Judson Mills v. Norris

• Decision Date: 21 July 1932
• Docket Number: 13455.
• Citation: 164 S.E. 919,166 S.C. 422
• Parties: JUDSON MILLS v. NORRIS et al.
• Court: South Carolina Supreme Court

164 S.E. 919

166 S.C. 422

JUDSON MILLS v. NORRIS et al.

No. 13455.

Supreme Court of South Carolina

July 21, 1932

Appeal from Common Pleas Circuit Court of Greenville County; H. F Rice, Judge.

Action by Judson Mills, a corporation, against D. L. Norris and another. From an adverse order, the defendants appeal.

Affirmed.

The order of Judge Rice, requested to be reported, follows:

This matter comes before me, (1) upon a motion made by defendants to strike certain parts of the complaint, and (2) upon a motion on the part of the plaintiff to refer the issues to the master.

The defendant contends that the action is one of law upon the notes, and that the allegations sought to be stricken have no relevancy to such an action. The plaintiff, on the other hand, contends that the suit is in equity for the foreclosure of a lien by way of pledge upon certain stocks set forth in the complaint.

If the case is one in equity, the facts set forth in the complaint to which objection is made, are pertinent as showing the propriety and necessity for resorting to a court of equity and in showing the inadequacy of the legal remedy.

It is well established by the authorities that suit may be instituted in equity for the foreclosure of mortgages on personal property and of liens by way of pledge upon stock and bonds, and that this is especially true where the debt and/or the lien, is in dispute. In such a suit all questions arising under the plaintiff's claim can be determined making an end to litigation. See Bryan v. Robert, 1 Strob. Eq. 334; Stokes v. Liverpool & L. & G. Ins Co., 130 S.C. 521, 126 S.E. 649; Broom v. Armstrong, 137 U.S. 266, 11 S.Ct. 73, 34 L.Ed. 648; 49 C.J. 1013, 1014; 21 R. C. L. § 54; Jones on Pledges,§§ 644, 645, 646 and 648; Pomeroy on Eq. Jur. (4th Ed.) § 1230; 6 Fletcher on Corp. § 3931; 6 Thompson on Corp. (3d Ed.) § 4293.

Nor is the nature of the action changed by reason of the fact that the defendants have, in their answers, set up defenses and counterclaims based upon alleged misrepresentations in the transaction upon which the plaintiff's note and pledge are predicated. The questions raised by these defenses and counterclaims directly affect the validity of the plaintiff's lien and the question as to the amount due upon the debt secured by the lien. Where in actions of foreclosure, the defendant sets up a defense and/or a counterclaim affecting the consideration, and arising out of the transaction in which the mortgage or lien was created, the authorities hold that the issues thus raised are equitable and are to be tried by the court upon its equity side. Hunt v. Nolen, 46 S.C. 551, 553, 24 S.E. 543; McLaurin v. Hodges, 43 S.C. 187, 20 S.E. 991; Armour Fert. Works v. Burckhalter, 141 S.C. 232, 237, 139 S.E. 465; Mobley Co. v. McLucas, 99 S.C. 99, 82 S.E. 986.

It is my conclusion, therefore, that the matters set forth in those portions of the complaint to which objection has been made are relevant to the issues involved in the proceeding. Paragraph XI gives the context of a letter from plaintiff's attorneys to the defendants and of their reply. It probably would have been better pleading to have set forth the substance of these letters, but as I understand the motion, the objection is upon the ground of the relevancy of the matters contained in those portions sought to be stricken.

It is therefore, ordered that the motion to strike out certain allegations of the complaint be, and the same hereby is, refused.

I think this is a case which should be referred to the master for the purpose of taking the testimony which, in my opinion, will probably involve matters of accounting, but I am not disposed to require...