Reid v. Bank

• Decision Date: 01 May 1912
• Citation: 74 S.E. 746,159 N.C. 99
• Parties: REID. v. CHARLOTTE NAT. BANK et al.
• Court: North Carolina Supreme Court

74 S.E. 746

(159 N.C. 99)

REID.

v.CHARLOTTE NAT. BANK et al.

Supreme Court of North Carolina.

May 1, 1912.

1. Banks and Banking (§ 119*)—General Deposit Customers—Nature of Relation.

The ordinary relation subsisting at common law between a bank and its general deposit customers is that of debtor and creditor; it being presumed in adjusting the account that the first money paid in is the first paid out.

[Ed. Note.—For other cases, see Banks and Banking, Cent. Dig. §§ 289-292; Dec. Dig. g 119.*]

2. Mortgages (§ 305*)—Deed of Trust—Securing Bank Indebtedness—Payment of Debt.

Complainant, who was a member of a commission company, executed a deed of trust to secure advances by defendant bank for a year from June 8, 1901, to an amount not exceeding $5,000. At the end of the 12 months, the commission company's total indebtedness to the bank was $27,000, amply secured by collateral. After June 8, 1902, the commission company continued to do business with the hank for two years, to the amount of several millions of dollars. On that date there was an outstanding note of $30,000, which had been executed by the commission company, and $3,000 on deposit, and the cashier testified that on January 5, 1904, such note, together with two other later notes, was marked Paid, " and three notes aggregating $75,000 were executed, $40,000 of which was afterwards paid. Held, that the indebtedness for which the deed of trust was executed was paid, and that complainant was entitled to a decree for cancellation thereof.

[Ed. Note.—For other cases, see Mortgages, Cent. Dig. §§ 889-894, 898; Dec. Dig. § 305.*]

Appeal from Superior Court, Mecklenburg County; Lyon, Judge.

Suit by E. S. Reid against the Charlotte National Bank and another. Judgment for defendants, and complainant appeals. Reversed.

Clarkson & Duls and Morrison & McLain, for appellant.

Pharr & Bell and Stewart & McRae, for appellees.

CLARK, C. J. This is an action to enjoin the foreclosure of a deed in trust executed by the plaintiff to E. J. Heath, trustee, to secure loans and advances to be made by the Charlotte National Bank to the Heath-Reid Jobbing & Commission Company during 12 months from June 8, 1901, to an amount not exceeding $5,000. The exact language of the mortgage is: "The said Reid has agreed that, if the said Heath-Reid Jobbing & Commission Co. shall fail to pay the said bank within 12 months from this date all amounts for which it is in any manner liable, then the said Reid will pay the balance that may remain due at the end of the 12 months aforesaid, not exceeding the sum of $5,000, however"—with the further provision that if the Commission Company failed to pay said bank the balance due, and if said Reid failed to pay said $5,000, then it should be the duty of said Heath, trustee, to advertise and sell. The final clause of the mortgage is: "It being the intention of the said Reid to secure the ultimate payment to said bank of the sum of $5,000 or so much thereof as may remain unpaid at the end of 12 months." At the end of 12 months, the total indebtedness of the Commission Company to the bank was $27,000, but the bank had ample collateral of the company to protect such indebtedness. After June 8, 1902, the Commission Company continued to do business with the bank two years longer, depositing and taking out money to the amount of several millions of dollars. On June 8, 1902, there was an outstanding note of $30,000,...