Citizens' Nat. Bank of Baltimore v. Angelo Bros.

• Decision Date: 20 April 1927
• Docket Number: 364.
• Citation: 137 S.E. 705,193 N.C. 576
• Parties: CITIZENS' NAT. BANK OF BALTIMORE v. ANGELO BROS. et al.
• Court: North Carolina Supreme Court

137 S.E. 705

193 N.C. 576

CITIZENS' NAT. BANK OF BALTIMORE v. ANGELO BROS. et al.

No. 364.

Supreme Court of North Carolina

April 20, 1927

Appeal from Superior Court, Forsyth County; Oglesby, Judge.

Action by the Citizens' National Bank of Baltimore against Angelo Bros., in which others were made defendants, and Angelo Bros. filed cross-actions. From a judgment overruling demurrers of the defendant C. A. Kent and others to the cross-actions, the demurring defendants appeal. Reversed.

Civil action to recover on a 60-day negotiable promissory note for $5,000, alleged to have been executed by Angelo Bros. to the Merchants' Bank & Trust Company March, 13, 1926, duly indorsed to the plaintiff for a valuable consideration before maturity, and without notice of any defect or equity constituting the plaintiff a holder thereof in due course.

The defendants M. A. Angelo and T. J. Angelo, partners trading as Angelo Bros., answered, alleging that on April 23, 1926 before the note was due, the sum of $4,985 was paid by them to Thomas Maslin, president and managing officer of the Merchants' Bank & Trust Company in payment of said note that the same was not surrendered, because the said Maslin with fraudulent intent, falsely represented that it was lost or misplaced, and that it would be surrendered as soon as found; that the note was then, and is now, in the possession of the plaintiff as collateral security; and that on the date of payment, and thereafter, until closed by the Corporation Commission, the said Merchants' Bank & Trust Company was insolvent and known by its officers and directors to be insolvent. Whereupon Angelo Bros. asked that the receiver of the Merchants' Bank & Trust Company, together with its officers and directors, be made parties defendant in this action, to the end that they might have judgment over against them in case the plaintiff be awarded judgment on the note in suit.

Upon the receiver and the officers and directors of the Merchants' Bank & Trust Company being made parties defendant, Angelo Bros. filed an amended answer and cross-complaint, alleging in effect: (1) That they are entitled to compel the plaintiff to satisfy its demand out of other collateral held by it; (2) that they are entitled to recover of the receiver of the Merchants' Bank & Trust Company the sum of $4,985 because of the fraud of its president in wrongfully obtaining said sum and refusing to apply it to the payment of said note; (3) that they are entitled to recover of the defendant Thomas Maslin whatever loss is sustained on account of his fraudulently inducing them to part with their money; (4) that they are entitled to recover of the officers and directors of the Merchants' Bank & Trust Company any loss sustained by them because said directors knowingly permitted the bank to remain open while insolvent, thus obtaining their money fraudulently, etc.

To the cross-complaint of Angelo Bros., the appellants herein, C. A. Kent, W. H. Watkins, T. V. Edmunds, W. H. Maslin, W. H. Hanes, Wade H. Bynum, S. F. Vance, and S.D. Craig, directors of the said Merchants' Bank & Trust Company, severally demurred upon the ground of a misjoinder of both parties and causes of action. From a judgment overruling said demurrers, the demurring defendants appeal, assigning errors.

King, Sapp & King, of Greensboro, and Benbow, Hall & Benbow, and Ratcliff, Hudson & Ferrell, all of Winston-Salem, for appellant Kent.

Brooks, Parker, Smith & Hayes, of Greensboro, and Swink, Clement & Hutchins, of Winston-Salem, for appellants Maslin, Hanes, and Craig.

Hastings & Booe, of Winston-Salem, for appellant Watkins.

King, Sapp & King, of Greensboro, and W. T. Wilson, of Winston-Salem, for appellant Edmunds.

L. M. Butler, of Winston-Salem, for appellant Bynum.

Wallace & Wells, of Winston-Salem, for appellant Vance.

Moses Shapiro, of...