Jackson v. Carter

• Citation: 121 S.E. 559,128 S.C. 79
• Decision Date: 23 February 1924
• Docket Number: 11428.
• Parties: JACKSON v. CARTER ET AL.
• Court: South Carolina Supreme Court

121 S.E. 559

128 S.C. 79

JACKSON v. CARTER ET AL.

No. 11428.

Supreme Court of South Carolina

February 23, 1924

Appeal from Common Pleas Circuit Court, Aiken County; J. W. De Vore Judge.

Action by W. H. Jackson against F. A. Carter and another. Judgment for plaintiff, and defendants appeal. Affirmed.

John F Williams, of Aiken, for appellants.

R. L Gunter, of Aiken, for respondent.

MARION J.

Action by the payee to recover against the makers of a promissory note. From judgment for the plaintiff, the defendants appeal.

The defense was that the note was "without consideration" and that the consideration "entirely failed." The nature of the contentions embraced within the exceptions necessitates a somewhat extended preliminary reference to the pleadings and to the evidential facts.

On July 1, 1919, F. A. Carter and G. W. Byers, the appellants here, executed and delivered to W. H. Jackson, the respondent, their promissory note in writing, and thereby promised to pay to Jackson the sum or $601.85 on December 1st after date, with interest at 8 per cent. for "value received." Answering the complaint setting forth the cause of action on the note, the defendants, Carter and Byers, admitted the execution of the note and that it had not been paid, but alleged that it was "wholly without consideration" and that the consideration had "entirely failed." The facts set forth in the answer to support the legal conclusion as to want and failure of consideration, are substantially as follows:

That the plaintiff, Jackson, was interested in a tool-selling business with the defendant Byers; that the defendant Carter entered into an agreement with the plaintiff, Jackson, to purchase his interest in that business; that the plaintiff represented to Carter "that the business was profitable and paying, so much so that he was willing, if the defendant would execute to him the note described in the complaint and get his codefendant, G. W. Byers, to sign the same with him, that plaintiff was willing to hold the note, and to make no demand for payment until enough of the coupons used in the business had been disposed of to pay the note"; that the foregoing representations as to the profitableness of the business were false, and that plaintiff knew them to be false; that the defendant Carter relied upon the false representations as to the "status and condition of the business and the profitableness thereof and the value of the tools sold by the plaintiff"; that the business was a "dead loss to the plaintiff and these defendants"; that the defendants had offered to pay the note by returning "coupons"; that the defendant Byers also signed the note upon the aforesaid representations; that, while Byers had been financially interested in said business with the plaintiff, the plaintiff had been in active charge, and Byers was not fully aware of the situation, etc.

From the evidence adduced it appears that the plaintiff, Jackson, and the defendant Byers were partners in the business of selling a tool, called a "jack," under the terms of a "special dealers' contract" in writing, which had been entered into by them with the "owner" and the manufacturer of said tool, whereby it was provided that Byers and Jackson were to be furnished 1,000 of these tools during a period of one year from April 1, 1919, to be sold in Orangeburg, Calhoun, and Dorchester counties, for the consideration of $1 in cash paid by them and received by the owner on each of the tools, and the payment of the balance of $3 on each tool to the manufacturer as they were ordered out. The $1,000 paid to the "owner" by Byers and Jackson, each paying $500 were evidenced by "coupons," each coupon representing $1, which coupon, together with $3 in cash, entitled the dealers to have one of the jacks shipped. Prior to July, 1919, Byers and Jackson sold, or took orders, for a number of these tools. In July, the defendant Carter, who was a son-in-law of Byers, living on the same place with him, bought Jackson out. Jackson sold to him his half "interest in the business," which consisted of the "dealers' contract," the $1,000 in coupons acquired by Byers and Jackson thereunder, the orders taken, and one or more demonstration jacks. The purchase price paid for the "interest" represents the consideration of the note which Carter and Byers gave to Jackson, the note here in suit.

Thereafter Carter and Byers took orders for a large number of the machines, which were sold at $12.50 apiece. They ordered out from the manufacturer 425 jacks in one lot, using the coupons on these orders. They had a profit of over $6,000 on the machines which they had sold or had received orders for. They had trouble in delivering the jacks and getting customers to pay for them. Some of this was apparently due to delay in receiving a shipment mislaid by the carrier. But the cause upon which the defendants mainly relied to explain the failure of their customers to take the jacks was that the machines "were worthless." There is nothing in the evidence tending to show that the machines shipped by the manufacturer on the defendants' order were in any wise different from or inferior to the sample or demonstration machines which Byers and Carter had used in selling the jack. Byers had been in the business with the plaintiff, Jackson, at least three months before he and his son-in-law, Carter, bought Jackson's "interest." Carter had full opportunity to examine the demonstration jack, the dealers' contract, the coupons, and the orders taken, before he purchased. There is no evidence tending to prove that the plaintiff, Jackson, had anything to do with the failure of Byers and Carter to deliver and collect for the jacks sold by them.

The exceptions, eight in number, will be considered in order:

First. It is charged that the trial court erred in excluding a certain "letter from the company," offered in evidence by the defendants. The exception is overruled, for the reason that neither the letter nor any agreed statement of its contents is set out in the record. Assuming that it was of the nature and purport suggested in the exception, its exclusion as irrelevant was within the sound discretion of the trial court.

Second. Error is imputed to the trial judge in charging, with respect to the alleged failure of consideration of the note:

"And unless the consideration for which it was given failed, and failed on account of the representations made by the plaintiff in this case to the defendants, as alleged in the complaint, that is a valid note, and plaintiff would be entitled to recover."

The use of the word "complaint" for "answer" in the foregoing statement was a verbal inaccuracy, which could not have misled the jury. Appellants do not so contend, but do contend that "the court was too limited in laying down this principle," in that "even though there was no false representation, if the things for which the coupons were exchanged were worthless, the note would be invalid for that reason." In the view that the defense of a total failure of consideration would be available under the issue raised by a general denial (3 R. C. L. 944, par. 140), the answer did not interpose a general denial. The execution of the note was admitted, and the defendants then undertook to set out the facts which rendered the note invalid. Upon analysis, the somewhat involved allegations of the answer amount to no more than an averment that plaintiff made certain false representations, which defendants relied upon in executing the note. In construing the answer to mean that the failure of consideration relied upon by defendants was "on account of the representations made by the plaintiff to the defendants as alleged," we cannot say there was prejudicial error. If there had been error, it would have consisted of a misstatement of the issues, which should have been called to the court's attention on the trial. The exception is overruled.

Third. It is charged that the trial court committed error in instructing the jury to this effect:

"The defendants in this case allege, and it is their contention, that the plaintiff promised not to push this note, not to call on them for the payment of it, until they had sold the jacks. I charge you that that promise is null and void, because it is based on no consideration," etc.

It is contended that the plaintiff's promise was a part of a valid contemporaneous verbal contract between plaintiff and defendants, for which the execution of the note constituted a sufficient consideration on the part of the defendants. The answer alleged that plaintiff represented to the defendant Carter that the "business was profitable and paying, so much so that he was willing" to hold the note, etc. The promise is...