Case ID: nc_59/html/0341-01.html
Source: Caselaw Access Project
Author: {"author": "Battle, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

JUNE TERM, 1863.
    
      W. H. PARTIN and another against T. S. LUTERLOH and others
    
    That a note had been obtained by fraud in the factum, is a good defense at law, and cannot afterwards be brought forward for the purposes of an injunction.
    It is no ground for a bill for 'an injunction, that the complainant was not a party to the suit at law, because that process bad not been served on him. His proper remedy is to have the judgment set aside, on motion, in the Court granting it.
    Cause transmitted from the Court of Equity of Cumberland county.
    This was a bill for an injunction, filed in the names of William H. Partin and Norman G. McLeod against T. S. Luter-oh, Charles Luterloh, W. H. Lambert and Thomas Lambert, The object of the bill is to restrain the collection of a judgment and execution, which was obtained in the County Court of Cumberland, on a note for $416.52, dated June 16th, 1852, payable to T. Luterloh & Co., and endorsed to Charles Lut-erl.oh. Signed by W. H. & T. Lambert, and W. H. Partin, and N. G. McLeod.
    W. II. Partin was engaged in the business of getting turpentine in the county of Johnson, where W. H. and Thomas Lambert were engaged in the same business as partners, and where the two latter resided. The bill alleges in behalf of Partin, that he had consigned spirits of turpentine to T. S, Luterloh, who owed him a balance on that account, and that Thomas Lambert being about to visit Fayetteville, where Luterloh resided, he requested him to settle with Luterloh, and bring him the money that was due him, and to enable him to do so, he signed his name on a blank piece of paper, in order that it might be filled up as a receipt for the money when it might be paid ; that Thomas Lambert pretending that Partin wished to get money to the amount of $200, from a bank in Fayetteville, applied to the plaintiff, N. G. McLeod, to join in the note with Partin and the firm to which he belonged, and as an inducement for McLeod to sign the note, lie offered to draw it for four hundred dollars, and out of the proceeds to pay a debt of $125, which Lambert’s father owed McLeod, and with the understanding that the note was to be thus filled up and offered for discount at a bank; he also signed it in blank. The bill then states that, McLeod proceeded with Thomas Lambert to Fayetteville, and the blank paper then having the names of W. II. and T. Lambert on it, was handed to T.'S. Luterloh, who had-promised to assist them in getting the paper discounted, and he departed for the purpose of going to the Bank on the business; that in a short time he returned and announced that he bad failed in procuring the discount, on which, McLeod, in the presence of T. S. Lnter-loh, asked for the paper that had his name on it; to which T. Lambert said, it did not matter, as the paper was still in blank and could not hurt him; that be then instructed T. Lambert to erase his name from the paper ; that without the consent of either Partin or McLeod, the note, in question, was filled tip, payable to T._S- Luterloh. Partin further says, that he was not served with the writ in the suit, at law, and had no knowledge of its pendency against him, or of the existence of the judgment until after its rendition. It is further alleged, that the endorsement was made to Charles Luterloh without consideration, but to give jurisdiction to the county court of Cumberland. The, prayer is for an injunction. T. S,. Luterloh denies, in his answer, that he owed Partin any thing, or that there was any open account between him and this defendant, or the firm ; he admits that there had been some dealings, but says that these had been closed before the transaction in question. He states, that the true history of the transaction is this: Thomas Lambert and plaintiff, N. G-. McLeod, came to Fayetteville, and asked his assistance to have a note discounted in a bank at that place, and they produced to him a paper, subscribed in blank by W. II. and T. Lambert, W. II. Partin and N. G. McLeod. It was stated by them, that they wished to get $1000 from the bank, and out of that-sum, a debt, which the firm of W. II & T. Lambert owed his firm, should be paid ; that he endeavored to procure the bank accommodation, but found it could not be obtained, and so informed the other party — thereupon, it was agreed by Thomas Lambert and N. G. McLeod, that the blank paper should be filled up for the debt due his firm, and this was done accordingly. Charles Luterloh answers, that the note was endorsed to him bona fide for a debt due him by T. G. Luterloh & Co.
    Graham, for the plaintiffs.
    
      Gorrell, for the defendants.
   Battle, J.

"We are unable to discover any equity in the transactions disclosed by the pleadings and proof, that entitles the plaintiffs to the injunctive relief which they seek. The allegation, that the plaintiff at law, Charles Luterloh, took the endorsement of the note, in question, without consideration, and merely for the purpose of giving jurisdiction to the court of pleas and quarter sessions for Cumberland county, is positively denied in his answer, and, on the contrary, he avers that he took it bona fide and for a valuable 'consideration. His right to recover on it, at law, is fully sustained by the recent case of McArthur v. McLeod, 6 Jones, 476.

The authority of Thomas Lambert to bind his partner by signing the note in the name of the firm, for a debt of the firm, is unquestionable. The partners would be bound in such a case, even though the particular note was signed by one partner without the consent and against the wishes of the other; Wharton v. Woodburn, 4 Dev. and Bat. 507; Dickson v. Alexander, 7 Ired. 4.

Had the note been obtained by fraud in the factum, that would have been a good defense, at law, and could not after-wards be brought forward for the purposes of an injunction in equity ; Tysor v. Luterloh, 4 Jones’ Eq. 247.

The objection to the validity of the judgment, as to Partin, urged by him, on the ground, that he was not a party to the suit at law, because no process had been served on him,, is very clearly one to be used at law, and cannot be made available in equity. The proper course to be pursued in such case, is to apply to the court in which the judgment was rendered, for the purpose of having it set aside on motion. Whenever that, or any other complete remedy can be given, at law, a court of equity will not interfere ; Parker v. Jones, 5 Jones’ Eq. 276. The injunction must be dissolved and the bill dismissed.

Pee Cueiam, Bill dismissed.