U.S. Tire Co. v. Keystone Tire Sales Co.

• Citation: 150 S.E. 347,153 S.C. 56
• Decision Date: 04 November 1929
• Docket Number: 12753.
• Parties: UNITED STATES TIRE CO. v. KEYSTONE TIRE SALES CO.
• Court: United States State Supreme Court of South Carolina

150 S.E. 347

153 S.C. 56

UNITED STATES TIRE CO. v. KEYSTONE TIRE SALES CO.

No. 12753.

Supreme Court of South Carolina

November 4, 1929

Appeal from Common Pleas Circuit Court of Greenville County; T. J Mauldin, Judge.

Action by the United States Tire Company, against the Keystone Tire Sales Company. From an order allowing examination before trial, defendant appeals. Reversed.

B. F Martin, of Greenville, for appellant.

Wilton H. Earle, of Greenville, for respondent.

BLEASE J.

The respondent, as plaintiff, sued the appellant, a corporation as defendant in the court of common pleas for Greenville county.

The complaint alleged certain indebtedness claimed to be owing to the respondent by the appellant, both on a promissory note and an open account. The pleading also contained certain allegations, looking, as we conceive it, to a claim on the part of the respondent that it had a lien on certain accounts and merchandise. Attached to the complaint, and made a part thereof, was a written agreement, alleged to have been made by the parties to the cause. This agreement provided for certain examinations of the books of the appellant corporation by the respondent. It was alleged in the complaint that the respondent was entitled to an investigation of the books, that demand for the books had been made, and that the appellant would not allow such investigation.

Attached to the complaint was a purported verification thereof. Therein the affiant, who styled himself as the "branch treasurer" of the respondent corporation, swore that the complaint was "true of his own knowledge, except as to the matters stated upon information and belief, and as to these he believes it to be true; that the allegation as to the incorporation of plaintiff is upon knowledge; other allegations are upon information." We do not find in the complaint anything to show what allegations were made upon the knowledge of the affiant, and those he intended to make upon his information and belief. The verification, however, shows that the only allegation made by the affiant on his own knowledge was the one as to the corporate capacity of the respondent, and all the other allegations were made upon the affiant's information alone.

In the prayer of its complaint, the respondent demanded judgment for the debts alleged to be owing to it by the appellant, an order requiring the defendant to appear before the master of Greenville county for examination, as provided in section 692 of the Code of Civil Procedure, and the appointment of a receiver for certain property.

Some time soon after the service of the summons and complaint, or perhaps on the same day (we are unable to state exactly from the record), respondent caused to be served upon the appellant a notice entitled, "Notice of Motion for Order Requiring Defendant to be Examined under Section 692, Code of Civil Code Procedure, and Notice of Motion for Order Appointing Receiver." In that instrument, the defendant was notified that the plaintiff's attorney would move before Hon. T. J. Mauldin, Presiding Judge, on June 11, 1929, "for an order requiring the defendant to appear before Hon. E. Inman, Master, Greenville County, together with his books for examination, as provided in Section 692, Code of Civil Procedure, S. C." In the same notice, the defendant was also notified that an order appointing a receiver would also be asked for. It was stated in the paper that the "motion will be made on the verified summons and complaint served this day on you."

In obedience to the said notice, after argument, Judge Mauldin passed an order, the pertinent portions of which were as follows:

" It is ordered that the defendant, or any officers or agents of said defendant, and specifically the president, L. M. Davidson, appear for examination before E. Inman, Master, Greenville County, Tuesday, the 18th day of June, 1929, at ten-thirty o'clock A. M. subject, however, to said master continuing said examination for cause from time to time as he may be advised.

"It is further ordered that said defendant, its agents and servants, bring with it, or them, its books of accounts which show the sales of property of plaintiff made in the year 1928, or any other books or papers of accounts receivable, of sales of plaintiff's property by the defendant to its customers; or any other books or accounts that show, or are connected with, any such sales. Said Master has authority to order any further books that he may be advised of." It is from this order that the appeal comes; and the several questions raised by the appellant in its eight exceptions will be disposed of without quoting the exceptions.

The first position of the appellant is that section 692, and the other sections relating to that section, found in chapter 6 of the Code of Civil Procedure, and the amendment passed in 1923 (33 Stat. 170), do not apply to corporations. Our opinion is to the contrary. Chapter 6 is entitled, ""Examination of Parties." The purpose appears all through the chapter to allow the examination of a party to an action at the instance of an adverse party. It is true the word "corporation" is not expressly used in the chapter, but it is clear to us that it is included in the word "party." There is certainly nothing in the statute to show that it was the legislative intent to exclude corporations. The general rule of the law is that, when the word "person" or ""party" is used in a statute, it is broad enough to include corporations, artificial persons, unless the intention to exclude such artificial persons is plainly obvious. "Party" is a technical word, and it has a precise meaning in legal parlance. It is understood to include all persons, natural or legal, by whom, or against whom, a suit is brought, either in law or in equity. See Black's Law Dictionary.

The appellant suggests that a corporation, being an artificial person, cannot give oath, and cannot appear as a witness, and cites some authorities to show that the old remedy of discovery was not applicable to corporation parties. The provisions made in chapters 5 and 6 of the Civil Code of Procedure created a new remedy, and operated to destroy pre-existing remedies in equity. Hall v. Joiner, 1 S. C. 186: Fox v. Clifton Mfg. Co., 122 S.C. 86, 114 S.E. 700. It is true the legal entity cannot itself speak, or give oath, but the corporation speaks, and can testify, through its officers. One of the main purposes of the statute would be defeated if the appellant was right in its contention, namely, allowing those who sue, and who are sued by, corporations the right to examine into the affairs of the corporation, pertaining to the matters involved in the litigation. It would be manifestly unjust and unreasonable to say that a corporation, sued by or suing an individual in a court of justice, could not be examined, for proper cause, while its adversary could be so examined at the instance of the corporation. If we placed such construction on the statute under consideration, we might have to go further and declare the whole act unconstitutional as being discriminatory between corporations and in individuals. It is against the policy of the court to so declare, when, by any reasonable construction, legislative enactments may be harmonized with the Constitution.

Another position of the appellant is that there was error on the part of the circuit judge in ordering the examination to be held by the master, instead of before the judge himself.

So far as the record before us discloses, no reference to the master has been ordered; the case seems to stand at the present for trial in the court of common pleas before the judge of that court. We are not called upon here to pass upon the authority of a master in equity to order and hold the examination before trial, provided for in sections 692 and 693. Nor are we called upon to decide on the propriety of the examination being ordered or held by the master when the cause has been referred to him generally. In People's Bank v. Helms, 140 S.C. 107, 138 S.E 622, which apparently was an equitable action entirely, there was a general order of reference by the circuit judge to the master, and at the same time an order requiring the defendants to submit to an examination before the master. The report of the case in this court does not show...