V.P. Randolph & Co. v. Walker

• Decision Date: 11 September 1907
• Citation: 59 S.E. 856,78 S.C. 157
• Parties: V. P. RANDOLPH & CO. v. WALKER.
• Court: South Carolina Supreme Court

59 S.E. 856

78 S.C. 157

V. P. RANDOLPH & CO. v. WALKER.

Supreme Court of South Carolina

September 11, 1907

Appeal from Common Pleas Circuit Court of Fairfield County Dantzler, Judge.

Action by V. P. Randolph & Co. against D. V. Walker. Judgment for plaintiff, and defendant appeals. Affirmed.

A. S. & W. D. Douglass, for appellant.

Nelson & Nelson and Buchanan & Hanahan, for respondent.

WOODS J.

The complaint alleges plaintiff's deposit with defendant of the sum of $1,498.03 during the months of January, February and March, 1905, defendant's agreement to hold the money as plaintiff's agent subject all times to his order, the tortious conversion of $1,076.03 by defendant to his own use and his refusal to return to plaintiff the money so converted.

The first defense is a general denial. As a second defense, the defendant alleges the receipt by him of several different sums of money from the plaintiff between May 23, 1905, and June 14, 1905, disbursements by him at the direction of the plaintiff, leaving a balance in his hands on June 13, 1905, of $1,421.31, and notice to the plaintiff that on that day he had "retained and applied $1,076.03 thereof to amount due defendant by plaintiff on account of certain transactions and contracts by plaintiff for him, in buying and selling for future delivery cotton, corn, wheat, stocks and shares of stock, and other commodities and produce, said contracts having been made during the months of January, February and March, 1905, said amount of $1,076.03 having been paid by plaintiff or its duly authorized agent as margins to cover any loss that might be sustained by plaintiff in the buying and selling by plaintiff for defendant, and being without any intention on the part of either to make an actual delivery in kind, but being nothing more nor less than gambling on the future prices of said cotton, corn, wheat, stocks or shares of stocks, and other commodities and produce." The defendant further alleges payment to the plaintiff of $421.49, plaintiff's failure to respond to his notice of the appropriation of the remainder, $1,076.03, now claimed, or to make any demand on him until September 2, 1905, and he alleges the plaintiff is estopped from claiming the fund, because, relying upon plaintiff's acquiescence, he had used it as his own and for his own purposes. As the case turns upon a certain question of pleading involving the precise language of the counterclaim, it is necessary to set it out in full: "(1) That plaintiff being a corporation under the laws of the state of Pennsylvania, the defendant, at various times between 8th day of January, 1905, and the 14th day of March, 1905, delivered to and deposited sundry sums of money, aggregating $1,076.03, with one R. J. McCarley, one J. R. Thompson, and one J. Boyd Stevens, who did business in the town of Winnsboro, in the county and state aforesaid, at the times of such deposits, as the Winnsboro Cotton Exchange, commonly called a bucket shop, and were the duly authorized agents of plaintiff. (2) That said deposits or payments, aggregating $1,076.03, were made for the purpose of contracts with the plaintiff to buy and sell cotton, wheat, corn, stocks or shares of stocks, or other commodities and produce for future delivery, and the same was held by the plaintiff as margins to cover the loss that might be sustained in such buying and selling by plaintiff for defendant. That said contracts were made between plaintiff and defendant without any intention on the part of either that said cotton, corn, wheat, stocks or shares of stocks, or other commodities and produce should be actually delivered in kind; said contracts being, in fact, acts of gambling on the future prices of cotton, corn, wheat, stocks or shares of stocks, and other commodities and produce. (3) That plaintiff has refused to carry out its contracts as aforesaid with defendant and refuses to pay him the said sum of $1,076.03, although plaintiff gave defendant notice that he released all profits that might arise on said contracts. Wherefore said defendant demands judgment against the plaintiff for said sum of $1,076.03, with interest thereon from the 13th day of June, 1905, and for costs."

The second defense of the answer was struck out as irrelevant and redundant because not set up within the limit of three months prescribed by section 2312 of the Civil Code of 1902, for the recovery of losses on contracts in futures, where actual delivery is not contemplated. A demurrer to the counterclaim was sustained on the ground that the complaint states a cause of action for tort and not ex contractu; and as the cause of action alleged in the counterclaim did not arise out of the transaction set forth in the complaint as the foundation of plaintiff's claim, and was not connected with the subject of the action, it was held not available as a counterclaim. The case then went to trial, and the defendant, being sworn as a witness on the plaintiff's behalf, proved deposits by the plaintiff in the form of several drafts, payable to defendant's order, and of cash turned over to him by one Morris, aggregating in all $1,572.51 received, and testified to his disbursement of part of the fund as agent for the plaintiff. All evidence as to cotton speculation was excluded, and the circuit judge directed a verdict for the plaintiff for the amount claimed. If the circuit judge was right in striking out the second defense, and sustaining the demurrer to the counterclaim, it follows he was right in excluding the evidence as to the counterclaim and second defense, and in directing a verdict.

1. We consider first the demurrer to the counterclaim. Code Civ Proc. 1902,§ 171, requires that a counterclaim must arise "out of one of the following causes of action: (1) A cause of action arising out of the contract or transaction set forth in the complaint as the foundation of the plaintiff's action or connected with the subject of the action. (2) In an action arising on contract, any other cause of action arising also on contract, and existing at the commencement of the action." The first subdivision may be left immediately out of view, for the cause of action set up as a counterclaim obviously does not arise out of anything alleged in the complaint, nor is it in any way connected with the subject of the plaintiff's action. As the second subdivision allows any other cause of action, arising on contract existing at the commencement of the action, to be set up as a counterclaim in an action arising on contract, the demurrer was properly sustained, unless the plaintiff stated a cause of action on contract. The definitions of tort and contract are familiar, but there is no certain test by which the court can be guided in determining whether a particular action is ex delicto or ex contractu. Under the old practice, the pleader could prevent any doubt by the use of certain formulae, but the Code lays down no rule. It may be well to refer to some of our own cases on the subject, though in none of them was just such a complaint as is here presented passed on. In Abrahams v. Bank, 1 S. C. 441, 7 Am. Rep. 33, plaintiff left with defendant bank, as security for a loan of $4,000 in Confederate money, $4,000 of the bank's own bills, which it was agreed should be laid aside and returned to the plaintiff upon his repayment of the Confederate money. The bills were kept in a separate package and not placed to the credit of the plaintiff on his bank book, and he never intended to...