White v. Fisheries Products Co.

• Decision Date: 07 March 1923
• Docket Number: 105.
• Citation: 116 S.E. 169,185 N.C. 68
• Parties: WHITE v. FISHERIES PRODUCTS CO.
• Court: North Carolina Supreme Court

116 S.E. 169

185 N.C. 68

WHITE v. FISHERIES PRODUCTS CO.

No. 105.

Supreme Court of North Carolina

March 7, 1923

Appeal from Superior Court, Bertie County; Horton, Judge.

Action by O. F. White against the Fisheries Products Company. Judgment for plaintiff, and defendant appeals. Affirmed.

In an action for damages for negotiating notes in breach of an agreement with the maker and for fraudulent representations inducing the execution and delivery thereof to defendant evidence held sufficient to permit the inference that defendant's agent obtained the notes under the guise of a bona fide agreement not to negotiate them with the fraudulent purpose of so disposing of them.

The action is to recover damages for wrongfully negotiating by indorsement, and to a holder in due course of certain notes of plaintiff in breach of defendant's agreement to hold same until a binding contract should have been made by the parties. (2) For false and fraudulent representations on part of defendant's agent in charge of the matter, by which plaintiff was induced to sign and deliver the notes in such form that defendant was enabled to negotiate the notes to a holder in due course to plaintiff's damage.

In either aspect of the matter there was denial of liability on part of defendant. On the trial there were facts in evidence tending to show that on June 17, 1920, plaintiff signed and delivered to defendant's agent three promissory notes aggregating $11,410, due June 1, 1921, and on each note there appeared over plaintiff's signature an indorsement in terms as follows:

"This is to certify that this note is given for a cash consideration; therefore it will be satisfactory to me for the holder to cash this note before it is due, and I will pay in full at maturity to the purchaser."

There was evidence on part of plaintiff to the effect that these notes were to be placed for safe-keeping in the Bank of Colerain, and it was understood and agreed that, if plaintiff sold a certain farm in Chowan county at a suggested price before the maturity of the notes, he would so inform defendant and take up the notes, paying principal and interest, and receive therefor 761 shares of stock in defendant company, and, further, that should plaintiff fail to sell said farm as above stated, the notes were to be returned and all negotiations abandoned; that, instead of depositing said notes in accordance with the above understanding and agreement, defendant's agent wrongfully and fraudulently, and with intent to cheat plaintiff negotiated said notes to the Bank of Colerain, which became an innocent purchaser for value, and plaintiff was forced to pay said notes at maturity, though he had not been able to sell said farm as contemplated, and the contingency on which the notes were to take effect as between the original parties had not occurred. See statement of facts in former appeal reported in 183 N.C. 228, 111 S.E. 182.

There was further evidence tending to show false and fraudulent statements and assurances of defendant's agent as to the value of the stock, and there were also allegations with supporting evidence on the part of plaintiff to the effect that, at the time said notes were obtained, defendant's agent had no purpose of abiding by the agreement made, but same was entered into with the fraudulent purpose and design to obtain the notes and at once sell and dispose of same, and thereby cheat and defraud plaintiff, which they did to his pecuniary damage.

Defendant maintained that the contract and agreement was fully shown on face of the written papers, and offered evidence tending to show that the stock was of real value, and that no imposition had been made on plaintiff.

On a former appeal in the cause, reported in 183 N.C. 228, 111 S.E. 182, plaintiff having obtained a judgment as for mere breach of the agreement not to presently negotiate the notes, the judgment was set aside, and a new trial ordered on the ground that in that aspect of the matter it was not open to plaintiff, by parol evidence, to contradict the express written agreement appearing on the back of the notes. The opinion having been certified down, in deference thereto the case at the present trial was submitted to the jury on the issue of fraud, and verdict was rendered as follows:

"(1) Did the defendant fraudulently and wrongfully induce plaintiff to execute the notes as alleged, and by such fraudulent means obtain possession of the same and fraudulently and wrongfully sell and dispose of same and convert the proceeds thereof to its own use, as alleged in the complaint? Answer: Yes.

(2) If so, what damage has plaintiff sustained, and in what sum is defendant indebted to plaintiff by reason thereof? Answer: $11,410.00, with interest from June 1, 1920."

Judgment for plaintiff, and defendant excepted and appealed, assigning errors.

O. H Guion, of...