Willey v. Gatling

• Decision Date: 31 January 1874
• Citation: 70 N.C. 410
• Court: North Carolina Supreme Court
• Parties: HENRY C. WILLEY v. JOHN GATLING, Public Administrator and others.

70 N.C. 410

HENRY C. WILLEY

v.JOHN GATLING, Public Administrator and others.

Supreme Court of North Carolina.

January Term, 1874.

A sues B on a note, which he swears he obtained from C under the following circumstances: C hands the note to A, telling him to collect it if possible, and from the proceeds pay himself $800, being the amount of a note held by A against C, and pay over the balance to him C: Held, that the charge of his Honor below, that if they believed the above statement of A, the plaintiff, he had such an interest in the note as entitled him to recover, was right, and that the defendant was not entitled to a new trial for misdirection.

Held further, that the charge of his Honor, on the issue as to whether the note had been paid, that if they believed the defendant, they should find the note paid; but if they believed the plaintiff, they should find-the note had not been paid, was unsatisfactory and improper, on account of which, the defendant is entitled to a new trial.

CIVIL ACTION, tried at the Spring Term, 1873, of the Superior Court of GATES county, before Watts, J.

The facts, involved in this action, are thus stated and transmitted to this Court, by his Honor, as part of the record.

1. On the 10th of August, 1858, one Jacob Alphin, being indebted to R. H. L. Bond in four notes of $1,100.06 each, of date January, 1856, to which John Boothe and John Alphin, (the testator of the defendants, John Alphin Costen Jordan,) were sureties; one of which notes had a credit of $1,052 thereon endorsed; and being further indebted to Jacob Hinton, the intestate of the defendant, John G. Gatling, in four other notes of $1000 each, of date 21st January, 1858, to which the said Bond and John W. Hinton were sureties; and also indebted to other sums due other persons, but over which the eight notes above set out, had priority of payment, made a deed in trust, conveying to Shadrach W. Worrell two lots in the town of Gatesville, known respectively as the U. S. Hotel lot, containing about twenty acres of land, and the Hotel stable lot, together with certain personal property, particularly described in the deed, for the purpose of paying his debts and saving his sureties harmless.

The trustee, Shadrach W. Worrell, was empowered to sell either publicly or privately the property conveyed, and apply the proceeds in payment of the said eight notes, equally.

2. The personal property, with the exception of a quantity of hotel furniture, still in the possession of the defendant, John Brady, was lost by the results of the war.

3. On the 1st November, 1858, the trustee sold the property conveyed, or so much of it as was not lost, real and personal, to the defendant, Brady, for the sum of $9,500, receiving in payment a lot in Gatesville, which was valued by the trustee and Brady at $1000, (and the title to which was taken to the defendant, Worrell, individually,) and four bonds executed by Brady, for $1,150 each, payable on the 15th days of January, 1860-'61-'62 and 1863, respectively, and three other bonds, each for the sum of $1,300, payable on the 14th days of January, 1859-'60 and 1861, respectively, all bearing interest from the said day of sale, the 1st day of November, 1858. To secure the payment of these notes, the purchaser, Brady, re-conveyed the property to Worrell, the first trustee in trust, &c.

4. Three of the notes due by Alphin, and to which Boothe and John Alphin were sureties, were purchased from Bond, the payee, by the defendant, David Parker, for himself; and the remaining note of that class was bought by him, as agent for his brother, the defendant, James W. Parker, before the execution of the deed in trust. Of the four notes due to Jacob Hinton, one was sold by him to Jacob Parker, two others to the plaintiff, and one seems to have been paid to him by the trustee.

3. Of the notes given to Worrell, the trustee, by Brady, for the purchase of the trust property, the three for $1,300 each, were paid at maturity in money; and so also was one of the $1150; a second of these was paid in 1863, in Confederate money; a third was taken up by Brady during the war, upon his surrendering to the trustee one of the notes due Bond, which Brady had purchased from Parker, the first purchaser as aforesaid for the purpose, and with the consent of the parties, and the fourth was taken up by surrendering to the trustee, one of the said notes payable to Jacob Hinton, and by him sold to Parker, and obtained by Brady under circumstances hereinafter described; whereupon the trustee conveyed to Brady the trust property absolutely.

6. Of the notes due Bond and purchased by David Parker, one was paid in full, as was also the balance of a second, after allowing the credit before stated of $1050, or about the commencement of the war; the third was paid to David Parker by Brady, under the circumstances before recited, who also paid on the fourth note the sum of $350, April 10th, 1860, to James H. Parker, this last being sued on in Gates Superior Court, 1868, and judgment obtained thereon. This, too, has been paid in full, by the executors of the surety, John Alphin, the only solvent obligor.

In 1868, the condition of the trust fund and the notes primarily secured in the trust, was as follows;

The trustee, then resident in Baltimore, and insolvent, still held in his hands one only of the notes given for the purchase of the property by defendant, Brady, for $1,150 and interest. Of the notes secured by the trust, David Parker, another defendant, held as his own property, one of the four, payable to Jacob Hinton, for $1000 and interest. The sureties in this note at that time were insolvent. Parker also held, as agent of his brother, the defendant, James H., one of the Bond notes for $1000 and interest, one of the sureties to this being solvent. The plaintiff, Willey, partly in his own right, and partly for Jacob Hinton, held one of the notes payable to said Jacob Hinton for $1000 and interest. All of the rest of the eight notes had been paid, or otherwise taken in, except one of the Jacob Hinton notes, also then held oy the plaintiff, but which at the first trial of this action, the jury found to have been paid in Confederate money in 1863.

In the Summer of 1868, the defendant Brady, having solicited of David Parker a loan sufficient to pay off the balance due in his purchase of the trust property, so that he could procure an absolute title to the same, was informed by Parker that he had no money that he could lend, but that he did have one of the Jacob Hinton notes. He, Brady, borrowed this note of $1000, giving in exchange therefor his individual note without security, and that he and Parker went to Baltimore, surrendered this, the Hinton note, to the trustee, and took up his own $1,150, the only part of the trust funds then in the hands of the trustee; whereupon the trustee made Brady a deed for the property he had theretofore purchased. On their return, Brady and Parker had a settlement, and Brady gave him his individual note for the amount due him, (Parker,) including the amount of the Hinton note, borrowed as aforesaid. On this note Parker brought suit, and at the return term obtained judgment for want of a plea, execution issued, and under it, and others against Brady, the whole controlled by David Parker, the property bought of the intestate and all the other property of Brady was sold and purchased by Parker. The plaintiff was present at the sale, and read a written notice of his claims on the trust property.

At Fall Term, 1869, the plaintiff brought suit, alleging his possession and ownership of the two notes, secured as hereinbefore set forth, by the trust made by Alphin, and charging, in substance, the facts above stated, and praying for an adjustment and settlement of all the equities arising under the said deed of trust, and for other relief, &c. At Spring Term, 1871, the case was submitted to a jury, by his Honor, Judge POOL, who left the question of payment to their decision under the evidence. He charged, that if there was any understanding or knowledge or agreement between Brady and Worrell, or any two of them, that the trustee should apply the payment made to him to the notes of the testator held by one creditor, to the exclusion of those held by another creditor, to the prejudice of the latter, such notice or agreement would constitute collusion.

The plaintiff requested his Honor to charge, that upon the facts ascertained, and not controverted, the question of fraud was one of law, and that upon the facts set up by the defence, there was such collusion and constructive fraud, as to prevent either the defendant Brady, who purchased under the trust, or the defendant, Parker, who purchased under the execution against Brady, with notice of the plaintiff's claim, from holding the trust property discharged from the equities created by the trust, and still outstanding. His Honor refused to give the instructions, but charged as before recited.

The jury found first: that both the notes of the plaintiff had been paid by the trustee; second: that there was no collusion between the defendants.

Upon this verdict there was a judgment and appeal to the Supreme Court.

The Supreme Court, without rendering an opinion upon the refusal of his Honor to give the instructions asked, or upon the charge as made upon the question of fraud and collusion, directed that the plaintiff should have leave to move for judgment upon the second note described in the complaint, notwithstanding the verdict of the jury; and that the defendant, Shadrack W. Worrell should have leave to replead, in case he should so elect.

Upon this being certified to the Court below, the plaintiff moved for judgment upon his second note, and the defendant Worrell, asked leave to replead. The motion of the plaintiff was denied, and the defendant, Worrell, was allowed to replead, alleging in his repleader, payment of the said second note.

Upon the...