American Exchange Nat. Bank v. Winder

• Decision Date: 27 November 1929
• Docket Number: 404.
• Citation: 150 S.E. 489,198 N.C. 18
• Parties: AMERICAN EXCHANGE NAT. BANK v. WINDER et al.
• Court: North Carolina Supreme Court

150 S.E. 489

198 N.C. 18

AMERICAN EXCHANGE NAT. BANK v. WINDER et al.

No. 404.

Supreme Court of North Carolina

November 27, 1929

Appeal from Superior Court, Guilford County; Clement, Judge.

Action by the American Exchange National Bank against Helen M Winder, William T. Winder, and another. Judgment for plaintiff, and defendant William T. Winder appeals. No error.

Evidence held sufficient for jury on question of estoppel to claim interest in diamonds pledged as security for note.

The plaintiff brought suit on two promissory notes under seal payable to its order, executed by the defendant Helen M Winder. The first was in the sum of $3,335.05, was dated October 16, 1927, and was payable November 28, 1927; the second was given for $690, was dated December 26, 1927, and was payable 30 days after date. The maker of the notes authorized the payee to hold all securities put up for payment as security for all her indebtedness to the payee whether incurred before or after the execution of the notes. She filed an answer to the complaint, alleging that the original debt of $5,000, contracted in 1920, was that of her husband, John C. Winder, and that he procured her indorsement of a note in this amount and obtained from her four diamonds, which he deposited with the plaintiff as collateral security. She alleged that her husband had given her one of the diamonds as an engagement ring, and had given her the others some time after the death of his mother; also that in May, 1926, her husband executed a deed of separation admitting her title to the diamonds and agreeing to pay the amount of the note but, upon his failure or refusal to make payment, she was forced to renew the note. When the diamonds were pledged, there was due the bank $1,800, but an additional loan was made, increasing the debt to $5,000, which was subsequently reduced to $3,335. Mrs. Winder admits that, as collateral security for the note of $690 which was given for her individual debt, she deposited with the plaintiff her diamond pendant. The answer to the first issue is made up of these two sums. She asks that all the stones be sold under an order of court, that the proceeds be applied to the payment of her notes, and that the surplus, if any, be paid to her.

John C. Winder filed no pleading. William T. Winder filed an answer admitting the execution of the notes and the deposit of the diamonds with the plaintiff; but he alleged that he owns a one-half interest in the pendant and in all the other diamonds except Mrs. Winder's wedding ring, and that his title is not and cannot be affected by her disposition of them.

The issues were answered as follows:

"1. What amount, if any, is the plaintiff entitled to recover of the defendant, Helen M. Winder? Answer: $4,025.05 with interest on $3,335.05 from December 28, 1927, and interest on $690 from January 25, 1928.

"2. Did the defendants, Helen Winder and John Winder pledge with the plaintiff as collateral security for the debt sued on, the property described in the complaint? Answer: Yes.

"3. Is the defendant, William T. Winder, the half owner of any of said property, and if so, which? Answer: Yes, all diamonds except Helen Winder's engagement diamond.

"4. If so, is the said William T. Winder, estopped as against the plaintiff in this cause from asserting any claim thereto? Answer: Yes."

Judgment was rendered for the plaintiff, and William T. Winder appealed.

King, Sapp & King, of Greensboro, for appellant.

Brooks, Parker, Smith & Wharton, of Greensboro, for appellee.

ADAMS J.

The fundamental question is whether there is enough evidence to sustain the jury's answer to the fourth issue; for if the appellant is estopped as against the plaintiff to assert title to the property in controversy, only a few of the exceptions need be considered. The answer may be found in the doctrine of estoppel.

We are not concerned with estoppel by record or by writing, but with estoppel in pais--i. e., equitable estoppel. While equitable estoppels arise from facts which are matters in pais, there is an essential and marked distinction between them and legal estoppels in pais. The two agree in that they preclude a person from showing the truth in an individual case; but while legal estoppel, in shutting out the truth, shuts out also the equity and justice of the individual case, equitable estoppel, which is available in an action at law, is admitted on the opposite ground of preventing a person from asserting his rights under a technical rule of law when his conduct has been such as in good conscience should prevent him from alleging and proving the truth. Eaton's Equity (2d Ed.) 147, § 60; Dickerson v. Colgrove, 100 U.S. 578, 25 L.Ed. 618.

Equitable estoppel is defined as "the effect of the voluntary conduct of a party whereby he is absolutely precluded, both at law and in equity, from asserting rights which might perhaps have otherwise existed, either of property, of contract, or of remedy, as against another person who in good faith relied upon such conduct, and has been led thereby to change his position for the worse, and who on his part acquires some corresponding right either of contract or of remedy. This estoppel arises when one by his acts representations, or admissions, or by his silence when he ought to speak out, intentionally or through culpable negligence induces another to believe certain facts to exist and such other rightfully relies and acts on such belief, so that he will be prejudiced if the former is permitted to deny the existence of such facts." 21 C.J. 1113, § 116; Boddie v. Bond, 154 N.C. 359, 70 S.E. 824. Neither fraud nor representation in express words is in all cases an essential requisite. Conduct, acts, or even silence may be adequate. Nor is it necessary that the conduct of the person estopped be prompted or characterized by an intention or expectation that...