Royster v. Hancock, 742

• Decision Date: 01 February 1952
• Docket Number: No. 742,742
• Citation: 235 N.C. 110,69 S.E.2d 29
• Court: North Carolina Supreme Court
• Parties: ROYSTER et al. v. HANCOCK.

Page 29

69 S.E.2d 29

235 N.C. 110

ROYSTER et al. v. HANCOCK.

No. 742

Supreme Court of North Carolina.

Feb. 1, 1952

W. M. Hicks, Oxford, Ruark & Ruark, and Joseph C. Moore, Jr., all of Raleigh, for plaintiffs appellants.

T. G. Stem, Edward F. Taylor, Oxford, Marshall T. Spears, Durham, and Royster & Royster, Oxford, for defendant appellee.

VALENTINE, Justice.

The only question presented is, did plaintiffs make out a case sufficient to repel defendant's demurrer to the evidence and motion for judgment as of nonsuit? The facts impel an affirmative answer to this question.

The fact that the note in question is under seal raises the presumption of a good and sufficient consideration. Angier v. Howard, 94 N.C. 27; Wester v. Bailey, 118 N.C. 193, 24 S.E. 9; Lentz v. K. B. Johnson & Sons, 207 N.C. 614, 178 S.E. 226. The plaintiffs allege execution, delivery and nonpayment of the note. These 'issuable facts' are admitted by the defendant and when so admitted become as effective as if established by a jury's verdict. McIntosh, 475, 476; Leathers v. Tobacco Co., 144 N.C. 330, 57 S.E. 11, 9 L.R.A.,N.S., 349; McCaskill v. Walker, 147 N.C. 195, 61 S.E. 46; Fleming v. Norfolk Southern R. R., 160 N.C. 196, 76 S.E 212; Barbee v. Davis, 187 N.C. 78, 121 S.E. 176. This is true even when the defendant attaches to his admission certain qualifications. Cook v. Guirkin, 119 N.C. 13, 25 S.E. 715; Eames v. Armstrong, 142 N.C. 506, 55 S.E. 405.

By the introduction of the note, the execution and delivery of which are admitted in the answer, plaintiffs made out a prima facie case even though the note is not negotiable. Stronach v. Bledsoe, 85 N.C. 473; Carrington v. Allen, 87 N.C. 354; Hunt v. Eure, 188 N.C. 716, 125 S.E. 484; Hunt v. Eure, 189 N.C. 482, 127 S.E. 593; Roberts v. Grogan, 222 N.C. 30, 21 S.E.2d 829. When the plaintiff thus makes out a prima facie case, the defendant is put to the election of going forward with proof or take his chance of an adverse verdict. Speas v. Merchants Bank & Trust Co., 188 N.C. 524, 125 S.E. 398, Webster v. Wachovia Bank & Trust Co., 208 N.C. 759, 182 S.E. 333; Warren v. Pilot Life Insurance Co., 215 N.C. 402, 2 S.E.2d 17; Russ v. Western Union Telegraph Co., 222 N.C. 504, 23 S.E.2d 681.

The defendant in this case seeks to avoid liability upon the claim that the note is based on a gambling transaction and therefore there is a failure of consideration. This is a matter requiring the defendant to offer proof, or take his chance with the jury upon plaintiffs' prima facie case. G.S. § 25-33; Lentz v. K. B. Johnson & Sons, supra. He is permitted to show, if he can, a failure of consideration by parol evidence, for the presumption of fact arising in favor of plaintiff upon an introduction of a sealed note is rebuttable. Patterson v. Fuller, 203 N.C. 788, 167 S.E. 74; American Agricultural Chemical Co. v. Griffin, 202 N.C. 812, 164 S.E. 577; Taft v. Covington, 199 N.C. 51, 153 S.E. 597; Farrington v. McNeill, 174 N.C. 420, 93 S.E. 957.

The defendant invokes as a matter of avoidance and defense the principle set forth in C.S. 2144 (1919), now G.S. § 16-3, which provides that certain transactions, including trading in cotton futures and stocks where actual delivery is not intended, are illegal and void, and C.S. 2146 (1919) which provided that when the defendant in any action pending should allege specifically in his verified answer that plaintiff's cause of action was founded upon a contract made void by C.S. 2144, the burden of proof should be upon the plaintiff to show by proper evidence that the contract sued upon is a lawful contract. The defendant contends that the note sued upon arose out of transactions condemned by C.S. 2144 and that his verified answer setting up that fact has the effect of putting on the plaintiffs the duty of proving the validity of the transaction upon which the note is based. There would be force in this argument, except for the fact that C.S. 2146, the statute relied upon, was repealed by Chapter 236, Public Laws of 1931, and the further fact that the note sued upon is a contract executed and delivered on January 1, 1941, more than nine years after the repeal of said statute.

Defend...