Hughes v. Wachter , 61 N.D. 513 ( 1931 )

The plaintiff asked for a rehearing to determine the questions of burden of proof as to payment and the status of the books of the corporation, and a re-hearing was granted.

It is claimed that non-payment need not be alleged, because payment is an affirmative defense.

The general rule is that non-payment must be alleged in the complaint where failure to pay is an essential element of the cause of action "as for example, in an action on a contract, the breach of which consists of non-payment." 48 C.J. 665. See also Lent v. New York M.R. Co. 130 N.Y. 504, 29 N.E. 988, 989; Witherhead v. Allen, 4 Abb. App. Dec. 628; Van Giesen v. Van Giesen, 10 N.Y. 316; Keteltas v. Myers, 19 N.Y. 231.

It is true that we held in Gans v. Beasley, 4 N.D. 140, 155, 59 N.W. 714, 719, that where the complaint had attached to it a note and made the note a part of the complaint a specific allegation of nonpayment is not necessary. This decision cites that of Keteltas v. Myers, supra, but in each case the note was made a part of the complaint; and the possession of the note is sufficient to show non-payment.

But there is also unanimity of opinion that payment is an affirmative defense and must be proved. See 48 C.J. 666; 21 R.C.L. 116.

This apparent contradiction arises because of the survival of the distinction in the old common law pleadings. The nature of the declaration or complaint determined the character of the answer. 1 Chitty, Pl. 16th ed. 610 et seq.; McKyring v. Bull,16 N.Y. 297, 69 Am. Dec. 696. Under the reformed Code it was merely the "forms of pleadings heretofore existing" which were abolished and one form substituted for all. See § 7355, Comp. Laws. The requirements of pleading however were not changed. Plaintiff was still required to set forth the necessary allegations to show he was entitled to the relief demanded, which included breach of the contract in whatever form it took, but the defendant was also required to prove anything which would discharge his obligation, in case an obligation was shown. In Robertson Lumber Co. v. State Bank,14 N.D. 511, 516, 105 N.W. 719, 720, it is stated: "A defense of payment is an affirmative defense to be raised by answer." But this is in a case involved in the foreclosure of a lien where the question of payment was one within the knowledge of the defendant and a third party and not within the knowledge of the plaintiff.

Section 7440 of the Comp. Laws, requires the complaint to set forth "a plain and concise statement of the facts constituting a cause of action without unnecessary repetition." This does not in any way dispense with any of the material and necessary allegations which go to show that payment should be compelled. Hence it does not dispense with the necessity for the allegation of non-payment, for unless a complaint showed non-payment there would be no necessity for compelling the payment.

Thus the allegation of non-payment is necessary in the complaint under review, but the burden rests upon the defendant to prove payment. See also First Nat. Bank v. Warner, 17 N.D. 76, 84, 114 N.W. 1085, 17 Ann. Cas. 216.

Plaintiff says the defendant cannot be permitted to prove payment in this case because of the nature of her answer, it being in effect a general denial.

The complaint alleges non-payment, and with the exception of the admission of the death of G.C. Wachter and the appointment of the defendant as the executrix the answer is a general denial. This raises the question of whether payment can be proved under the general denial.

There is a difference of authority on this proposition, some holding that as payment is an affirmative defense it must be specially pleaded in order to be available. The rule that "it cannot be proved in a general denial" is set forth in Ann. Cas. 1912B, 487, note, as is also the contrary rule. See also 1 Enc. Pl. Pr. 842; Wehle v. Butler, 12 Abb. Pr. N.S. 139; Lent v. New York M.R. Co. 130 N.Y. 504, 29 N.E. 988, 989, supra; Hubler v. Pullen, 9 Ind. 273, 68 Am. Dec. 620; L.B. Menefee Lumber Co. v. MacDonald, 122 Or. 579,260 P. 444; Hudelson v. First Nat. Bank, 51 Neb. 557, 71 N.W. 304, 308.

This matter however is largely a matter of statutory statement and construction.

Section 7448 says:

"The answer of the defendant must contain:

(1) A general or specific denial of each material allegation of the complaint controverted by the defendant, or of any knowledge or information thereof sufficient to form a belief.

(2) A statement of any new matter constituting a defense or counterclaim in ordinary and concise language without repetition."

Under this provision in our Code only "new matter" need be specially pleaded, as the general denial puts the material allegations of the complaint in issue.

Frisch v. Caler, 21 Cal. 71, 74, says: "It is not new matter to aver affirmatively the existence of the fact thus negatived in the complaint for obviously nothing new is brought into controversy." Davanay v. Eggenhoff, 43 Cal. 395, says: "a general denial in the answer puts in issue the fact of payment" as the complaint must allege non-payment in order to state a cause of action. In Brooks v. Ardizzone, 9 Cal. App. 215, 98 P. 393, 394, it is said: "While no plea of payment is presented by the answer, the right to prove the same exists in this state where the general isssue only is tendered." See also Mendocino County v. Johnson, 125 Cal. 337, 58 P. 5, 6; and McLarren v. Spalding,2 Cal. 510, which says: "where such general denial is the equivalent of the plea of nil debit — payment — may be given in evidence." In Brown v. Forbes, 6 Dakota 273, 43 N.W. 93, the court held that under a general denial the defendant could prove payments other than those alleged in the complaint, because the general denial of the defendant put in issue the allegations of the complaint that only certain payment had been made. The court said that had the plaintiff sued on his contract, alleging performance of it and demanded payment, as he might have done, it would have been incumbent upon the defendant in his answer to have alleged payment in order to have permitted him to have proved such defense; but where a plaintiff sues for a balance, alleging certain payments and no others have been made he empowers the defendant by a general denial to have that state of the account investigated, the extent to which the original payment has been reduced by payments ascertained, and the amount of the balance determined.

In Tolerton W. Co. v. Sult, 33 N.D. 283, 288, 156 N.W. 939, this court held, in an action on an account, that the complaint "contained negative averments of non-payment which a denial, general or specific, would have put in issue;" and further stated therein, "A plea of payment is only necessary when it interposes new matter."

As pointed out in the California cases it is not "new matter" to affirm what is denied in the complaint. It is the same matter involving the same point — is the debt discharged by payment? The complaint says it is not, but though this is a negative statement the general denial denies the negative and the two negatives make a positive. Thus it is not "new matter" and therefore under the general denial may be proved.

"If an issue is formulated by the allegation of an amount due and the denial thereof, evidence tending to prove payment is admissible, though payment was not specially pleaded as a defense." Robertson v. Robertson, 37 Or. 339, 82 Am. St. Rep. 756, 62 P. 377.

That plaintiff may prove payment under a general denial is set forth in Marysville Development Co. v. Hargis, 41 Idaho, 257,239 P. 522; State ex rel. Spaulding v. Peterson, 142 Mo. 526, 39 S.W. 453, 40 S.W. 1094; Ball v. Putnam, 123 Cal. 134, 55 P. 773, 775; Brenton Bros. Leach v. Hill, 197 Iowa, 125, 196 N.W. 947; Jones v. El Reno Mill Elevator Co. 26 Okla. 796, 110 P. 1071, Ann. Cas. 1912B, 486; Knapp v. Roche, 94 N.Y. 329; Parker v. Mayes, 85 S.C. 419, 137 Am. St. Rep. 912, 67 S.E. 559.

Plaintiff contends that the holding with reference to the books of the corporation and their admissibility in evidence is too broad, and if carried to its logical conclusion will shut them out for any purpose.

We were passing upon the reception of the books for the purpose for which they were offered, and no other. Plaintiff says it is conceivable a situation may arise in the new trial whereby such books may be received. We are not passing upon such a situation, nor do we hold that under no circumstances can the books be received.

With these additions, treating of the questions raised on the rehearing, the original opinion is confirmed.

CHRISTIANSON, Ch. J., and NUESSLE, BIRDZELL and BURKE, JJ., concur.