Patapsco Guano Co. v. Bryan & Co.

24 S.E. 364, 118 N.C. 576

• Court: Supreme Court of North Carolina
• Decided: February 5, 1896
• Status: Published

Opinion

Montgomery, J.:

Upon an examination of the complaint and answer in this action it appears that the defendant confesses that the plaintiff lias stated a cause of action against him. He admits the execution of the notes and contract set out in the complaint, and admits by his failure to deny the first section in allegation seven of plaintiff’s amended complaint that he had collected enough, in cash and upon the notes executed to him by the purchasers of the guano sold to him by the plaintiff, to pay his notes due to the plaintiff. His denial of embezzlement and conversion charged against him in the complaint plainly appears, in his answer, to be made, not because he has not misappropriated the trust funds which were derived from a saie of the guano, but because of the legal construction which he puts upon the contract between himself and the plaintiff. The defendant relies upon matter wh ch he pleads in avoidance to defeat the action. The plea in avoidance which he sets up is that the con-, tract between himself and the plaintiff for the sale of the guano constitutes him simply the debtor of the plaintiff for the value of the guano, and does not make him a trustee, as well as a debtor, of the notes and cash received by him for the guano. If,'therefore, the contract as a matter of law establishes a relation of trust between the parties, the matter pleaded in avoidance is insufficient.

There can be no doubt that the contract makes the defendant a trustee for the plaintiff’s benefit of the guano sold to him by the plaintiff, of the notes taken by the defendanUfroin the purchasers of the guano, aud of the cash money derived from the sales and of that collected on the notes. A contract of this nature, to this effect, has been construed by the Court in the case of Chemical Co. v. Johnson, 98 N. C., 123. Issues, among which was the following, “Did the defendant wrongfully convert the guano, notes or other evidences of indebtedness or the proceeds thereof to his own use?” were submitted to the jury, and the response to the one above written out was in favor of the defendant. The plaintiff moved for a judgment, non obstante veredicto. The motion was denied and j udgment was rendered for the defendant. There was error in the ruling of the court refusing the motion of the plaintiff. He^was entitled upon the pleadings to his judgment as prayed for. The j udgment is reversed, and j udgment must be entered in the court below for the plaintiff according to the prayer of his complaint.

Reversed.