Rutherford College, Inc. v. Payne
| Decision Date | 08 April 1936 |
| Docket Number | 320. |
| Parties | RUTHERFORD COLLEGE, Inc., v. PAYNE. |
| Court | North Carolina Supreme Court |
Appeal from Superior Court, Catawba County; Warlick, Judge.
Action by Rutherford College, Inc., against T. D. Payne. Judgment for plaintiff, and defendant appeals.
New trial ordered.
This is an action to recover on a note which is in words and figures as follows:
"Rutherford College, N. C.
October 26, 1927.
$300.00.
Five years after date, for value received, I promise to pay to the order of Rutherford College (Incorporated) the sum of Three hundred dollars, with interest from date at the rate of 6 per cent, payable annually.
The consideration of the foregoing obligation is together with other subscribers and contributors mutually to provide create and establish an endowment fund for the said Rutherford College, an institution dedicated to Christian Education, said fund and endowment to be held by the said Rutherford College and used in the cause of Christian Education; and it is provided that in the event of my death before the maturity of this bond and obligation, that the total sum herein pledged, both principal and interest, shall become at once due and payable.
T. D Payne. [Seal.]"
It is alleged in the complaint and admitted in the answer that the interest accrued on said note from its date to October 26 1932, has been paid by the defendant.
In his answer, the defendant admits the execution of the note sued on. He does not allege that he has paid the said note, or any part of its principal.
In defense of plaintiff's recovery on the note described in the complaint, the defendant alleges in his answer, among other things:
"(c) That on account of the mismanagement of Rutherford College by its Trustees, it became insolvent, and has been unable to run as an institution of learning; and that the defendant is informed and believes, and so alleges, that the Trustees of Rutherford College and others connected with its operation, including G. F. Ivey, who now claims to be Treasurer of Rutherford College, used the assets of said institution, including money that had been contributed to its endowment fund, for the purpose of paying debts which they themselves created, and for which they are personally responsible.
(d) That on account of the mismanagement of Rutherford College by its Trustees and those in charge of it, the institution has been utterly discontinued, as an institution of learning and the corporation is now in process of liquidation and dissolution.
(e) That on account of the mismanagement of Rutherford College as hereinbefore alleged, the very purpose for which this defendant promised to contribute has been destroyed and it is not now and never can be again an institution of learning, and there is not now and never can be again any endowment fund created for the said Rutherford College.
(f) That the purpose of the plaintiff in this action instituted by G. F. Ivey, who claims to be Treasurer of Rutherford College, is to attempt to collect money on the note or obligation which this defendant executed for the purpose hereinbefore alleged, and to use such proceeds as may be collected on said note for the payment of debts and obligations of said institution which were made and contracted without any authority from this defendant, but on which indebtedness, as this defendant is informed and believes, and so alleges, the said G. F. Ivey and others are liable as endorsers or otherwise, and not for the purpose of creating an endowment fund for Rutherford College.
(g) That this defendant is informed and believes, and so alleges, that the said G. F. Ivey, claiming to be Treasurer of Rutherford College, has no authority nor direction given by any one to institute suit against the defendant for any cause whatsoever, and particularly has been given no power or authority to represent Rutherford College in bringing this action against this defendant.
(h) That the defendant is informed and believes that by action of the Western North Carolina Conference of the Methodist Episcopal Church, South, which Conference was the owner and operator of Rutherford College, while it was in existence, has previously to the filing of this action by the plaintiff, transferred and assigned all of the assets of Rutherford College to Brevard College, Incorporated; and that Brevard College, Incorporated, is an educational institution, owned and operated by the Western North Carolina Conference of the Methodist Episcopal Church, South, and that the plaintiff has no right to bring an action against this defendant, nor against any other person, for or on behalf of Rutherford College, Incorporated, inasmuch as Rutherford College, Incorporated, does not now own any assets or choses in action, and therefore, can not become a proper party to any suit on any obligations which have been assigned by the Western North Carolina Conference of the Methodist Episcopal Church, South, to Brevard College, Incorporated."
At the trial, after offering in evidence the note described in the complaint, together with the defendant's admission in his answer that he executed the note as alleged in the complaint, the plaintiff rested.
The evidence offered by the defendant tended to support the allegations in his answer to the effect that Rutherford College has been discontinued as an institution under the control of the Western North Carolina Conference of the Methodist Episcopal Church, South, dedicated to the cause of Christian education, and that the plaintiff corporation is now in process of liquidation because of its insolvency, for the purpose of its ultimate dissolution.
As a witness in his own behalf, the defendant testified as...
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