Lockhart v. . Ballard , 113 N.C. 292 ( 1893 )

BURWELL, J., did not sit. Appeal by the National Exchange Bank of Dallas et al. The tenth class, into which the judgment admits the appellee creditors, is thus described in the deed of assignment: "To J. S. Lockhart, or the holders thereof, the amount of all notes and drafts on which J. S. Lockhart is bound as surety, or acceptor, or indorser for W. T. Blackwell, all the same amounting to about thirty-five thousand dollars, and having been done for the benefit and accommodation of W. T. Blackwell." On none of the paper set out in the judgment does J. S. Lockhart appears as "surety or acceptor, or indorser (293) for W. T. Blackwell," nor does it appear that they were executed "for the benefit and accommodation of W. T. Blackwell." Parol evidence was competent to show that, notwithstanding the apparent relation of the parties upon the face of the notes and drafts, the relation of J. S. Lockhart in regard to them was, in fact, either that of "surety, indorser or acceptor for W. T. Blackwell, or that they were executed for his benefit." But no evidence was introduced, and it was error to hold that this was established by admissions in the pleadings. There were two suits — one by creditors claiming to come under class ten, and the other by creditors belonging to the fourteenth class — seeking to restrain the defendants, assignees of Blackwell, from paying out to the plaintiffs in the first suit under class ten. These two suits were consolidated without objection, and the plaintiffs in the two separate actions are, in effect, the real litigants, the nominal defendants being mere stockholders. The answer to the complaint filed in the suit first brought denies specifically the allegation of the appellee creditors, plaintiffs in that suit. The following section of the answer, however, admits, by inadvertence probably, the ninth allegation of the complaint. Whatever question might have arisen upon this conflicting pleading was obviated by the consolidation of the two actions and the express denial in the pleadings in the latter case that the appellee creditors are in any wise entitled to come within class "ten." As always in creditors' bills, one creditor can plead a defense to the claim of another creditor, since its exclusion enlarges the fund in which he himself is to share. Oates v. Lilly, 84 N.C. 643.

The notes and drafts sued on by those claiming under class ten aggregate within a few thousands of the thirty-five thousand dollars specified in that clause. This fact, however, cannot supply, by itself, evidence to show that Lockhart was "surety, indorser or acceptor" on the notes and drafts set out in the pleadings.

While the judgment is erroneous in holding that, upon (294) admissions in the answer, the appellees were entitled to share in class ten, it may be that when the case goes back evidence can be found to prove that, notwithstanding in form, J. S. Lockhart was not "surety, indorser or acceptor for W. T. Blackwell," yet, in fact, that was the true relation he occupied as to the notes and drafts in controversy.Southerland v. Fremont, 107 N.C. 565. If so, it would be decreed that the holders thereof should participate in said estate under class ten. If this is not shown, those claimants would come in under section 14 and share pro rata with the other creditors named in that class.

Error.

Cited: Dunn v. Beaman, 126 N.C. 769.