Opinion
12908
April 25, 1930.
Before SHARKEY, J., County Court, Florence, August 1929. Affirmed.
Action by E.M. Dupre, trading as the Dupre Motor Company, against J.D. Gilland. From an order sustaining plaintiff's demurer to defendant's counterclaim, defendant appeals.
ORDER OF JUDGE SHARKEYThis is an action in claim and delivery brought in this Court, the prayer of the plaintiff being for immediate possession of the property described in the complaint (the value of which is fixed by plaintiff at $800), or if same cannot be had, for judgment in the sum of $421.12, besides interest and attorney's fees.
The defendant has answered and has interposed a counterclaim and asks for judgment against the plaintiff for $2,100. The defendant also alleges in Paragraph 12 of his answer that the monetary jurisdictional limitation of this Court is the sum of $2,000, and that this Court therefore has no jurisdiction of "this cause of action," the same being in excess of the statutory limitation of this Court.
The plaintiff having specifically reserved his right to reply, has demurred to so much of the defendant's answer which undertakes to set up a counterclaim on the ground that it appears from the face of the alleged counterclaim that this Court has no jurisdiction, the amount of the counterclaim being for a sum in excess of the monetary jurisdiction of this Court.
Section 2 of the Act of March 6, 1929, Volume 36 of the Statutes at Large, page 119, establishing the civil Court of Florence and defining the powers and jurisdiction thereof, is as follows: "The said civil Court shall have jurisdiction to try and determine all civil cases and special proceedings, both at law and in equity, where the value of the property in controversy, or the amount claimed, does not exceed the sum of Two Thousand ($2,000.00) Dollars."
I have heard arguments of counsel for plaintiff and for the defendant on the demurrer which has been interposed by plaintiff. The issue presented by the pleadings is whether in an action brought by plaintiff for an amount within the jurisdictional limit, a counterclaim interposed by defendant for an amount beyond the jurisdictional limit will oust this Court of jurisdiction of an action, the jurisdiction of which has been fixed by plaintiff's demand.
The question presented is one of grave import, as its adjudication will determine whether or not in any action arising ex contractu the defendant may, by interposing a counterclaim for an amount beyond the jurisdictional limitation, oust this Court of jurisdiction.
At the outset we are confronted with the general rule that the question of jurisdiction is determined by the amount claimed by the plaintiff, without reference to any defense or plea set up by the defendant. Corley v. Evans, 69 S.C. 520, 48 S.E., 459, 460.
It is undisputed here that the demand of plaintiff in this action is within the jurisdictional amount, and therefore, so far as plaintiff's cause of action is concerned, this Court undoubtedly has jurisdiction. It is likewise clear that this Court cannot entertain jurisdiction of defendant's counterclaim for more than the jurisdictional amount of $2,000. The question, therefore, is: "Does the action of the defendant in interposing a counterclaim for more than the jurisdictional monetary limitation fixed by the statute oust this Court of jurisdiction to try plaintiff's action? As stated, the decision of this question is important and will have a far-reaching effect upon the future business of this Court. The question is squarely presented by the answer of the defendant and by plaintiff's demurrer thereto. If the demurrer be overruled, it must necessarily follow, that this Court will be forced to declare itself without jurisdiction in this action. Such a decision would throw the entire business of the Court (certainly in so far as actions ex contractu are concerned) into a state of confusion and uncertainty, and the result could well be that one of the primary objects of the establishment of this Court, to wit, an effort to relieve the congestion which has heretofore obtained in the Court of Common Pleas and thereby give the litigants an opportunity of disposing of their cases with the minimum of delay, would in large measure be defeated.
In answer to the question thus propounded, the following language found in the case of Corley v. Evans, supra, is pertinent. The Supreme Court in that case, speaking through Mr. Justice Woods, said: "The second question is, was the magistrate ousted of jurisdiction of the cause by the defendant setting up a counterclaim for more than $100? The general rule is that the jurisdiction is determined by the amount claimed by the plaintiff without reference to any defense or plea set up by the defendant. 12 Ency. P. P., 130. In setting up a counterclaim, the defendant becomes the actor, relying on a new cause of action. In the absence of statutory regulation, when a suit is pending in a magistrate's Court on a cause of action within that jurisdiction, it seems clear that the defendant cannot out the jurisdiction by bringing a cross-suit for an amount beyond the jurisdiction of the magistrate. This condition of the law may seem in some cases to result in hardship; for an insolvent, holding a claim under $100, may recover judgment in a magistrate's Court, and undertake to enforce it while owing a large sum to the defendant; but such an attempt may be met by the reducing his defendant's counterclaim to an amount within the jurisdiction of the magistrate (Haygood v. Boney, 43 S.C. 63, 20 S.E. 803); and, it may be, relief could be obtained in a separate proceeding."
Again, in 7 R.C.L., 1057, the following well-considered statement of the principle involved here is found: "If a counterclaim is in substance an action wherein affirmative relief is sought by the defendant against the plaintiff, Statutes permitting the interposition of counterclaims are construed in connection with other Statutes limiting the amount over which the Court has jurisdiction. The limitation of jurisdiction is made to apply to both parties to the action. The result is that the defendant cannot interpose a counterclaim for an amount exceeding the jurisdiction of the Court. A counterclaim in excess of the jurisdiction of the Court may be pleaded as defensive matter, where no affirmative relief is demanded and the defendant may waive the excess by his pleading and demand judgment for an amount within the jurisdiction of the Court." (Italics added).
The same line of reasoning is followed in 15 C.J., 774, wherein the following language appears: "If plaintiff sues in a Court of limited jurisdiction the amount of a set-off or counterclaim asserted by defendant cannot be added to plaintiff's claim to oust the jurisdiction of the Court, but each will be considered separately. Nor will the assertion of a set-off or counterclaim in excess of the jurisdiction of the Court oust the jurisdiction with respect to the claim asserted in the complaint, that being within the jurisdiction."
It would seem to be clear, therefore, that the jurisdiction of this Court cannot be ousted in the instant case in so far as the claim asserted by plaintiff is concerned.
It is true that, as stated in 15 C.J., 775, and as decided by our Supreme Court in the case of Haygood v. Boney, 43 S.C. 63, 20 S.E., 803. "The institution of an action in a Court of limited jurisdiction for a sum within its jurisdiction cannot give such Court the right to adjudicate upon a counterclaim which exceeds the jurisdictional amount," yet this leaves to the defendant the option of either reducing his claim to an amount within the jurisdictional limitation or waiving it entirely in so far as any affirmative relief against the plaintiff in this action is concerned. As stated, it may still be pleaded as defensive matter.
In the event of the exercise by defendant of either of these alternatives, the question then arises: Would defendant be estopped from maintaining all or any portion of his demand in another action against the plaintiff? In the case of Fidelity Fire Insurance Company v. Windham, 134 S.C. 373, 133. S.E., 35, 38, which has been cited by defendant in argument before me, the Court in construing Section No. 410, Volume 1, Code of 1922, said: "The defendant must plead in answer all his defenses, legal or equitable; he cannot bring a separate action on any matter that could have been so pleaded." (Italics added.)
In the case at bar the defendant has undertaken to set up a cause of action by way of counterclaim that is for more than the jurisdictional amount. It therefore cannot be properly pleaded in this action.
It seems to me that the doctrine announced in the Windham case, supra, can logically be applied only in a case where the Court which has already obtained jurisdiction of plaintiff's demand would likewise have jurisdiction of the demand of defendant in its entirety. By way of illustration, if the defendant here had a bona fide demand against plaintiff, growing out of the same subject-matter, for the sum of $1,500, and in this action he interposed a counterclaim demanding affirmative relief against the plaintiff for only $1,000, he would then be estopped to set up an additional claim against the plaintiff in another action, for the reason that his entire demand could have been pleaded and adjudicated in the first action.
Under such circumstances as those under discussion, the weight of authority appears to be to the effect that the defendant would not be barred from prosecuting his action in a Court of general jurisdiction; for example, the Court of Common Pleas, solely because this Court, being a Court of limited jurisdiction, could not adjudicate his claim in the original cause. To hold otherwise would appear to me to be illogical and certainly out of harmony with the spirit not only of the statute establishing this Court, but of Section 410 of the Code of Civil Procedure.
The exact point involved here is discussed in 34 C.J. at pages 865, 866, as follows:
"In several states the statutes now provide generally that if the demand or cross claim arises out of the transaction set forth in the complaint as the foundation of plaintiff's action, or is connected with the subject of the action, defendant must present it as a set-off, or forfeit his right to claim relief upon it, or declare that in certain specified proceedings all set-offs and counterclaims not interposed shall be barred; and in some all matters available as a set-off or counterclaim must be presented by defendant in answer to plaintiff's action, where the suit is before a Justice of the Peace or other inferior Court, except where the cross demand would exceed the jurisdiction of the Justice, or consists in a claim for unliquidated damages.
"In any case where the nature of plaintiff's claim is such that defendant's affirmative matter could not properly be pleaded by way of set-off, or the amount of the set-off is beyond the jurisdiction of the Court, the judgment will not preclude defendant from bringing a separate action."
Again, at page 935, this statement is found; "A judgment is not conclusive on any point or question which from the nature of the case, the form of action, or the character of the pleadings could not have been adjudicated in the suit in which it was rendered; nor, the action having been at law, of a claim or defense which would be cognizable only in equity; nor as to any matter which must necessarily have been excluded from consideration in the case as being beyond the jurisdiction of the particular Court." (Italics added)
For the reasons herein announced, it is hereby ordered that the demurrer to the answer be, and it is hereby, sustained, with leave to the defendant, within twenty days from the date of the service of this order upon him, to amend his answer for the purpose of setting up a counterclaim for an amount within the jurisdictional limitation of this Court, and in the event of his failure so to do, it is further ordered that the said counterclaim be stricken out, without the further order of this Court.
Mr. D. Gordon Baker for appellant, cites: Demurrer admits allegations of defense and counterclaim: 134 S.C. 324; 141 S.C. 98; 141 S.C. 364; 142 S.C. 369; 131 S.C. 48; 124 S.C. 498; 108 S.C. 364; 112 S.E., 426; 114 S.C. 482; 167 Fed., 367; 69 S.C. 520; reversed by 144 S.C. 137. Act of Court beyond power delegated is a nullity: 254 U.S. 358; 251 Fed., 986; 119 N.E., 940; 193 Pa., 909; 155 Fed., 110; 83 Vt., 174. Jurisdiction fixed by amount involved in demands of plaintiff and defendant: 251 Fed., 213; 192 U.S. 232; 204 U.S. 286; 227 Fed., 321; 74 Fed., 424; 176 Fed., 343. Consent cannot confer jurisdiction over subject matter: Court cannot reduce claim below jurisdictional amount to give jurisdiction: 144 S.C. 164; 210 N.Y.S., 618; 189 S.W. 296; 241 S.W., 1084. Waiver of portion of demand will not confer jurisdiction: 80 S.E., 699; 77 N.J. Law, 325; 155 N.Y.S., 167; 175 S.W. 863; 3 McC., 280; 1 N McC., 192; 3 Brev., 407; 72 S.C. 582. Defendant must set up in answer all matters of defense between parties: 134 S.C. 373; 144 S.C. 137; 9 S.C. 281; 313 S.C. 543; 77 S.C. 507; 87 S.C. 132; 26 Stat. 119; Code Civil Procedure, 1922 Sec. 410, 411. Court had no right to adjudicate upon counterclaim beyond jurisdictional amount: 113 S.C. 487; 15 C.J., 774; 43 S.C. 63; 150 S.E., 316. Appellant is estopped from bringing further action against respondent: 150 S.C. 345; 71 S.C. 95; 90 S.C. 229; 146 S.C. 290.
Mr. Sam J. Royall for respondent, cites: Jurisdiction is determined by amount claimed by plaintiff and cannot be defeated by counterclaim for larger amount: 69 S.C. 520; 134 S.C. 373.
April 25, 1930. The opinion of the Court was delivered by
For the reasons stated by the trial Judge, which are entirely satisfactory to this Court, the order appealed from is affirmed.
MR. CHIEF JUSTICE WATTS and MESSRS. JUSTICES BLEASE, STABLER and CARTER concur.