Greene County v. Nat'l Bank Of Snow Hill

• Decision Date: 13 April 1927
• Docket Number: (No. 159.)
• Citation: 137 S.E. 593
• Parties: GREENE COUNTY et al. v. NATIONAL BANK OF SNOW HILL et al.
• Court: North Carolina Supreme Court

(193 N.C. 524)

137 S.E. 593

GREENE COUNTY et al.

v.NATIONAL BANK OF SNOW HILL et al.

(No. 159.)

Supreme Court of North Carolina.

April 13, 1927.

Appeal from Superior Court, Greene County; Nunn, Judge.

Action by the State, on the relation of Greene County and others, against the National Bank of Snow Hill, receiver, and others. From judgment overruling their demurrer to the complaint, defendants Josiah C. Exum and others appeal. Affirmed.

Civil action to recover a deposit of $300,-000, and to hold the defendants liable for the payment thereof: First, by reason of the official bond, in the penal sum of $25,000, given by the financial agent of Greene county with the Fidelity & Deposit Company of Maryland as surety thereon; and, second, because of the following terms contained in a surety bond, given for the full amount of said deposit, and duly signed by the individual defendants, appellants herein:

"The condition of this bond is such that, whereas, the North Carolina state highway commission has on deposit in the First National Bank of Snow Hill, N. C, the sum of $300,000, and we the undersigned, jointly and severally, undertake, promise, and agree to save harmless, in all respects, the North Carolina state highway commission, because and on account of any deposit that has been, is now, on deposit, or may hereafter be made, with the First National Bank of Snow Hill, N. C, and we hereby guarantee unto the said North Carolina state highway commission the payment, upon demand, of any funds of the North Carolina state highway commission now deposited in the First National Bank of Snow Hill, N. C, or that may hereafter be deposited therein by the North Carolina state highway commission, or any authorized officer thereof, it being the purpose and intention of the undersigned, by these presents, to bind ourselves, and each of them jointly and severally, to the payment of any funds now on deposit, or that may hereafterbe put on deposit, in the First National Bank of Snow Hill, N. C, by the North Carolina state highway commission."

The facts are that on November 29, 1922, the commissioners of Greene county placed to the credit of the state highway commission, in the First National Bank of Snow Hill, the sum of $300,000, to be used in the construction of certain roads in said county. A month later, as appears from the date of the bond, the state highway commission caused the said First National Bank of Snow Hill to have prepared and executed the bond aforesaid, and delivered to it as a protection against loss on account of, or by reason of, said deposit.

Later, the First National Bank of Snow Hill, by action of its directors, went out of business, and the Bank of Greene was organized, and took over all of its assets and assumed all of its liabilities.

In July, 1925, the state highway commission and the county of Greene entered into an agreement whereby the state highway commission was relieved of its obligation to build said roads as aforesaid, and the commission thereupon returned or transferred and assigned to the county of Greene the deposit above mentioned, and, at the same time, by written memorandum, duly transferred and assigned to the county of Greene the bond executed by the individual defendants as a protection against loss on account of or by reason of said deposit as aforesaid. In August following, the county made demand upon the Bank of Greene, successor to the First National Bank, for the said deposit and accrued interest thereon, but the bank failed and refused to make payment. This suit is to enforce collection.

It is further alleged that the Bank of Greene is utterly insolvent; that the First National Bank of Snow Hill no longer exists; and that the directors of the Bank of Greene "are all or in large part the same as the sureties on the special bond hereinbefore set forth, " etc.

From a judgment sustaining the demurrer interposed by the Fidelity & Deposit Company of Maryland (presumably ore tenus, as the record discloses no written demurrer by said defendant, though reference is made In the judgment to "the demurrer of the Fidelity & Deposit Company of Maryland herein filed"), and overruling the written demurrer filed by the individual defendants, the said individual defendants appeal, assigning error.

J. Paul Frizzelle, of Snow Hill, and L. I. Moore, of New Bern, for appellants.

J. A. Albritton, of Snow Hill, Albion Dunn, of Greenville, and Cowper, Whitaker & Allen, of Kinston, for appellees.

STACY, C. J. (after stating the facts as above). The answer to the question, raised by the demurrer of the individual defendants, depends upon whether the bond signed by them is one of strict suretyship, specially limited to the state highway commission, and therefore nonassignable, or whether it is a general guaranty of payment, assignable with the transfer of the deposit it was given to secure.

We concur in the view taken by the trial court that the bond in question partakes of the nature of a general guaranty of payment, and is assignable with the debt it was given to secure. 2 R. C. L. 593-601; Trust Co. v. Const. Co., 191 N. C. p. 667, 132 S. E. 804. For present purposes, it is sufficient to say that a guaranty of payment is an absolute or unconditional promise to pay some particular debt, if not paid by the principal debtor at maturity (Jones v. Ash-ford, 79 N. C. 173), and it is generally held that such a guaranty is assignable and enforceable by the same persons who are entitled to enforce the principal obligation, which it is given to secure (28 C. J. 950; 5 C. J. 948; Sykes v. Everett, 167 N. C. p. 608, 83 S. E. 585, 4 A. L. R. 751; Bank v. Libbey, 101 Wis. 193, 77 N. W. 182; Ellsworth v. Harmon, 101 Ill. 274; Claflin v. Ostrom, 54 N. Y. 581; Stillman v. Northrup, 109 N. Y. 475, 17 N. E. 379; Everson v. Gere, 122 N. Y. 290, 25 N. E. 492; Lane v. Duchac, 73.Wis. 655, 41 N. W. 962; Kimball Co. v. Mellon, 80 Wis. 133, 48 N. W. 1100...