Court Opinion

ID: 3674478
Source: CourtListenerOpinion
Date Created: 2016-07-06 06:21:46.851712+00
Date Added: 2024-06-11T15:21:54.707410
License: Public Domain

The defendant was cashier of a joint-stock company, a copartnership doing a banking business. Faison v. Stewart, 112 N.C. 332; Bain v. LoanAssociation, ibid., 248; Hanstein v. Johnson, ibid., 253. By its articles of agreement, styled "The Constitution of the Clinton Loan Association," the duties of defendant as cashier were defined: "The cashier shall receive and hold subject to the order of the board of directors, all moneys, notes, mortgages, bonds, policies of insurance, deeds and other valuables belonging to the association." And by a further provision, "The board of directors, or any three of them, *Page 177 
together with the cashier, shall constitute a finance committee, whose duty shall be to loan, invest and collect the moneys and other securities of the association, as defined in the constitution and by-laws."
It will appear from the above quotations that the cashier, while he may not have been invested alone with all the powers generally delegated to cashiers of banks, was the custodian of all the funds, securities and effects of the association, "subject to the order of the board of directors." He occupied the relation of a fiduciary while a member of the copartnership; he was also its servant and agent. The reception of its effects constituted him not simply a debtor; he had not separate authority to disburse, but was bound to pay over on request or order; and (257) it was also provided that he should give bond for the faithful performance of his duties. It was not a case of deposit, like a bank or its depositor, where the bank could mingle the funds with its own and use the same until drawn out, and it was in no sense a loan, as in Hervey v.Devereux, 72 N.C. 463. It was clearly akin to a pure trust. "The relation of trust between the bank and cashier gives equity jurisdiction to compel an account for money misappropriated or other breach of trust." 1 Morse Banking, sec. 173.
The gravamen of the charge here is that the defendant, as cashier, received into his possession all the moneys, notes, etc., of the association, and failed and neglected to account for a part of the same, but converted and fraudulently misapporpriated [misappropriated] it. The necessity of an account is set out in order that the true liability may be ascertained.
We have been impressed with the very interesting and ingenious argument of the learned counsel for defendant, to the effect that the defendant was neither bailiff, guardian, nor receiver, and that consequently the old and now obsolete action of account would not lie against him. Without undertaking to decide whether this be so or not, we are entirely satisfied that a bill in equity for an account would be sustained, for, "where an agent is entrusted with money to be disbursed, his principal may sustain a bill against him for an account of his agency, and, in some instances, although no discovery is sought. Adams Eq., 321, note;McCaskill v. McBride, 17 N.C. 265. and we think it clear that, under our present practice, in which legal and equitable relief may be demanded and obtained in the one form of action, this defendant may be held to account, the action being to recover a balance alleged to be in the hands of defendant, and an account being necessary to ascertain the amount of said balance, if there be any. The old bill of discovery is dispensed with, but the law affords better facilities for reaching the desired end than was provided in the distinct equity system (258) once in practice. Code, sec. 579 et seq. Old forms have been done away with, but principles of substantial justice ever remain. *Page 178 
The association became incorporated; the corporation succeeded to its rights and liabilities, and becoming insolvent a receiver was appointed to take charge of and administer the asserts. This action is not brought by a creditor, but it is the receiver who seeks through this means to secure the effects of the insolvent corporation for the benefit of all parties in interest and have distribution according to law. The Code, sec. 668 et seq. His allegation is, in substance, that those assets have been wasted by the defendant who had them in charge. If the defendant failed to turn over the property entrusted to him, he might have been sued by the association or its successor, the corporation. While one copartner had no action at law against another to recover the partnership property to which each had equal title, the equitable jurisdiction to compass a dissolution of the partnership and the administration of its effects has always existed. 1 Story Eq. Jur., Sec. 463; Marvin v. Brooks,94 N.Y., p. 81. This corporation having succeeded to the rights of the copartnership, is now in liquidation under our statute, and being under the control of the court, no one else can collect its assets but the receiver. Among its assets is this claim against the cashier of the copartnership association. If said cashier has not fully accounted for the property which came into his hands, the only remedy left is an action by the receiver against the cashier. If there were any ascertained balance in his hands there would be no necessity for an account, but the plaintiff, a receiver, alleges that a long account is necessary to enable the court to ascertain the sum for which judgment should be rendered against the defendant. Section (259) 421 of The Code provides for a reference to state an account. If upon the taking of such account before a referee it should be found that defendant has had in his possession property of the association, and has not paid over the same to his successor, the opportunity is then offered the defendant to discharge himself of all liability by showing that such property has been disposed of by him by order of the directors, or has been dissipated in any way other than by his neglect or default.
It is further contended by the defendant that the complaint as amended is too vague and uncertain to require an answer. We reiterate what has more than once been said, that The Code has by no means dispensed with that certainty and regularity in pleading which is essential to every system adopted for the administration of justice. Rowland v. Windley, 82 N.C. 131. And that now, as in the old equity practice, ":there should be such certainty in the averment of the title upon which the bill is found that the defendant may be distinctly informed of the nature of the case which he is called upon to meet" (Story Eq. Pl., sec. 241), that a charge of fraud in general terms is insufficient, and that to open a settled account specific errors should be pointed out. But if we should reject the charge of fraudulent misappropriation of the funds of the *Page 179 
association, we still have the distinct allegation that defendant, in the course of his agency, received into his possession, of the funds of the association now represented by the receiver, a certain amount, and that he accounted for and turned over to his successor a less amount; that a demand has been made upon him for the balance which went into his hands, and that he has failed to pay over the same to the receiver.
Here is the foundation for an action in the nature of an indebitatusassumpsit, upon an account stated, in which action it is not necessary to state the particular items constituting the debt. 1 Selwyn Nisi Prius, 68. And The Code, as we have seen, provides the means for discovery and the statement of an account to ascertain the balance in the hands of the defendant, if any there be. Marvin v. Brooks, supra.   (260) Neither is there necessity in equitable proceedings of this character, if we look at it in the light of a bill for discovery and account, to state with precision each item of the balance claimed, for in such case there would be no necessity for a discovery or an accounting.
It may be proper, however, to remark that every material fact to which the plaintiff means to offer evidence ought to be distinctly stated in the premises, for otherwise he will not be permitted to offer or require any evidence of such fact. A general charge or statement, however, of the matter of fact is sufficient, and it is not necessary to charge minutely all the circumstances which may conduce to prove the general charge, for these circumstances are properly matters of evidence which need not be charged in order to let them in as proofs. Story Eq. Pl., sec. 28.
Affirmed.