May 12, 1926. The opinion of the Court was delivered by Plaintiffs brought suit in the Court of Common Pleas of Pickens County on August 13, 1920, against the defendants, alleging in their complaint that the defendant, Whitmire, was due the plaintiffs a balance of $788.99 on account, as per written contract made by that defendant with the plaintiffs on December 2, 1916, and they exhibited with their complaint an itemized, verified statement of the account sued upon. Plaintiffs further alleged that defendants, Smith *Page 41 and Robertson, for valuable consideration, guaranteed, in writing, the payment of the account of the defendant, Whitmire, to plaintiffs.
The defendant, Whitmire, in his answer, admitted that he had purchased goods from the plaintiffs, but denied that he owed the amount demanded in the complaint, or any other amount; he further alleged that the plaintiffs were due him money, and asked for judgment in his favor for such amount as should be found was owing to him by plaintiffs. To the counterclaim the plaintiffs replied with a general denial.
The defendants, Smith and Robertson, by answer, denied the allegations of the complaint, except as to such matters as were admitted. They admitted that they had signed a paper for their codefendant to plaintiff, but alleged that it was simply a "recommendation" as to the "honesty and good character" of Whitmire, and they specifically denied that they in any way guaranteed the payment of any debt or obligation of his to the plaintiffs, and said that if plaintiffs had "such paper" it was fraudulent. They further set up in their answer:
"If there is any paper in the possession of plaintiffs which can be construed into a guaranty for said defendant (Whitmire), signed by these defendants, then such words were inserted after the same was signed by them."
The action is one at law, but the parties waived the right of trial by jury and agreed that the case should be referred to O.S. Stewart, Esq., who was directed to take the testimony and report the same with his conclusions as to the facts.
A reference was held, at which testimony for the plaintiffs, taken by deposition, was offered. The defendants testified in person, and did not offer any other witness.
The Referee filed the testimony taken by him, and in his report found the following facts: (1) That after allowing certain credits in favor of the defendant, Whitmire, that Whitmire was still due the plaintiffs a balance of $725. *Page 42 (2) That the defendants, Smith and Robertson, signed the contracts in the form presented to the Referee by plaintiffs, and thereby guaranteed the payment of orders of the defendant, Whitmire, to the plaintiffs.
All the defendants filed exceptions to the Referee's report. The defendant, Whitmire, based his exceptions on the ground that the Referee had not allowed him all the credits to which he was entitled, and that the Referee should not have found that he was due any sum to plaintiffs.
The defendants, Smith and Robertson, excepted on the ground that the Referee erred in finding that the contract held by plaintiffs was signed by the defendants, J.P. Smith and P.C. Robertson, in its "present form," when he should have found that nothing was printed after the signature of D.H. Whitmire at the time the said defendants signed the same, and that they did not, in any way, become guarantors of the said Whitmire.
Upon the hearing of the report of the Referee and the exceptions thereto, his Honor, T.J. Mauldin, presiding Judge, sustained the findings as to the defendant, Whitmire, but reversed them as to the defendants, Smith and Robertson. Let the decree of Judge Mauldin be reported.
Defendant Whitmire has not appealed. From the findings of the Circuit Judge in favor of the defendants, Smith and Robertson, the alleged guarantors, the plaintiffs have appealed.
There are two exceptions: The first charges error on the part of the Circuit Judge in setting aside the findings of the Referee on the ground, "that here was no competent testimony to rebut the presumption that the paper was regular and without fraud and no competent testimony to rebut the direct testimony of the plaintiffs to the effect that the instrument sued on was the one signed by these respondents." The second exception alleges that there was error on the part of the Circuit Judge "in not holding that the respondents were liable for the balance due on said contract *Page 43 even though it should be proven by them that the last paragraph of the contract was not in it when executed by them, the error being that if this were true they would be liable as principals according to the tenor of the original instrument."
As to the first exception: Both the defendants, Smith and Robertson, testified to the effect that there was "no printing below Whitmire's name at the time I signed contract." Plaintiffs alleged in their complaint that these defendants had signed the contract, and they introduced it in evidence. The defendants stated, under oath, that the paper presented to the Court was not in the same form that it was when they attached their signatures. In their answer, Smith and Robertson alleged that they did not sign any guaranty. The evidence referred to was competent on the issues involved and was a direct attack upon the genuineness of the instrument which was the basis of the suit against these two defendants. This exception is overruled.
As to the second exception: The plaintiffs did not sue Smith and Robertson as principals, but as guarantors. It does not appear that before the Referee, or before the Circuit Judge, plaintiffs took the position that these two defendants were liable as principals. Under the pleadings and testimony they were liable as guarantors, or they were not liable at all. We cannot sustain this exception.
The plaintiffs earnestly insist that there was no testimony whatever in behalf of the defendants, Smith and Robertson, on which to sustain the Circuit Judge's finding in favor of these defendants, and that his findings of fact should be reviewed and reversed.
The case being one at law, the plaintiffs had the right to insist upon a jury trial. But they waived that right by agreeing to submit all questions of law and fact to a Referee and to the Circuit Judge. The Referee *Page 44 found in their favor, but on exceptions the Circuit Judge found against them. When parties consent to an order of reference in a law case and agree that all the issues are to be heard and determined by a Referee, a Circuit Judge has the power to review the Referee's findings of fact and his conclusions of law, and upon such review the Circuit Judge has the right to affirm, modify, or reverse such findings.Meetze v. Charlotte, etc., 23 S.C. 1. Gregory v. Cohen, 50 S.C. 502;27 S.E., 920.
The facts as found by the Circuit Judge are sustained by sufficient evidence; we have pointed to some of it already; therefore, those findings are conclusive and are not reviewable here. Smyth v. Brunson et al., 115 S.C. 385;108 S.E., 99.
All the exceptions are overruled.
The judgment of the Circuit Court is affirmed.
MR. CHIEF JUSTICE GARY and MESSRS. JUSTICES WATTS and STABLER concur.
MR. JUSTICE COTHRAN dissents.
MR. JUSTICE COTHRAN: Action against the defendant, Whitmire, as principal, and the other two defendants, J.P. Smith and P.C. Robertson, as guarantors, for a balance of $788.99, claimed to be due by the defendant, Whitmire, upon a certain contract of employment as a salesman for the plaintiffs, which contract the plaintiffs claimed was guaranteed by the other two defendants.
The defendant, Whitmire, does not appear to contest his liability. The alleged guarantors answered, practically admitting the signing of the paper, but allege that they signed it simply as a recommendation of the honesty and good character of Whitmire, and that, if the plaintiffs hold a paper purporting to be a guaranty on their part, the words of guaranty were inserted into the paper after they had signed it.
The case was referred to the very capable and efficient Clerk of the Court, O.S. Stewart, Esq., who took the testimony *Page 45 offered and filed a report in favor of the plaintiff. The case was then heard by his Honor, Judge Mauldin, who filed a decree reversing the Special Referee as to the alleged guarantors, holding that the preponderance of the evidence sustained their contention that the words of guaranty were inserted after their signature had been attached.
The plaintiffs offered in evidence without objection the original contract. It is upon a printed form and contains two parts. In the first part is the contract between the plaintiffs and the defendant. Whitmire, in which his employment is effected and certain duties in the collection and remittance of money are detailed. It is dated November 1, 1916, signed by Whitmire and accepted by the plaintiffs on December 2, 1916. Immediately after the signatures of the plaintiffs and Whitmire, within three-sixteenths of an inch from the line upon which they appear, begins the first line of the guaranty. It contains eight lines, printed in exactly the same type as the first part of the contract, and is followed immediately by the names, occupations, and post office addresses of the alleged guarantors. There is not the slightest sign of an erasure or insertion of any matter upon the paper. Although the defendants in their answer allege that they only signed a recommendation of the honesty and character of Whitmire, they testify to nothing of this character, but boldly swear that when they signed the paper it was entirely blank between the signature of Whitmire and their own.
I fully recognize the rule so clearly stated by Chief Justice McIver in the case of Gregory v. Cohen, 50 S.C. 502;27 S.E., 920, that, while a Circuit Judge has the right to affirm, modify, or reverse the findings of the Master or Referee in a law case, this Court can only review the findings of the Circuit Judge in such a case when his conclusions are based upon an error of law. Of course, if there be no evidence at all in the case to sustain his conclusions, that becomes a question of law reviewable by this Court.
The evidence for the plaintiffs tended to show that they *Page 46 first sent to Whitmire a blank form of the contract about December 1, 1916; that in due course they received it back from Whitmire duly executed as it appears today; that they then made inquiry as to the financial standing of the guarantors, which would have been entirely unnecessary if their signatures had been simply recommendations, and accepted the contract on December 2, 1916.
In view of the allegation in the answer that the defendants only signed a recommendation of Whitmire, they are concluded by that allegation. It is entirely inconsistent with their testimony that the space was entirely blank, and renders the last statement practically nugatory.
More than half of the learned Judge's decree is based upon the proposition that the weight of the evidence was in favor of the defendants for the reason that the plaintiffs should have rebutted the testimony of the defendants with evidence that the paper had not been added to, and concludes with this statement:
"The statement of F.G. Thomas, plaintiff here quoted, goes no further than to set forth that which all the defendants admit and swear. The issue had been squarely made, and no testimony in behalf of the plaintiffs controverts the vital contention of the defendants save only that a writing is in evidence."
I think that the testimony of Thomas went a good deal further than the defendants were willing to "admit and swear," and that it materially "controverted the vital contention of the defendants." He testified:
"D.H. Whitmire made application to us for a contract to sell goods which we distribute at wholesale. In response to his application we sent him a contract, which was in blank or unsigned at the time. It was returned to us on November 22, 1916.
"Q. Can you produce this contract (that is, the identical paper forwarded in blank and returned filled out)? A. Yes, I have it here. *Page 47
"Q. Please make the contract you have produced Exhibit A over your signature for the purpose of identification. A. I have done so. (The original contract, offered in evidence shows upon its face, in the upper left corner `Exhibit A.' and under the signature of `F.G. Thomas.')
"Q. Examine Exhibit A and state whether or not this contract, when received by the firm of Furst Thomas, bore the signature of D.H. Whitmire, and at the bottom J.P. Smith and P.C. Robertson, as they now appear on same? A. Those signatures were on the contract when it was received.
"Q. How did you receive it? A. It came to us in the U.S. Mail.
"Q. After receiving it will you state what you did with reference to Exhibit A? A. We made an investigation as to the responsibility of the parties who signed the contract, and, that being satisfactory to us, I made acceptance of the contract, that is, Exhibit A, on December 2, 1916, and gave D.H. Whitmire notice to that effect. * * *
"Q. Will you please attach Exhibit A, which you have identified as the contract between your firm and D.H. Whitmire and the other parties who signed the same, to your deposition and make it a part of the same and as evidence given by you? A. I have done so."
I do not see how anything could be plainer than that the witness identified the contract as it stands today as the contract returned by Whitmire with the signatures of the defendants to the guaranty, which goes much further than the flat denials of the defendants.
The learned Judge has manifestly misconstrued the testimony, and equally manifestly his conclusion is based upon this misconstruction, an error of law.
This misconstruction has also led him into the error of holding that, as there was no evidence controverting the statements of the defendants, the plaintiffs should have offered evidence in rebuttal. As I think the testimony should *Page 48 be construed, the plaintiffs could have done no more in reply than they had already done — introduced evidence to show that as the contract was in exactly the shape in which it was when received from Whitmire there could have been no ground for inferring that the plaintiffs would have done the most improbable thing of sending the contract to Whitmire with the guaranty not on it, and then when the signatures of the defendants, under a perfectly blank space and, therefore, meaningless, send the contract back to the same printer with the same type to have the guaranty falsely and fraudulently interpolated.
The conclusion of the Judge manifestly, therefore, being based upon two misconceptions of the law, should not be allowed to stand.
It is not improbable, an hypothesis which comports with the high reputation the Circuit Judge has given the defendants, and which doubtless they fully deserve, that they were deceived into signing the paper upon the representation of Whitmire that it was only a recommendation of him, upon which they based their testimony that there was no guaranty upon the contract. It is impossible to reconcile the allegation in their answers that the contract contained a recommendation with their testimony that the space was entirely blank.
I think that the judgment of the Circuit Court should be reversed, and that the report of the Referee be confirmed.