Virginia Trust Co. v. Dunlop

• Citation: 198 S.E. 645,214 N.C. 196
• Decision Date: 28 September 1938
• Docket Number: 121.
• Parties: VIRGINIA TRUST CO. v. DUNLOP et al.
• Court: North Carolina Supreme Court

198 S.E. 645

214 N.C. 196

VIRGINIA TRUST CO. v. DUNLOP et al.

No. 121.

Supreme Court of North Carolina

September 28, 1938

Appeal from Superior Court, Buncombe County; A. Hall Johnston Judge.

Action by the Virginia Trust Company against Laura S. Dunlop, Joseph P. Dunlop, Jr., and Charles S. Dunlop, executors of the estate of Joseph P. Dunlop, deceased, upon a guaranty made by the deceased on certain notes secured by a trust deed. From a judgment denying the plaintiff's motion to strike a certain defense, the plaintiff appeals.

Affirmed.

On a motion to strike, the test of relevancy of a pleading is the right of the pleader to present in the evidence upon the trial the facts to which the allegation relates.

The plaintiff sued the defendants, executors of the will of Joseph P. Dunlop, deceased, upon a guaranty made by said Dunlop on certain notes of Charles S. Dunlop, secured by a trust deed.

The plaintiff filed its complaint, alleging in substance that Charles S. Dunlop made the notes to bearer and executed a deed of trust securing the same to P. B. Watt and W. B Jerman, Trustees; and that after the execution of the notes and deed of trust, and before delivery or negotiation of said notes, or the delivery and recording of the deed of trust Joseph P. Dunlop, defendants' testator, for value received, and as a condition precedent, endorsed and signed upon the promissory notes the following guaranty:

"The undersigned hereby guarantees the prompt payment of the within obligation, both principal and interest, as and when same becomes due according to its terms, and agrees not to claim any right to be subrogated to the rights of the holder thereof until after the payment in full of all obligations described in the within mentioned deed of trust. The undersigned further agrees to remain bound notwithstanding any extension of time which may be granted to the maker of the within obligation, hereby waiving all claim to any homestead exemption as to this obligation. Witness the following signature and seal on the day and year of the within mentioned obligation.

Jos. P Dunlop (Seal)"

It was further alleged that the notes so guaranteed were negotiated for full value, and before maturity and default, to the plaintiff, and that the deed of trust was delivered and recorded. That upon default in the payment of the notes, and after notice to both maker and guarantor, the deed of trust was duly foreclosed and the net proceeds from the foreclosure sale credited on the amount then due on the notes, leaving a balance of $3,975.14 still due. That Dunlop died testate, leaving the defendants as executors of his will; and when plaintiff filed proof of claim for the amount alleged to be due, with interest, the defendants denied the claim. That by reason of these facts the estate of Dunlop is indebted to the plaintiff in the sum aforesaid, with interest thereon, recovery of which plaintiff demanded.

The defendants, in their further answer, set up as a defense against plaintiff's claim that the plaintiff had caused the property to be bought in at the foreclosure sale by the Investors Service Corporation for plaintiff's benefit; that the Investors Service Corporation was a subsidiary of the plaintiff, which held all or a substantial part of the capital of said subsidiary; that plaintiff was the owner and in control of the corporation; and that an understanding existed between the Investors Service Corporation and the plaintiff at the time of the foreclosure that the Investors Service Corporation would accept and hold the title to the lands so foreclosed, and would hold and dispose of the title thereto at the direction and for the use and benefit of the plaintiff.

The defendants further alleged that the plaintiff was really the purchaser of the...