| N.C. | Jan 5, 1878
The claim of the defendant Richardson, to realize nearly $1,000 for a $125 horse, provokes scrutiny, to say the least. One William Earp held a note on one Hocutt for $500. William Earp died, and said note came into the hands of his son John, plaintiff, as a legacy. The plaintiff John delivered the note to his son, Taylor Earp, with instructions to go to Hocutt, the maker of the note, and buy a mule, and enter the price of the mule upon the note as a credit. The principal and interest of the note were then about $860.
The legal effect of that transaction between the plaintiff John and his son was to leave the property in the note in the said plaintiff, with a power in the son to appropriate enough of it to his own use to pay the *187 maker, Hocutt, for a mule, and enter the amount as a credit on the note, and then to return the note to the plaintiff John.
Failing, however, to get a mule from Hocutt, the son, Taylor (280) Earp, "took the liberty" of entering into a bargain with defendant Richardson for a horse at $125, and gave him the note, with the understanding that if Richardson did not collect $125 out of said note by the 25th of the next December, he was to have his choice to take the horse back or to take $125 for him.
The legal effect of this contract (supposing the son, Taylor Earp, to have had the power to make it at all) was to place the note with Richardson as a security for the $125, and the property in the note remained in the plaintiff, John Earp. In opposition to this, it is insisted that the note itself was given to Richardson as the payment of the price of the horse, if he thought proper so to regard it. But this is not true. There was no agreement that he was to collect the whole of the note and have it all, but if he did not collect $125 by a given time "out of the note," then he was to have, not the note, but $125 or the horse back again. This is not only the proper construction of the words used, but a subsequent transaction shows that the parties understood that the note itself was not given for the horse; for subsequently, and before December, it was agreed between the son and Richardson that Richardson "might keep the note for the horse," which agreement would have been unnecessary if it had been so agreed in the first instance.
What was the effect of this last contract — that Richardson was to have the note for the horse? We have already seen that when the plaintiff John parted with the note to his son, it was upon the express understanding that his son was to have enough of it to buy a mule of the maker of the note, and to enter the amount as a credit on the note. This was a limited power by the very terms of it, and the son could not exceed it, and any one dealing with him was obliged to look out for his power, as the note was neither payable to him nor indorsed to him; for although the note was negotiable, yet it was past due and dishonored, and put the purchaser upon inquiry. The son had no power to use the note to buy a horse of any one else except Hocutt. But suppose (281) we allow a liberal construction, and say that as it was the plaintiff's intention to give the son so much of the note as would buy him a horse, it is not a matter of substance whether he bought the horse of one man or another; still we could not give the son any larger power over the note in trading with Richardson than if he had traded with Hocutt; and that was, not to pay for the horse with the note, but out of the note.
Our opinion therefore is, that when Richardson took the note, whether under the first contract or under the second, he took it as a security for the price of the horse, $125. This view settles the other question as to *188 the statute of limitations; for if Richardson held the note as a security only, then he was bailee, or trustee, for the plaintiff John, and the statute did not begin to run until after a demand. It is true that the referee finds that he held adversely; but he also finds that the plaintiff made no demand, and as a question of law the defendant could not hold adversely until after a demand. He could not change his character, of his own will. Indeed, the statute would not bar anyway, because Richardson has not yet collected the note, but the same is due and unpaid. There is error. The judgment below is reversed.
There will be judgment in this Court in favor of Richardson against the defendant trustee, Taylor, for the price of the horse, $125 and interest from the date of the sale. And there will be judgment in favor of the plaintiff Wyatt Earp against the defendant trustee for the remainder due on said note. The clerk of this Court will make (282) the calculation and report, for which he will be allowed $5. The costs will be paid by the plaintiff Wyatt Earp.
PER CURIAM. Reversed.
Cited and affirmed on rehearing,