Walter J. Klein Co. v. Kneece

• Decision Date: 31 January 1962
• Docket Number: No. 17866,17866
• Citation: 123 S.E.2d 870,239 S.C. 478
• Parties: WALTER J. KLEIN COMPANY, Inc., Respondent, v. Jack M. KNEECE, d/b/a Crown Chicks, and Marjorie J. Kneece and C. W. Haynes & Company, Appellants.
• Court: South Carolina Supreme Court

Page 870

123 S.E.2d 870

239 S.C. 478

WALTER J. KLEIN COMPANY, Inc., Respondent, v. Jack M. KNEECE, d/b/a Crown Chicks, and Marjorie J. Kneece and C. W. Haynes & Company, Appellants.

No. 17866.

Supreme Court of South Carolina.

Jan. 31, 1962.

Jack F. McGuinn, Kneece & Lewis, Columbia, for appellants.

McCants & Drawdy, Columbia, for respondent.

TAYLOR, Chief Justice.

This is a suit in equity by Walter J. Klein Co., Inc., the respondent herein, against Jack M. Kneece, doing business as Crown Chicks, and Marjorie J. Kneece, the appellants herein, and C. W. Haynes & Company. The purpose of the action was to set aside a certain conveyance of real estate executed by Jack M. Kneece to his wife, Marjorie J. Kneece, the said conveyance being dated October 26, 1950, and promptly recorded in the office of the Clerk of Court for Richland County in Deed Book 63, at page 171, as having been made in violation of the Statute of Elizabeth, now in force in this State as Section 57-301 of the 1952 Code of Laws of South Carolina. The complaint alleges that the aforesaid conveyance was made to conceal the title of Jack M. Kneece in and to said real estate, and was made without any consideration except the sum of $5.00 and love and affection, with the intent on the part of the appellants to hinder, delay and defraud the creditors of Jack M. Kneece, and particularly the respondent in this action of its just claim against him.

The complaint alleges that in an action in the United States District Court for the Eastern District of South Carolina the respondent recovered a judgment, on August 9, 1951, against Jack M. Kneece in the sum of $8,040.12, with costs of $37.00, and that said judgment was duly transcripted to the office of the Clerk of Court for Richland County, and that an execution on said judgment against Jack M. Kneece was duly issued and delivered to the Sheriff of said county prior to the commencement of this action, and such was duly returned nulla bona. It is then alleged that the claim and cause of action upon which said judgment was rendered accrued prior to January 1, 1950, and at such time Jack M. Kneece was the owner in fee simple of the real estate hereinbefore mentioned. It is further alleged that the conveyance made by Jack M. Kneece to his said wife was fraudulent and void under the aforesaid statute.

C. W. Haynes & Company was joined as a party to the action for the reason that on September 4, 1950, Jack M. Kneece executed to it a mortgage covering the property in question, which said mortgage was of record in the office of the Clerk of Court for Richland County in Mortgage Book 76, at page 391.

The respondent, by the prayer of the complaint, demands judgment that the conveyance made by Jack M. Kneece to Marjorie J. Kneece be adjudged and declared fraudulent, void and a nullity; that the said property be sold subject to the existing mortgage of C. W. Haynes & Company, and the proceeds derived from such sale be applied to the liquidation of the judgment indebtedness of Jack M. Kneece to the respondent.

The appellants, by way of answer, admitted the allegations of the complaint, except a general denial was interposed to so much of the complaint as alleged that the conveyance and transfer of the real estate in question by Jack M. Kneece to Marjorie J. Kneece was done with the intent and purpose to hinder, delay and defraud the creditors of the said Jack M. Kneece.

The appellants, for a second defense, affirmatively plead the statute of limitations, Section 10-143(7) of the 1952 Code of Laws, it being asserted that by reason of the lapse of six years from the date of the deed under attack, October 26, 1950, and the judgment obtained on August 9, 1951, the said statute bars any right of action by the respondent for relief on the ground of fraud. The appellants, for a third defense, affirmatively allege that the respondent is precluded from maintaining this action because of laches. The answer of the appellants demanded that the respondent be required to reply to the second and third defenses. The respondent duly filed a reply and alleged that the statute of limitations had no application to this action, and by an accompanying affidavit asserted that it had no knowledge of the transfer and conveyance of the real estate by Jack M. Kneece to Marjorie J. Kneece until June, 1960. The respondent, likewise, specifically denied that it was guilty of laches.

The appellants moved for judgment on the pleadings, or in the alternative, for an order striking the complaint of the respondent and sustaining the second and third defenses on the ground that such defenses, under the pleadings, presented only an issue of law. This motion was heard and denied by the Honorable John Grimball, Presiding Judge of the Fifth Judicial Circuit. The trial Judge held that the question of the defenses presented by a plea of the statute of limitations and laches could only be determined by a trial on the merits of the factual issues presented by the pleadings. The appellants assert that the trial Judge committed error in so holding.

The appellants assert that the trial Judge committed error in failing to grant their motion for a judgment on the pleadings on the ground that the cause of action asserted by the respondent is barred by the statute of limitations. They also assert that the pleadings raise no issue of fact and that the motion should have been granted because only an issue of law is involved.

A motion for judgment on the pleadings is in the nature of a general demurrer. It is appropriate, where the pleading is fatally deficient in substance, that is where the complaint fails to state a good cause of action in favor of the plaintiff and against the defendant. Being in the nature of a demurrer, a motion for judgment on the pleadings raises an issue of law only. Where the plaintiff's pleadings are attacked, the motion should be sustained only where they are so defective that the court is authorized, taking all the facts to be admitted, in concluding that no cause of action is stated entitling the plaintiff to relief. However, if there is joined an issue of fact upon which, if supported by the evidence, a valid judgment may be based, a judgment on the pleadings is improper; but it has been held that a judgment on the pleadings is allowable, not for lack of proof but for lack of an issue; hence, it is proper where the pleadings entitle the party to judgment without proof, as where they disclose all of the facts, or where the pleadings present no issue of fact or where the pleadings, under the circumstances, present an immaterial issue. Wooten v. Standard Life & Casualty Insurance Company, S.C., 122 S.E.2d 637.

It is provided in Section 57-301 of the 1952 Code, that every conveyance of lands which may be had or made, to or for any intent or purpose to delay, hinder or defraud creditors and others of their just and lawful actions, suits, debts, accounts, damages, penalties and forfeitures, shall be deemed and taken to be clearly and utterly void, frustrate, and of none effect. However, an action to set aside a conveyance of lands made contrary to Section 57-301 of the 1952 Code, must be instituted within six years and the cause of action in such case is not deemed to have accrued until the discovery by the aggrieved party of the facts constituting the fraud. Section 10-143(7) of the 1952 Code. Under the cited section, the six year period begins to run at the time of the acquisition of knowledge of such facts that are sufficient to put the party on inquiry which, if developed, will disclose the alleged fraud. Tucker v. Weathersbee, 98 S.C. 402, 82 S.E. 638. A cause or right of action accrues, so as to start the running of the statute of limitations, as soon as the right to institute and maintain the action arises. Tuten v. Almeda Farms et al., 184 S.C. 195, 192 S.E. 153, and Wooten v....