Greensboro National Bank v. Carolina Mutual Life Insurance ( 1912 )

Brown, J.

The plaintiff introduced testimony tending to prove that some time in 1907 the Mutual Registry Life Insurance Company, a corporation, sold its entire business to the defendant, the Carolina Insurance Company; that at the time the defendant company took over the business of the Mutual the plaintiff held two notes of the Mutual Registry Life Insurance Company in the sums of $185 and $65.

It is contended by the plaintiff that as a part of the transaction between the two companies the defendant company assumed the payment of these notes. An inspection of the record discloses that all of the evidence introduced for the plaintiff, as well as the defendant, establishes that the contract between the two companies was wholly in writing and dated 26 March, 1908, and was put in evidence by the defendant.

It is true that Waddy, a witness for the plaintiff, upon examination in chief, said that the defendant company assumed the liabilities of the Mutual and agreed to pay the notes in question. But upon cross-examination the witness materially qualifies his testimony in chief, admits that the contract between the two companies was in writing, and states that he was not present when any contract between the two companies was made. He states that he did not see the written contract, but under stood tbat there was one. Upon being questioned by tbe court as to bow be knew tbat tbe defendant assumed tbe debts, tbe witness does not undertake to say, but states tbat be was not present when tbe contract was signed.

Tbe witness Ellington, president of tbe plaintiff -bank, states tbat "Waddy, Newby, and others, representing tbe defendant company, came to tbe bank and said tbat tbe manager of tbe defendant was there and tbat be was to take oyer their assets and liabilities. •

It also appears from tbe testimony of Ellington upon cross-examination tbat they came in tbe bank with this paper with them, evidently tbe contract of 26 March, entered into between tbe two companies, thus fixing Ellington, tbe president of tbe plaintiff bank, with notice tbat tbe contract between tbe two companies was in writing.

Tbe contract between tbe two companies does not purport to be unconditional assumption of tbe debts of tbe Mutual Company, but, on tbe contrary, it provides for only partial payment, in these words: “and tbe said Carolina Mutual agrees to allow said Mutual Registry Life Insurance Company 25 per cent of tbe gross earnings derived from policyholders as premium on same, and tbat tbe said 25 per cent be applied on tbe two notes made and indorsed by tbe said Mutual Registry Life Insurance Company to tbe Greensboro National Bank of tbe city of Greensboro, each month, and tbat said sum be paid direct to said bank, and tbat a written report, showing such gross earnings, be sent to tbe proper officer of said Mutual Registry Life Insurance Company, and tbat said Carolina Mutual agrees tbat such 25 per cent be continued for a period of twelve (12) months; and it is further agreed tbat all policyholders of said Mutual Registry Life Insurance Company be fully reinstated from tbe date hereof and such amount arising therefrom as premiums be also applied as is herein stated.”

It is further contended tbat Powell, tbe manager of tbe defendant company, stated “tbat be would assume tbe liabilities, and tbat Powell conducted negotiations for tbe Carolina Mutual Life Insurance Company.”

It may be that Powell personally undertook to assume these particular liabilities of the Mutual Company, himself; but there is not a shred of evidence that he had any authority to assume them on behalf of his -company.

The contract between the two companies, as we have already shown, was in writing, and the rights and liabilities of the two insurance companies under it were already well defined, and there is nothing to show that Powell was authorized in any way to change them. If Powell had any such authority, the burden of proof would be upon the plaintiff to show it. 31 Cyc., page 1644, and cases cited.

While the plaintiff is not entitled to recover upon the notes sued on, upon the ground that they have been unconditionally assumed by the defendant, by proper amendment to the pleadings the plaintiff may call upon the defendant to account for such sums as it has collected under the contract, and have the same applied to the payment of the notes.

New trial.