BANK OF TIMMONSVILLE v. FIDELITY & CASUALTY COMPANY.

120 Fed. (C. C.), 315. [1903.]

SIMONTON, Circuit Judge. This case comes up on a rule to show cause why the complaint should not be made definite and certain in the particulars mentioned. The Code of Procedure of South Carolina does not prescribe the mode in which the object now sought can be attained. Code, Sec. 181. The usual course is to do this by motion. Nicholas v. Briggs, 18 S. C., 473. But the course now taken is just as effective. The action is brought by the plaintiff, the Bank of Timmonsville, against the Fidelity & Casualty Company of New York, upon a bond or policy of insurance issued by the defendant to the plaintiff, whereby the defendant agreed, on certain conditions, to make good and reimburse any loss plaintiff might sustain by reason of the fraud or dishonesty of one Lechner, its cashier, committed during the term of the policy.

The particulars in which it is sought to make this complaint more definite and certain are:

(1) By setting forth in full the policy of insurance or bond mentioned in paragraphs 3, 5, 6, 8, and 10, of the complaint. Under the rules of Code pleading, it is not necessary to set out in haec verba written instruments sued on. They may be set out according to their legal effect. 6 Cyc. Pl. & Prac., 263, and cases cited 4 Cyc. Pl. & Prac., 916, 3 Cyc. Pl. & Prac., 645. This, also, is the rule of pleading in the Federal Court. In Sheehy v. Mandeville, 7 Cranch, 217, 3 L. Ed., 320, Marshall, C. J., says:

"It is not necessary to recite the contract in haec verba, but, if it be recited, the recital must be strictly accurate. If the instrument be declared on according to its legal effect, that effect must be truly stated. If there be a failure in one respect or the other, an exception for the variance may be taken, and the plaintiff cannot give the instrument in evidence." So 1 Chitty, Pl., 430.

"It is a principle of pleading that a party relying on a deed, etc., either as a foundation of a cause of action, or as a ground of

defense or answer to the pleading of his opponent, shall make profert of the instrument; that is, produce it nominally in court. But in alleging the deed the plaintiff need not, in his pleading, show more of it than answers his own purpose, and even that part which he states may be set forth according to its legal purport or in substance."

If, in such a case, the opposite party wants the deed to be actually produced, he must pray oyer. Chitty, Pl. p. 429.

This complaint sets out the contract thus:

"That on the 18th day of March, 1891, the defendant, then engaged, among other things, in the business of fidelity and casualty insurance, in consideration of a premium of thirty-seven and 50-100 dollars paid to it by the plaintiff, then and now engaged in the banking business, made the plaintiff its policy of insurance, whereby it agreed that during a term beginning on the 17th day of March, 1891, and ending on the 17th day of March, 1892, and during any subsequent renewal thereof, it would, at the expiration of the three months next, after satisfactory proof to the said company of any loss, make good and reimburse to the employer, to the extent of the sum of five thousand dollars, such loss, if any, as the employer should sustain by reason of the fraud or dishonesty of the employed, F. C. Lechner, in connection with his duties as cashier of said bank, or the duties to which the employer might thereafter assign or appoint him, provided such fraud or dishonesty should be committed during the continuance of said term, or any renewal thereof, and discovered during said continuance, or within six months thereafter, and within six months after the death, dismissal or retirement of the employed.” This is sufficient.*

*"The petition itself is not beyond criticism under the rules of good pleading (although it follows what seems to have become a not unusual practice) and if it had been demurred to on the statutory ground that it did not state facts constituting a cause of action, the demurrer should have been sustained. The statute requires the facts constituting the cause of action to be stated. By this is meant the ultimate facts as distinguished from the evidentiary or argumentative facts. The statute in this respect lays down for the code pleader in clearer terms the same rule that the common law on this subject prescribes, that is, that a plea must not be argumentative. To set out in the petition haec verba the contract on which the case is founded is to plead the evidence, not the facts. A pleader should determine in his own mind the legal effect of the written contract or other document that underlies his case, and plead it by its legal effect as he understands

Nor is it essential to good pleading that a copy of the instrument sued on be attached as an exhibit to the complaint. Rule 11 of the court says:

"It shall not be necessary for a party to set forth in a pleading, the items of an account therein alleged, but he shall deliver to the adverse party within ten days after demand therefor, in writing, a copy of the account and every bond, deed or other writing sued on, which, if the pleading be verified, must be verified by his own cath or that of his agent or attorney, to the effect that he believes it to be true, or be precluded from giving evidence thereof." Rule discharged.

*

(b) The Facts to be Stated.*

HILL v. BARRETT.

14 B. Monroe, 83. [1853.]

Judge MARSHALL delivered the opinion of the court.

This is an action by petition under the code, in which the plaintiff seeks to recover the value of certain brick alleged to have been made by him on the premises of the defendants. From the written contract referred to and filed as a part of the petition, and which is thus made a part of the record, it appears that Hill undertook to make, burn, and lay for the defendants, two hun

it, and as he purposes to maintain it. If the instrument is merely copied into the petition it leaves uncertain the issue intended to be tendcred, depending on the construction that may be put upon it at the trial. Our code pleading furnishes no authority for such uncertainty. But where, as in this case, no demurrer is filed and no objection is made to the petition until the trial is on, it comes too late, if, by construing the petition then as stating what the evidence pleaded tends to prove, it constitutes a cause of action. This petition is susceptible of such construction."-Valliant J., in Reilly v. Cullen, 159 Mo. 322.

*The substantive law of contracts, or of torts, or of whatever topic is involved, determines what facts are essential to constitute a given cause of action; and these, of course, are to be stated, because that is the function of the complaint, both at common law and under the code. The law of pleading does not undertake to determine what facts are necessary to the cause of action, any more than the law of evi

dred thousand merchantable bricks, at such place as said defendants may designate at the Grayson Springs, the plaintiff furnishing all the materials, boarding, etc., for which the defendants agreed to pay him seven dollars and fifty cents per thousand, not counting the openings in the buildings, to be paid in one, two and three years, except one hundred dollars, to be taken out in boarding at the springs. But it is provided that the defendant have the privilege of not putting up said buildings the next spring if they choose, in which event they were to pay the plaintiff four dollars and fifty cents per thousand (kiln count), in the manner and times above stated; and Hill bound himself to complete said building, or laying of said brick, on or before the first day of the next June, provided said defendants notify him by the first day of the next March, of their intention to have said brick laid the next spring. But the defendants undertook to build the foundation on which the said bricks were to be laid, in time for laying the brick the next spring, provided they elect to build.

The plaintiff, without setting out any part of this agreement in the petition, but stating that one was entered into by the parties In August, 1849, avers, that after its date, he made and burnt on the premises of the defendants, in the year 1849, one hundred and seventy thousand merchantable bricks; that they were not laid and put into a house, because the defendants did not notify him. that they intended to have the building put up, and did not have the foundation laid in time for him to build the said house by the first day of June, 1850, or any other time, but they elected that they would not build said house, whereby he was prevented from making and laying the two hundred thousand bricks contracted for; and he claims payment for the one hundred and seventy

dence undertakes to determine what facts must be proved in order to sustain it.

When a pleading is adjudged insufficient for failure to state a cause of action, the question ordinarily decided is one of substantive law rather than of pleading. And yet this subject cannot be wholly relegated to the domain of substantive law. When a general demurrer is interposed to a complaint, very often two questions are presented: Is a given "fact" essential under the rules of substantive law? And if so is it sufficiently alleged? Here the rules of pleading must be taken into account. How far will "judicial notice," or "presumptions," or implication and intendment supply the place of express averment? These, in part, at least, are problems in the law of pleading, and must be treated as such.-ED.

thousand bricks at the rate of four dollars and fifty cents, kiln count. A demurrer to this petition was sustained, and judgment having been rendered against the plaintiff, he brings the case to this court for revision.

Although the code of practice has abolished not only the preexisting forms of action, but also the pre-existing forms of pleading, and has declared, that henceforth, the forms of pleading, and the rules by which their sufficiency is to be determined, are those prescribed in the code itself; it adopts what has always been a cardinal rule with respect to the allegation of the plaintiff, now called the petition, that it must contain a statement of the facts constituting the plaintiff's cause of action, with scarcely any other specific requisition, but that it be made in ordinary and concise language, without repetition. Title 7, chapter 1, section 144, p. 30, 31. But while the code contains a very few additional rules with respect to the mode or manner of alleging the facts relied on as constituting a cause of action, it does not, and could not, particularize the facts necessary to be stated, nor give any affirmative rule more special or more instructive than that which requires that the petition shall contain the facts constituting the plainiff's cause of action. The code makes no change in the law which determines what facts constitute a cause of action, except that by reducing all the forms of action to the single one by petition, it changes the question whether the plaintiff's statement of his cause shows facts constituting a cause of action in trespass, or assumpsit, or other particular form, into the more general question, whether it shows facts which constitute a cause of action at all, that is, whether the facts stated are sufficient to show a right in the plaintiff, an injury to that right by the defendant, and consequent damage. What facts do in this sense, constitute a cause of action, is determined by the general rules or principles of law respecting rights and wrongs, and by a long course of adjudication and practice, applying those rules to particular actions, under the long established rule of pleading, that the declaration must state the facts which constitute the plaintiff's cause of action. In adopting this fundamental rule of pleading, the code must be considered as adopting also the prevailing and authoratative exposition of it as understood at the time, except so far as the code itself, either expressly, or by necessary implication, requires facts to be stated which need not before have been