Case Name: AMERICAN NATIONAL BANK v. R. E. L. NORTHCUTT et al.
Court: Supreme Court of North Carolina
Jurisdiction: North Carolina
Decision Date: 1915-05-12
Citations: 169 N.C. 219
Docket Number: 
Parties: AMERICAN NATIONAL BANK v. R. E. L. NORTHCUTT et al.
Judges: 
Reporter: North Carolina Reports
Volume: 169
Pages: 219–222

Head Matter:
AMERICAN NATIONAL BANK v. R. E. L. NORTHCUTT et al.
(Filed 12 May, 1915.)
1. Pleadings — Counterclaim.
A counterclaim which only alleges that the plaintiff is indebted to the defendant, without alleging further the nature, extent, and kind of indebtedness, and how it arose, is imperfectly pleaded, and should he disregarded.
2. Same — Banks and Banking — Bills and Jiotes — Parties.
Where in an action on a note brought by a bank which had taken it with other papers as collateral to a note from the local bank of deposit and original discount, an allegation is made in the answer by way of offset or counterclaim that the local bank was indebted to the defendant; that no demand for payment of its note had been made; that plaintiff had more than sufficient collateral to secure the note, etc., states no valid counterclaim as against the local bank, and the failure of the plaintiff to have made it a party defendant is immaterial.
Appeal by defendants from Rountree, J., at March Term, 1915, of ANSON.
Civil action, tried upon these issues;
1. Is the plaintiff the owner and holder in due course of the notes described in the complaint? Answer: “Yes.”
2, What amount, if any, is the plaintiff entitled to recover of the defendants? Answer: “$2,000, with interest on $1,000 from 1 October, 1914, and interest on $1,000 from 1 November, 1914.
When the ease came on for' trial, the plaintiff moved to strike out the “further defense” set up by defendants in the answer. The motion was allowed. Defendants excepted and appealed.
Plaintiff introduced evidence sustaining tbe several allegations of tbe complaint. Defendants introduced no evidence. There were no exceptions to tbe evidence or to tbe charge of tbe court.
Tbe following is tbe “further defense” stricken out by tbe court:
“Tbe plaintiff is a nonresident corporation; that receivers have been appointed by tbe courts of this State for tbe Southern Savings Bank of Wadesboro; that said savings bank is indebted to plaintiff in the sum of $., evidenced by its notes now held by plaintiff; tbát said notes have not been presented to said receivers for payment; that if tbe plaintiff is tbe bolder of tbe notes described in tbe complaint, they are held by it as collateral security for tbe payment of the notes of tbe said Southern Savings Bank, given to tbe plaintiff, and that they are informed and believe that tbe plaintiff bolds notes and mortgages, tbe property of tbe said Southern Savings Bank, as collateral securing said indebtedness, largely in excess of tbe amount due it by tbe said Southern Savings Bank; and that tbe plaintiff has collected a large sum of money from said collateral, and is endeavoring to collect more than is due it on account of tbe indebtedness of tbe said Southern Savings Bank, and to that end has instituted numerous suits in tbe Superior Court of Anson County for tbe collection of said notes and collateral security held by it, without alleging in any of tbe complaints filed in said actions that said notes are held by it as collateral security for said indebtedness, and without making tbe receivers of tbe said Southern Savings Bank parties to any of said actions.
“That R. E. L. Northcutt and W. N. Northcutt are stockholders of tbe said Southern Savings Bank, and that tbe defendants herein were depositors in said bank at tbe time of tbe appointment of tbe receivers, as aforesaid, and as such are now among tbe creditors of said bank.
“Tbe defendants are informed and believe that tbe plaintiff bad in its possession a large sum of money belonging to tbe said Southern Savings Bank at tbe time of tbe appointment of said receivers, which said money has not been applied to tbe indebtedness of said Southern Savings Bank by tbe plaintiff, and that tbe same should be applied to said indebtedness.
“That on account of tbe matters and things herein alleged, tbe defendants are informed, advised, and believe that tbe receivers of tbe said Southern Savings Bank are necessary and proper parties to this action, in order that tbe rights of all tbe parties may be properly adjudicated and protected.”
Lockhart & Dunlap for plaintiff.
Robinson, Caudle & Pruette, II. H. McLendon for defendants.

Opinion:
BkowN, J.
This action is brought to recover on two promissory notes of $1,000 each, payable to tbe Southern Savings Bank of Wadesboro, N. C., and indorsed by that bank to plaintiff. Tbe execution and in-dorsement of tbe notes by defendants are admitted.
There are no exceptions to tbe evidence or to tbe charge; therefore, tbe findings of tbe jury stand unchallenged. These entitle tbe plaintiff tbe judgment, unless tbe defendants have pleaded a Valid set-off or counterclaim in their answer, which has been disregarded by tbe court.
This case is very similar to that of the American National Bank v. Hill, from same county, post, 241. Much that is said in that opinion is applicable to this appeal.
There is no allegation in tbe answer that tbe debt due plaintiff by tbe Southern Savings Bank, for which tbe note sued on and other notes have been assigned as collateral, has been fully paid by tbe collection of tbe collateral by tbe plaintiff.
Then, again, tbe answer fails to properly plead any set-off or counterclaim. Tbe allegation is that tbe defendants "are stockholders in tbe Southern Savings Bank, and were depositors in said bank at tbe time of tbe appointment of tbe receivers, and as such are now among tbe creditors of said bank."
Tbe answer fails to set out tbe amount of tbe deposit and in what amount tbe Southern Savings Bank is indebted to defendants. It may be $1 or it may be a much larger sum. If tbe true amount were set out, and it appeared to be inconsiderable, plaintiff could and probably would admit it and give defendants credit for it on tbe note and take judgment for tbe balance. As it is, no counterclaim is sufficiently pleaded that would be good against the Southern Savings Bank, tbe assignor of plaintiff. v
It is well settled that tbe averments as to set-off or counterclaim shall be definite and certain. Yague, general, and indefinite allegations are not sufficient. Tbe plea must be specific and must fully apprise tbe plaintiff of tbe nature and extent of tbe defendant's claim. 19 Enc. P. and P., 151.
In some cases it has been held that in pleading a set-off or counterclaim tbe same definiteness and certainty are required as in stating a cause of action in a declaration or complaint. Bernard v. Mullott, 1 Cal., 368; Stockton v. Graves, 10 Ind., 294; Gragg v. Frye, 32 Me., 283; and other cases cited; 19 Enc. P. and P., 751.
In this State it' is held that a counterclaim which only alleges that plaintiff is indebted to tbe defendant, without alleging further tbe nature, extent, and kind of indebtedness, and bow it arose, is imperfectly pleaded and ought to be disregarded. Smith v. McGregor, 96 N. C., 101.
In that case the Court says: "A counterclaim should be alleged with clearness and precision; its nature and tbe consideration supporting it; when, how, and where it arose, should be stated with reasonable certainty. This the statute requires, and, moreover, it is necessary to just and intelligent procedure. The counterclaim is substantially the allegation of a cause of action on the part of the defendant against the plaintiff, and it ought to be set forth with the same precision as if alleged in the complaint."
The judgment of the Superior Court is
Affirmed.