Opinion
39316.
DECIDED FEBRUARY 27, 1962. REHEARING DENIED MARCH 12, 1962.
Action on note. Fulton Civil Court. Before Judge Wright.
Heyman, Abram, Young, Hicks Maloof, Joseph Lefkoff, for plaintiff in error.
George Carroll, contra.
In a suit by an individual on an unpaid note executed by the defendant and payable to the individual plaintiff, the defendant debtor cannot set off a claim due the defendant by a partnership of which the plaintiff is a member, in the absence of special circumstances which would authorize an equitable set-off.
DECIDED FEBRUARY 27, 1962 — REHEARING DENIED MARCH 12, 1962.
D. W. Kennedy filed suit against A. C. Schultz in the Civil Court of Fulton County, seeking recovery of the principal amount of $1,000 plus interest on an unpaid note executed by the defendant and payable to the order of the plaintiff. The defendant filed his answer, in which he admitted execution of the note and demand by the plaintiff. By way of further plea and answer, the defendant alleged that he had entered into a contract with the plaintiff and the partnership of Kennedy and Kennedy, who are father and son, and the sole proprietors of the Kennedy and Kennedy Company; and that the plaintiff and Kennedy and Kennedy Company were indebted to him in the amount of $1,426.83 under this contract, which was attached as an exhibit to the plea; and that he had made demand on the plaintiff to cancel said note sued upon and send the balance of the amount due him from the plaintiff and Kennedy and Kennedy Company. The defendant further alleged that the plaintiff and Kennedy and Kennedy Company intermingled their personal and business matters, advanced monies and loaned monies between each other and to third persons, including the defendant, and that the plaintiff and Kennedy and Kennedy Company were one and the same person. The employment contract, which was attached as an exhibit to the plea and answer, recited that it was an agreement between A. C. (Tommy) Schultz (the defendant) and Kennedy and Kennedy Company.
The plaintiff's general demurrer to the plea and answer was overruled. Subsequently, the defendant served a Notice to Produce upon the plaintiff, items 9 through 13 of which called for the production of certain records and books of Kennedy and Kennedy Company. The plaintiff filed timely objections to said items in the Notice to Produce which were overruled by the trial court. Upon the plaintiff's failure to respond to said items in the Notice to Produce, the trial court, on motion of the defendant, directed the jury to return a verdict for the defendant in the amount of $426.83.
The plaintiff assigns error on the order of the trial court overruling his general demurrer to the defendant's plea and answer, and his objections to items 9 through 13 of the Notice to Produce, and on the direction of a verdict for the defendant and the entering of judgment thereon.
In a suit by an individual on an unpaid note executed by the defendant and payable to the individual plaintiff, the defendant debtor cannot set off a claim due the defendant by a partnership of which the plaintiff is a member in the absence of special circumstances which would authorize an equitable set-off. West v. Kendrick, 46 Ga. 526; Metcalf v. Peoples Grocery Co., 24 Ga. App. 663 (1a) ( 101 S.E. 768). While it was alleged in the defendant's plea and answer that the plaintiff and the partnership were indebted to him in the amount of the set-off, the employment contract which was attached as an exhibit to the defendant's pleadings, and which was the basis of the alleged claim, disclosed that the alleged set-off was the obligation of the partnership and not of the plaintiff individually. Accordingly, since allegations in pleadings must yield to contradictory facts shown in the exhibits attached thereto ( Harris v. Ackerman, 88 Ga. App. 128, 76 S.E.2d 132), it affirmatively appears from the pleadings that the defendant was attempting to plead a debt due him by a partnership as a set-off against a debt owed to the plaintiff individually.
Whether or not the allegations of the defendant's plea and answer were sufficient to show the existence of such a "special equitable circumstance" as would take the case out of the general rule and authorize an equitable set-off, is immaterial to the determination of this case. The Civil Court of Fulton County would have no jurisdiction to entertain a plea setting up an equitable set-off or an equitable right of set-off for the reason that, to entertain such a plea, it is necessary for the court not only to recognize an equitable right but to give affirmative equitable relief as a result of such recognition. Gormley v. Chance, 55 Ga. App. 838 ( 191 S.E. 701); Hecht v. Snook Austin Co., 114 Ga. 921 ( 41 S.E. 74); Fuller v. Coker, 24 Ga. App. 418 ( 101 S.E. 1); Georgia Machinery Co. v. Auburn Machine Works, 103 Ga. App. 574 ( 120 S.E.2d 28).
The trial court therefore erred in overruling the general demurrer to the defendant's plea and answer since the claim asserted therein, irrespective of the question of its merits, could not be set off against the plaintiff in the present action. Such error rendered the subsequent proceedings in the case nugatory.
Judgment reversed. Nichols, P. J., and Frankum, J., concur.