Mitchell v. Fed. Intermediate Credit Bank

165 S.C. 457, 164 S.E. 136 (1932)

 

RULE:

Where a demand or right of action is in its nature entire and indivisible, it cannot be split into several causes of action and sued piecemeal, or made the basis of as many separate suits; but a recovery for one part must bar a subsequent action for the whole, the residue, or another part. A like rule forbids the splitting of defenses, or set-offs and counterclaims. Neither can a party, by assigning a part of his claim, to another, divide an entire cause of action so as to sustain more than one suit upon it. It is immaterial that the form of the second action is different from the first, or that the demand is divided for the purpose of bringing actions within the jurisdiction of a justice of the peace or other inferior court. But the rule against splitting causes of action cannot be applied unless the two claims separately sued on are both parts of one and the same cause of action, equally available for purposes of suit at the time of the first action, and equally within the scope and purview of that action; and where the court, in its discretion, limits the recovery in the first action to a part of the claim, a separate action for the residue is not barred. Nor is the rule applicable to claims omitted because of plaintiff's want of knowledge of their mere existence, or according to some decisions, because of mistake.

FACTS:

The farmer brought an action seeking an accounting between him and the bank, for the proceeds of a crop of potatoes, and recovery of any balance due him after the payment of an indebtedness evidenced by two outstanding notes. The court held that the legal wrong suffered by the farmer was the violation by the bank of his right to receive the proceeds of his potato crop, which had come into the bank's hands, and that for this wrong, he had a single indivisible cause of action against the bank. When the bank sued him on his two notes, he had the option to interpose his claim as a defense or to demand judgment against the bank, by way of counterclaim, but he was barred from bringing his claim separately.

ISSUE:

Could a plaintiff split his cause of action, using a portion of it for defense in the Federal Court case and the balance for offense in the appellate court?

ANSWER:

No.

CONCLUSION:

In the matter before us, the legal wrong which Mitchell suffered was the violation by the bank of his right to receive the proceeds of his potato crop which had come into the bank's hands, amounting to about $ 18,000.00, and for this wrong he had a single indivisible cause of action against  the bank. When the bank sued him on his two notes, amounting to about $ 9,000.00, he had the option to interpose his claim as a defense to that suit or to demand judgment against the bank, by way of counterclaim, for the amount owing him by it. He elected to set up his claim as a defense only, and the jury applied it to the payment of the notes held by the bank. The transaction out of which the case at bar arises is the same transaction that Mitchell pleaded as a defense in the Federal suit. He might, therefore, "have recovered in that action, upon the same allegations and proofs which he there made, the judgment which he now seeks, if he had prayed for it." He did not do this, but attempted to split his cause of action, and to use one portion of it for defense in that suit and to reserve the remainder for offense in a subsequent suit, which, under applicable principles, could not be done. As said in the Miller Company case: "If in the application of such principles the want of full satisfaction accrues to the plaintiff, it is only because of its [his] own actions, deliberately taken in choosing the method of enforcing its [his] claims and demands."

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