Court Opinion

ID: 5588727
Source: CourtListenerOpinion
Date Created: 2022-01-11 02:02:45.65129+00
Date Added: 2024-06-11T08:36:21.944825
License: Public Domain

On Motion for Rehearing.
Bussell, C. J.
In this case the action was a suit upon a note executed and delivered by McBrayer, payable to T. B. Lovelace, T. P. Lovelace, B. A. Lovelace, and W. B. Whiteside, which had *250been transferred to the Farmers Bank & Trust Co., of which the plaintiff is the liquidating agent. To this suit the defendant filed an equitable cross-action in which he set up, among other things, a partial failure of consideration, due to the failure of the original payees to deliver certain named property and assets valued and included in the amount for which the note was given; and he asked that the value of the property which the payees agreed to deliver to him be allowed by way of recoupment and set-off, and that certain deeds which he had given as security be canceled as a cloud upon his title. He alleged, as one of the means of identification of his purchase from the individual payees of the note, that he purchased the capital stock and assets of the LovelaceMcBrayer Lumber Co. In the cross-action the term “capital stock and assets” is minutely and specifically mentioned. Demurrers based upon the ground that the purchase of the capital stock necessarily included all the assets of the corporation were properly overruled, inasmuch as it plainly appears from the allegations of the cross-action as a whole that the entire transaction which furnished the consideration for the note was a matter of individual dealings, by which the corporation was not affected or in any way involved. The only effect of the transaction which culminated in the execution of the note was to transfer to the maker of the note whatever interest the payees of the note had in any of its assets, whether attached to or detached from the property essential to the operation of the corporation, whether attached to or detached from its manufacturing plant, as well as the certificatés of stock of each of these individual owners, which served the purpose of evidencing the right of each to enjoy the franchise of the corporation and participate in its management. Rehearing denied.