Wilson Lumber & Milling Co v. Atkinson

• Decision Date: 22 May 1913
• Citation: 162 N.C. 298,78 S.E. 212
• Court: North Carolina Supreme Court
• Parties: WILSON LUMBER & MILLING CO. v. ATKINSON et al.

(162 N.C. 298)

78 S.E. 212

WILSON LUMBER & MILLING CO.

v.ATKINSON et al.

Supreme Court of North Carolina.

May 22, 1913.

1. Evidence (§ 106^*)—Character—Application of Proof.

In a suit to set aside a compromise and settlement for defendants' alleged fraud, evidence that the general character of a defendant, who had testified in his own behalf, was good, while competent to sustain his credibility as a witness, could not be considered as a substantive fact to disprove the fraud.

[Ed. Note.—For other cases, see Evidence, Cent. Dig. §§ 177-187; Dec. Dig. § 106.*]

2. Appeal and Error (§ 1050*)—Scope of Evidence—Prejudice.

Where evidence of defendants' alleged fraud in inducing complainant to make a compromise and settlement of a claim against them was such as to sustain a finding in complainant's favor and require submission of the question to the jury, a ruling that evidence of defendants' good character could be considered as substantive proof to rebut the fraud was prejudicial error.

[Ed. Note.—For other cases, see Appeal and Error, Cent. Dig. §§ 1068, 1069, 4153-4157, 4166; Dec. Dig. § 1050.*]

Appeal from Superior Court, Caldwell County; Lyon, Judge.

Action by the Wilson Lumber & Milling Company against J. B. Atkinson and others. Decree for defendants, and complainant appeals. Reversed.

This action was brought to set aside a compromise and settlement between the plaintiff and the defendant J. P. Rabb, made on December 29, 1909. Plaintiff, during the years 1904, 1905, 1906, and 1907, was en-gaged in the lumber business, of which J. B. Atkinson, the other defendant, was its manager at Lenoir, N. C. The defendant Rabb cut, sold, and delivered to the plaintiff at Morganton and other points a large quantity of lumber, for which the plaintiff paid him from time to time. At the end of that period the books of the plaintiff showed that the plaintiff had overpaid Rabb for lumber so cut and delivered in the sum of $1,354.82. Plaintiff alleged and offered proof to show that, while this was the apparent amount due by Rabb, he had in fact received a large payment or credit for lumber which had not been delivered, and the real balance should be $10,900, instead of $4,354.82, and in addition to this amount thus owing by Rabb to the plaintiff the latter paid for him four certain notes for the aggregate amount of $1,900, which was not charged on its books against him. Plaintiff further alleges that these items were omitted from the books by reason of fraudulent collusion between Atkinson and Rabb, or by mistake of the parties. It then appears that on December 29, 1909, plaintiff and defendant Rabb entered into an agreement for a settlement, by which certain timber was conveyed to J. H. Beall, as trustee, to be sold and the proceeds of sale, together with any cash paid by Rabb, to be applied to the liquidation of Rabb's debt to the plaintiff. This agreement was made for the purpose of "adjusting and settling" the account between the plaintiff and Rabb. Plaintiff alleges that at the time this agreement was entered into by the parties it was totally ignorant of the fact that the lumber on the yard at Morganton had been delivered by Rabb, under its contract with him, or that Rabb owed the company a much larger amount than the balance of $4,354.82 recited in the compromise agreement; that these facts were only known to Rabb and fraudulently concealed by him from* the plaintiff, whereby it was made to convey its own property for the payment of a debt due by Rabb to it; and that Rabb otherwise suppressed the true facts, for the purpose of obtaining an unfair advantage of the plaintiff. Issues were submitted, and upon them the jury returned the following verdict:

"(1) Did the plaintiff company, at various times prior to December 29, 1909, advance to the defendant J. P. Rabb money to be used by him in purchasing lumber and timber to be manufactured into lumber by him for the said lumber company? Answer: Yes.

"(2) Did the plaintiff and defendant, by contract entered into between them on December 29, 1909, make a full and final settlement of all matters of account existing between them, growing out of their lumber transactions? Answer: Yes.

"(3) Did the defendant Rabb, at the time of making the contract of December 29, 1909, fraudulently suppress or conceal from plaintiff facts within his knowledge as to the true status of the account between them? Answer: No.

"(4) If so, was the plaintiff thereby misled to its injury?" No answer.

"(5) Was said contract entered into by mutual mistake as to the true status of the account? Answer: No.

"(6) Is the defendant Rabb indebted to the plaintiff? If so, in what amount?" No answer.

"(7) Is the plaintiff's cause of action barred by the statute of limitations? Answer: No."

In the verdict proper the answer to the first issue is simply "Yes, " while the recital of the verdict in the judgment of the court states that it was, "Yes; but not as agent." But this discrepancy is not considered material in the view we now take of the case. By the contract with Rabb for cutting the timber and delivering the lumber, it is provided that the lumber shall be considered as delivered, and shall become the property of the lumber company when it is piled on the yard. At the close of the evidence the court ordered a nonsuit as to Atkinson, and the case proceeded as to Rabb with the result above stated. Judgment was entered upon the verdict, and plaintiff, having duly excepted to certain rulings, appealed to this court.

Mark Squires, of Lenoir, and A. E. Holton, of Winston-Salem, for appellant.

W. B. Councill, of Hickory, and Lawrence Wakefield, of Lenoir, for appellee Atkinson.

W. C. Newland, of Lenoir, and S. J. Ervin, of Morganton, for appellee Rabb.

WALKER, J. (after stating the facts as above). [1] We have stated so much of the pleadings and evidence as is necessary to present clearly one of the exceptions of the plaintiff, which we think was properly taken and should be sustained. Evidence of the general character of the defendant J. P. Rabb was introduced; the witnesses testifying that it was good. He had testified himself, at great length, as a witness in his own behalf, and had denied circumstantially the charge of fraud made against him. It was competent to prove his good character, so far as necessary to sustain his credibility as a witness; but in his charge to the jury the learned judge expressly permitted the jury to consider his character as a substantial fact involved in the issue of fraud. This is the language of the particular instruction, to which exception was noted: "The defendant Rabb being charged with fraud, evidence of his good character should be considered by you as substantive as well as corroborative evidence, in passing on the issue of fraud." This was error. It has been said: "That a person did or did not do a certain act because his character would predispose him to do or not to do it is an inference which, although sometimes logically proba-tive, the English law of evidence, with some exceptions, absolutely rejects in civil cases." 16 Cyc. 1263. The text-writer cites numerous cases in the notes to this passage in support of the proposition, and, among others, several decided by this court. Jeffries v. Hunt, 10 N. C. 105; McRae v. Lilly, 23 N. C. 118; Heileg v. Dumas, 65 N. C. 214; Marcom v. Adams, 122 N. C. 222, 29 S. E. 333. In McRae v. Lilly, supra, Judge Gaston applied the rule of exclusion to a case of seduction, in these words: "It is also insisted that the judge erred in rejecting the testimony offered by the defendant to show that his general character was that of a modest and retiring man. We are satisfied that there was no error in rejecting the testimony proposed. In civil suits the general rule is that, unless the character of the party be put directly in issue by the nature of the proceeding, evidence of his character is not admissible. And no reason is seen why, in this case, there should be an exception to the general rule." More directly to the point is the language of the court in Heileg v. Dumas, supra: "If such evidence is proper, then a person may screen himself from the punishment due to fraudulent conduct till his character becomes bad. * * * Every man must be answerable for every improper act, and the character of every transaction must be ascertained by its own circumstances, and not by the character of the parties"—citing Thompson v. Bowie, 4 Wall. 470, 18 L. Ed. 423, and quoting from Fowler v. Insurance Co., 6 Cow. (N. Y.) 673, 16 Am. Dec. 460. The subject is treated exhaustively, with full citations, in Norris v. Stewart, 105 N. C. 455, 10 S. E. 912, 18 Am. St. Rep. 917, where the defendant was...