37 S.E. 449 | N.C. | 1900
This case was before us at the last term, and is reported in
The plaintiff contracted and agreed with the defendant H. Baruch, to compromise his debt of $20,000 for $10,000, and to surrender his notes, amounting to $20,000, upon the receipt of $10,000; and under said contract and agreement of compromise the $10,000 was paid to plaintiff, and his noted for $20,000 surrendered. If this does not bring the case within the terms of section 574 of The Code, which reads as follows: "In all claims, or money demands, of whatever kind, and howsoever due, where an agreement shall have been, or shall be, made and accepted for a less amount than that demanded, or claimed to be due, in satisfaction thereof, the payment of such less amount, according to any such agreement in compromise of the whole, shall be a full and complete discharge of the same" — we are not able to understand the meaning of the English language. This was not so before the enactment of section 574 of The Code. McKenzie v. Culbreth,
We are, therefore, compelled to hold that the plaintiff can not recover on the old notes, and with this we might close this opinion and sustain the demurrer, if we were entirely governed by the argument of plaintiff's counsel. He contended in his argument that this action was brought expressly upon the old notes, and not on the new promise. And in his printed brief he says: "In order that the demurrer be sustained in this action, it is absolutely necessary that the first proposition argued by the defendant above be true. In other words, unless this is an action, not to recover the original debt, but for a breach of the promise to execute the new notes, then the whole argument of the defendant falls to the ground. * * * We submit that upon the face of the complaint it is clearly and undoubtedly an action to recover the original indebtedness set forth in the first paragraph of the complaint, which the demurrer admits to be true. * * * We are at a loss to see how anyone can read the complaint, and come to the conclusion that this is an action based upon the promise of the defendant to execute new notes, when it is alleged that this promise was merely a trick and fraudulent contrivance on the part of the defendant H. Baruch." A demurrer only admits facts stated in the complaint, and not arguments, or conclusions, that may be drawn from them. So it would seem that we have gotten ourselves into the trouble of this rehearing by undertaking to give plaintiff something that he does not ask for the and does not want — by undertaking to give him a "chance" upon the new promise, which he says he does not ask for, and by his argument virtually admits can not be done. It is hard to overlook the admissions and argument of so learned a lawyer as represented the plaintiff, and the Court has decided to (317) reverse its former judgment and sustain the demurrer. But, in doing this, it is only just to the Court that we *218
should extend this opinion so as to give a short discussion to what we thought before was embraced in the complaint, called the "new promise;" that is, the promise of the defendant to execute new notes to the plaintiff for the balance of his debt. This fact is clearly stated in the complaint, and it seems to have led the Court into the error of considering it in the former opinion. It was contended in the argument for the defendants that the Court, on the former hearing, overlooked the fact that the plaintiff was a trustee of the assets of the defendant H. Baruch, and of the creditors of said Baruch, under the deed of trust, and that the Court was led into error by reason of this oversight. The defendants' counsel are in error in stating that the fact that plaintiff was the trustee of this fund was overlooked by the Court on the former hearing. This fact was considered by the Court, as the opinion will show, and some of the authorities cited for the defendants on the rehearing are cited in the opinion of the Court. But it may be (and as it now seems to the Court) that it did not give to this fact the weight it was and is entitled to. The case at last term was not argued by defendant upon this point with the care and elaboration it was at this term. This may have been because the defendant thought, with plaintiff, that the case depended upon the correctness of that ground of the demurrer — the right to recover an old debt. But, however this may be, the defendant cited many new authorities, not cited or considered before, which have influenced the Court to reverse its judgment. These authorities are to the effect that an executory contract, based upon a fraudulent or illegal consideration, will not be enforced. For this position the defendant cites many authorities (318) — among them, Covington v. Threadgill,
The matter about which the Court erred was in not holding that it was unlawful for the plaintiff to sell out his trust to Latta. We said then that it was a badge of fraud, but, it seems, we stopped too soon. The authorities cited upon this hearing have satisfied us that it was not only a badge, but a fraud upon the other creditors of Baruch, who were hiscestius que trustent; that it was illegal for him to do this. And no executory contract based upon this transaction will be enforced in the courts of this State. Foot v. Emerson, 33 Am. Dec., 205, is directly in point, and shows that a trustee can not sell his trust. Hays *219 v. Davidson, supra; Comstock v. Draper,
While we reverse our judgment in this case, we find, upon reading the opinion of the Court at the last term, that it is not necessary to change or modify any argument or statement made in that opinion, except the last paragraph, (319) in which it is said that it does not sufficiently appear on the face of the complaint for us to declare it a fraud, and the sentence overruling the demurrer. We now think that it does sufficiently appear, and we will allow the petition to rehear, and sustain the demurrer. This will be certified to the court below, and the action dismissed.
Petition allowed.
Cited: Ore Co. v. Powers,