Liberty Central Trust Co. v. Union Trust Co.
| Decision Date | 12 November 1925 |
| Docket Number | 253. |
| Parties | LIBERTY CENTRAL TRUST CO. v. UNION TRUST CO. |
| Court | North Carolina Supreme Court |
Appeal from Superior Court, Wake County; Daniels, Judge.
Action by the Liberty Central Trust Company against the Union Trust Company. Judgment for plaintiff, and defendant appeals. No error.
Court properly directed verdict for plaintiff, where sole evidence introduced supported sole issue in its favor.
Willis Smith and Winston & Brassfield, all of Raleigh, for appellant.
M Ashby Lambert and Robert N. Simms, both of Raleigh, for appellee.
The plaintiff, formerly the Liberty Bank of St. Louis, is a corporation organized and existing under the laws of Missouri, and the defendant is a corporation created under the laws of North Carolina, having its principal office in the city of Raleigh. On August 24, 1920, the defendant executed and delivered to the Moon Motorcar Company the following certificate of deposit:
The defendant's corporate seal was affixed. The plaintiff alleged that the certificate of deposit was negotiable and that the plaintiff was a holder in due course by virtue of the Moon Company's indorsement, transfer, and delivery thereof for value and before maturity, and contended that the title thus transferred was unincumbered and free from any and all equities pleaded in behalf of the defendant. The defendant denied that the plaintiff was a holder in due course, and contended that the plaintiff was the agent for collection of the Moon Company and not the real party in interest; that these two had conspired to collect the amount due on the certificate for the wrongful purpose of relieving the Moon Company from the operation of an attachment and judgment in a case prosecuted against the Moon Company by one H. L. Whitaker; and that the plaintiff in no event would suffer any loss.
On November 22, 1920, the certificate was protested for nonpayment; but on March 21, 1921, the defendant made a payment of $11,267.32, with interest from November 22, 1920, leaving unpaid the sum of $2,200. The defendant denied liability for the remainder and the plaintiff waived no rights, legal or equitable, but expressly reserved its right to bring suit for the amount claimed. The summons was issued on May 25, 1921. Upon the trial the plaintiff introduced in evidence the certificate of deposit, the protest thereof, and the deposition of Edward Barklage, vice president of the plaintiff company. The defendant offered no evidence. Only one issue was submitted to the jury:
"Is the plaintiff the holder in due course of the certificate of deposit described in the complaint?"
The defendant did not object or except to the issue and agreed that, if it should be answered in favor of the plaintiff, judgment should be given for the amount alleged to be due. At the conclusion of the evidence the jury were instructed to answer the issue "yes" if they found the facts to be as testified to by the witnesses, and upon the verdict judgment was rendered for the plaintiff. The defendant excepted to the judgment, to the instruction given the jury, and to the denial of its motion to dismiss the action as in case of nonsuit.
The Negotiable Instruments Law became effective in North Carolina March 8, 1899, and in Missouri April 10, 1905. C. S. c. 58; Laws of Missouri 1905, p. 243; Brannan's Neg. Ins. pp. v, vi, note. It sets forth the requisites of negotiability and of the title to be acquired in due course. C. S. §§ 2982, 2987, 3010, 3033. On the trial the negotiable character of the certificate seems to have been assumed and the controversy to have centered in the question whether the plaintiff was a holder in due course, for the defendant's exceptions were aimed chiefly at his honor's instruction to the jury. The only evidence of the circumstances under which the plaintiff took a transfer of the certificate appears in the deposition of Edward Barklage. Upon his testimony the defendant contended that the plaintiff had discounted the certificate for the benefit of the indorser (the Moon Company) under an express agreement or an agreement implied from the course of dealing that, if not paid at maturity, the paper should be charged back to the indorser, and that the plaintiff had therefore become merely an agent for the collection of the Moon Company's claim. The plaintiff insisted that the deposition was reasonably susceptible of only one construction; that the plaintiff was a holder in due course and held the Moon Company to liability only by reason of the relation created by its indorsement of the certificate of deposit. The law with respect to these contentions is given in Worth Co. v. Feed Co., 172 N.C. 335, 342, 90 S.E. 295, 298:
"The rule prevails with us, and it is supported by the weight of authority elsewhere, that if a bank discounts a paper and places the amount, less the discount, to the credit of the indorser, with the right to check on it, and reserves the right to charge back the amount if the paper is not paid, by express agreement or one implied from the course of dealing, and not by reason of liability on the indorsement, the bank is an agent for collection and not a purchaser."
Again at pages 343, 344 (90 S.E. 299)...
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