Morgan's, Inc. v. Surinam Lumber Corp.

• Citation: 251 S.C. 61,160 S.E.2d 191
• Decision Date: 08 March 1968
• Docket Number: No. 18770,18770
• Court: United States State Supreme Court of South Carolina
• Parties: MORGAN'S, INC., Respondent, v. SURINAM LUMBER CORPORATION, Appellant.

Page 191

160 S.E.2d 191

251 S.C. 61

MORGAN'S, INC., Respondent, v. SURINAM LUMBER CORPORATION, Appellant.

No. 18770.

Supreme Court of South Carolina.

March 8, 1968.

Charles S. Bernstein, Charleston, for appellant.

Barnwell, Whaley, Stevenson & Patterson, Henry T. Gaud, Charleston, for respondent.

LEWIS, Justice.

This appeal involves the validity of a default judgment entered against defendant on an account. After the entry of the judgment and, in order to collect it, a levy or execution was issued against the defendant's bank account. Defendant then moved unsuccessfully in the lower court to set aside both the judgment and the execution. The motion to set aside the judgment was made upon the grounds that (1) defendant was not in default because an extension of time had been granted in which to plead and (2) the judgment was improperly entered without the taking of testimony in proof of the account. Defendant sought to have the execution set aside on the ground that the issuance of such process against a bank account was not authorized under the statutes of this State. Under our view of the matter, we need only decide whether or not the lower court was correct in sustaining the judgment against attack on the foregoing grounds.

Section 10--401, 1962 Code of Laws, provides that civil actions in courts of record in this State shall be commenced by service of a summons. Generally, when an action is instituted, the complaint need not be served at that time but, in such event, the summons must state where the complaint is or will be filed. Section 10--633, 1962 Code of Laws.

As permitted by the foregoing statutory provisions, plaintiff instituted this action on an account against the defendant Corporation by serving a summons, without a complaint, on November 30, 1965 on Hans Paul, Esquire, an officer of the defendant Corporation and a practicing attorney. The summons stated that the complaint would be filed in the office of the Clerk of Court for Charleston County. Thereafter, as noticed, the verified complaint with an attached verified statement of the account sued upon was filed with the Clerk of Court on December 14, 1965, but was not served on the defendant.

When the foregoing summons was served on defendant on November 30, 1965, it became defendant's duty, if it desired to contest the action, to give to plaintiff, within twenty days, notice of appearance and to demand in writing a copy of the complaint. Section 10--633, supra. No such notice of appearance and demand for a copy of the complaint was given by defendant to plaintiff within twenty days after service of the summons and, upon the failure of defendant to do so, it became in default. Kerr v. Cleveland, 182 S.C. 29, 188 S.E. 370; Bissonette v. Joseph, 170 S.C. 407, 170 S.E. 467; Baker-Jennings Hardware Co. v. Culp, 105 S.C. 418, 90 S.E. 26.

Since defendant was in default, counsel for plaintiff filed an affidavit to that effect on December 21, 1965, and obtained on the same date an order for judgment by default against defendant for the amount of the account set forth in the complaint.

The defendant first contends that the default judgment should be set aside because plaintiff's counsel had extended the time in which to plead. The trial judge, in the exercise of the discretion vested in him in such matters, has held to the contrary. This conclusion is amply sustained by the record, and no abuse of discretion is shown. See: Strickland v. Rabon, 234 S.C. 218, 107 S.E.2d 344.

It is next contended that the default judgment should be set aside because it was not taken according to the provisions of Section 10--1531, 1962 Code of Laws, since it was entered solely on the pleadings without independent proof of the account sued upon.

Under the terms of Sections 10--1531 and 10--1532, when the action is on a complaint for the recovery of money only, judgment by default may be rendered by the court solely on the pleadings (1) if the demand be liquidated, or (2) if unliquidated and the plaintiff serve 'with the summons and complaint on the defendant' an itemized, verified statement of his account. Therefore, when a complaint is for the recovery of an unliquidated account and an itemized statement thereof duly verified is not 'served with the summons and complaint on the defendant,' the court can grant judgment by default only upon proof of the account by plaintiff.

It is conceded that an itemized, verified statement of the account, although subsequently filed in the office of the Clerk of Court, was never served on the defendant and that judgment by default was granted at chambers solely upon the pleadings, without other proof of the account.

The complaint in this matter alleges that...