139 S.E. 596 | N.C. | 1927
From judgment on facts agreed defendant appealed to the Supreme Court. This action was heard upon a statement of facts agreed. They are as follows:
1. Plaintiff is the receiver of Martin County Savings and Trust Company, an insolvent corporation, which prior to his appointment as such receiver was engaged in the banking business at Williamston, Martin County, N.C. He has brought this action to recover of defendant the amount of his indebtedness to said corporation, as evidenced by two promissory notes.
2. Defendant, prior to its insolvency, executed and delivered to said corporation his two promissory notes, one in the sum of $300, and the other in the sum of $2,100. Both said notes came into the hands of the receiver as assets of said corporation. No payment has been made by defendant on said notes, or either of them, and both are now due.
3. On the date of its insolvency defendant had on deposit with said corporation, subject to his personal check, the sum of $50.23. The said sum is now due to defendant by said corporation.
4. Defendant is now, and was prior to the insolvency of said corporation, the treasurer of Martin County. As such treasurer he has executed and filed with said county a bond conditioned as required by statute. He is personally liable to the county for all moneys which have come into his hands belonging to said county, and which have not been lawfully paid out by him. *369
On the date of its adjudication as insolvent, defendant had on deposit with said corporation as treasurer the sum of $2,801.91. This deposit was made with moneys received by defendant as treasurer, belonging to Martin County. Defendant is personally liable to the county for said moneys. He is solvent. This sum is now due to defendant as treasurer by said corporation.
Upon the foregoing facts the court was of opinion that defendant was entitled to have the deposit in the sum of $50.23 applied as a credit upon his indebtedness to the corporation, as evidenced by his notes, but that he was not entitled to offset said indebtedness by the deposit in the sum of $2,801.91 standing on the books of the corporation to his credit as treasurer. From judgment in accordance with this opinion, defendant appealed to this Court. His only assignment of error is based upon his exception to the judgment.
It is conceded that there is no error in the judgment, applying the deposit in the sum of $50.23, as a payment on defendant's indebtedness to the bank. The judgment in that respect is in accord with well settled principles and is sustained by authoritative decisions of this Court. TrustCo. v. Spencer,
In Dameron v. Carpenter,
Defendant contends that there is error in the judgment with respect to the deposit in the sum of $2,801.91, standing on the books of the bank, at the date of its insolvency, to his credit as treasurer. The Court was of opinion that defendant was not entitled to have his personal indebtedness to the bank deducted from the amount due by the bank to him as treasurer. The judgment was in accordance with this opinion. In this respect defendant contends that the judgment is erroneous. *370
As a general rule a bank may apply the amount due by the bank to its depositor as a payment on a debt of the depositor to the bank, at any time after the debt becomes due; this rule, however, applies only when the amount due as a deposit belongs to the depositor. It does not apply where the bank has knowledge that the money deposited belongs, not to the depositor, but to another, and was deposited in trust for the owner. 7 C. J., 653 and 658. The right of set-off arises and can be enforced only where there are mutual debts between the parties. The party invoking the right cannot maintain it, unless he could also maintain an action against the other party to recover the amount which he seeks to have allowed as a set-off or counterclaim. Thus in Battle v. Thompson,
The rule is not strictly applied, however, when either the bank or the depositor has become insolvent. Thus in Davis v. Mfg. co.,
In the instant case, although the deposit in the sum of $2,801.91 was made by defendant with moneys belonging to Martin County, and stands on the books of the bank in his name as treasurer, he is personally liable to the county for the moneys received by him as treasurer. He is solvent, and must account to the county for the amount of the deposit. As between the bank and the defendant, the bank is liable primarily to the defendant, and not to the county. His contention that upon the facts agreed he is entitled to have the amount of his indebtedness to the bank deducted from the amount due him by the bank must be sustained, not only upon principles of justice and equity, but also upon well supported authority. *371
In Funk v. Young, Trustee (Ark.),
That the want of mutuality is not always permitted to defeat the right of set-off, see People v. California Safe and Deposit Co.,
There is error in the judgment with respect to the deposit in the sum of $2,801.91. Defendant, because of his personal liability to the county for the amount of this deposit, is entitled to have his indebtedness to the bank, on his personal notes, deducted from the amount of the deposit. This will result in a judgment in favor of the defendant and against the receiver for the difference. The action is remanded in order that judgment may be entered in the Superior Court of Martin County in accordance with this opinion.
Affirmed in part and remanded.