McRae v. Wilby

• Decision Date: 30 January 1939
• Docket Number: 27202.
• Citation: 1 S.E.2d 77,59 Ga.App. 401
• Parties: McRAE v. WILBY.
• Court: Georgia Court of Appeals

1 S.E.2d 77

59 Ga.App. 401

McRAE v. WILBY.

No. 27202.

Court of Appeals of Georgia, Division No. 2.

January 30, 1939

Mrs Myrtle Gleason Wilby, as executrix under the will of G. R Wilby, deceased, sued out an attachment on February 3, 1936 against the property of M. C. McRae, it being alleged that he was indebted to her in her representative capacity in the sum of $3075, the attachment being served by process of garnishment on Gulf Refining Company. In aid of the attachment the plaintiff, on April 17, 1936, filed a declaration, alleging that McRae was indebted to her as executrix in the sum of $2900, balance on a promissory note of $3000, dated January 30, 1935, due one year after date at 6 per cent. interest per annum, besides $215 interest to April 16, 1936. The defendant filed a plea and answer denying the indebtedness, and setting up that while he executed the note in question he was given in exchange by Wilby a note for $3000 which was past due and unpaid, although demand had been made for payment, and he prayed for judgment in the sum of $100 and interest. The plaintiff filed a replication, setting up that the note claimed by McRae to have been executed to him was a forgery, and was devised many months after the death of Wilby in a fraudulent and nefarious scheme to defeat payment of the note sued on by her, that it was without lawful consideration and was a nudum pactum.

On the trial of the case the evidence was substantially as follows G. R. Wilby had been sales manager for Gulf Refining Company for many years, having authority to appoint distributors for the company's products in certain southeastern States. McRae sought and obtained from the company, subject to Wilby's approval, a distributorship in Salisbury, North Carolina. Wilby gave his approval under a secret agreement with McRae that Wilby should have a one-fourth interest in the business and receive one-fourth of the profits. Wilby gave McRae a check for $1250 for such interest. Afterwards higher officials of the company started an investigation as to the ownership of the distributorship, and Wilby suggested to McRae that he be given a note for $1500 so that he would be able to explain certain remittances from McRae, as profits from the business, as applying against the note. This note in the amount of $1500 was thereupon executed as a blind. The partnership continued for several years, but the officials of the Gulf Refining Company finally ordered that it be dissolved on penalty of McRae losing his franchise. The partnership was in fact dissolved on December 18, 1933, McRae paying Wilby the sum of $2104. Subsequently, Mitchell McRae a brother of M. C. McRae, organized the Georgia Cypress Company, a corporation, at Waycross, Georgia, and M. C. McRae became the principal stockholder. Wilby became disconnected from the Gulf Refining Company and made one or two trips to Waycross to see the operations of the corporation. On one occasion, according to testimony of witnesses for the defendant, Wilby, while somewhat incapacitated, professed a desire to purchase stock in the corporation, and, while in such condition in a hotel room with Mitchell McRae and another officer of the corporation, threw a batch of stock certificates upon the bed with the request that they be used in purchasing stock for him in the cypress corporation. Because of the condition he was in, the certificates were deposited with the hotel clerk for safety.

On September 11, 1934, in the home of Wilby in Atlanta McRae received from Wilby a check for $3000. The check was subsequently endorsed by M. C. McRae and deposited in a bank to the credit of the Georgia Cypress Company. McRae testified that he was acting on behalf of the Georgia Cypress Company, and that the money was given him with the understanding that Wilby would later advise whether he desired the money to be considered as a loan to the corporation or to be used in the purchase of some of its stock. The plaintiff testified that she was present at the time the check was given to McRae; that it was given as a personal loan to McRae by Wilby, and that the money was to be paid back by McRae in a few weeks. McRae issued to Wilby a receipt for the check. Later this was lost, and Wilby, desiring evidence of the loan, went to Salisbury, North Carolina, and obtained from McRae his personal note in the sum of $3000, the note sued on by the plaintiff in the present case. McRae, while admitting that he executed this note, protested that he was in no wise obligated to Wilby, and that he did so only because he was at the same time protected by a note executed by Wilby to him in the same amount, that they "just swapped notes." The signature on the note alleged to have been given by Wilby to McRae was identified by a witness who had for twelve years been secretary to Wilby and was familiar with his signature, she identifying his signature on a number of checks which had been made payable to Wilby, had been endorsed by him and cashed. Another former secretary also testified that the signature on the note was that of Wilby. A former assistant to Wilby in the sales department of the Gulf Refining Company also swore to the signature. J. E. Eagle, office clerk of McRae, testified that he typed on a machine the note in question, handed Wilby the pen with which he signed, and that he witnessed the actual signing of the note by Wilby. His disqualification being waived, McRae testified that Wilby signed the note to him on the same occasion that he signed the $3000 note to Wilby. The plaintiff testified: "It is my opinion that the note does not contain the genuine signature of Mr. Wilby. I do not even recognize the existence of it, and I don't recognize it as Mr. Wilby's signature. Yes, it is most similar to his signature. I was not able to find in the records or papers of Mr. Wilby any connection with this document or record or entry that in any way referred to him having an outstanding note of $3000. I did not find among the papers any letter wherein payment of this $3000 note was demanded." She identified various signatures on checks as those of Wilby. Six of the checks offered she did not identify as to signature of Wilby, testifying that she "did not like these."

The evidence also showed that when Wilby went to Salisbury on January 30, 1935, and obtained the note from McRae, he returned with a check signed by McRae for $67.50, representing interest which had accrued on the $3000 loan or amount given to McRae by him in Atlanta. McRae's explanation of this check was that he gave his personal check, instead of having one sent by the Georgia Cypress Company, because Wilby explained that he was short of funds and needed to cash a check at the hotel in Salisbury before departing, but there was evidence that he held the check at least ten days before depositing it. It was shown that Wilby made repeated efforts to obtain money from McRae "on account which you owe me," and that McRae wired him several times in regard to the requests for payment, the last telegram stating "Will call on you as soon as possible." As to a letter from Wilby stating, "You promised me that I would hear from you in ten days. This I did not do, and therefore wired you. Your telegram does not give any assurance to a man who is desperately in need of funds. I want you, on receipt of this letter, to send me what you can on account which you owe me," McRae explained that upon receipt of such letter of June 29, 1935, he called Wilby over long-distance telephone and told him he was getting in touch with the Georgia Cypress Company to find out how they could handle the payment of the loan, but it appeared from the evidence that at that time the company had been adjudicated a bankrupt, namely, on June 21, 1935, and that McRae was familiar with the bankruptcy proceedings. The books and records of the company were not produced at the trial, having been destroyed after bankruptcy. In August, 1935, the schedules had been amended, adding Wilby as an unsecured creditor "for money loaned, $3000," and at the same time the amendment reduced accordingly what had been shown as the amount due by the bankrupt to McRae.

Although the plaintiff had been familiar with her husband's business affairs since their marriage about a year and a half before his death, she did not know of the alleged existence of the note set up by the defendant until informed by her attorney in December, 1935, several months after Wilby's death. She engaged counsel to handle some matters involving the decedent's estate, and on December 18, 1935, he went to Salisbury to see McRae in regard to the $3000 note which he had executed to Wilby. McRae denied the debt on the ground that he and Wilby had had a settlement of their accounts before Wilby's death and had just "cleaned the slate," explaining that the settlement he relied on was evidenced by a written release dated and signed in December, 1933, and that while the release was final and absolute on its face there were certain items of the partnership left open because of litigation still pending against the partnership, that shortly after January, 1935 when the $3000 note was given by Wilby, as alleged, the litigation was settled by McRae, costing him a little more than $6000, Wilby's liability as a partner being in excess of $3000, and that Wilby had, therefore, in that manner received settlement of the $3000 note. When called upon for information to support his contentions of settlement, McRae then stated that, as another reason for not owing the estate, he had never actually borrowed the money, and that the money was loaned by Wilby to the Georgia Cypress Company. After plaintiff's counsel had discussed this contention with McRae, stating that he had represented Wilby as attorney...