The opinion of the court was delivered by: Moss, Justice.
January 6, 1958.
This is an action by Benjamin S. Wise, respondent-plaintiff, against Edward I. Picow and Sara G. Picow, doing business under the name of Allan's, appellants-defendants, for an accounting to ascertain the amount due the plaintiff from the defendants and for judgment for the amount so determined.
It appears from the evidence and from the pleadings that on January 16, 1950, the defendants entered into a contract with the National Shoe Company, by the terms of which said shoe company was assigned certain space in the store of defendants with the right to sell therefrom shoes, hosiery and kindred accessories. The cash received from such sales was handled by the cashier of the defendants and from the gross amount received weekly or monthly 11% thereof was to be deducted as rental for the space and services rendered by the defendants in connection with the business, and the balance paid over to plaintiff.
The complaint alleges that Benjamin S. Wise purchased the business of National Shoe Company and entered into an agreement with the defendants whereby the plaintiff was to have certain space in the defendants' store for the purpose of selling therefrom shoes, hosiery and kindred accessories, upon the same terms as was contained in the original contract. The complaint alleges that the defendants gave notice in September, 1953, that the agreement would be terminated on February 1, 1954, and the plaintiff was required to vacate the premises on January 30, 1954. It is also alleged that the plaintiff unsuccessfully attempted to secure an accounting from the defendants. This action followed.
The defendants answered the complaint and denied the allegations thereof. They asserted also that there was not now, and never had been in the past, any agreement, written, oral or implied, between the plaintiff and the defendants concerning the use of a portion of the defendants' store for the purposes aforesaid. They also assert that the plaintiff did operate the said shoe department located in their store, but only as an employee of some other person, firm or corporation, who had a lease agreement with the defendants. They denied that there was any contractual relationship between the plaintiff and the defendants. The defendants also filed a counterclaim, asserting that the plaintiff sold shoes and withheld knowledge of such sales from the defendants, thereby depriving them of the 11% of such sales as rent for the use of the shoe department. They further assert that because of the fraudulent conduct of the plaintiff in failing to report such sales, they were entitled to damages in the sum of $10,000.00.
This action being one in equity for an accounting, a general Order of Reference to the Master of Richland County, South Carolina, was made. After taking the testimony the Master filed his Report in which he found that the plaintiff was entitled to recover the amount due him for the months of December 1953, and January 1954, in the total amount of $2,396.96. He also found that the plaintiff owed the defendants on merchandise sold on "the lay away" plan, not reported and handled by the defendants through the cash register. He also found that the defendants were entitled to payment for advertising and window display expenses, making a total due the defendants in the amount of $415.55, leaving a balance due the plaintiff by the defendants in the sum of $1,981.41, which said amount should draw interest at the legal rate from February 1, 1954. He accordingly recommended judgment in favor of the plaintiff against the defendants for this sum.
At appropriate stages of the hearing before the Master, the defendants moved for a dismissal of the action on the ground that the entire claim, the basis of this action, is predicated on a written lease for the operation of the shoe department by Joe Isenberg, and that the plaintiff is not a party to the lease, and whatever amounts may be due by the defendants is due to the holder of this lease, Joe Isenberg, and not to the plaintiff. They assert that the plaintiff is not the real party in interest and hence not entitled to maintain this action.
The Master found in connection with this defense, the following:
The plaintiff testified that he furnished the money to purchase the shoe department and operated the same as his own. He further testified that his brother-in-law, Joe Isenberg, endorsed certain notes for him in order to finance the purchase and operation of the store. These notes were paid by the plaintiff.
Joe Isenberg appeared as a witness for the plaintiff and testified that even though the lease to the store was taken in his name that the entire ownership and operation of the store was that of the plaintiff herein, and that he acted solely for the benefit of his brother-in-law, and that Mr. Picow knew this. He said he signed the documents because Mr. Picow asked him to execute same. He further testified that he had not "one dime" interest in the store and that it was entirely the separate and distinct business of the plaintiff. He further testified that Mr. Picow let Mr. Wise have the department on "my account". He further testified that Mr. Picow made out checks to Mr. Wise and that he knew that the witness had nothing to do with the department financially and that plaintiff was the owner of the shoe department.
Mrs. Ethel Davis was an employee of the shoe department and testified that the plaintiff was the owner thereof and that he paid the salaries and commissions of the employees. She also testified that when the defendants made out the May 1952 statement that they changed the word "National" by inserting the word "Wise". This testimony shows that the defendants recognized the plaintiff as the successor to the National Shoe Company.
The defendants contend that the plaintiff has no right to institute this action as he is not the real party in interest. They plead as a defense the provisions of Sec. 10-207 of the 1952 Code of Laws of South Carolina, which provides that "Every action ...