Caldwell County v. George

• Decision Date: 04 December 1918
• Docket Number: 480.
• Citation: Caldwell County v. George, 176 N.C. 602, 97 S.E. 507 (N.C. 1918)
• Parties: CALDWELL COUNTY v. GEORGE.
• Court: North Carolina Supreme Court

97 S.E. 507

176 N.C. 602

CALDWELL COUNTY v. GEORGE.

No. 480.

Supreme Court of North Carolina

December 4, 1918

Appeal from Superior Court, Caldwell County; Cline, Judge.

Action by Caldwell County against John J. George. From judgment for plaintiff, defendant appeals. Affirmed.

In county's action against agent for successful bidder for bonds, who had personally guaranteed performance by indorsing checks and making his own checks to county, suit being on instruments, parol evidence to show agent's personal liability held not inadmissible as varying instruments.

This is an action to recover judgment against the defendant George as indorser of certain checks of Sidney Spitzer & Co. aggregating $1,900, and as drawer of one check for $1,100.

A jury trial was waived, and the court found the facts and announced certain conclusions of law as follows:

(1) In the fall of 1916, the commissioners of Caldwell county deemed it necessary to issue and sell $50,000 of county bonds, the proceeds to be used: $38,000 thereof for rebuilding roads and bridges destroyed in the July flood and $12,000 for purchasing a new site for a county home. They advertised for bids for such bonds to be opened on December 6th, and Sidney Spitzer & Co., of Toledo, Ohio, through the defendant, John J. George, as their agent, filed a bid for the same at par with accrued interest to delivery, and a premium, the rate of interest and time of maturities being fully understood and agreed upon. The commissioners had specified that each bid should be accompanied by a certified check for $3,000 payable to them or the county, to support and protect the bid and as security for its performance. Mr. George deposited five checks dated November 24, 1916, aggregating $1,900, drawn by Sidney Spitzer & Co., payable to "John J. George agent," indorsing each of them, "John J. George Agent," and his own check for $1,100 on the First National Bank of Cherryville, N. C., payable to the order of W. J. Harrington, chairman.

(2) Spitzer & Co. referred the matter to Hon. John C. Thomson corporation lawyer of New York, who expressed doubt as to the validity of both the road and bridge bonds and the county home bonds. On the 9th of January, 1917, the plaintiffs and their attorneys procured the passage by the General Assembly of an act to authorize Caldwell county to issue bonds to improve and maintain the public roads and refund the debt incurred for building roads and bridges and to secure a site for and build a new county home.

(3) This still did not remove the doubt from the mind of Mr. Thomson, counsel to Spitzer & Co., and he was yet unwilling to certify the bonds to be valid and binding upon the county. It resulted that a case was constituted for the Supreme Court, Commissioners v. Spitzer, 173 N.C. 147, 91 S.E. 707, opinion filed March 14, 1917, in which the validity of the county home bonds was upheld and the doubt about the road and bridge bonds raised by the decision of the Campbell Case, 94 Ohio St. 403, 115 N.E. 29, disposed of by our own decisions in Reade v. Durham, 173 N.C. 668, 92 S.E. 712, Rankin v. Gaston County, 173 N.C. 683, 92 S.E. 719, and Richardson v. Commissioners of Caldwell, 173 N.C. 685, 92 S.E. 719, opinions handed down May 30, 1917. The latter case was made up at the suggestion of Spitzer & Co., as shown by their letter of March 15, 1917; they also having suggested a court decision touching the county home bonds in their letter of February 5th. They were ready and willing to take the bonds, as their correspondence shows, up to May, 1917 (and in March had the form of the $38,000 road bonds printed and sent to commissioners), provided always Mr. Thomson approved and accepted them. On the 24th of May they notified the attorneys of the plaintiffs that they held themselves no longer obligated to take the bonds and asked a return of their certified checks. The reason given was on account of the unreasonable delay in the delivery of these bonds.

(4) The defendant, John J. George, was the agent for the bidder for the bonds, a relationship well known to all concerned. The checks or drafts by him were not on and certified by any bank, but were certified by the drawer, Spitzer & Co., to be good when properly indorsed. When he tendered them to the board of commissioners, he added his own check for $1,100 to make up the required deposit of $3,000, and stated to the board that he was solvent and had property in North Carolina sufficient to make his indorsement good as well as his own check good. The board accepted these papers and contracted to sell the bonds to his principal, Spitzer & Co. He requested the board not to send them in for collection, saying he would replace them with New York Exchange. On June 1, 1917, he wired plaintiffs' attorney: "Suggest you not press payment of my check. When you get Supreme Court decision we may be able to adjust matters."

(5) The defendant was acquainted with the status of the transaction when he wrote the letter of January 5, 1917, and was inquiring about its progress on March 26th and seeking to aid in its confirmation on April 6th, June 9th, 31st, and as late as August 3d, several months after the bonds had been declined by his principal. He had not then and did not demand a return of his check.

(6) Spitzer & Co. did not elect to withdraw their bid, nor did the defendant, their representative and agent, elect to do so, because the bonds for roads and bridges ($38,000) could not legally be issued in December, 1916, except upon approval by popular vote or without the assistance of the act of Assembly, ratified January 9, 1917, being chapter 67, Public-Local Laws of 1917, but continued the bid in force, giving opportunity to the plaintiffs to have themselves clothed with authority and to resolve any further doubts by Supreme Court decision. While on several occasions in the spring of 1917 making some complaint of the delay and trouble incident to their issue, both Spitzer & Co. and the defendant reiterated their willingness to accept them if legal, this until May 24th, as before stated, Spitzer & Co. were on January 11, 1917, notified of the legislative enactment of January 9, above mentioned, repealing chapter 468, Public-Local Laws of 1913. and on January 15th they authorized Mr. Thomson to prepare a resolution to be adopted by the commissioners of Caldwell in compliance with this special act of the Legislature.

(7) On February 2, 1917, Mr. Thomson, attorney for Spitzer & Co., rendered an opinion declining to approve of the county home bonds, but approving the road and bridge bonds. On February 11th, Spitzer & Co. proposed to take the road bonds at a premium of $361, and the county home bonds at a premium of $174, and the county board assented to this. The Spitzer & Co. checks were presented to them for payment on June 25, 1917, and payment was refused; the reason given the notary being "contract not complete." They were then protested. The George check was on June 4th presented to the Cherryville bank on which it was drawn, and payment refused as having been stopped by him. It was then protested. The delay in presentation in each case was at the special instance and request of the defendant.

(8) Later the plaintiff board ordered the bonds to be resold, and directed that action be taken for the recovery of any deficiency or lossage below the bid of Spitzer & Co. They were finally sold to Cummings, Prudden & Co. at par, accrued interest, and a premium of $137, but at a rate of 5 1/2 per cent. interest; no bids having been received for 4 3/4 or 5 per cent. bonds. The shortage in the proceeds of such sale below the bid of Spitzer & Co. was more than $3,000. The checks aggregating $1,900 were on November 24, 1916 (prior to their delivery to the plaintiffs), certified by Spitzer & Co. to be good when properly indorsed. The plaintiffs are the owners and holders of said checks as well as the aforesaid individual check of the defendant George. They brought this suit against him alone.

(9) The court finds that Mr. George meant to say to the commissioners that he personally assured and guaranteed them that his principals would keep and perform their proposed contract, and he was depositing evidences of debt to the amount of $3,000, to the payment of which in due course he was personally obligating himself in order that the board might not reject the bid on account of any failure to make the deposit required as a condition precedent. It concludes and holds as a matter of law that he thereby bound himself to the extent of this $3,000 for the performance of the contract upon the part of his principals.

(10) The court is of the opinion that the county commissioners could not legally issue the $38,000 of road and bridge bonds prior to the enabling and validating act of Assembly of January 9, 1917, and that therefore Spitzer & Co., or the defendant, could have at any time recalled their bid and have withdrawn it, though the $12,000 of county home bonds were at all times regular and valid. They did not do this, but assented to the act of validation and kept their bid intact. So the court holds that the contract was not void or avoided on that account.

(11) As to the resolutions adopted by the board of county commissioners of February, 1917, superseding, rescinding, and annulling all other resolutions (now found as a fact to have been...