Lynch v. . Loftin

MANNING, J. This case presents some unusual features. The plaintiff takes a note from J. ~W. Lynch and L. Y. Morrill for $1,500, in the usual form. He endorses that note in blank, and it comes, before maturity, to the possession of the defendant, S. *273 H. Loftin, wbo endorses it to tbe Merchants National Bank of Richmond, Ya. The note being unpaid at maturity, the holder sued the endorsers and makers and recovered judgment; the plaintiff being the first endorser (the principals being insolvent), has paid the judgment amounting to $1,875.50. This amount he now seeks to recover of his subsequent endorser, S. H. Loftin. It would seem to be clear that he could not recover. See. 2217, Revisal; Adrian v. McCaskill, 103 N. C., 182. “As respects one another, endorsers are liable prima facie in the order in which they endorse; but evidence is admissible to show that as between or among themselves they have agreed otherwise.” Revisal, sec. 2217. But the plaintiff endeavors to prevent this result by setting up an agreement made by defendant Loftin and his assignees under a deed of assignment for the benefit of his creditors with J. TI. Lyüch, one of the principals in the note recited. The material part of the agreement alleged by plaintiff is the paragraph set out in the preceding statement of the ease. It will be observed that the plaintiff was not á party to that agreement, but he contends that he was a beneficiary thereof, and that he can insist upon its performance by the defendant; and upon his failure, that he is entitled to recover damages, to-wit, the amount paid by him in satisfaction of the judgment recovered upon the note. The plaintiff further invokes to his aid a consent judgment rendered in an action brought upon the note, to which the defendant Loftin was not a party, and which judgment was subsequently rendered nugatory by another judgment of the Superior Court of Lenoir County, upon the ground that one of the parties named — the banking corporation — did not exist, and because, further, none of the parties to the pretended consent judgment had any authority to bind the real owner of the note by such a judgment. In Vaughan v. Gooch, 92 N. C., 524, Smith, C. J., speaking for this Court to the effect and validity of a consent judgment, said':' “The judgment, or, as it is termed, the decree is, by consent, the act of the parties rather than of the court, and it can only be modified or changed by the same concurring agencies that first gave it form, and whatever has been legitimately and in good faith done in carrying *274 out its provisions must remain undisturbed. Tbe authorities to this effect are simple and decisive among our own adjudications. In Wilcox v. Wilcox, 1 Ird. Eq., 36, Gaston, J., declares a decree rendered by consent to be in truth the decree of the parties, and in such a decree, stat pm rations, voluntas, their will is a sufficient reason.” In Edney v. Edney, 81 N. C., 1, Dillard, J., says that “a decree by consent, as such, must stand and operate as an entirety, or be vacated altogether, unless the parties by a like consent shall agree upon and incorporate into it an alteration or modification. If a clause be stricken out,” he adds, “against the will of a party, then it is no longer a consent decree, nor is it a decree of the court, for the court pever made it.” Such being the law in this State, the consent judgment was properly avoided as having been rendered without the consent of one of the parties thereto. Further, the defendant Lof-tin was not a party to the consent judgment or the action in which it was rendered. As it cannot operate as an entirety, it is altogether a nullity, and the plaintiff can derive no benefit therefrom. The facts which render it ineffective appear in the complaint. We will next consider the agreement upon which plaintiff relies to change the order of liability upon the note. If this agreement does not change this order of liability, then the complaint states no cause of action and the demurrer should have been sustained. The complaint does not distinctly allege a change in the prima facie order of liability, but it sets out the contract, and if this effects this change, it would be held, under our liberal construction of pleadings, sufficiently pleaded. The contract was executory in its provisions. J. W. Lynch, a party thereto, was required to transfer certain properties, and the defendant Loftin was required to do certain acts. The plaintiff does not allege any performance by J. W. Lynch — through whom he must work out his rights — of the acts required of him by the contract. The contract is simply alleged to have been executed, and there the allegations end. Nothing is charged to have been done under it and no new relations or rights acquired. To hold the defendant Loftin „to a performance, conceding that it is efficient to protect the plaintiff and vest in him an enforceable right, without alleging a performance by J. W. Lynch of the *275 covenants and agreements imposed npon Mm, and especially as plaintiff rests npon a performance by J. W. Lyncb to entitle Mm to any relief, would be unwarranted by any principle of liberal construction of pleading or by any recognized principle of law or equity. There is an entire absence of essential connection between the matters alleged and the relief demanded. We think J. W. Lynch not only a proper, but a necessary party to this action. If, as a fact, J. W. Lynch performed Ms part of the agreement, and his performance was a discharge and payment of the note described in the complaint to S. H. Loftin, the defendant, he being a principal in the note, his payment would ensure to the benefit of the plaintiff whose liability was only that of an endorser, and as between plaintiff and defendant, the defendant would be required to account to the plaintiff for the consideration received. In this way only, in our opinion, can the agreement be of any avail to the plaintiff, but even in this way it is -doubtful if this note was embraced within the terms of the agreement. It was not “held” by the defendant Loftin or his assignees, as may have been known to J. W. Lynch. In any view, the demurrer should have been sustained, and the action will be dismissed unless the plaintiff shall obtain leave to make new parties and to amend his complaint and insert therein the necessary allegations to entitle him to relief. In overruling the demurrer there was Error. Hoke, J., not sitting.