{ "id": 8654632, "name": "SECURITY FINANCE COMPANY v. CHARLES M. HENDRY, Trading as BALTIMORE MERCANTILE COMPANY", "name_abbreviation": "Security Finance Co. v. Hendry", "decision_date": "1925-04-29", "docket_number": "", "first_page": "549", "last_page": "558", "citations": [ { "type": "official", "cite": "189 N.C. 549" } ], "court": { "name_abbreviation": "N.C.", "id": 9292, "name": "Supreme Court of North Carolina" }, "jurisdiction": { "id": 5, "name_long": "North Carolina", "name": "N.C." }, "cites_to": [ { "cite": "11 Neb., 95", "category": "reporters:state", "reporter": "Neb.", "case_ids": [ 4397295 ], "opinion_index": 0, "case_paths": [ "/neb/11/0095-01" ] }, { "cite": "13 Ohio, 250", "category": "reporters:state", "reporter": "Ohio", "case_ids": [ 489896 ], "opinion_index": 0, "case_paths": [ "/ohio/13/0217-01" ] }, { "cite": "11 Ohio, 417", "category": "reporters:state", "reporter": "Ohio", "case_ids": [ 589527 ], "opinion_index": 0, "case_paths": [ "/ohio/11/0356-01" ] }, { "cite": "42 Ark., 167", "category": "reporters:state", "reporter": "Ark.", "case_ids": [ 8722283 ], "opinion_index": 0, "case_paths": [ "/ark/42/0167-01" ] }, { "cite": "4 Leigh, 581", "category": "reporters:state", "reporter": "Leigh", "case_ids": [ 6727297 ], "opinion_index": 0, "case_paths": [ "/va/31/1043-02" ] }, { "cite": "40 Mich., 517", "category": "reporters:state", "reporter": "Mich.", "case_ids": [ 1328344 ], "opinion_index": 0, "case_paths": [ "/mich/40/0517-01" ] }, { "cite": "14 Fed., 662", "category": "reporters:federal", "reporter": "F.", "case_ids": [ 6731983 ], "opinion_index": 0, "case_paths": [ "/f/14/0662-01" ] }, { "cite": "186 N. C., 461", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8653863 ], "weight": 2, "opinion_index": 0, "case_paths": [ "/nc/186/0461-01" ] }, { "cite": "128 N. C., 195", "category": "reporters:state", "reporter": "N.C.", "opinion_index": 0 }, { "cite": "126 N. C., 302", "category": "reporters:state", "reporter": "N.C.", "opinion_index": 0 }, { "cite": "117 N. C., 240", "category": "reporters:state", "reporter": "N.C.", "opinion_index": 0 }, { "cite": "112 N. C., 677", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8651705 ], "opinion_index": 0, "case_paths": [ "/nc/112/0677-01" ] }, { "cite": "39 Mich., 137", "category": "reporters:state", "reporter": "Mich.", "case_ids": [ 1333071 ], "opinion_index": 0, "case_paths": [ "/mich/39/0137-01" ] }, { "cite": "111 N. C., 340", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8651306 ], "weight": 3, "opinion_index": 0, "case_paths": [ "/nc/111/0340-01" ] }, { "cite": "128 N. C., 193", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8659248 ], "opinion_index": 0, "case_paths": [ "/nc/128/0193-01" ] }, { "cite": "125 Am. St. Rep., 207", "category": "reporters:state", "reporter": "Am. St. Rep.", "opinion_index": 0 }, { "cite": "83 Tex., 59", "category": "reporters:state", "reporter": "Tex.", "case_ids": [ 2211472 ], "opinion_index": 0, "case_paths": [ "/tex/83/0059-01" ] }, { "cite": "86 S. C., 170", "category": "reporters:state", "reporter": "S.C.", "case_ids": [ 1931621 ], "opinion_index": 0, "case_paths": [ "/sc/86/0170-01" ] }, { "cite": "11 Mont., 285", "category": "reporters:state", "reporter": "Mont.", "case_ids": [ 2277722 ], "opinion_index": 0, "case_paths": [ "/mont/11/0285-01" ] }, { "cite": "1 L. R. A., 546", "category": "reporters:federal", "reporter": "L.R.A.", "opinion_index": 0 }, { "cite": "69 Md., 433", "category": "reporters:state", "reporter": "Md.", "case_ids": [ 1044960 ], "opinion_index": 0, "case_paths": [ "/md/69/0433-01" ] }, { "cite": "107 Ga., 318", "category": "reporters:state", "reporter": "Ga.", "case_ids": [ 395425 ], "opinion_index": 0, "case_paths": [ "/ga/107/0318-01" ] }, { "cite": "90 Ala., 136", "category": "reporters:state", "reporter": "Ala.", "case_ids": [ 5574791 ], "opinion_index": 0, "case_paths": [ "/ala/90/0136-01" ] }, { "cite": "120 S. C., 385", "category": "reporters:state", "reporter": "S.C.", "case_ids": [ 1974255 ], "opinion_index": 0, "case_paths": [ "/sc/120/0385-01" ] }, { "cite": "147 N. C., 589", "category": "reporters:state", "reporter": "N.C.", "opinion_index": 0 }, { "cite": "177 N. C., 298", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8654330 ], "opinion_index": 0, "case_paths": [ "/nc/177/0298-01" ] }, { "cite": "182 U. S., 427", "category": "reporters:federal", "reporter": "U.S.", "case_ids": [ 383914 ], "pin_cites": [ { "page": "436" } ], "opinion_index": 0, "case_paths": [ "/us/182/0427-01" ] }, { "cite": "73 Cal., 599", "category": "reporters:state", "reporter": "Cal.", "case_ids": [ 2333275 ], "opinion_index": 0, "case_paths": [ "/cal/73/0599-01" ] }, { "cite": "153 Cal., 533", "category": "reporters:state", "reporter": "Cal.", "case_ids": [ 1982184 ], "opinion_index": 0, "case_paths": [ "/cal/153/0533-01" ] }, { "cite": "152 Cal., 357", "category": "reporters:state", "reporter": "Cal.", "case_ids": [ 1980201 ], "opinion_index": 0, "case_paths": [ "/cal/152/0357-01" ] }, { "cite": "31 Mo., 435", "category": "reporters:state", "reporter": "Mo.", "case_ids": [ 996102 ], "opinion_index": 0, "case_paths": [ "/mo/31/0435-01" ] }, { "cite": "75 Ia., 617", "category": "reporters:state", "reporter": "Iowa", "case_ids": [ 2061032 ], "opinion_index": 0, "case_paths": [ "/iowa/75/0617-01" ] }, { "cite": "9 Iowa, 209", "category": "reporters:state", "reporter": "Iowa", "case_ids": [ 8664346 ], "opinion_index": 0, "case_paths": [ "/iowa/9/0209-01" ] }, { "cite": "47 N. 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C., 255", "category": "reporters:state", "reporter": "N.C.", "opinion_index": 0 }, { "cite": "49 N. C., 524", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8683149 ], "opinion_index": 0, "case_paths": [ "/nc/49/0524-01" ] }, { "cite": "102 N. C., 95", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8649206 ], "opinion_index": 0, "case_paths": [ "/nc/102/0095-01" ] }, { "cite": "141 N. C., 60", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 11252074 ], "opinion_index": 0, "case_paths": [ "/nc/141/0060-01" ] }, { "cite": "151 N. C., 536", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8655438 ], "opinion_index": 0, "case_paths": [ "/nc/151/0536-01" ] }, { "cite": "160 N. C., 439", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 11271966 ], "opinion_index": 0, "case_paths": [ "/nc/160/0439-01" ] }, { "cite": "184 N. C., 119", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 11269304 ], "weight": 2, "opinion_index": 0, "case_paths": [ "/nc/184/0119-01" ] }, { "cite": "179 N. C., 498", "category": "reporters:state", "reporter": "N.C.", "opinion_index": 0 }, { "cite": "75 Va., 239", "category": "reporters:state", "reporter": "Va.", "case_ids": [ 4383316 ], "opinion_index": 0, "case_paths": [ "/va/75/0239-01" ] }, { "cite": "149 N. C., 357", "category": "reporters:state", "reporter": "N.C.", "opinion_index": 0 }, { "cite": "135 N. C., 733", "category": "reporters:state", "reporter": "N.C.", "opinion_index": 0 }, { "cite": "175 N. C., 41", "category": "reporters:state", "reporter": "N.C.", "opinion_index": 0 }, { "cite": "178 N. C., 494", "category": "reporters:state", "reporter": "N.C.", "weight": 3, "opinion_index": 0 }, { "cite": "176 N. C., 82", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8655117 ], "weight": 2, "opinion_index": 0, "case_paths": [ "/nc/176/0082-01" ] }, { "cite": "173 N. C., 479", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 11270579 ], "weight": 9, "opinion_index": 0, "case_paths": [ "/nc/173/0479-01" ] } ], "analysis": { "cardinality": 1100, "char_count": 24219, "ocr_confidence": 0.464, "pagerank": { "raw": 2.1889224930237883e-07, "percentile": 0.7735609296140431 }, "sha256": "919ad0090fd56acbc78e8608faa256d770ca34c185c25ca790dcac5defffef72", "simhash": "1:9d95ced2bc92e60d", "word_count": 4241 }, "last_updated": "2023-07-14T21:40:32.095485+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [], "parties": [ "SECURITY FINANCE COMPANY v. CHARLES M. HENDRY, Trading as BALTIMORE MERCANTILE COMPANY." ], "opinions": [ { "text": "Varser, J.\nC. S., 3288, prohibits persons from carrying on business in this State \u201cunder assumed name, or under any designation, name or style other than the real name of the individual owning, conducting or transacting such business,\u201d unless a certificate is filed by such person in the office of the clerk of the Superior Court, in the county where such business is carried on, setting forth the name under which such business is conducted or transacted, and the true or real full name of the persons conducting or transacting the same, with the home and postoffice address of such person; and punishment for the violation of this section is prescribed in C. S., 3291. As originally enacted, Public Laws 1913, ch. 77, sec. 4, made the person owning, carrying on or conducting or transacting business without complying with what is now C. S., 3288, guilty of a misdemeanor, and prescribed punishment. Public Laws 1919, ch. 2, added a proviso, however, to C. S., 3291: that the failure to comply with C. S., 3288, \u201cshall not prevent a recovery by said person or persons in any civil action brought in any of the courts of this State.\u201d This proviso was added in the light of the decision of this Court in Courtney v. Parker, 173 N. C., 479. Prior to this amendment this statute was commented upon in Fineman v. Faulkner, 174 N. C., p. 16. In Courtney v. Parker, supra, it was the plaintiff that had violated the foregoing statute by engaging in the prohibited transaction out of which the suit arose. In Fineman v. Faulkner, supra, the plaintiff had not violated any statute, but was suing the administrator of Mamie Faulkner, who was engaged in an illegal business, and the Court says: \u201cIn all the cases in which recovery has been denied, it will be found that either the consideration or the transaction was illegal, or the vendor participated in the illegal purposes of the purchaser.\u201d\nThis statute was further considered by the Court in Jennette v. Coppersmith, 176 N. C., 82. In that case Courtney v. Parker, supra, was distinguished, and the plaintiffs allowed to recover without filing the certificate required by C. S., 3288, because the title of the plaintiffs\u2019 firm, Jennett Bros., afforded a reasonable and sufficient guide to correct knowledge'of the individuals composing the firm, and, therefore, did not come clearly within the doctrine of \u201cassumed\u201d names; and in Hines v. Norcott, 176 N. C., p. 130, tbe Court held that tbis statute did not apply, because tbe actiou did not arise out of tbe doing of an act forbidden by tbe statute.\nTbe foregoing were'decided by tbis Court prior to tbe enactment of chapter 2, Public Laws 1919. Tbis enactment added tbe proviso now appearing in C. S., 3291, and tbis proviso bad tbe effect to change tbe decision in Courtney v. Parker, supra, as to violations of C. S., 3288. Tbe legislative intent is clear, not only in tbe act itself, but tbe title, \u201cAn act to amend chapter 77, of tbe Public Laws of 1913, regulating tbe use of assumed names in partnerships, so as to permit recovery in actions brought, by a partnership which has failed to register.\u201d\nIn Price v. Edwards, 178 N. C., 494, tbis statute again came under tbe consideration of tbe Court under tbe following circumstances: Tbe administrator of S. J. Edwards, together with J. H. Edwards, in bis individual capacity, instituted a proceeding for tbe final settlement of tbe estate of S. J. Edwards, deceased. S. J. Edwards, at tbe time of bis death, was conducting a mercantile business in Stanly County in tbe name of \u201cS. J. Edwards.\u201d J. H. Edwards claimed to.be a partner in tbis business and to own a one-tbird interest in tbe same. Other distributees of tbe deceased denied tbis partnership and pleaded chapter 77, Public Laws 1913 (C. S. 3288-3289-3291), in bar of J. H. Edwards\u2019 right to recover as such partner, and in answer to appropriate issues tbe jury found that J. H. Edwards was a partner to tbe extent of one-tbird interest in tbe business conducted by S. J. Edwards, and that no certificate bad been filed with tbe clerk of tbe Superior Court, .as required by law. Tbe Court said tbe statute did not apply, since \u201cno question arises as to tbe rights of third persons.\u201d \u201cNo good reason can be assigned, or, at least, none has been suggested, why such a statute should defeat tbe recovery of bis share by tbe living partner, where no third person is involved, but only tbe partners themselves in relation to transactions wholly inter se. Tbe intent and object of tbe statute was to require notice to be given to tbe business world of tbe facts required to be set out in tbe certificate, to tbe end that people dealing with a firm may be fully informed as to its membership and know with whom they are trading, and what is tbe character of tbe firm and tbe reliability and responsibility of those composing it.\u201d\nAs stated in Courtney v. Parker, supra, and reaffirmed in Price v. Edwards, supra, tbis statute is \u201ca police regulation to protect tbe general public, as heretofore stated, from fraud and imposition.\u201d\nTbe courts will not lend their aid to extend a highly penal statute, although it is within tbe police power, unless tbe case comes within tbe letter of tbe law, and, also, within its meaning and palpable design. It is just as clearly tbe policy of tbe law that it will not lend its aid in enforcing a claim founded on its own violation. Price v. Edwards, supra; Marshall v. Dicks, 175 N. C., 41; McNeill v. R. R., 135 N. C., 733; Vinegar Co. v. Hawn, 149 N. C., 357.\nIn Jenette v. Coppersmith, supra, the Court, reviewing Courtney v. Parker, supra, after referring to tbe highly penal character of this statute, says: \u201cIt should not be extended or held to include cases that do not come clearly within its provision.\u201d\nThe legislative intent must be the controlling spirit in the construction and application of statutes of this nature. Niemeyer v. Wright, 75 Va., 239; Harris v. Runnels, 12 How. (U. S.), 79. In the latter case, the Court, in speaking of a statute containing a prohibition and a penalty, says that- when prohibition and penalty included in the statute \u201cmakes the act which it punishes unlawful, and that this may be implied from a penalty without a prohibition. But it does not follow that\u2018the unlawfulness of the act was meant by the Legislature to avoid a contract made in contravention of it. When the statute is silent, and contains nothing from which the contrary can be properly inferred, a contract in contravention of it is void. It is not necessary, however, that the reverse of that should be expressed in terms to exempt a contract from the rule.\u201d\nIn the instant case it is clear by express enactment that the Legislature intended by adding the proviso that the punishment should be confined to the fine or imprisonment set out in C. S. 3291, but that contracts made by persons carrying on or conducting or transacting the business in violation of this statute should not be void.\nIn Real Estate Co. v. Sasser, 179 N. C., 498, the Court considers this statute, Public Laws 1913, ch. 77, together with chapter 2, Public Laws 1919, now contained in C. S., 3288-3291, inclusive, and allows the plaintiff to recover, although he was carrying on a real estate business, and he admitted direct violation of this statute. The Court says that this amendment (chapter 2, Public Laws 1919) applied to pending actions and to transactions prior to its enactment in the absence of a saving clause. 36 Cyc., 1164. And, since it is a mere police regulation, it may be abolished at any time and no vested rights are required under it.\nIn Miller v. Howell, 184 N. C., 119, the Court denied the right to the plaintiff to recover on notes given in violation of C. S., 4742-4743-4744-4749. The Court discusses the rule very fully, with many authorities, and applies Courtney v. Parker, supra; Ober v. Katzenstein, 160 N. C., 439; Lloyd v. R. R., 151 N. C., 536; Edwards v. Goldsboro, 141 N. C., 60; Puckett v. Alexander, 102 N. C., 95; Warden v. Plummer, 49 N. C., 524; Sharp v. Farmer, 20 N. C., 255, as follows: \u201cIt is well established that no recovery can be had on a contract forbidden by the positive law of the State, and the principle prevails, as a general rule, whether it is forbidden in express terms or by implication arising from the fact, that the transaction in question has been made an indictable offense or subjected to the imposition of a penalty.\u201d\nIn Miller v. Howell, supra, as well as the cited case from which this rule is deduced, the actor was asserting a right to recover out of a transaction expressly prohibited and penalized by the statute, which contained no provision limiting its effect to the punishment or penalty prescribed.\nIn Phosphate Co. v. Johnson, 188 N. C., 419, Mr. Justice Connor clearly reviews the authorities on this question and reaffirms Courtney v. Parker, supra, but notes that chapter 2, Public Laws 1919, takes out of chapter 77, Public Laws 1913, the bar to a recovery in a civil action on a contract growing out of transaction prohibited thereby.\nThe plaintiff in the instant case asserts that this amendment, chapter 2, Public Laws 1919, does not, now, affect plaintiffs or actors, but that it applies, in all its rigor, to defendants, or persons against whom liability is asserted.\nPlaintiff further asserts that, whenever it appears that the defendant has violated this statute, the trial court has the power to strike out its answer and to render judgment by default against him because of his admitted no compliance therewith.\nThe defendant in the instant case filed an answer raising issues properly triable by jury, if the court below was in error in striking out his answer. The power of the court below to strike out the answer is vigorously challenged in defendant\u2019s exceptions.\nThe exercise of the power to strike out pleadings in cases where no statute authorizes the striking out has not frequently arisen in the courts of this State. That the power of the courts to strike out pleadings does exist in certain cases admits now of no doubt. Crump v. Thomas, 89 N. C., 241. In that case the amended answer was stricken out because it was in direct^ violation of the leave given to file an amended answer. The Court was protecting its own order.\nIn Lumber Co. v. Cottingham, 168 N. C., 544, the Court holds that the Superior Courts, as did the former Equity Courts, have, now, full power to refuse to allow a party in contempt to oppose relief sought by the plaintiff by contradicting the allegations of the bill or bring forward any defense. It appears that Chancellor Kent recognized this rule which formerly obtained in the English Chancery. Manning v. Manning, 1 Johns Ch., 527; Walker v. Walker, 82 N. Y., 260; Brinkley v. Brinkley, 47 N. Y., 41; Saylor v. Mockbie, 9 Iowa, 209; O\u2019Connor v. Ry. Co., 75 Ia., 617; Kaskell v. Sullivan, 31 Mo., 435.\nIn 31 Cyc., 632, we find that \u201cpleadings are frequently stricken out for disobedience to orders of court.\u201d This power is exercised in practically all the States. See note 3 Cyc., 632.\nThis power, so clearly established in this State, yet so infrequently exercised, is an attribute of the equity jurisdiction, based on the contemptuous conduct of a party toward the Court and its administration, and does not include the instant case. If defendant\u2019s admission invoked the rule in Courtney v. Parker, supra, it was necessary for the answer to remain a part of the record in order to support the judgment. The answer was filed within the statutory time allowed, and he was not in contempt; he has a right to be heard and to interpose all defenses, legal or equitable, unless he has forfeited this right by some act in this action, which is tantamount to his refusal to accept or use the right of \u201cdue process.\u201d\nIn O'Neil v. Thomas Day Co., 152 Cal., 357, the Court distinguishes, even in punishing for contempt in civil cases, thus: \u201cThe plaintiff is always a voluntary actor before a court. A defendant is always under compulsion.\u201d\nIn American Wireless v. Superior Court, 153 Cal., 533, the answer was stricken from the files on the ground that defendant, a 'foreign corporation, had \u201cfailed and neglected\u201d to comply with a California statute requiring foreign corporations doing business in that State to file a certified copy of its articles of incorporation with the Secretary of State, and this statute further provided that foreign corporations failing to comply with this requirement could not maintain any suit or action in any of the courts of the State. An order striking out the answer under this statute was reversed, the Court saying that such a statute \u201cwill not be construed to extend beyond the plain meaning of its terms considered in connection with its object and purpose.\u201d\nThe object of C. S., 3288, is to protect creditors and third persons dealing with parties trading under \u201cassumed names\u201d from fraud and imposition; to enable them to know the real names of those with whom they deal. This object cannot be accomplished by taking away the right to defend an action. This would allow any person not only to sue, but to recover, ad libitum, when the legislative intent is now limited to the punishment prescribed in C. S., 3291.\nThe same rule is announced in Weeks v. Gold Mining Co., 73 Cal., 599; Benefit Order v. Jones, 20 Tex. Civil Apps. Rep., p. 73.\nThe defendant is entitled to the benefits of \u201cdue process of law.\u201d \u201cThe essential elements of due process of law are notice and opportunity to defend.\u201d Phillips v. Telegraph Co., 130 N. C., p. 522; Simon v. Craft, 182 U. S., 427, 436. A contumacious defendant loses the right to claim the protection of \u201cdue process\u201d when he contemptuously refuses this right and willfully refuses to obey rules of the forum.\nIn Grocery Co. v. Bails, 177 N. C., 298, it was held that a violation of a similar statute, C. S., 3292, did not affect a married woman\u2019s right to her personal property exemptions.\nWeld v. Shop Co., 147 N. C., 589, does not allow Rev. 2118, now C. S., 3292, to apply, even though violated, if creditor knew the truth when he sold the goods.\nTherefore, we must conclude that the legislative intent, as well as its meaning and spirit, will not permit the striking out of the defendant\u2019s answer, or a judgment against him, because of his admitted violation of 0. S., 3288.\nIn Trust Co. v. Murphy, ante, 479, Mr. Justice Cownor, in discussing the effect of C. S., 3288, says: \u201cThis statute manifestly-is for the protection of creditors of persons who fail to comply with its provisions, or of others who do business with them. The consequences of a violation of the statute are prescribed by C. S., 3291. They seem to be limited to punishment as a misdemeanor, for it is expressly provided that failure to comply with C. S., 3288 shal,l not prevent a recovery in a civil action by the person who shall violate the statute.\u201d It would be anomalous to allow the violator to recover on the ground that the transaction is valid, when he is plaintiff, but allow others, when he is a defendant, to recover of him on the ground that it is void.\nSince the question of the validity of the stipulation in the notes sued on as to payment of \u201cattorney fees\u201d may arise at the next trial, we will now consider it:\nWe recognize that, in several States, these stipulations are upheld. Bank v. Yarborough, 120 S. C., 385, both in law and equity cases; Williams v. Flowers, 90 Ala., 136; Jones v. Crawford, 107 Ga., 318; Bowie v. Hall, 69 Md., 433; 1 L. R. A., 546 (note); Bank v. Fuqua, 11 Mont., 285; Peyser v. Cole, 11 Oregon, 39; Bank v. Badham, 86 S. C., 170; Morrill v. Hoyt, 83 Tex., 59; 8 C. J., 148; 3 R. C. L., 895.\nSuch stipulations are held, in many States, to impair the negotiability of the notes containing them. Others hold-otherwise. See note collecting the authorities on both views in 125 Am. St. Rep., 207-212. North Carolina settled this', by statute, C. S., 2983, both as to the effect on negotiability and as to validity of the stipulation itself.\nThis statute (O. S., 2983) provides that \u201ca provision incorporated in the instrument to pay counsel fees for collection is not enforceable.\u201d Although the note is executed and payable in another State, such a provision must stand the test of validity here. Lex fori governs. Bank v. Land Co., 128 N. C., 193. Such stipulations were discussed in Tinsley v. Hoskins, 111 N. C., 340; Bullock v. Taylor, 39 Mich., 137. Tinsley v. Hoskins, supra, has been affirmed in Briscoe v. Norris, 112 N. C., 677; Williams v. Rich, 117 N. C., 240; Turner v. Boger, 126 N. C., 302; Bank v. Land Co., 128 N. C., 195; Ragan v. Ragan, 186 N. C., 461. In Ragan v. Ragan, supra, Mr. Justice, Clarkson ably discusses tbis doctrine and arrays the authorities in this State, and clearly sets forth the views in North Carolina in its various phases. In Tinsley v. Hoskins, supra, our Court declared that: \u201cSuch a provision is a stipulation for a penalty or forfeiture, tends to the oppression of the debtor and to encourage litigation, is a cover for usury, is without any valid consideration to support it, contrary to public policy and void.\u201d Bank v. Sevier, 14 Fed., 662; Meyer v. Hart, 40 Mich., 517; Toole v. Stephen, 4 Leigh, 581; Boozer v. Anderson, 42 Ark., 167; Shelton v. Gill, 11 Ohio, 417; Martin v. Trustees, 13 Ohio, 250; Dow v. Updike, 11 Neb., 95.\nUnless authorized by statute, the long-standing rule that they are invalid must prevail. Both the statute, C. S., 2983, and the decisions of our Court establish and assert their invalidity.\nIn order that a trial may be had on the issues raised by the pleadings, let the judgment appealed from be\nReversed.", "type": "majority", "author": "Varser, J." } ], "attorneys": [ "Thos. W. Alexander for plaintiff.", "J. Lawrence Jones for defendant." ], "corrections": "", "head_matter": "SECURITY FINANCE COMPANY v. CHARLES M. HENDRY, Trading as BALTIMORE MERCANTILE COMPANY.\n(Filed 29 April, 1925.)\n1. Trade Name \u2014 Assumed Names \u2014 Statutes \u2014 Registration \u2014 Actions\u2014 Police Powers.\nWhile the violation of C. S., 3288, prohibiting carrying on a mercantile business under an assumed name without registration, is made a misdemeanor by C. S., 3291, a further provision is made by the Public Laws of 1919, eh. 2, that such violation shall not prevent a recovery by \u201csaid person or persons in any civil action,\u201d etc., evidencing the intent of the legislature that the protection of C. S., 3288, as to creditors, should not extend to giving the courts the power to strike out an answer setting up a valid defense upon the admission that defendant had violated sec. 3288, and render judgment in favor of the plaintiff; and Held further, the courts will not lend their aid to extend the provisions of C. S., 3288, 3291, highly penal in their nature, and coming within the police powers of the State.\n2. Same \u2014 Defenses\u2014Fraud.\nIn an action upon his promissory notes the defendant alleged that the plaintiff held the notes sued on as the agent for the payee, who had procured them through fraud, sufficiently stated: Meld, the pleadings raised issuable matters for the determination of the jury.\n3. Bills and Notes \u2014 Attorney and Client \u2014 Attorneys\u2019 Fees \u2014 Statutes.\nA provision incorporated in an instrument for the payment of money for counsel fees for collection, is not enforceable. C. S., 2983.\nAppeal by defendant from Harding, J., at January Special Term, 1925, of MecicleNbueg.\nTbe plaintiff, a corporation, sued tbe defendant, an individual, trading under tbe style of \u201cBaltimore Mercantile Company,\u201d on six promissory notes. These notes are payable to Brenard Manufacturing Company, and plaintiff sues as bolder in due course. In each note is tbe stipulation: \u201cIn case of default in payment I agree to pay payee\u2019s reasonable attorney fees.\u201d\nTbe defendant admits tbe execution and delivery of these notes to tbe payee, but denies that plaintiff is a bolder in due course. Tbe defendant further says the notes were procured by fraud and deceit of tbe payee, and that tbe goods constituting tbe consideration of tbe notes were refused by him asi soon as be discovered tbe fraud and deceit, and that plaintiff is, in truth, tbe agent of tbe payee and not tbe owner of tbe notes.\nTbe defendant also admitted plaintiff\u2019s allegation that, \u201ctbe defendant was engaged in business under tbe firm or trade name of tbe \u2018Baltimore Mercantile Company,\u2019 and) that tbe defendant while thus trading failed to record bis said trade name in tbe office of tbe clerk of tbe Superior Court of Mecklenburg County, N. O., as >he was required so to do by law.\u201d\nTbe plaintiff moved tbe court to strike out tbe defendant\u2019s answer and for judgment by default final on tbe complaint, upon tbe defendant\u2019s admission that be failed to comply with 0. S., 3288.\nTbe court rendered tbe following judgment:\n\u201cThis cause coming on to be beard before bis Honor, W. E. Harding, judge presiding, and being beard upon motion of tbe plaintiff for judgment, for that tbe defendant having failed to comply with tbe law. relative to recording bis trade name; and to strike out answer and for judgment by default final. Tbe court finds tbe following facts: (1) That tbe defendant, Chas. M. \u2022 Hendry, is and was at tbe times mentioned in tbe complaint, a resident of Mecklenburg County, and was at and before tbe date of tbe execution of tbe notes sued on engaged in business in said county under tbe trade name of \u2018Baltimore Mercantile Company.\u2019 (2) That tbe defendant has not and never bad, complied with tbe law in regard to causing bis said trade name to be recorded in tbe office of tbe clerk of tbe Superior Court of said county. (3) That it is alleged in tbe complaint and admitted in tbe answer that tbe defendant bad so failed to record bis trade name \u2018as required by law.\u2019 (4) That as a result of the failure of the defendant to file his trade namei the plaintiff in this action brought suit on said notes against a corporation by the name of the Baltimore Mercantile Company, and was compelled in said action to take a nonsuit and suffered costs and expense, whereas if the defendant had complied with the law recording his trade name this suit and mistake would not have occurred. That upon these facts and admissions the court is of the opinion that the defendant haying violated the law by failing to file said trade name to be recorded, and having violated the penal laws of the State by this omission, is not entitled to defend the present action.\n\u201cAnd it further appearing that the summons in this action has been personally served upon the defendant; that a duly verified complaint setting forth the breach of an express contract to pay a definite sum of money upon notes has been filed according to law, and the court being of the opinion that the answer should be struck out and that the plaintiff is entitled to judgment. .\n\u201cIt is therefore upon motion of Thos. \"W\". Alexander, attorney for the plaintiff, that it' is hereby ordered, adjudged and decreed that the plaintiff have and recover judgment against the defendant in the sum of\u2014\n\u201c$87.00 with interest thereon from 9 March, 1924, until paid at six per cent.\n\u201c$87.00 with interest thereon from 9 April, 1924, until paid at six per cent.\n\u201c$87.00 with interest thereon from 9 May, 1924, until paid at six per cent.\n\u201c$87.00 with interest thereon from 9 June, 1924, until paid at six per cent.\n\u201c$87.00 with interest thereon from 9 July, 1924, until paid at six per cent.\n\u201c$84.26 with interest thereon from 9 August, 1924, until paid at six per cent.\n\u201cAnd it further appearing that this action is to recover obligations upon which defendant agreed to pay a reasonable attorney\u2019s fee for collection, and being an action by a bank for collection of notes purchased by it, and the court being of .the opinion that the sum of $50 is a reasonable charge: It is ordered and adjudged that the plaintiff recover of the defendant the additional sum of $50 with interest thereon from 12 January, 1925, being the first day of this term of court, at six per cent per annum until paid; that the defendant pay the costs of the action; that the action being upon notes that the same be marked \u2018judgment\u2019 by the clerk.\u201d\nThe defendant appealed, assigning error in granting plaintiff\u2019s motion to strike out the answer and in rendering judgment by default final, and in allowing attorneys\u2019 fees.\nThos. W. Alexander for plaintiff.\nJ. Lawrence Jones for defendant." }, "file_name": "0549-01", "first_page_order": 627, "last_page_order": 636 }