Am. Nat. Bank Op Richmond v. Hill

• Decision Date: 12 May 1915
• Docket Number: (No. 410.)
• Citation: 85 S.E. 209,169 N.C. 235
• Court: North Carolina Supreme Court
• Parties: AMERICAN NAT. BANK OP RICHMOND, VA. v. HILL.

85 S.E. 209

169 N.C. 235

AMERICAN NAT. BANK OP RICHMOND, VA.

v.HILL.

(No. 410.)

Supreme Court of North Carolina.

May 12, 1915.

Appeal from Superior Court, Anson County; Rountree, Judge.

Action by the American National Bank of Richmond, Va., against J. E. C. Hill. Judgment for plaintiff, and defendant appeals. Affirmed.

Civil action, tried upon these issues:

1. Is the plaintiff the owner and holds in due course the notes described in the complaint? Answer: Yes.

2. What amount, if any, is the plaintiff entitled to recover of the defendant? Answer: $935.00, ' with interest from October 12, 1914.

The defendant introduced no evidence. His honor instructed the jury. There was no exception to the evidence or the charge of the court. In apt time the plaintiff moved to strike out the "further defense, " set up by the defendant in his answer. The motion was allowed, and the defendant excepted. The plaintiff introduced evidence sustaining the allegations contained in the complaint. From the judgment rendered, the defendant appealed. The only assignment of error is the granting of the said motion.

H. H. McLendon, of Wadesboro, for appellant.

Lockhart & Dunlap, of Wadesboro, for appellee.

BROWN, J. This is an action to recover upon a promissory note, executed by the defendant to the Southern Savings Bank of Wadesboro, N. C, and duly indorsed to the plaintiff before maturity. The execution of the note and its nonpayment are admitted. The findings of the jury under the charge of the court, to which no exception is taken, establishes the fact that the plaintiff is the owner and holder in due course of the said note.

Striking out the answer, or other pleading, or a part of it, is an unusual practice in this state, but is recognized as proper practice elsewhere. "It is often necessary, " says 5 Ency. P. & P. 341, "for the court, in the administration of justice, to strike out a count" (citing Sherratt v. Webster, 9 Jur. U. S. 629; Chapman v. King, 4 D. & L. 311, and other cases).

The evident purpose of the part of the answer stricken out is to set up a counterclaim or set-off against the note sued on in plaintiff's hands. We will therefore treat the motion to strike out the "further answer" as a demurrer ore tenus to it upon the ground that it fails to state a valid counterclaim.

It is admitted that the plaintiff bank holds the note of the defendant as collateral security for the note of the Southern Savings Bank. The jury find that the plaintiff was the holder in due course of the note sued on; that is to say, that plaintiff received it by indorsement before maturity for value and without knowledge of any infirmity. The note is a negotiable instrument on its face, and the fact that it was indorsed to the plaintiff as collateral security for the debt of the indorser, the Southern Savings Bank, does not invalidate the position of the plaintiff that it is a holder in due course.

The plaintiff has the legal right to collect the collateral which it has thus received in due course in its own name, and can maintain an action thereon against the maker. Bank v. Oil Co., 157 N. C. 302, 73 S. E. 93.

It is true that where, in an action on a note, the plaintiff proves only an equitable title thereto, the defendant, maker of the note, cannot properly be cut off from matters of defense existing between the defendant, maker, and indorsee or payee. Tyson v. Joyner, 139 N. C. 70, 51 S. E. 803.

In this case, the defendant fails to allege that the debt due to the plaintiff by the Southern Savings Bank has been paid and...