A.M. Law & Co., Inc. v. Cleveland

• Court: South Carolina Supreme Court
• Writing for the Court: BONHAM, Justice.
• Citation: A.M. Law & Co., Inc. v. Cleveland, 173 S.E. 638, 172 S.C. 200 (S.C. 1934)
• Decision Date: 06 March 1934
• Docket Number: 13796.
• Parties: A. M. LAW & CO., Inc., v. CLEVELAND.

173 S.E. 638

172 S.C. 200

A. M. LAW & CO., Inc., v. CLEVELAND.

No. 13796.

Supreme Court of South Carolina

March 6, 1934

Appeal from Common Pleas Circuit Court of Spartanburg County; Miller C. Foster, County Judge.

Action by A. M. Law & Company, Inc., against Henry M. Cleveland. From a judgment for plaintiff, defendant appeals.

Affirmed.

L. K Jennings, T. H. Munro, and I. A. Phifer, all of Spartanburg for appellant.

Evans & Galbraith and Lyles & Daniel, all of Spartanburg, for respondent.

BONHAM Justice.

The respondent brought its action in the court of common pleas for Spartanburg county to recover the sum of $555, the price of 37 shares of the stock of Dollar Savings Bank of Spartanburg, S. C., which it alleges it sold and delivered to the appellant at the agreed price of $15 per share, for which, after demand, appellant refused to pay. The case was transferred, by proper order, to the county court of Spartanburg county.

Appellant for answer to the complaint set up a general denial, and alleged that the alleged sale was for goods of a value of more than $50; that no written memorandum thereof was made and signed by the defendant, or any one thereunto authorized by him, and the transaction is therefore obnoxious to the statute of frauds; that in selling the stock plaintiff warranted that the stock was worth $15 per share, and that the bank was in sound condition, whereas the bank was insolvent and the stock was worthless, which entitled the defendant to rescission; that the stock was never delivered nor tendered to defendant, and the bank closed its doors before plaintiff offered to perform its contract.

The case was heard by Judge M. C. Foster and a jury. At the conclusion of the testimony for the plaintiff, the defendant moved the court for a nonsuit, which was refused, and, at the conclusion of all the testimony, defendant moved for direction of a verdict in its favor, which motion was also refused. The grounds upon which these motions were made appear on the record. The jury found for the plaintiff, and a motion for a new trial was made and refused. This appeal followed, based upon seven exceptions which allege error in admitting evidence of the custom between respondent and appellant pertaining to the manner of respondent in dealing with appellant relative to the delivery of stock; error in admitting evidence of appellant's actions as president of the First National Bank of Spartanburg, which had recently failed, touching appellant's transactions in relation to his deposits and stock therein; error in admitting evidence of the written memoranda of the sale of the stock sued on, it not being shown that the written memoranda were signed by appellant; error in refusing to grant the motions for nonsuit, directed verdict, and new trial on the ground that there was no sufficient proof of an agreement by defendant, or any one lawfully authorized by him to sign the same, to take the contract out of the statute of frauds.

It is not necessary to decide these questions separately, but all of them will be considered and disposed of.

It is not denied that respondent, who is a broker, dealer in stocks and bonds, approached the appellant with the proposition to sell him the stock in question, and the appellant agreed to purchase it at the agreed price. In fact the appellant testifies that he bought it in good faith, but he holds himself to be absolved from paying for it because it was never delivered to him nor tendered to him till after the bank had closed its doors. This plea brings us to the consideration of the most vital issue in the case.

When plaintiff offered testimony to show delivery by showing that the stock was delivered to the bank to be transferred on the books to the appellant, as it alleged was the custom between the parties, objection was made on the ground that the custom had not been pleaded. For the admission of this testimony error is assigned.

If plaintiff had brought its action upon a contract or claim founded upon a general or local custom, there would be merit in the position taken by appellant, and the authorities cited by him would be applicable. The reason of the rule requiring that such a custom be pleaded is that such custom is not binding unless both parties know of the custom and that they contract with reference to it; it is not binding on him to whom it is unknown. 27 R. C. L. § 3, p. 154; 17 C.J. §§ 1, 12, pp. 446, 463.

It would be a useless thing to plead a custom of dealing as between two persons, which, if it exists, must be as well known to one as to the other. Properly speaking, the respondent proffered testimony tending to prove a usage rather than a custom, a usage in dealings of a similar nature between it and appellant. 27 R. C. L. 152.

Plaintiff was not called on to anticipate defendant's defense that the manner of delivery between them would be denied.

"It is a general principle that a pleading need and should not, by its averments, anticipate a defense thereto, and negative or avoid it." Outlines of Pleading, p. 16, by Donald J. Kiser, Editor-in-Chief of Corpus Juris, citing 31 Cyc. 109, 110.

"In equity pleadings the petitioner was allowed to anticipate and avoid a defense, and this was called the charging part of the bill, (Story's Eq. Pl. Sec. 1). At law, one was never expected to state matters which should come more properly from the other side; it was sufficient for such party to work out his own case." 1 Chitty's Pl. 222. Bliss on Code Pleadings, § 200, p. 248.

The appellant argues that, even if the usage of delivery be proper...