New Mexico Tire & Battery Co. v. Ole Tires, Inc.

683 P.2d 39, 101 N.M. 357
CourtNew Mexico Supreme Court
DecidedJune 6, 1984
DocketNo. 15282
StatusPublished
Cited by2 cases

This text of 683 P.2d 39 (New Mexico Tire & Battery Co. v. Ole Tires, Inc.) is published on Counsel Stack Legal Research, covering New Mexico Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
New Mexico Tire & Battery Co. v. Ole Tires, Inc., 683 P.2d 39, 101 N.M. 357 (N.M. 1984).

Opinion

OPINION

WALTERS, Justice.

From a motion granting summary judgment to plaintiffs on two open account debts, defendant appeals.

Plaintiffs’ claims were joined in a four-count single complaint, the separate, claims of each plaintiff being set forth in separate counts. Attached to the complaint were several exhibits. Exhibit A was a sworn statement of James F. House, president of plaintiff New Mexico Tire and Battery Co., Inc. (Tire Company), alleging the balance of Ole Tires, Inc.’s (Ole) account and attaching copies of the ledger cards showing $6,897.31 due from Ole as of April 30,1983. Exhibit B was the affidavit of F.E. Year-wood, president of plaintiff Yearwood and House, Inc. (Yearwood), attached to which were billing statements showing a balance of $64,773.18 due as of April 1983. Exhibit C was a photocopy of a $16,000 check payable to Yearwood from Ole, stamped “insufficient funds.” Exhibit D was a copy of a certified letter from counsel for Year-wood to Ole, advising Ole of the dishonored check, the criminal nature of knowingly issuing an insufficient check and failing to pay it after notice of dishonor, and a demand for payment.

Ole filed an answer and counterclaim to the complaint of plaintiffs in which it denied the debts alleged, and affirmatively alleged that when the $16,000 check was returned to Yearwood, the parties agreed to add the $16,000 “back to the open account and future payments were to be applied to the cancellation of the total indebtedness, including the amount of that check.” In its counterclaim Ole alleged that Yearwood acted maliciously in “threatening criminal sanctions,” thus damaging Ole’s reputation in the amount of $20,000. Ole asked $5,000 in punitive damages for Yearwood’s “wilfull and reckless disregard” of the parties’ agreement that the $16,000 would be charged back to Ole’s account.

On July 11, 1983, the two plaintiffs filed a joint motion for summary judgment unaccompanied by any documents or affidavits, and a motion for dismissal of Ole’s counterclaim. Ole’s Response to Motion for Summary Judgment, filed on July 22nd, did not controvert the summary judgment motion with affidavits or other supplementary materials. See NMSA 1978, Civ.P.R. 56(c) (Repl.Pamp.1980). The Response noted that plaintiffs had not complied with the local rule requiring a “short, concise statement of the grounds in support” of a summary judgment motion; that the amount of the debts, the method of payment, and other material facts were disputed by the pleadings; and that plaintiffs’ motion was not supported by interrogatory answers, depositions or affidavits. The Response was not verified.

The trial court granted the motion and entered summary judgment against Ole in a total amount of $71,670.49, together with interest of 18% per annum from April 31, 1983, until paid, and Ole appeals. The judgment was for the combined amount pled by both plaintiffs.

Ole contends that issues of material fact existed which precluded summary judgment; plaintiffs claim that they made a prima facie case pursuant to New Mexico’s verified accounts statute, NMSA 1978, Section 38-7-1, and because Ole did not file a verified answer, summary judgment was proper.

Our difficulty with the arguments of both parties is that the procedure followed in this case fits neither the verified accounts statute relied on by plaintiffs nor the rule for granting summary judgment.

Section 38-7-1, entitled “Verified accounts; instruments in writing; denial under oath,” reads as follows:

Except as provided in the Uniform Commercial Code [55-1-101 to 55-9-507 NMSA 1978], accounts duly verified by the oath of the party claiming the same, or his agent, and promissory notes and other instruments in writing, not barred by law, are sufficient evidence in any suit to enable the plaintiff to recover judgment for the amount thereof, unless the defendant or his agent denies the same under oath.

It would appear, from the form of the complaint and the documents thereto attached, as well as from plaintiffs’ brief, that plaintiffs intended to proceed under the above statute. Apparently, however, plaintiffs and the trial court misapprehended the limitations of the statutory procedure, and assumed the statute to be self-executing.

Allowance of judgment on the verified account of a party has a long history in this jurisdiction. Laws 1880, ch. 5, § 18, the progenitor of the current statute, contained language identical to that contained in the current statute:

Accounts duly verified by the oath of the party claiming the same, or his agent, * * * shall be sufficient evidence in any suit to enable the plaintiff to recover judgment for the amount thereof, unless the defendant, or his agent, shall deny the same under oath.

It was said in Richardson v. Pierce, 14 N.M. 334, 339, 93 P. 715, 716 (1908), that the “very purpose” of the statute was “to obviate the necessity of the introduction of the books of original entry * * * where the truth of such accounts is not directly denied under oath.” In Wagner v. Hunton, 76 N.M. 194, 413 P.2d 474 (1966), the statute was again construed. Plaintiff there, an attorney, had attached his affidavit to the complaint, which outlined his fees for services rendered, relying for judgment on the provisions of NMSA 1953, Section 20-2-7, another forerunner of the current statute. Defendant failed to answer, under oath or otherwise. The trial court refused to grant a default judgment. Chief Justice Carmody, writing for this Court, looked to the default judgment rule and held that the verified accounts statute was “merely a rule of evidence” excusing the need to introduce the original books and records, but it did not relieve a party from producing evidence to support a judgment and “unless and until offered in evidence, it [the verified account] remained as it was— merely a part of the pleadings.” Id. at 195, 413 P.2d at 475. The judgment of the trial court was sustained.

We observe that plaintiff in Wagner, although relying on the verified account statute’s provisions, without offering any evidence or testimony, applied for a default judgment. In the instant case, plaintiff, assertedly acting also under the statute and also without offering evidence or testimony, moved for summary judgment. Upon the reasoning of Wagner, we might well hold that summary judgment based on verified attachments to the plaintiffs’ pleadings was improper for two reasons: there is nothing in plaintiffs’ affidavits to show that the affiants’ statements were made upon personal knowledge, or that affiants were competent to testify regarding the accuracy of the records, as required by the rule for summary judgment, NMSA 1978, Civ.P.Rule 56 (Repl.Pamp.1980). See Martinez v. Metzgar, 97 N.M. 173, 637 P.2d 1228 (1981).

But Wagner was not the last word on Section 38-7-1. In 1973, this Court held that in a proceeding under the statute (then NMSA 1953, Section 20-2-7), if plaintiff submitted the verified account attached to the complaint into evidence, defendant could not thereafter rely at trial on sworn testimony denying the indebtedness to defeat plaintiff’s claim. Alexander Concrete Co. v. Western States Mechanical Contractors, Inc., 84 N.M.

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Bluebook (online)
683 P.2d 39, 101 N.M. 357, Counsel Stack Legal Research, https://law.counselstack.com/opinion/new-mexico-tire-battery-co-v-ole-tires-inc-nm-1984.