of this Court, that the judgment of the Circuit Court be affirmed and that the appeal be dismissed.

For a full understanding of the issues involved and decided, the complaint, the answer and the rulings of the Circuit Judge should by the Reporter be set forth in his report of this case.