Ludden & Bates Southern Music House v. Hornsby

• Decision Date: 10 September 1895
• Citation: 22 S.E. 781,45 S.C. 111
• Parties: LUDDEN & BATES SOUTHERN MUSIC HOUSE v. HORNSBY.
• Court: South Carolina Supreme Court

22 S.E. 781

45 S.C. 111

LUDDEN & BATES SOUTHERN MUSIC HOUSE v. HORNSBY.

Supreme Court of South Carolina

September 10, 1895

Appeal from common pleas circuit court of Richland county; Benet Judge.

Action in replevin by the Ludden & Bates Southern Music House, a corporation, against Martha A. Hornsby. Defendant answered setting up a counterclaim in equity, and, upon reference of the case to a master, plaintiff's demurrer thereto was sustained. From an order of the circuit court reversing the ruling of the master, and ordering the case back to him for trial, plaintiff appeals. Affirmed.

The order referred to is as follows:

"The plaintiff, a corporation duly incorporated under the laws of the state of New Jersey, brings its action in claim and delivery against the defendant, and alleges that under the terms of a 'lease,' hereto attached as an exhibit, it leased a certain musical instrument, to wit, an organ, to the defendant, upon the terms, and subject to the conditions, therein particularly set forth, which permitted her to buy said organ for the sum of one hundred and fifteen dollars. The defendant, in answering said complaint, admits the execution of the paper termed a 'lease,' and alleges that certain payments, aggregating sixty-five dollars, have been made by her under its terms; that, after paying said sum, she has discovered that a fraud has been practiced upon her by the plaintiff, whereupon she has refused to make further payments, and has offered to restore the organ to plaintiff upon the return of the money obtained from her by reason of the fraud and imposition complained of. The alleged fraud, as charged in the answer, amounts to this That at the time of, and before, the signing of the lease under which plaintiff proceeded, the plaintiff represented to defendant that the instrument in suit was a new one, which had never been out of its storeroom, and that it was, in all respects, in good order; whereas she has discovered that it is a worn and second-hand instrument, worth no more than the sum already paid by her to plaintiff, whereupon she has refused to pay any more of the installments claimed by said plaintiff. Thereupon a consent order was made, referring the case to the master for Richland county, with instructions to take the testimony and report upon all matters of law and fact. At the first reference held by that officer the plaintiff interposed an oral demurrer to the answer, on the ground that the affirmative defenses set up in the answer did not state facts sufficient to constitute a cause of action. At first the master overruled the demurrer, but, after the testimony was all in, he entertained and sustained it, and having dismissed the affirmative defenses interposed in the answer, reported to this court his finding that the demurrer was well taken. Upon exceptions having been filed by the defendant, the case comes before me for consideration.

"I shall not address my remarks to the exceptions as filed, but rest my decision upon the ground, raised by the answer, that fraud and imposition were practiced upon the defendant in obtaining her signature to the contract of lease which is the foundation of the pending controversy. It is hardly necessary to make refutation of the master's position that an answer cannot change a law case into an equity case. The case (Maxwell v. Thompson, 15 S.C. 612) which he cites to sustain that doctrine does not apply here, where a consent order has been made, based upon an equitable defense, referring all issues of law and fact to him for his determination. See Adicks v. Lowry, 12 S.C. 108; Parker v. Jacobs, 14 S.C. 118; Chapman v. Lipscomb, 18 S.C. 233. It is very true that the supreme court, in the case entitled Music House v. Dusenbury, 27 S.C. 464, 4 S.E. 60, has interpreted the paper here sued on as a lease, and not as a chattel mortgage. But it is equally true that the extreme doctrine therein enunciated has been limited by the later case, decided by that same tribunal, entitled Manufacturing Co. v. Smith (S. C.) 19 S.E. 132, where it is declared by Mr. Justice McGowan, as the mouthpiece of the court: 'It is difficult for one to sell and deliver property, and at the same time to remain owner of it. After careful consideration, I feel constrained to concur with his honor, Judge Izlar, that the contract between these parties was not a lease, but, substantially, a sale of the machine for fifty-five dollars,--ten dollars in cash, and the remaining forty-five dollars in small installments. *** We think that a lease is generally executed by the owner of the property. This paper was signed by the person negotiating for a purchase of the article. The defendant could not secure the credit portion of the purchase money until some interest was conveyed to him by the company.' Neither can I agree with the plaintiff or the master that the case under consideration, and the answer interposed by defendant, are settled by Manufacturing Co. v. Smith, supra, or by Talbott v. Padgett, 30 S.C. 167, 8 S.E. 845, because those cases decided no such issues as are raised in this case. On the contrary, they rightfully decided, in keeping with the unbroken line of precedent, that the defendant in claim and delivery is not entitled to an accounting, nor can he interpose a counterclaim in his answer. The defendant, however, has a right, under the new practice, to interpose an equitable defense, which puts in issue the making of the contract itself,--call it what you may: lease, conditional sale, or chattel mortgage. And such a defense is properly pleaded and a proper matter of investigation in a court of equity, and, when sustained by legal proof, entitles the party to the protection of this court when, in a case of claim and delivery, or in any other law case, it can be shown 'that, at the time of entering into the agreement to purchase said organ, said plaintiff, its agents and servants, assured this defendant that the organ she was purchasing was new, and had never been in use, that it was in first-rate condition, and that it was as represented; that this defendant, by reason of said representations fraudulently made to her, was induced to sign the agreement herein sued on, when said plaintiff, its servants and agents, well knew at the time of the sale to this defendant, and before said sale, that said organ was an old one, which had been out of their possession under a similar agreement to the one herein sued on, and had, after months of use, been returned to said plaintiff, who deliberately disposed of it to defendant at a price charged for a like instrument new and in good order, when it was known to be a worn-out and second-hand instrument.' See Riggs v. Wilson, 30 S.C. 172, 8 S.E. 848, and Parker v. Jacobs, 14 S.C. 118, where it is said: 'Since the enactment of the Code, the question is not whether the plaintiff has a legal right or an equitable right, or the defendant a legal or equitable defense against the plaintiff's claim, but whether, according to the whole law of the land applicable to the case, the plaintiff makes out the right which he seeks to establish, or the defendant shows that the plaintiff ought not to have the relief sought for. Or, as is said by Saunderson, J., in Grain v. Aldrich, 38 Cal. 514: "Legal and equitable relief are administered in the same forum, and according to the same general plan. A party cannot be sent out of court merely because his facts do not entitle him to relief at law, or merely because he is not entitled to relief in equity, as the case may be. He can be sent out of court only when, upon his facts, he is entitled to no relief either at law or in equity."

' See, also, Cobbey, Repl. §§ 794, 824, 1148.

"Now, inasmuch as defendant is interposing an affirmative equitable defense, and is asking its consideration, under the well-settled rule of pleading, by virtue of the consent order herein, where all matters of law and of fact were referred to the master, why is that

...