$536. * 660. Further Illustrations. The Supreme Court of New York, in an early case, described the office of the general denial a portion of the text. "The next question is, whether evidence of payment, either in whole or in part, is admissible in mitigation of damages. As the code contains no express rule ou the subject of mitigation, except in regard to a single class of actions, this question cannot be properly determined without a recurrence to the principles of the common law. By these principles, defendants in actions sounding in damages were permitted to give in evidence, in mitigation, not only matters having a tendency to reduce the amount of the plaintiff's claim, but, in many cases, facts showing that the plaintiff had in truth no claim whatever. It was not necessarily an objection to matter offered in mitigation, that, if properly pleaded, it would have constituted a complete defence. Thus, in Smithies v. Harrison, 1 Ld. Raym. 727, the truth of the charge was received in mitigation in an action of slander, although not pleaded. Again in the case of Abbott v. Chapman, 2 Lev. 81, which was an action of assumpsit, the defendant having given in evidence a release, Lord Holt said that 'he should have pleaded exoneravit, but that the evidence was admissible in mitigation of damages.' So too, in the modern case of Nicholl v. Williams, 2 M. & W. 758, which was assumpsit for use and occupation, the defendant, having pleaded payment to a part of the demand, and nonassumpsit to the residue, was permitted, upon the trial, to prove payment in full; but it was held that the evidence could only go in mitigation, and that the plaintiff was entitled to judgment for nominal damages. It is obvious that this practice was open to serious objections. It enabled defendants to avail themselves of their defences for all substantial purposes without giving any notice to the plaintiff. . . . But in regard to payment, release, etc., so long as they were received in evidence under the general issue in bar, no objection could be made to allowing them in mitigation. As soon, however, as this practice was abrogated by the rules of Hilary Term, 4th William IV., the question as to the admissibility of payment in mitigation at once arose." The learned judge here traces the course of English decisions upon this question, citing and reviewing a number of cases, and referring to certain additional legislation (Lediard v. Boucher, 7 C. & P. 1, per Lord Denman; Shirley v. Jacobs, 7 C. & P. 3, per Tindal C. J.; Henry v. Earl, 8 M. & W. 228; Rule of Trinity Term, 1st Vict. 4 M. & W. 4), and concludes this discussion as follows: "The matter is now placed, therefore, in the English courts, upon a footing of perfect justice. If the demand for which an action is brought has once existed, and the defendant relies upon its having been reduced by payment, he must appear and plead. § 659. "It is to be determined in this case whether we have kept up with these courts in our measures of reform. The rules of Hilary Term (4 William IV.) and the system of pleading prescribed by the code have, in one respect, a common object; viz., to prevent parties from surprising each other by proof of what their pleadings give no notice. These rules, according to the construction put upon them by the courts, were found inadequate, so far as proving payment in miti. gation is concerned, to accomplish the end in view; and it became necessary to adopt the rule of Trinity Term (1st Vict.) to remedy the defect. If the provisions of the code are to receive in this respect a construction similar to that given to the rules of Hilary Term, then an additional provision will be required to place our practice upon the same basis of justice and convenience with that in England. But is such a construction necessary? Section 149 of the code provides that the answer of the defendant must contain, 1. A general or specific denial of the material allegations of the complaint; and, 2. A statement of any new matter constituting a defence or counter-claim. The language here used is imperative, - 'must contain.' It is not left optional with the defendant whether he will plead new matter or not; but all such matter, if it constitutes 'a defence or counter-claim,' must be pleaded; and this is in entire accordance with the general principles of plead in the following brief but very accurate manner: "Under a denial of the allegations of the complaint, the defendant may introduce any evidence which goes to controvert the facts which the plaintiff is bound to establish in order to sustain his action." 1 "Under the general denial of the code, evidence of a distinct affirmative defence is not admissible. The only evidence which the defendant is entitled to give is limited to a contradiction of the plaintiff's proofs, and to the disproval of the case made by him." 2 ing. The word 'defence,' as here used, must include partial as well as complete defences; otherwise it would be no longer possible to plead payment in part of the plaintiff's demand, except in connection with a denial of the residue; since section 153 provides that the plaintiff may in all cases demur to an answer containing new matter, when, upon its face, it does not constitute a counter-claim or defence.' Such a restriction would be not only contrary to the general spirit of the code in regard to pleading, but would obviously conflict with § 244, subdivision 5, which provides that where the answer expressly, or by not denying, admits part of the plaintiff's claim to be just, the court may, on motion, order such defendant to satisfy that part of the claim,' etc. The question to be determined, then, is, whether these provisions are limited in their operation to cases where the defendant seeks to avail himself of new matter strictly as a defence either in full or pro tanto, or whether they extend to the use of such matter in mitigation. Were there nothing in the code to indicate the intention of the legislature on this subject, we might feel constrained to follow the construction put by the English courts upon the rules of Hilary Term. But § 246 provides that in all actions founded upon contract brought for the recovery of money only, in which the complaint is sworn to, if the defendant fails to answer, the plaintiff is entitled absolutely to judgment for the amount mentioned in the summons without any assessment of damages. It is plain, that, in this class of actions, defendants who have paid part only of the plaintiff's demand must appear and plead such part payment, or they will lose the benefit of it altogether. The provisions of § 385 afford no adequate remedy in such cases, because the offer to allow judgment for a part does not relieve the defendant from the necessity of controverting the residue by answer. Section 246 could never have been adopted, therefore, without an intention on the part of the legislature that § 149 should be so construed as to require defendants, at least in this class of cases, to set up part payment by answer; and it is difficult to suppose that they intended the section to receive one construction in one class of actions, and a different one in another. My conclusion, therefore, is, that § 149 should be so construed as to require defendants in all cases to plead any new matter constituting either an entire or partial defence, and to prohibit them from giving such matter in evidence upon the assessment of damages when not set up in the answer. Not only payment, therefore, in whole or in part, but release, arbitrament, accord and satisfaction, must here be pleaded. In this respect, our new system of pleading under the code is more symmetrical than that prescribed by the rules adopted by the English judges." 1 Andrews v. Bond, 16 Barb. 633, 641, per T. A. Johnson J. [In Milbank v. Jones (1894), 141 N. Y. 340, 36 N. E. 388, it was held that the defendant might introduce evidence to controvert anything that plaintiff is bound to prove or is permitted to prove. See also Whitney v. Whitney (1902), 171 N. Y. 176, 63 N. E. 834, reaffirming the rule quoted in the text.] 2 Beaty v. Swarthout, 32 Barb. 293294, per E. Darwin Smith J.; and see Wheeler v. Billings 38 N. Y. 263, 264, per Grover J. § 537. *661. Necessity of Reply depends upon Nature of Defence. Whenever a reply is made necessary to all new matter contained in the answer, the question as to the nature of a defence has often arisen upon the plaintiff's failure to reply to allegations which the defendant insisted were new matter, and therefore admitted to be true by means of the omission, but which the plaintiff claimed to be mere argumentative denials, or, in other words, unnecessary averments of evidentiary facts which could be proved under a denial. In passing upon such a question, the Supreme Court of Minnesota fully approved and adopted the general doctrine which has been stated in the text. In another case before the same court, the question was examined with great care and marked ability. The action was upon a contract of sale: the answer consisted of specific denials of each allegation in the complaint; and the defendant offered to prove that the contract was entered into on Sunday, and was therefore illegal and void. [The conclusion of the court is given in the note.] 2 § 538. 662. Anything Tending directly to controvert Allegations in Complaint Admissible under General Denial. In an action to recover possession of chattels where the complaint alleged property in the plaintiff, and the answer was a general denial, evidence tending to show that the plaintiff was not the owner was excluded on the trial. This ruling was disapproved on appeal, the court saying: "The answer is a denial of each and every allegation of the complaint. The allegation of ownership is therefore denied. In Bond v. Corbett, it was held that anything which tends to directly controvert the allegations in the complaint may be shown under the general denial. The defendant might, therefore, introduce evidence to show that plaintiff was not the owner, nor entitled to possession." 1 Nash v. St. Paul, 11 Minn. 174, 178; Finley v. Quirk, 9 Minn. 194. 2 Finley v. Quirk, 9 Minn. 194, 200, per Wilson C. J.: "We hold, therefore, (1) that an answer merely by way of denial raises an issue only on the facts alleged in the complaint; (2) that the denial of the sale in this case only raised an issue on the sale in point of fact, and not on the question of the legality of such sale; (3) that all matters in confession and avoidance showing the contract sued upon to be either void or voidable must be affirmatively pleaded." 3 Bond v. Corbett, 2 Minn. 248. 4 Caldwell v. Bruggerman, 4 Minn. 270, 276, per Atwater J. [The Supreme Court of Minnesota, in Dodge v. McMahan (1895), 61 Minn. 175, 63 N. W. 487, stated the rule as follows: "Authorities may be found, even in some of the code States, to the effect that, under a mere denial, evidence of any fact may be given in evidence that would go to the The same doctrine is maintained by the Supreme Court of Indiana.1 § 539.663. Same Subject. The doctrine thus stated has also been approved by the Supreme Court of Missouri.2 "It is clear, both upon principle and authority, that, under a general or specific denial of any fact which the plaintiff is required to prove to maintain the action, the defendant may give evidence to disprove it." 3 The true scope of and limitations upon this form of traverse were well illustrated in a very recent case decided by the New York Court of Appeals. The complaint alleged that the plaintiff was owner of certain shares of stock in a corporation; that the stock had been transferred to one W. to hold for the plaintiff; that W., without the plaintiff's knowledge, had transferred the same to the defendant, in payment, as defendant claimed, of a debt due from him to defendant; and prayed that defendant might be compelled to re-transfer and deliver the same to the plaintiff. The answer was a general denial. The nature and extent of the issues thus presented were discussed, and the original validity of the contract sued on, that is, which, although admitting the making of the contract, would show that, when made, it was, for some reason invalid; as, for example, that it was made on Sunday, or that it was a gambling or wagering contract. But this rule is not in accordance with either the spirit of the reformed procedure or the decisions of this court. The correct rule is that, under a denial, the defendant is at liberty to give only such evidence as tends to disprove the existence of facts, as facts, alleged by the plaintiff, but not of any matter aliunde, which, although admitting such facts, would tend to avoid their legal effect and operation." See also Iselin v. Simon (1895), 62 Minn. 128, 64 N. W. 143; Fort Dearborn Bank v. Security Bank (1902), 87 Minn. 81, 91 N. W. 257.] 1 Wood v. Ostram, 29 Ind. 177, 186. 2 Northrup v. Miss. Vall. Ins. Co., 47 Mo. 435, 443. [Jones v. Rush (1900), 156 Mo. 364, 57 S. W. 118: "Under a general denial any legal evidence is admissible which tends to show that the statements in the petition constituting the plaintiff's cause of action are not true, and to that end he may affirmatively show facts inconsistent with the - plaintiff's statements tending to prove them to be false." In Cunningham v. Roush (1900), 157 Mo. 336, 57 S. W. 769, the rule was stated as follows: "Where a cause of action which once existed has been determined by some matter which subsequently transpired, such new matter must, to comply with the statute, be specially pleaded; but where the cause of action never existed, the appropriate defence under the law is a denial of the material allegations of the petition; and such facts as tend to disprove the controverted allegations are pertinent to the issue." See also Patton v. Fox (1902), 169 Mo. 97, 69 S. W. 287, containing a list of special defences which have been held admissible under the general denial in Missouri. And in Bolton v. Mo. Pac. Ry. Co. (1903), 172 Mo. 92, 72 S. W. 53, the court said: "Any fact the effect of which is to show that an essential statement in the plaintiff's cause of action is untrue may be proven under the general denial, and, therefore, should not be specially pleaded and if so pleaded should be stricken out as redundant. "] 8 Greenfield v. Mass. Mut. L. Ins. Co., 47 N. Y. 430, 437, per Grover J.; Wheeler v. Billings, 38 N. Y. 263. principle which controlled them was stated by Mr. Justice Grover, who pronounced the defence inadmissible.1 § 540.664. Same Subject. A general denial being pleaded in an action on a non-negotiable note brought against the maker thereof, evidence designed to show a want of consideration was rejected at the trial. The New York Supreme Court, in reviewing this ruling, very properly held that this defence may be proved under an answer of denial in actions upon all contracts which do not import a consideration.2 While the very point decided, that evidence of a want of consideration could be admitted, is undoubtedly correct, the opinion as a whole is very careless and inaccurate, and the general criterion which it lays down is clearly erroneous. There are many classes of defences which show that a cause of action never existed, and which cannot be proved under the general denial, but must be pleaded; as, for example, illegality, fraud, duress, and the like. The learned judge was entirely misled by the analogies drawn from the ancient practice. The general denial puts in issue the facts, which, if true, constitute a prima facie cause of action. A consideration is, in general, one of these facts in actions upon contract. When these facts are admitted, but by reason of some extraneous features or elements affecting them they do not produce the otherwise necessary result, that element which constitutes the defence, and which destroys the prima facie legal aspect of the facts, is certainly not put in issue by the general denial: it is new matter, and must be specially pleaded. bona fide purchaser from W. To meet this case, the defendant offered to prove in substance that he was a bona fide purchaser from W. The special term held, against plaintiff's objection, that this was admissible under the answer. This was error. Under the general denial, the defendant could not introduce evidence tending to show a defence founded upon new matter, but such only as tended to disprove any fact that the plaintiff must prove to sustain his case." The court, however, did not pass upon the question thus discussed by Grover J.: the decision was placed upon a different ground; viz., that defendant was not a bona fide pur chaser. 2 Evans v. Williams, 60 Barb. 346. |