Court Opinion

ID: 3652974
Source: CourtListenerOpinion
Date Created: 2016-07-06 06:07:03.287214+00
Date Added: 2024-06-11T14:29:08.595573
License: Public Domain

The petition is addressed to the failure of the court, in the opinion heretofore filed herein, to interpret chapter 85, section 5, Public Laws of 1923 (N.C. Code of 1935 [Michie], sec. 1864i), and to apply the same to the instant case. Specifically, the petition is directed to that portion of the prior opinion, 215 N.C. at p. 75, which declares: "The complaint alleges that the only notice plaintiff had was the fact that the checks were signed `Paine Statistical Corporation, J. O. Paine, Prest.' We do not think that this was sufficient to put defendant on notice that the checks were not bona fide." This statement must be interpreted in the light of the question then before the Court, to wit, whether plaintiff was entitled tojudgment on the pleadings where it is not denied that a personal debt was paid by a corporate check but the allegation of misappropriation or fraud is, without any further plea in justification or extenuation, denied. The statement: "We do not think that this was sufficient to put defendant on notice, etc.," simply means that it is not sufficient as a matter of law, so as to entitle plaintiff to a judgment on the pleadings. The allegation was that Paine, as corporate president, fraudulently used a check drawn by him as corporate president to pay a personal debt and that defendant knowingly participated therein; both the fraudulent user and participation was denied. This raised an issue for trial, and the trial judge properly refused to grant the motion for judgment on the pleadings.
Since this case presents a single question, to wit, whether the matters of fact put at rest by the pleadings are sufficient to support a judgment for plaintiff, it was not deemed necessary to discuss, in the prior opinion herein, the effect of the last sentence in section five, chapter 85, Public Laws 1923, as follows: ". . . If, however, such instrument is payable to a personal creditor of the fiduciary and delivered to the creditor in payment of or as security for a personal debt of the fiduciary to the actual knowledge of the creditor, or is drawn and delivered in any *Page 30 
transaction known by the payee to be for the personal benefit of the fiduciary, the creditor or other payee is liable to the principal if thefiduciary in fact commits a breach of his obligation as fiduciary indrawing or delivering the instrument." This statute, by its plain intendment, has no application unless the fiduciary commits "a breach of his obligation as fiduciary in drawing or delivering the instrument." In the instant case the denial of fraud raised an issue as to the existence of "a breach of his obligation as fiduciary." This issue has not been disposed of. Nor is it properly before us in the instant case, which is here for review only as to the correctness of the decision of the trial judge in denying the motion for judgment on the pleadings.
We adhere to our original position: The motion for judgment on the pleadings was correctly denied.
The costs will be taxed against the petitioner.
Petition dismissed.