Chance v. Jackson

PARKER, Judge. Over plaintiff’s objection the court permitted defendant to introduce in evidence four checks which had been drawn by defendant, two in 1962 and two in 1963, and which together totaled $12,400.00. Two of these checks were payable to plaintiff’s husband, one was payable to a bank and was marked for deposit to the account of plaintiff’s husband, and the fourth was payable to “The Garden Center.” On the face of two of these checks was the notation, “For Loan.” One of the two checks which was payable to plaintiff’s husband, being also one of the two which bore on its face the notation, “For Loan,” was endorsed by the payee “For Deposit to account Mr. or Mrs. John B. Chance.” In explanation of why he had made a check payable to paintiff’s husband, defendant was permitted, over plaintiff’s objection, to testify as follows: “I made it out with no real significance as to whether it was to Mr. and Mrs. Johnnie B. Chance or Mr. Johnnie B. Chance, because I was loaning the money to my sister for her benefit and I just made the check out as I was instructed to make it out. I couldn’t say absolutely as to who instructed me to make the check out in that manner. Each individual time, I asked her or got, it was just the agreement and I didn’t get a new agreement for each transaction.” In response to his counsel’s question as to why he had made out one of the checks to the bank, defendant testified: “That’s what I was told to do at that time.” Referring to all of the checks, defendant testified without objection that they “repre [642] sent the amount of money that I have paid for the loan to Mrs. Chance.” The admission of these checks in evidence and the overruling of her objections to questions directed to defendant by his counsel as to why he had made the checks payable in the manner in which they had been made payable are the subjects of plaintiff’s first three exceptions and assignments of error. In these we find no merit. The checks were competent to show that defendant had advanced the amount of money which he contends he had advanced. While the form in which the checks were made payable made them more consistent with plaintiff’s contention that defendant had loaned money solely to her husband than with defendant’s contention he had made loans to her, this presented a matter for the jury to evaluate in the light of defendant’s explanations and all other relevant circumstances, including the relationship between the parties. The checks and defendant’s testimony explaining them were admissible in evidence. Consistent with her theory that the loans made by defendant were made to her husband and not to her, plaintiff contends that defendant’s evidence at the most tends to show only a collateral oral promise on her part to pay the debt of her husband, thus bringing this case squarely within the provisions of the statute of frauds, G.S. 22-1. However, no issue as to the statute of frauds was presented by the pleadings in this case. Under the Rules of Civil Procedure the statute of frauds is now an affirmative defense, G.S. 1A-1, Rule 8(c), and plaintiff failed to plead it as a defense to defendant’s counterclaim. Moreover, defendant alleged in his counterclaim only that he had made loans to the plaintiff, and his evidence, if considered in the light most favorable to him, would support a jury finding that plaintiff’s obligation was based on original promises to repay loans made to her, though the proceeds of the loans were, at her request, furnished to her husband. Such original promises, if found to have been made, would not fall within the statute of frauds. Piedmont Aviation v. Motor Lines, 262 N.C. 135, 136 S.E. 2d 658; Pegram-West v. Insurance Co., 231 N.C. 277, 56 S.E. 2d 607; Farmers Federation, Inc. v. Morris, 223 N.C. 467, 27 S.E. 2d 80; see also Annotation, 20 A.L.R. 2d 246. In its charge to the jury the trial court, after recapitulating the evidence and stating the contentions of the parties, gave [643] certain general instructions as to what, in law, constitutes a contract. In the mandate portion of the charge with respect to the second issue, the court then instructed the jury as follows: “The burden of proof on this issue is upon the defendant, Mr. Jackson, to satisfy you from the evidence and by its greater weight that some time in 1962 and 1963 he made her a loan of $12,400.00; that she has not repaid him this money; that she still owes him this money; that as of December of 1969, she still owed him $14,214.92; that he has properly applied these proceeds off against this amount, then it would be your duty to answer this issue in favor of the defendant, anywhere from $14,214.92, down to nothing.” Appellant’s assignment of error to this portion of the charge must be sustained. Defendant’s evidence did not show any original understanding between him and his sister that he would lend to her, upon her credit and promise to repay, $12,400.00 or any other specific amount. Rather, defendant’s evidence indicated, as he had alleged in his counterclaim, a series of loans made over a period of approximately ten months. There was no dispute but that these loans were made in the form of advances of funds, not to plaintiff, but to her husband. At no point in the charge did the trial court instruct the jury that it could answer the second issue in favor of the defendant only if it should find that one or more of these loans were made upon the express agreement, existing at the time the funds were advanced, that the loan was being made by defendant to plaintiff upon her promise to repay and upon the understanding that the funds were to be advanced to plaintiff’s husband rather than directly to her. Neither did the court instruct the jury that it could answer the second issue in favor of defendant only in such amount as it should find had been so loaned by defendant to plaintiff. Under the evidence in this case the jury might well have found that some of the loans were made to plaintiff upon her original promise to pay, while other loans were made solely to her husband. For failure of the trial court adequately to declare and explain the law arising on the evidence in this case as required by G.S. 1A-1, Rule 51 (a), appellant is entitled to a New trial. Judges Vaughn and Graham concur.