Trust Co. v. . Shaw , 206 N.C. 367 ( 1934 )

On 25 April, 1927, the defendants, W. R. Shaw and his wife, Ruth Shaw, executed and delivered to the defendant Bradham Drug Company their note for the sum of $500.00. The said note is payable to the order of the Bradham Drug Company, and was due on 25 October, 1929. Before its maturity, the Bradham Drug Company endorsed said note, and transferred and assigned the same, for value, to the First National Bank of New Bern.

On 9 October, 1929, the First National Bank of New Bern endorsed the said note, and transferred and assigned the same, for value, to the plaintiff. The plaintiff is now the holder in due course of the said note. Interest accrued on said note was paid to 25 April, 1929.

The note sued on in this action is one of a series of notes executed by the defendants W. R. Shaw and his wife Ruth Shaw, and payable to the order of the Bradham Drug Company. The said notes were secured by a chattel mortgage executed by the makers and duly recorded in the office of the register of deeds of Craven County. All the notes secured by said chattel mortgage, except the note sued on, have been paid. The said chattel mortgage was wrongfully canceled in the record by the Bradham Drug Company. There is now due on the note sued on the sum of $500.00, with interest from 25 April, 1929.

From judgment that plaintiff recover of the defendants, W. R. Shaw and his wife, Ruth Shaw, the sum of $500.00, with interest on said sum from 25 April, 1929, and the costs of the action, and that the cancellation of the chattel mortgage entered on the record by the defendant Bradham Drug Company be stricken therefrom, the defendants, W. R. Shaw and his wife, Ruth Shaw, appealed to the Supreme Court. The First National Bank of New Bern was the holder in due course of the note sued on in this action on 9 October, 1929. At said date, the said National Bank endorsed and assigned said note, for value, to the plaintiff. The note was due and payable on 25 October, 1929.

The First National Bank of New Bern closed its doors and ceased to do business on 25 October, 1929, because of its insolvency. At said date, the defendant, W. R. Shaw, had on deposit with the said First National Bank of New Bern, a sum more than sufficient for the payment of said note. There was no evidence at the trial of this action tending to show that the First National Bank of New Bern was insolvent on 9 October, 1929, or that it contemplated insolvency at said date. For that reason, the contention of the defendants that the transfer and assignment by said National Bank of the note sued on was void, and that the plaintiff did not become the holder in due course as the result of said transfer and assignment, cannot be sustained.

There was no error in the instruction of the court to the jury to the effect that if the jury should find the facts to be as all the evidence tended to show, they should answer the third issue "Yes." The judgment is affirmed.

No error.