Jones v. Hester, 18
| Decision Date | 09 October 1963 |
| Docket Number | No. 18,18 |
| Citation | 132 S.E.2d 586,260 N.C. 264 |
| Court | North Carolina Supreme Court |
| Parties | Eugene M. JONES v. Waverly M. HESTER. |
Robert N. Golding, W. Y. Wilkins, Jr., Tryon, for plaintiff-appellant.
McCown, Lavender & McFarland, by Wm. A. McFarland, Tryon, and Hamrick & Jones, by Fred D. Hamrick, Jr., Rutherfordton, for defendant-appellee.
The plaintiff relied on the defendant's adverse examination to fill in the low places in his case. We have quoted in part and summarized in part admissions taken from the adverse examination, most of which were excluded by the court. However, the admissions in the pleadings, the evidence introduced, and that which was offered and excluded tended to show the following: Prior to February, 1958, the plaintiff and Matt O'Shields were comanagers of Ballenger's, Inc. Each owned $15,000 stock in the corporation. O'Shields was released as comanager in 1958. The plaintiff acted as sole manager thereafter. The defendant was president of the corporation.
On April 15, 1960, the defendant issued a call for a stockholders meeting 'to present evidence of dishonesty on the part of some former employees of Ballenger's, Inc., and to call a $5,000 surety bond on Matt O'Shields and Eugene Jones.' On the adverse examination the defendant was asked whether between April 15, 1960, the date of the notice calling the meeting, and April 19, 1960, the date of the meeting, he did not (on behalf of Mountain Land Company in which he was interested) purchase the Matt O'Shields stock for $5,000 with the understanding 'it was to be a closed transaction and there would be no further demands on Matt O'Shields * * *.' Answer: 'That is the record that speaks for itself.'
O'Shields and Jones were comanagers. Both were covered by a faithful performance bond. The conduct of both was to be investigated in the stockholders meeting. The defendant purchased the O'Shields stock for one-third of its par value between the call and the meeting and O'Shields was released from further responsibility. On the day of the stockholders meeting the defendant wrote the plaintiff that he, the defendant, had conferred with the manager and adjustor of the surety company who, in turn, would confer with plaintiff and his attorney 'regarding a settlement of the bond held by Ballenger's, Inc., guaranteeing your honesty and integrity.' This evidence which appears to have been excluded may or may not be sufficient to permit the inference the president of Ballenger's, Inc., meant to charge O'Shields and plaintiff with dishonesty and a breach of their bond in order to influence them to sell their Ballenger's stock (not to the Ballenger corporation--but to another company in which the defendant was interested) for one-third of its par value.
In view of the tie-in between O'Shields and the plaintiff, the latter was entitled to place before the jury the defendant's admission that he arranged the purchase of the O'Shields stock and released O'Shields from further responsibility to Ballenger's. The rule governing the admissibility of such evidence was stated by Stacy, C. J., in Farmers Federation v. Morris, 223 N.C. 467, 27 S.E.2d 80: "It is not required that the evidence bear directly on the question in issue, and it is competent and relevant if it is one of the circumstances surrounding the parties and necessary to be known...
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...to be known to properly understand their conduct or motives, or to weigh the reasonableness of their contentions." Jones v. Hester, 260 N.C. 264, 132 S.E.2d 586 (1963); Farmers' Federation, Inc. v. Morris, 223 N.C. 467, 27 S.E.2d 80 (1943); Bank v. Stack, 179 N.C. 514, 103 S.E. 6 (1920). Re......
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