F. D. Cline Paving Co. v. Southland Speedways, Inc.

Decision Date20 May 1959
Docket NumberNo. 462,462
Citation250 N.C. 358,108 S.E.2d 641
PartiesF. D. CLINE PAVING COMPANY v. SOUTHLAND SPEEDWAYS, INC., G. F. Penny, J. A. Morgan, Archie Fleming, Jr., C. C. Triplett and John W. Griffin.
CourtNorth Carolina Supreme Court

Hofler & Mount, Durham, for defendant appellants.

Ruark, Young, Moore & Henderson, Raleigh, for plaintiff appellee.

RODMAN, Justice.

Appellants contend: (1) The filing of the lien and claim with the receiver for $18,342 was an election to release them, which now bars plaintiff's right to proceed against them; (2) the acceptance of the Chesnutt note was a payment of the note endorsed by them; and (3) if the acceptance of the Chesnutt note did not discharge their obligation, the acceptance of the stock in Capital Investment Company was a payment and discharge.

None of these contentions rests on a solid foundation. Speedways was the real or primary debtor; defendants were only secondarily liable. The mere fact that the creditor called on the party primarily liable and sought to compel it to pay the full amount of its debt is not inconsistent with the creditor's right to thereafter call upon the party secondarily liable to discharge his obligation. Since there was no inconsistency in plaintiff's procedure, it was not called upon to make an election as to the remedy sought. Thomas v. Catawba College, 248 N.C. 609, 104 S.E.2d 175; Carrow v. Weston, 247 N.C. 735, 102 S.E.2d 134; Surratt v. Charles E. Lambeth Insurance Agency, 244 N.C. 121, 93 S.E.2d 72; Baker v. J. J. Edwards & Son, 176 N.C. 229, 97 S.E. 16.

Payment is an affirmative defense, which must be established by the party claiming its protection. Auto Finance Co. v. McDonald, 249 N.C. 72, 105 S.E.2d 193. Defendants' plea of payment, if sustained, would require us to hold that a creditor who accepts from his debtor the obligation of a third person takes it in payment, releasing the debtor from his obligation irrespective of the intent with which the new obligation is assigned and accepted. The law is otherwise. It is, we think, correctly stated by Clark, C. J., in Grady v. Pink Hill Bank & Trust Co., 184 N.C. 158, 113 S.E. 667, 668, 28 A.L.R. 660: 'The note of a third person given for a prior debt will be held a satisfaction, where it was agreed by the creditor to receive it absolutely as payment, and to run the risk of its being paid. The onus of establishing that it was so received is on the debtor. But there must be a clear and special agreement that the creditor shall take the paper absolutely as payment, or it will be no payment if it afterwards turns out to be of no value. A receipt in full of an account does not establish an agreement on the part of the creditor to accept as absolute payment at his own risk the note of a third person for the debt.' First Nat. Bank v. Hall, 174 N.C. 477, 93 S.E. 981; Terry v. Robbins, 128 N.C. 140, 38 S.E. 470; 70 C.J.S. Payment §§ 28-29, p. 240; 40 Am.Jur. 786.

Here the court has found there was no intent to take in payment. The fact, as stipulated, that defendants as well as plaintiff participated in the receivership proceeding without protest to the charge in form of creditors' claims against the properties of Speedways supports the finding and negatives the plea of payment.

The findings establish a partial discharge of Speedways indebtedness to plaintiff. This payment was not a voluntary payment made by Speedways as to which it could direct its application, or which in default of such direction, would permit the creditor to apply as may be most advantageous to it.

The payment came as the result of a lien on Speedways' property. G.S. § 44-1. That lien applied with equal force to each part of...

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9 cases
  • Hunt v. Hunt
    • United States
    • North Carolina Supreme Court
    • March 18, 1964
    ...the 10 1/4 acre tract in Forsyth. This was an affirmative defense. The burden of proof was on defendant. Ciline Paving Company v. Southland Speedways, Inc., 250 N.C. 358, 108 S.E.2d 641; Winkler v. Appalachian Amusement Company, 238 N.C. 589, 79 S.E.2d Defendant's contention that the langua......
  • Akamine and Sons, Ltd. v. Hawaii Nat. Bank, Honolulu, 5129
    • United States
    • Hawaii Supreme Court
    • November 21, 1972
    ...173 N.W.2d 921, 924 (1970); Lindberg v. Ferguson Trucking Co., 74 N.M. 246, 392 P.2d 586 (1964); F. D. Cline Paving Co. v. Southland Speedways, Inc., 250 N.C. 358, 108 S.E.2d 641 (1959). As the court said in Grady v. Pink Hill Bank & Trust Co., 184 N.C. 158, 162, 113 S.E. 667, 668 ". . . th......
  • State Bank of Streeter v. Nester
    • United States
    • North Dakota Supreme Court
    • March 19, 1986
    ...Hargis Bank & Trust Co. v. Gambill, supra; Orleans County Nat. Bank v. Moore, supra; see F.D. Cline Paving Co. v. Southland Speedways, Inc., 250 N.C. 358, 108 S.E.2d 641 (1959); Bancroft v. Granite Savings Bank & Trust Co., 114 Vt. 336, 44 A.2d 542 (1945); see also Merchants Mut. Bonding Co......
  • Bulk Sale of Inventory, Furniture, Fixtures, Vehicles, and All Other Assets of Hart's Transfer and Storage, Inc., Matter of
    • United States
    • Kansas Court of Appeals
    • July 10, 1981
    ...Gall. Tr. & Sav. Bk. v. Darrah, 153 Mont. 228, 456 P.2d 288 (1969); (2) creditors forcing receivership, Paving Co. v. Speedways, Inc., 250 N.C. 358, 108 S.E.2d 641 (1959); (3) condemnation proceedings, Adams v. Taylor, 253 N.C. 411, 117 S.E.2d 27 (1960); (4) mortgage foreclosure in a receiv......
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