Sellars v. First National Bank in Henderson

BaRNHill, J. The defendants are not prosecuting a claim against the administrator which had been denied. They are merely asserting the right to apply the proceeds of collateral in their possession to the satisfaction of obligations for the payment of which, said collateral was pledged. Furthermore, the original administrator signed the creditor’s agreement, and the agreement entered into by him with the' bank at the time said deposit was made expressly recites that neither party waives *304 any rights or defenses. C. S., 100 has no application and the defendants are not barred by the terms thereof from asserting their right to the proceeds of said deposit. The three-year statute of limitations is equally inapplicable. The plaintiffs offered in evidence the agreement entered into between the original administrator and the old bank. This agreement recites “that the said bank now holds two other notes made and executed by Mixon Jewelry Company as principal and endorsed by C. P. Sellars as surety. One of these notes for $2,500 due on 16 January, 1930, and the other for $1,500 due on 3 March, 1930. The total amount of the two notes with interest to date, less reduction, is $3,400. These two notes are held as collateral to a new note of Mixon Jewelry Company dated 5 August, 1930, for $3,400.” The defendant offered evidence establishing said debt and showing that the total amount of same after the application of all credits was and is in excess of the amount of the deposit. This testimony did not tend to contradict or impeach the evidence of the plaintiff. It only served to amplify and explain the same. It was a proper subject of consideration on the motion to nonsuit. Hare v. Weil, 213 N. C., 484. In any event the burden rested upon the plaintiffs to show that the debts for the payment of which the collateral was pledged had been discharged, thus releasing the collateral. This they have failed to do. We consider the assignment of the policy of insurance sufficiently broad to include the liability of C. P. Sellars, deceased, as endorser on the notes of Mixon Jewelry Company. This being true, the defendants have at all times been entitled to the proceeds of said life insurance policy. The plaintiffs cannot complain that the bank applied said proceeds to the payment of said indebtedness before the controversy was “mutually adjusted, or until it is disposed of by judgment of the court.” All the evidence considered in the light most favorable to the plaintiffs fails to disclose that the plaintiffs, or either of them, have any right to recover any part of said deposit either as a general deposit or as a preferred claim. Nor can the plaintiffs complain that the defendants did not institute an action under the agreement to adjudicate the rights of the parties. If the controversy could not be mutually adjusted the obligation to institute the suit rested upon plaintiffs as much as upon the defendants, and all rights and defenses were reserved. The judgment below is Affirmed.