Citizen's Bank v. White
| Decision Date | 02 March 1932 |
| Docket Number | 15. |
| Citation | 162 S.E. 736,202 N.C. 311 |
| Parties | CITIZENS' BANK v. WHITE. |
| Court | North Carolina Supreme Court |
Appeal from Superior Court, Chowan County; Frizzelle, Judge.
Action by the Commissioner of Banks, on the relation of Citizens' Bank, against E. C. White. A judgment unsatisfactory to plaintiff was rendered, and plaintiff excepts and appeals.
Error.
Surety may not claim subrogation against insolvent debtor until creditor is paid in full.
The facts, as set out in the judgment, are as follows:
1. The defendant, E. C. White, is indebted to the plaintiff in the sum of $1,000, with interest from April 30, 1931.
2. The defendant, at the request and solicitation of the plaintiff, Citizens' Bank, signed an indemnity bond on or about March 19, 1930, in which the defendant, with 9 other directors of said bank, guaranteed to protect and save harmless the bonding company which had issued a depository bond to the county commissioners of Chowan county.
3. The Citizens' Bank closed its doors, on account of insolvency, on December 27, 1930, and soon thereafter the bonding company was compelled to pay to the county the sum of $10,000, on account of the depository bond issued by the said Maryland Casualty Company which had issued such bond and soon thereafter the said bonding company called upon the directors, including this defendant, to make good to it under their indemnifying bond, and the said directors were compelled to pay, on account of signing said bond for the benefit of said bank, the said $10,000.
4. At the time the said Citizens' Bank closed its doors the county had on deposit to the credit of George Hoskins treasurer of said county, the sum of $18,541.61. When the bonding company paid to the county its $10,000, the county assigned to the said bonding company $10,000 of its deposit in the said bank. When the directors, including this defendant, paid to the bonding company the $10,000 which they were required to pay under their indemnifying bond the said bonding company then assigned to the said directors the said $10,000 assigned to it by said county.
The liquidating agent of said Citizens' Bank then assigned to each of the 9 paying directors one-ninth of the $10,000, to wit: $1,111.11, and this defendant is the owner of a certificate of proof of claim, No. 172-B, issued to him by said liquidating agent in said amount of $1,111.11.
The court further finds as a fact that at the time the said Citizens' Bank closed its doors there was on deposit to the credit of George Hoskins, treasurer of Chowan county, the sum of $18,541.61, and, for the receipt by the county commissioners on their demand of the $10,000 of said amount, the Maryland Casualty Company was liable to said commissioners, and the ten directors, including this defendant, were, at that time, liable to the bonding company for the said amount, and the court, applying the broad principles of equity and justice to the facts in this particular case, holds, as a matter of law, that the defendant is entitled to use his deposit of $1,111.11, as a set-off against plaintiff's claim of $1,000.
Upon these facts the court adjudged that the plaintiff recover of the defendant $1,000, with interest from April 30, 1931, and that the defendant have the right of set-off against said judgment together with a claim against the bank or the liquidating agent thereof for the balance of his certificate or proof of claim. The plaintiff excepted and appealed.
Dennis G. Brummitt, Atty. Gen., and A. A. F. Seawell, Asst. Atty. Gen., and W. S. Privott, of Edenton, for appellant.
J. Fernando White, of Edenton, for appellee.
When the Citizens' Bank closed its doors it held the defendant's promissory note on which the remainder due was $1,000. The defendant admits this indebtedness, and therefore has the burden of showing payment or other matters in avoidance. Bank v. Wilson, 124 N.C. 561, 32 S.E. 889. He undertakes to avoid liability by proof of the alleged counterclaim set out in the statement of facts. We are unable to see how this defense can avail him.
The county treasurer...
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