Opinion
12993
October 8, 1930.
Before GRIMBALL, J., Sumter, April, 1930. Affirmed.
Action by Weaver Piano Co., Inc., against C.H. Curtis, with counterclaims by defendants. A demurrer to the various defenses, and the counterclaim was sustained and defendant appeals.
The complaint, answer, and order of Judge Grimball were as follows:
COMPLAINTThe plaintiff above named, complaining of the defendant herein, alleges:
1. That the plaintiff is a corporation duly incorporated under the laws of the State of Pennsylvania, with the right to sue and be sued, etc.; and the defendant is a resident of the City of Sumter, State of South Carolina.
2. That on or about February 14, 1925, the plaintiff and the defendant entered into a written agreement, a copy of which is hereto attached and made a part hereof, whereby it was agreed that the company appointed the defendant as its selling and leasing agent and collector at Sumter, South Carolina, on the sales of pianos and phonographs, upon certain terms and conditions set forth in said contract, those most pertinent to this action being to the following effect:
(a) All pianos and phonographs that should be sent to the defendant by the plaintiff should be furnished to the defendant as selling and leasing agent for the plaintiff and that title to the same and to the contracts, leases, agreements and moneys taken and collected upon the sale or lease of the same should be and remain vested in the company.
(b) The defendant agreed to take all leases, notes and agreements in the name of the company or, if taken in the name of the defendant, the same should be assigned over to plaintiff.
(c) That at the termination of said agreement, the defendant agreed to return, free of expense to the plaintiff, or deliver to its order, all goods or property of any description belonging to the company not then sold or leased, including repossessed instruments, etc.
(d) That all accounts in the hands of the defendant for collection might be withdrawn at any time by the company, and in such cases, the company would be entitled to a collection fee of ten per cent on all moneys collected by it, except on notes paid at bank at or before maturity.
(e) The company, at its option, could assume any other duties belonging to the defendant under the terms of said agreement or any fulfillment of any of the conditions with any of the customers to whom instruments furnished by the company may have been leased or sold; in each case the plaintiff should be allowed a reasonable compensation for such services.
(f) At the termination of said agreement, or sooner termination if demanded by the company, the plaintiff should receive the entire amounts collected each month on all time sales and leases and other accounts shall become the property of the defendant, if the plaintiff had been paid all of the money coming to it.
(g) It is further provided that said agreement could be terminated by either party, so far as the selling or leasing of instruments was concerned, the remaining conditions and options to remain in force until the accounts were fully settled according to the conditions of the agreement.
3. The said agreement was to continue for no definite period of time, but could be terminated at any time by either party.
4. For a fuller detail of said agreement, a copy of the same is hereto attached and made a part of this complaint, and reference thereto is craved as often as may be necessary.
5. That on or about October 8, 1929, the plaintiff notified the defendant that the plaintiff exercised its right under the contract to terminate the agreement as to the selling and leasing of instruments and exercised its option to assume the duties at the time belonging to the defendant of making further collections and demanded of the defendant that it turn over to the agent of the plaintiff all of the property of every description in the possession of the defendant belonging to the company; and at said time notified the defendant that the plaintiff would take the same over under the terms of its contract and would scrupulously follow the terms of said contract for the mutual protection of both parties.
6. That the defendant refused to turn over to the plaintiff seven pianos, the property of the plaintiff, and of the value of twelve hundred dollars; all of which were in the possession of or under the control of the defendant and all of which belonged to and were the property of the plaintiff.
7. The plaintiff is informed and believes that the defendant refused to deliver the said property on claim that under the terms of said contract he had a right to hold the same.
8. The plaintiff has at this time possession of the notes and securities taken for the goods actually sold and delivered, in so far as the plaintiff is informed and believes, and the plaintiff will, under the terms of the contract, endeavor to liquidate the same and make an accounting with the defendant in accordance with the terms of said contract.
Wherefore, the plaintiff demands judgment against the defendant for the recovery of the possession of said property, or for the sum of twelve hundred dollars, the value thereof, in case a delivery cannot be had.
COPYFiled in Book 89 of Chat. Mtgs. Page 727.
"This Agreement made at York, Pa. (and to be construed according to the laws of Pennsylvania), this 14th day of February, 1925, between the Weaver Piano Company, Inc., a corporation duly incorporated under the laws of Pennsylvania, and located at York, Pennsylvania, hereinafter called the Company, whose corporate existence for all purposes is hereby admitted, and C.H. Curtis hereinafter called the Employed.
"Witnesseth: That the Company hereby appoints the Employed as its selling and leasing agent and collector (but without authority to bind the Company for any obligations whatsoever with others) at Sumter, South Carolina, upon the following terms and conditions, namely:
"All pianos and phonographs that shall be sent to the Employed by the Company, shall be furnished to the Employed as selling and leasing agent for the Company and the title to the same and to the contracts, leases, agreements and monies taken and collected upon the sale or lease of the same shall be and remain vested in the Company and shall not in any manner become the property of the Employed, except as hereinafter provided.
"The Employed agrees to take all leases, notes and agreements in the name of the Company, or if taken in the name of the Employed immediately to assign the same over to the Company and forward the same to the Company as soon as the Employed shall take them from the parties buying the instrument or instruments or leasing the same. The Employed agrees to give due diligence to the collections of the accounts on instruments furnished by the Company and to make a written report to the Company on the first day of each month showing the amount of monies received by the Employed on account of sales or lease of instruments and to pay the Company the amount appearing to be due according to the conditions herein mentioned.
"The Employed agrees to pay all expenses incident to the business conducted by this agency, including all taxes levied on instruments while in charge of the Employed and including the rent of such premises as the Employed may deem necessary for the business, and said Company is to be under no expense whatever in connection with the business at this agency. The instruments furnished to the Employed shall be kept insured in the name of the Company, by the Employed and at the expense of the Employed.
"At the termination of this agreement the Employed agrees to return, free of expense, to said Company or deliver to its order, as it may require, all goods or property of any description, belonging to the Company, not then sold or leased, including repossessed instruments, and if any instruments are in any way damaged to pay a reasonable amount for repairs of same to make them as good as new; or if lost to pay for them in full.
"The Company shall have the right, whenever it shall think proper, to take back any instrument sold or leased by the Employed, and at its option to surrender the notes or leases given therefor, and the Employed agrees to waive all claim for commissions which the Employed had or might have had in such note or lease, but for such retaking and surrendering, and to pay the expenses of such retaking.
"Should the Company at any time desire to know the location of any instruments furnished under this agreement, the Employed shall locate the same to the satisfaction of the Company, or its agent, and without expense to the Company, and the Employed agrees to repossess and deliver to the Company any instruments they may direct without cost to the Company.
"Accounts in the hands of the Employed for collection, may be withdrawn at any time by the Company and the Company will be entitled to a collection fee of ten per cent. on all monies collected by it, except on notes paid at bank at or before maturity.
"The Company may at its option assume any other duties belonging to the Employed, under the conditions of this agreement, or in fulfillment of any of the conditions agreed by the Employed with any of the customers to whom instruments furnished by the Company may have been leased or sold and for such services a reasonable compensation shall be allowed the Company by the Employed.
"The instruments taken in trade shall be retained by the Employed as part payment for commission. The Employed shall in no case allow more for an instrument in exchange than the excess above price on `Paper A' of the new instrument.
"The Employed agrees not to trade instruments belonging to the Company on any property, real or personal.
"In consideration of the foregoing the Company agrees that the Employed shall receive the following compensation for services rendered:
"On all cash sales the Employed shall receive the excess over and above prices quoted on `Paper A' for the instrument sold. On each time sale and lease, the Employed shall retain the first payment which the customer pays cash when the instrument is delivered and (except as herein otherwise provided) Twenty-five per cent of all monies collected after the first payment on Pianos and Player Pianos and Ten per cent. of all monies collected after the first payment on Phonographs; provided also that the Employed shall in no case retain more from the proceeds of any one instrument than the excess above the price on `Paper A.' The remainder of all monies received by the Employed on instruments furnished by the Company belongs to the Company and is the property of the Company and shall be paid by the Employed to the Company with the next monthly return after receiving any part of said monies and the Employed shall receive no further compensation until the entire cost of all instruments combined which were sold or leased by the Employed under this agreement, has been paid to the Company, at the prices on the annexed schedule marked `Paper A,' and until all other items properly charged into the account of the Employed by the Company, including all goods belonging to the Company, have been paid to the Company; then the entire balances owing on all leases or other accounts shall revert to the Employed and become the sole property of the Employed as further and final compensation for services rendered.
"When instruments are returned to the Company, all amounts paid by the customers on the contracts on such instruments, prior to their return to the Company shall be equally divided, between the Company and the Employed.
"At the termination of this agreement, or sooner, if demanded by the Company, said Company shall receive the entire amounts collected each month on all time sales and leases until the leases and other accounts become the property of the Employed according to the conditions hereinbefore mentioned.
"If for any reason the Company should at any time deem it advisable to send a special agent to check up or examine the business entrusted to the Employed, and on such investigation it should appear that the Employed had improperly withheld or applied any money, obligation or property, due or belonging to the Company, then the Employed agrees to pay the actual expenses incurred in making investigation (including compensation to the special agent) said payment to be considered merely as a reimbursement of such expenses and shall not release said Employed from any other or further liability.
"This agreement to terminate at the pleasure of either party so far as the selling or leasing of instruments in concerned, the remaining conditions and options to remain in force until the accounts are fully settled according to the conditions of this agreement.
"In Witness whereof, the Company has caused these presents to be signed by its President, attested by its Secretary, and its common seal to be affixed, and the hand and seal of the Employed has hereunder been set on the day and year above written."
THE AMENDED ANSWER AND COUNTERCLAIMThe defendant above named, answering the complaint herein, says:
1. He admits that he signed the contract dated February 14, 1925, copy of part of which is attached to the complaint; that the pianos mentioned in the complaint were in the possession and control of this defendant, and that some such demand as is set out in the complaint was made by the plaintiff through or by dictation of its attorneys, but alleges that said such demand was made only after the plaintiff had fraudulently and willfully breached said contract; and that defendant refused to deliver the possession of said seven pianos.
2. For a first defense:
That he denies each and every allegation in said complaint contained, except such as are hereinbefore admitted.
3. For a second defense:
This defendant alleges that by reason of the terms of said contract, and by reason of the dealings of the parties under said contract a debtor and creditor relation arose between the parties, and said contract operated as a contract of sale, in that interest was charged upon said pianos beginning six months from the date that said pianos were shipped by the plaintiff to the defendant; but this defendant alleges the plaintiff owed the defendant by reason of the unlawful breach of said contract, and the unlawful taking of said pianos more than said defendant owes the plaintiff.
4. For a third defense:
That on or about September the tenth, 1929, the plaintiff, without just cause or excuse, sent an agent, one G.G. Freeland, to Sumter, S.C. to aid and assist the defendant in his collections under said contract and to audit and check over the books of said defendant; that said plaintiff unlawfully and illegally, without just cause or excuse, after admitting that the accounts of said defendant were in good shape, and that all collections made by the defendant had been duly accounted for to the said plaintiff, charged against the account of this defendant seventy-five dollars per week, together with hotel bills and all expenses of said agent for said work, which this defendant alleges was unnecessary and not authorized by said contract, thereby breaching said contract.
5. For a fourth defense:
That on or about September 22, 1929, by mutual agreement, the plaintiff through its duly authorized agents, G.G. Freeland and William T. Huntsman, Jr., and the defendant entered into a new contract concerning the subject matter of the contract set up in the complaint herein, thereby terminating and doing away with said contract set up in the complaint herein.
6. For a fifth defense:
Specifically pleading to that portion of the complaint which alleges as follows: "and at said time notified the defendant that the plaintiff would take the same over under the terms of said contract and would scrupulously follow the terms of the contract for the mutual protection of both parties," this defendant admits that said notification was contained in a letter written by the attorneys for the plaintiff, but this defendant specifically denies that said plaintiff would scrupulously follow the terms of the contract for the mutual protection of said parties, said denial being based upon information and belief as to the plaintiff habitually and fraudulently defeating the rights of parties in a similar position as the defendant herein. And this defendant alleges that the plaintiff, through its agent Freeland, since the institution of this action and the taking of the pianos described in the complaint under order of this Court, has sold and disposed of certain of such pianos at prices far below the retail price provided for in the contract set out in the complaint herein, and in some instances, to wit: the sale to L.L. Brunson, had sold pianos at no more than the wholesale price thereof, thereby willfully and fraudulently destroying the entire equity of the defendant in and to said pianos, and thereby unlawfully and fraudulently and in violation of the terms of said contract, entered into unfair competition with this defendant in the business of selling pianos with the express purpose, so this defendant is informed and believes, of damaging the business of this defendant. That said plaintiff through its agent has high-handedly, and well knowing that, in the installment business in this section at this time certain indulgences to delinquent debtors are necessary for the preservation of said business, repossessed many of said instruments under the security mentioned in said complaint for the express purpose, as this defendant is informed and believes, of doing away with and destroying any equity that this defendant might have in said securities.
7. For a sixth defense:
Specifically pleading to that portion of the complaint contained in paragraph eight thereof alleging "And the plaintiff will, under the terms of the contract, endeavor to liquidate the same and make an accounting with the defendant in accordance with the terms of said contract" this defendant specifically denies the same, said denial being based upon information and belief as to the plaintiff's custom and habit in the past in dealing with other parties in the City of Sumter and elsewhere in a similar situation of the defendant under said contract. And the defendant alleges that the plaintiff through its agent Freeland since the institution of this action, in liquidating the securities mentioned in paragraph eight of the complaint, has, well knowing that in the installment business in this section at this time certain indulgences to delinquent debtors are necessary for the preservation of said business, high-handedly, so this defendant is informed and believes, and without just cause or excuse and in violation of all ideas as to the carrying on of said installment business repossessed many of said instruments and is dispoing of the same at whatever price or prices it can get for the same, and at sacrifice prices, for the express purpose, as this defendant is informed and believes, of doing away with and destroying any equity that this defendant might have had in said securities, and of damaging the defendant in his business, all of said acts of said Freeland being the acts of the plaintiff.
8. For a seventh defense and by way of counterclaim:
1. This defendant alleges, upon information and belief, that the plaintiff above named is a corporation duly organized under the laws of the State of Pennsylvania with the right to sue and to be sued; that defendant is a resident of the City and County of Sumter, State of South Carolina.
2. That on or about February 14, 1925, the plaintiff and defendant entered into a written agreement, a copy of part of which is attached to the complaint herein, and a copy of all of which is hereto attached and made a part hereof, reference to the same being craved as often as is necessary.
3. That by reason of the terms of said contract and by reason of the dealings of the parties thereto under said contract, the relation of purchaser and vendor, and the corresponding relation of debtor and creditor arose and was created, in that interest was charged to the defendant by the plaintiff upon all instruments shipped under the said contract, and that on account of said relation and on account of the fact that the title to said instruments has passed to this defendant, the taking of said instruments under this suit was willful and unlawful and without just cause or excuse, all to the damage of this defendant in the sum of twenty-four hundred dollars.
9. For an eighth defense and by way of second counterclaim:
1. This defendant alleges upon information and belief that the plaintiff above named is a corporation duly organized under the laws of the State of Pennsylvania, with the right to sue and be sued; that the defendant is a resident of the County of Sumter, State of South Carolina.
2. That on or about February 14, 1925, the plaintiff and defendant entered into a written agreement a copy of a part of which is attached to the complaint herein, and a copy of all of which is hereto attached and made a part hereof, reference to the same being craved as often as may be necessary.
3. That said agreement provided for the payment of interest under the guise of premium at the usurious rate of one per cent. per month.
4. That under the terms of said contract this defendant was required to, and did pay to the plaintiff interest at said usurious rate between the date of February 15, 1925, and September 30, 1929, the sum of two hundred ninety-one and 62/100 dollars, said interest so exacted by the plaintiff from this defendant being usurious both under the laws of the States of South Carolina and Pennsylvania; the legal rate of interest of the State of South Carolina being a maximum of eight per cent., and this defendant is informed and believes that the legal rate of interest of the State of Pennsylvania is a maximum of six per cent.
5. That the plaintiff unlawfully charged, exacted and received of the defendant said usurious interest in the amount of two hundred ninety-one and 62/100 dollars, as above set forth, all to the damage of this defendant in the sum of five hundred eighty-three and 24/100 dollars.
10. For a ninth defense and by way of a third counterclaim:
1. This defendant alleges, upon information and belief that the plaintiff is a corporation duly organized under the laws of the State of Pennslyvania, with the right to sue and be sued; that the defendant is a resident of the County of Sumter in said State.
2. That on or about February 14, 1925, the plaintiff and defendant entered into a written agreement, copy of which is hereto attached and made a part hereof, reference to the same being craved as often as may be necessary.
3. That in pursuance of said contract this defendant expended large sums of money for the upkeep of the display room, the maintenance of a sales and collection personnel for the carrying out of the terms of said contract, and for the payment of taxes and insurance upon said instruments, together with the license required by the City of Sumter for the operation of said business, all of which was known to the plaintiff through its duly authorized agents, and all of which was required by said contract.
4. That the defendant at his own expense kept and maintained said instruments in salable condition.
5. That under the terms of said contract this defendant was not required and could not be charged with the payment of expenses of any of the agents of said plaintiff unless by investigation it should appear that the defendant had improperly withheld or applied any money, obligation or property due or belonging to said plaintiff.
6. That on or about September the first, 1929, the plaintiff sent its duly authorized agent, one G.G. Freeland, to Sumter, S.C. for the purpose of auditing the books of account of this defendant and assisting in collecting indebtedness due by the customers of the said defendant upon instruments sold under said contract. That although said investigation and audit showed no improper withholding or application of any of said funds or property, the defendant in violation of the terms of said contract unlawfully and improperly, and with the express purpose, so this defendant is informed and believes, of destroying any and all equities the defendant had in the securities mentioned in the eighth paragraph of the complaint, and with the further purpose, so this defendant is informed and believes, of unlawfully and improperly bringing to an end without just cause or excuse the contract hereinabove referred to, charged to said defendant all of the expense of said agent, including a weekly compensation of seventy-five dollars, thereby breaching said contract. That on or about September 30, 1929, the plaintiff, through its duly authorized agent, collected certain funds of which the defendant was entitled to be paid twenty-five per cent. at that time, and converted said entire amount, being approximately the sum of three hundred dollars, to its own use and benefit, thereby converting to its own use approximately seventy-five dollars belonging to said defendant, and this defendant alleges that said conversion was willful, fraudulent and without just cause or excuse. All of said acts breaching said contract to the damage of the defendant in the sum of forty-seven hundred and fifty dollars.
11. For a tenth defense and by way of fourth counterclaim:
1. That the plaintiff is a corporation duly organized under the laws of the State of Pennsylvania, upon information and belief, with the right to sue and be sued; and that the defendant is a resident of the County of Sumter, in said State.
2. That on or about September 22, 1929, by mutual agreement of the plaintiff and defendant, a contract was entered into by and between the plaintiff and the defendant under the terms of which contract the plaintiff hired itself to the defendant at and for the sum of seventy-five dollars per week to act as selling and collecting agent for disposing of the pianos bought by the defendant from the plaintiff then on hand in possession of said defendant, and to collect the indebtedness created by such sales and represented by the notes and securities referred to in paragraph eight of the complaint herein and held by the plaintiff as collateral security to the indebtedness due it by the defendant.
3. That in pursuance of said contract said plaintiff through its agent, entered into the performance of said duty imposed upon it therein.
4. That in violation of the terms and meaning of said contract the plaintiff, through its agents, improperly, willfully and in fraud and violation of the rights of the defendant without consulting said defendant, improperly disposed of a piano at a price less than one hundred fifty dollars of the retail price therefor. That said plaintiff through its agent fraudulently, willfully and unlawfully failed to notify the defendant of said sale and failed and refused to pay and turn over to said defendant the down payment on said piano to which said defendant was entitled, to wit: the sum of one hundred dollars.
5. That in violation of the terms of said agreement the said plaintiff, through its agent, made said sale above referred to in the name of itself, appropriating said down payment to its own use and taking the security for the deferred payments directly to itself, fraudulently and willfully disregarding the defendant's rights therein, all of such acts being to the damage of the defendant in the sum of thirty-five hundred dollars.
12. For an eleventh defense and by way of a fifth counterclaim:
1. Defendant upon information and belief alleges that the plaintiff above named is a corporation duly organized under the laws of Pennsylvania, with the right to sue and to be sued; and the defendant above named is a resident of the County of Sumter in said State.
2. That since the taking by the Sheriff of Sumter County, S.C. of the seven pianos described in the complaint, said Sheriff having taken the same under and by virtue of these proceedings and delivered the same to the plaintiff herein, said plaintiff through its duly constituted agents, in violation of its duty under the contract set up in the complaint herein, and in violation of the implied contract made by its attorneys through their letter to the defendant herein, dated October 8th, 1929, have sold and disposed of the property so taken under these proceedings at prices no more than wholesale and at prices not sufficient to protect in any way the equity of said defendant and at prices far below the prices stipulated in the agreement attached to this answer and counterclaim, as part of this particular defense and counterclaim, reference to the same being craved as often as may be necessary.
3. That said plaintiff through its agent, well knowing that in the installment business at this time in this section, in order to preserve said business, and to protect the integrity of the defendant in his business, it is necessary to grant certain indulgences to delinquent debtors, high-handedly and with the full knowledge that said act or acts would reflect upon the integrity of defendant's business and harm and destroy the same, repossessed most or all of the instruments covered by said security and is disposing and has disposed of the same at ruinous and sacrifice prices with the purpose and effect of doing away with and destroying all of the defendant's equity in said securities. Said plaintiff has unlawfully and, so this defendant is informed and believes, entered into competition with the defendant in his business, selling at prices far below the contract prices stipulated by and between the plaintiff and defendant in the contract above referred to with the purpose and effect of harming the defendant in his business and destroying defendant's business.
4. That by reason of said unlawful, willful and fraudulent acts the defendant has been damaged and will continue to be damaged in his business in that said customers, whose instruments have been so high-handedly repossessed and against some of whom improper interest charges have been made by said plaintiff, have continuously and are continuing to complain of said acts to this defendant, said defendant being unable to protect in any way the rights of said customers and to preserve their good will, and thereby the integrity and honor of the defendant in his business is caused to be questioned, and said defendant is thereby being damaged in his business and will continue to be so damaged by said acts of the plaintiff and the natural consequences thereof. All of said acts being unlawful, malicious, willful and fraudulent on the part of said plaintiff and being to the damage of this defendant in the sum of ten thousand dollars.
Wherefore the defendant prays:
1. That the complaint be dismissed.
2. That the defendant have judgment against the plaintiff in the sum of Twenty-one Thousand Two Hundred Thirty-three and 24/100 ($21,233.24) Dollars.
Attached to this answer and counterclaim is a copy of the same contract attached to the complaint, and also the following paper:
"PAPER A. Weaver 20 ................................. $ 390.00 Weaver Adam ............................... 400.00 Weaver 57 ................................. 410.00 Weaver Player ............................. 590.00 Weaver Player Welte-Mignon (Licensee) ...... 910.00 Bench to Match Weaver Player .............. 24.00 Modern Grand .............................. 695.00 Bench to Match Modern Grand ............... 24.00 Louis XV Grand ............................ 850.00 Weaver Grand Welte-Mignon (Licensee) ...... 1,700.00 York 15 ................................... 260.00 York 16 ................................... 265.00 York 17 ................................... 280.00 York Player ............................... 400.00 York Player Welte-Mignon (Licensee) ....... 760.00 York Grand ................................ 530.00 York Grand Welte-Mignon (Licensee) ....... 1,345.00 Livingston H .............................. 225.00 Livingston Player, Single Valve ........... 335.00 Livingston Player, Double Valve ........... 350.00 Livingston Grand .......................... 415.00 Mercer Piano .............................. 190.00 Mercer Player ............................. 260.00 "Terms: Furnished, as per contract. "DISCOUNT ON CASH SALES"15% discount cash returns in 30 days from date of shipment; 14 per cent discount, cash 60 days; 13 per cent discount, cash 90 days; 12 per cent discount, cash 4 months; 11 per cent discount, cash 5 months; 10 per cent discount, cash after 5 months.
"TERMS UNTIL INSTRUMENTS ARE SOLD"1 per cent premium to be paid in cash each month after 6 months, on instruments not sold in 6 months; one-half of which will be credited on account of the instruments if afterwards sold by the employed.
"TERMS ON LEASE CONTRACTS"Interest at 6 per cent per annum from date of sale or lease, payable annually. 10 per cent discount from principal and interest on all contracts paid out within 12 months from date of sale or lease.
"4-600-JUNE 1924"f.o.b. York, Pa. on all except:
"York Grand ................ f.o.b. New York City
"Livingston Pianos and Players f.o.b. New York City
"Mercer Pianos and Players f.o.b. Indiana."
ORDER OF JUDGE GRIMBALLThis is an action in claim and delivery commenced on or about the 11th day of October, 1929, in which the plaintiff claims, by reason of ownership, the possession of seven pianos alleged to have been placed in the hands of the defendant as the agent for the plaintiff, for the purpose of effecting sales thereof. The complaint asks for no relief except for the possession of the pianos, or the value thereof, in case possession cannot be had, and the complaint sets forth, and has attached thereto, a copy of the alleged contract between the parties for the purpose of showing the manner in which the defendant came into possession of the property, etc.
The plaintiff executed a surety bond when the property was seized, and the defendant has not given any undertaking for the return thereof.
The defendant in due time filed an answer and counterclaim, to which the plaintiff has demurred.
The demurrer, after due notice, was argued before me in open Court at Sumter, S.C. on Saturday, April 5, 1930, and I have reserved my decision thereon until the present time.
Inasmuch as the defenses and causes of action in counterclaim are numerous, and inasmuch as the demurrer is taken to each defense and counterclaim, I shall pass upon them separately herein.
AS TO THE FIRST DEFENSEThe plaintiff demurs to this defense on the ground that the same does not state facts sufficient to constitute a defense in this proceeding, in that the admissions contained in paragraph 1 of the answer, taken in connection with the allegations of this defense, fail to state facts showing, or tending to show, that the plaintiff is not entitled to the possession of the property described in the complaint.
I am clearly of the opinion that the demurrer as to the first defense is well taken, and the same is sustained.
AS TO THE SECOND DEFENSEThe plaintiff demurs to this defense on the ground that the same fails to state facts sufficient to constitute a defense, as no facts are alleged to show, or tend to show, that the plaintiff is not entitled to possession of the property described in the complaint.
I am clearly of the opinion that the demurrer as to this defense should be sustained. Certainly the mere allegation that the interest was charged upon the pianos is not sufficient to show as a matter of law that this would transfer title from the plaintiff to the defendant.
The defendant sets out as a part of his answer and counterclaim what purports to be a copy of the contract, and after the signatures of the parties, there is another page marked "Paper A," in which it is provided that a 1 per cent premium should be paid in cash each month after six months on instruments not sold within that time one-half of which is to be credited on the account of the instruments if afterwards sold by the defendant. Even assuming this provision to be a part of the contract, for the purpose of passing upon this demurrer, there is certainly nothing in this provision which, as a matter of law, would transfer title in the pianos.
It is therefore ordered that the demurrer as to the second defense be, and the same is hereby sustained.
AS TO THE THIRD DEFENSEThe plaintiff demurs to the third defense on the ground that the allegations therein stated failed to allege facts sufficient to constitute a defense, in that no facts are alleged which show, or tend to show, that the plaintiff in not entitled to the possession of the property described in the complaint.
I am clearly of the opinion that the demurrer as to this defense should be sustained. Certainly even a wrongful charge made by the plaintiff against the defendant could not operate to transfer title to the property in dispute.
It is therefore ordered that the demurrer as to the third defense be, and the same is hereby, sustained.
AS TO THE FOURTH DEFENSEThe plaintiff demurs to the fourth defense on the ground that the facts therein stated are not sufficient to constitute a defense, in that no facts are alleged to show, or tend to show, that the plaintiff is not entitled to the possession of the property described in the complaint.
The allegations in this defense are mostly legal conclusions. No elements of a contract are set forth as matters of fact, and even if a new contract had been entered into, no facts are alleged showing, or tending to show, a transfer of title in and to the property described in the complaint.
It is therefore ordered that the demurrer to the fourth defense be, and the same is hereby, sustained.
The plaintiff demurs to the allegations contained in the fifth defense on the ground that the same failed to state facts sufficient to constitute a defense in this proceedings, in that no facts are alleged to show or tend to show that the plaintiff is not entitled to possession of the property described in the complaint.
The demurrer as to this defense is sustained, as there is certainly no allegation in this defense which would tend to show that the title of the plaintiff in and to the property described in the complaint has been transferred to the defendant.
AS TO THE SIXTH DEFENSEThe plaintiff demurs to the sixth defense on the ground that the allegations thereof fail to state facts sufficient to constitute a defense in that no facts are alleged to show or tend to show that the plaintiff is not entitled to the possession of the property described in the complaint.
The demurrer as to this defense is sustained, as there are certainly no allegations contained therein which would tend to show that the title to the property described in the complaint has been transferred from the plaintiff to the defendant.
AS TO THE SEVENTH DEFENSE AND FIRST COUNTERCLAIMThe plaintiff demurs to the seventh defense and first counterclaim on the ground that the allegations contained in this defense and counterclaim do not state facts sufficient to constitute a defense or counterclaim in this proceeding, in that no facts are alleged to show, or tend to show, that the plaintiff was not entitled to the possession of the property described in the complaint; and no facts are alleged to show any damage to the defendant by reason of the taking of the property by the plaintiff.
The demurrer to this defense and counterclaim is sustained. The defendant bases his defense and counterclaim upon the proposition that the charging of the premium of 1 per cent per month transferred the title in the property from the plaintiff to the defendant, and this defense and counterclaim are based upon this proposition.
There are certainly no allegations of fact in this defense and counterclaim which would tend to show as a matter of law that the title to the property had been transferred from the plaintiff to the defendant and there are no allegations of fact showing any damage.
AS TO THE EIGHTH DEFENSE AND SECOND COUNTERCLAIMThe plaintiff demurs to the eighth defense and second counterclaim on the grounds: (1) That this defense fails to state facts sufficient to constitute a defense, in that no facts are alleged to show, or tend to show, that the plaintiff is not entitled to the possession of the property described in the complaint; (2) no facts are stated sufficient to constitute a counterclaim, in that the counterclaim herein sought to be set up is one sounding in tort, and of no such nature as is permitted by law to be interposed by the defendant in claim and delivery proceedings; and (3) that the allegations of this counterclaim show that the money alleged to be usurious interest has already been paid to the plaintiff and the allegations fail to state facts sufficient to constitute a counterclaim on said account.
As to the first ground, the same is sustained, as there are certainly no facts alleged which would tend to show as a matter of law that title to the property described in the complaint has been transferred from the plaintiff to the defendant.
I shall consider the other two grounds together, as they were argued at the hearing. A copy of the alleged contract is attached to the complaint, and another copy to the answer and demurrer, which latter also contains an exhibit marked "Paper A," which for the purposes of the demurrer I shall consider as being a part of the contract, and in this paper we find the following provision: "Terms until instruments are sold one per cent premium to be paid in cash each month after six months, on instruments not sold in six months; one-half of which will be credited on account of the instruments, if afterwards sold by the employed."
The defendant, in his pleading, contends that this is usurious interest, while the plaintiff, in argument, contends that it is only a premium charged against the agent for the purpose of inducing him to exercise himself in making prompt sales of the instruments which he engaged himself to sell for his principal. In the first place, I do not see any of the elements of interest in this transaction. "Interest is the compensation allowed by law, or fixed by the parties, for the use or forbearance of money or as damages for its detention." 33 C.J., 178. There is certainly no indebtedness created by this contract and nothing upon which interest may be charged with respect to the matters now under consideration. I therefore hold that this provision in the contract is just what it purports to be, an agreement between the parties that the agent shall pay a premium on instruments not sold within six months; and I find nothing in this provision to constitute usurious interest or to be against public policy.
In the second place, even if it were usurious interest, the defendant would have only two alternative remedies — either to collect the forfeit in a separate action, or counterclaim the same in an action brought to recover the principal sum. The present action is certainly not an action brought to recover the principal sum and therefore usurious interest cannot be counterclaimed herein. Section 3639, Volume 3, Code 1922.
This suit being penal in its nature, one seeking a remedy thereunder must follow the course therein laid down. Porter v. Jefferies, 40 S.C. 92, 18 S.E., 229.
It is therefore ordered that the demurrer as to this defense and counterclaim be, and the same is hereby, sustained.
AS TO THE NINTH DEFENSE AND THIRD COUNTERCLAIMThe plaintiff demurs to the ninth defense and third counterclaim on the grounds: (1) That the allegations thereof fail to state facts which show, or tend to show, that the plaintiff is not entitled to the possession of the property described in the complaint; (2) that the same failed to show facts sufficient to constitute a counterclaim, in that no facts are alleged showing, or tending to show, injury to the defendant on account of any charge made against him by the plaintiff; and (3) that the same failed to state facts sufficient to constitute a counterclaim, in that a counterclaim of this nature cannot be interposed in this proceeding under any of the provisions of the Code.
The first ground of this demurrer is sustained, as there are certainly no facts alleged in this defense which would tend to show a transfer of title from the plaintiff to the defendant.
As pertinent to this case, the counterclaim which may be set up by the defendant in a claim and delivery proceeding of this nature is governed by the following sections of the Code of Civil Procedure 1922: Section 428, which provides that in all actions sounding in tort, the defendant shall have the right to plead a similar cause of action by way of counterclaim, provided that the cause of action of the plaintiff and defendant arose out of the same state of facts. Also Section 542 of the Code of Civil Procedure 1922, which provides for a counterclaim by the defendant for damages by reason of the detention or taking or withholding of the property; and also where the action is for recovery of personal property pledged to secure credit or debt, the defendant may plead a counterclaim arising out of the same transaction. And, lastly, Section 600 of the Code of Civil Procedure 1922, which provides that the defendant may counterclaim for the taking and withholding of the property. This Section further provides that after bond is given no punitive damages shall be awarded for anything thereafter occurring.
Now, let us apply these provisions of the Code to this counterclaim. Certainly nothing set up therein as the defendant's cause of action in counterclaim can be said to rise out of the same state of facts as the plaintiff's cause of action in claim and delivery. The plaintiff bases its right to possession in original ownership, and simply sets up the contract to show the bailment to the defendant for the purposes of sale, or to show that the defendant was lawfully in possession of the property as the agent of the plaintiff. The state of facts herein set out by the defendant as constituting his cause of action is entirely distinct as to point of time, nature and in every other respect.
Next, applying Section 542 of the Code, we find that the defendant does not allege any facts to show damage by reason of the detention or taking and withholding of the property, nor is this action one for the recovery of personal property, which has been pledged in any way to secure credit or debt. The provisions of this Section of the Code therefore cannot avail the defendant herein.
Applying Section 600 of the Code, we do not find any allegations of fact in this counterclaim showing damages for the taking and withholding of the property.
It is therefore ordered that the demurrer as to this defense and counterclaim be, and the same is hereby, sustained.
AS TO THE TENTH DEFENSE AND FOURTH COUNTERCLAIMThe plaintiff demurs to this defense and counterclaim on the grounds: (1) That the allegations thereof fail to state facts sufficient to constitute a defense in this proceeding, in that no facts are alleged which show or tend to show that the plaintiff is not entitled to the property described in the complaint; (2) that the allegations thereof fail to state facts sufficient to constitute a counterclaim, in that no facts are alleged as to the terms and conditions of the new contract sought to be set up, no allegations to show that the terms and conditions were broken by the plaintiff, and no allegations showing damages to the defendant; and (3) that the same does not state facts sufficient to constitute a counterclaim herein, in that a counterclaim of this nature cannot be set up in this proceeding, not being provided for by law.
As to the first ground of this demurrer, the same is sustained. This defense and counterclaim are based upon the proposition that the contract attached to the complaint and to the answer and counterclaim show a sale of the pianos by the plaintiff to the defendant. I hold that the contract does not show a sale, but it is simply an agency contract whereby the plaintiff employs the defendant as its agent, for the purpose therein stated, with the right to terminate the agency at the pleasure of either party as to the selling or leasing of instruments. This counterclaim fails to allege any terms of any new contract which were violated by the plaintiff.
My observation with regard to the ninth defense and third counterclaim is also applicable herein and I shall not repeat it.
It is therefore ordered that the demurrer as to this defense and counterclaim be, and the same is hereby, sustained.
AS TO THE ELEVENTH DEFENSE AND FIFTH COUNTERCLAIMThe plaintiff demurs to this defense and counterclaim on the grounds: (1) That the same fails to state facts sufficient to constitute a defense herein, in that no allegations are made which show, or tend to show, that the plaintiff is not entitled to the possession of the property; (2) no facts sufficient to constitute a counterclaim herein, in that the alleged wrongful acts are alleged to have occurred since the plaintiff executed its undertaking and had the property seized thereunder; and (3) no sufficient facts are stated to constitute a counterclaim, in that the same is not of such nature as the law allows to be set up in a proceeding of this nature.
The first ground of this demurrer is sustained, as there are no allegations to show any transfer of title.
The second ground apparently refers to the provisions of Section 600 of the Code of Civil Procedure 1922, which provides no punitive damages can be recovered after the giving of security and seizure of property.
The allegations of this counterclaim do not show any breach of any duty shown either by the pleadings or the contract to be owing by the plaintiff to the defendant, nor is this such a counterclaim as is provided for by law to be set up in a proceeding of this nature. My observations applicable hereto are hereinbefore stated as to the ninth defense and third counterclaim.
In the case of Sizer Co. v. Dopson, 89 S.C. 535, 72 S.E., 464, it is held that damages for the destruction of a business are not recoverable as a counterclaim in an action for claim and delivery.
It is therefore ordered that the demurrer as to this answer and counterclaim be, and the same is hereby, sustained.
In passing upon the matters herein involved, I have been guided by consideration of the law as described in the following cases, and having in view the amendments to the Code and their bearing upon the law as declared by the Supreme Court. Williams v. Irby, 15 S.C. 458; Badham v. Brabham, 54 S.C. 400, 32 S.E., 444; Sparks v. Green, 69 S.C. 198, 48 S.E., 61; Sizer Co. v. Dopson, 89 S.C. 535, 72 S.E., 464; Woodruff Machinery Mfg. Co. v. Timms, 93 S.C. 99, 76 S.E., 114; McMaster v. Ford Motor Company, 122 S.C. 244; 115 S.E., 244, 29 A.L.R., 230.
This last case is authority for the proposition that a lawful act even done maliciously is no ground for damages.
In my opinion, this case is easily distinguishable from the case of Bennett Cadillac Company v. Slater, 120 S.C. 202, 112 S.E., 918. In that case the facts were amply sufficient to warrant the counterclaim therein set up under Section 542 of the Code of Civil Procedure 1922, as the damages to the defendant were alleged to have occurred in the taking of the property. That counterclaim was also sustained under Section 428 of the Code, as both the plaintiff and defendant had seized the cars in question and the damages claimed arose out of the same state of facts. In original ownership dating back for several years, as is shown by the defendant's claim for interest paid; whereas the various claims for damages set up by the defendant arose out of sundry and various alleged torts occurring immediately previous to the commencement of this action or subsequent thereto.
It is ordered and adjudged that the answer and counterclaim interposed by the defendant be, and the same is hereby, stricken out.
It is further ordered that in case the defendant wishes to amend his answer or counterclaim and is able to do so, so as to state a valid defense, or cause of action by way of counterclaim, that he shall have twenty days from the date hereof to do so, but this shall not be construed as giving the defendant authority to restate any of the defenses or counterclaims herein struck out, unless the same are in compliance with the rulings herein made.
If the defendant complies with the permission herein granted, the plaintiff shall have the right to reply or demur to the same or move to have the same stricken out if not in compliance with this order.
Messrs. L.E. Purdy and M.M. Weinberg, for appellants, cite: Defendant entitled to have defense passed on by jury: 105 S.C. 137. Contract passed title reserving a lien to vendor: 74 S.C. 451; 40 S.C. 529; 112 S.C. 243; 93 U.S. 664. "Premium" was interest: 135 S.C. 190; 60 S.C. 23; 68 S.C. 236. Counterclaim proper: 1 Code Proc. 1922, Sec. 248; 120 S.C. 202; 152 S.E., 876; 61 S.C. 166. Counterclaim in claim and delivery action: 89 S.C. 535; 152 S.E., 652.
Messrs. Epps Levy, for respondent, cite: Conclusion of fact or of law not admitted by demurrer: 34 S.C. 362; 104 S.C. 268; 104 S.C. 311; 116 S.C. 77. Bailment properly recorded in chattel mortgage book: 3 Civil Code, 1922, Sec. 5519; 27 S.C. 646. Pleading foreign statute: 80 S.E., 530. Contract did not call for interest: 33 C.J., 178. Counterclaim did not arise out of same transaction: 153 S.C. 43.
October 8, 1930. The opinion of the Court was delivered by
The order of his Honor, Judge Grimball, is entirely satisfactory to the Court, and for the reasons stated by him the same is affirmed.
MESSRS. JUSTICES BLEASE and STABLER concur.
MR. JUSTICE CARTER dissents.
MR. CHIEF JUSTICE WATTS did not participate.
The plaintiff, Weaver Piano Company, Inc., commenced this action against the defendant, C.H. Curtis, in the Court of Common Pleas for Sumter County, October 11, 1929, for the recovery of certain personal property, consisting of seven pianos, alleged by the plaintiff to be its property. The defendant filed an answer, setting up several defenses and counterclaims, to which the plaintiff demurred. The demurrer was heard by his Honor, Judge William H. Grimball, April 5, 1930, who issued an order dated April 12, 1930, sustaining the same. From the order sustaining the demurrer to defendant's answer the defendant has appealed to this Court.
The pleadings in the case are unusually lengthy, due to the long and complicated contract which the parties executed, out of which the action arose, and the appellant presents a number of exceptions under which many questions are raised; but since under my view of the case that there should be a reversal, and desiring to avoid any prejudgment of the merits of the case, I shall consider only such questions as I deem necessary without expressing any opinion as to the other questions presented and without adjudicating the matters in connection therewith.
In accord with the allegations of the complaint, it is the contention of the plaintiff that, under the contract between the parties, the property in question was placed with the defendant as the sales agent of the plaintiff, and that the defendant has not now and has never had any interest in the same. It is the further contention of the plaintiff that the defenses and counterclaims attempted to be set up in the answer of the defendant do not constitute a defense or counterclaim to the plaintiff's alleged cause of action. On the other hand, the defendant contends, in accord with the allegations contained in his answer, that under the contract in question, especially when construed in connection with the dealings between the parties, the property in question was sold to the defendant and the plaintiff had a lien against the property for the price of the same until paid; that under the contract and by reason of the dealings between the parties, a debtor and creditor relation arose between the parties and the contract operated as a contract of sale. The defendant also contends, in accordance with the allegations contained in his answer, that the parties entered into a new agreement which took the place of the original contract concerning the said property.
The written contract, which is attached to the complaint and to which reference herein was first made, is not clear in its meaning as to whether it was the intention of the parties that the property in question be delivered to the defendant as the sales agent of the plaintiff, or whether it was intended to create the relation of debtor and creditor, and, as a result, when the price of the property was paid the defendant became the owner of the property free of all claims of the plaintiff. The defendant alleged that the plaintiff unlawfully and fraudulently violated the contract, and further alleged and contends that the plaintiff made wrongful charges against him in connection with said property, and in effect alleged that he did not owe the plaintiff any amount on the property at the time it was seized by the plaintiff in this action. It is not for this Court to say whether these allegations are true or not, but taking all of the allegations, those made by the plaintiff as well as those made by the defendant, and considering them as a whole in connection with the written contract between the parties, in my opinion questions were raised upon which his Honor, the trial Judge, should have received testimony. According to my view, the written contract is not clear, but is ambiguous on the material matters to which I have hereinbefore referred, and I think that the demurrer should have been overruled, the case ordered to trial, and testimony received pertinent to the facts alleged. By such a course, the intention of the parties to the contract could have been ascertained and the trial Judge would have been in a position to determine whether or not any question was raised for the jury under the law governing such matters. In this connection I desire to state that, under my view, if the defendant paid to the plaintiff the amount of the price of the property for the same, and at the time of the seizure of the property by the plaintiff owed the plaintiff nothing, as contended by the defendant, then the seizure of the property by the plaintiff was wrongful, regardless of whether the property was placed with the defendant as the sales agent of the plaintiff or whether the relation of debtor and creditor was created under the contract and dealings between the parties; and under such circumstances the defendant would be entitled to recover against the plaintiff such damages as he might be able to prove that he suffered on account of the alleged wrongful seizure, measured, of course, by the law governing such cases.
On the question of breach of the contract and as to counterclaims and damages, attention is called to the following cases: Green v. Washington, 105 S.C. 137, 89 S.E., 649; Bennett Cadillac Co. v. Slater, 120 S.C. 202, 112 S.E., 918; International Vegetable Oil Co. v. Townsend et al., 156 S.C. 103, 152 S.E., 876.
In view of the length of the pleadings, which, together with the order and exceptions, cover about thirty-nine printed pages, the same will not be ordered reported, since, in my opinion, reporting the same with the case would serve no useful purpose.
It is my opinion that the judgment of this Court should be that the appeal be sustained and the case remanded for trial, without prejudice to the plaintiff to raise in the Court below any question not herein passed upon, and with leave to the plaintiff to move before the Court below to require the several defenses or counterclaims set up or attempted to be set up in defendant's answer made more definite and certain, and with leave to the defendant to amend his answer as he may be advised, consistent with the rules of pleading.