Virginian-pilot. (Norfolk, Va.) 1898-1911, 1900-08-04
COURT DECISIONS.
D!GESTED BY W. B. MARTIN
EXCLUSIVELY FOR
vIRclNyAN-PILoT.
Notes Of Cases Recently Decided
Which Are Of Interest to
Our People.
w1rrKowsKY v. BARUcH.

Supreme Court of North Carolina.
May 20. 1900.
A COMPROMISE OF A NOTE BY
ONE CREDITOR WITH THE AS
S1GNEE OF THE DEBTOR, BY
WHICH THE CREDITOR WAS TO
GET HALF CASH AND A NEW
NOTE OF DEFENDANT, AND
WHERE THE CREDITOR SUR
RENDERED HIS OLD NOTE, IS
VALID.
The question in this case was whether
an agreement, such as is set forth in
the head note. was. as Il matter of law.
invalid. The lower court held that 1t
was and sustained n demurrer to the
declaration. from which judgment the
plaintiff appealed.
The court says:
1t seems that the creditors of Baruch
were 10 surrender the evidences of their
DEBTS upon receiving the compromise
money. and under this contract the
PLAINTIFF surrendered his notes to Latta
upon the receipt of the amount agreed
upon. And Latta, 1t seems, has con-
veyed the effects Conveyed to him by
the plaintiff) to H. d. Baruch, wife of
III. Baruch, and. the plaintiff says
without substantial consideration. and
in fraud of Baruchs creditors. 1t would
seem that the plaintiff has no cause of
action on the $1,000 notes, as he surren-
dered them to Latta under the agree
ment with Baruch to do so Code Sec
ton $40; and, If he has any cause of
action. 1t must be upon the new promise
to give the new notes; or, in other
words. to pay the plaintiff the difference
between what was paid out of the trust
fund and the $4,000 due by the four
notes of $1,000 each. The defendants
hi
for the reason that the contract en-
tered Into by the plaintiff and Baruch
and Latta was not only compromise
of this Indebtedness of Baruch but that
1t was composition of said indebted
ness. The defendants say this appears
from the fact that the Indebtedness was
to be compromised, and the evidences
OF debt were to be surrendered to Latta
and that Latta has since assigned the
property and effects (assigned to HIND
to the wife of IL. Baruch for a consid-
Grafton SO grossly Inadequate as to be
fraud on the creditors OF the insol-
vent husband; that this being a com
position of the debts of the insolvent
assignoc, the new promise upon which
the pltrSe'ff must rely is a fraud on the
other - ors. and cannot be enforced
in court of law. This proposition of
law seems to he correctly stated by the
defendants. and is we'll sustained by
numerous authorities. That there are
badges or evidences strongly tending to
sustain the charge OF fraud contended
for by defendants. must be admitted
And. while there is no form necessary
to constitute composition, and no for
NAL release of the claim is necessary,
still II is necessary that there should
have been q community or understand
ing as to the composition between the
plaintiff and the other creditors. or
some of them. to make it's violation q
fraud upon them. This element of
fraud. 1t seems to us. is not sufficiently
apparent on the face of the complaint
to justify us in saying that this new
promise was in fraud OF the rights of
the other creditors. We have, there
fore. concluded that the case should go
to trial, where the facts can be de-
velopcd and found by the court or the
jury. For this reason we think there
was error in sustaining the demurrer
Error.