Charles M. Britt Company v. Barefoot & Tatum Drugs

83 S.E.2d 883 (1954)

240 N.C. 755

CHARLES M. BRITT COMPANY, Inc., a North Carolina Corporation, and Charles M. Britt, Individually, v. BAREFOOT & TATUM DRUGS, Inc., a North Carolina Corporation.

No. 102.

Supreme Court of North Carolina.

October 13, 1954.

*884 Lee & Marler, H. Kenneth Lee, Asheville, for plaintiffs-appellants.

George Pennell, Asheville, for defendant-appellee.

JOHNSON, Justice.

The stipulations of the parties charted the course of the trial and established the alleged acts of forgery so as to entitle the corporate plaintiff to recover the face amount of the forged checks, 50 Am. Jur., Stipulations, Sec. 9; 7 Am.Jur., Banks, Sec. 697; Annotations: 31 A.L.R. 1068, 67 A.L.R. 1535, unless the right of recovery was defeated by the defendant's plea in bar based on negligence of the plaintiffs. The plea in bar was submitted to the jury under the third issue. It was resolved against the plaintiffs. Necessarily, then, since the appeal follows the theory of the trial as fixed by the stipulations, General Finance & Thrift Corp. v. Guthrie, 227 N.C. 431, 42 S.E.2d 601; Lyda v. Marion, 239 N.C. 265, 79 S.E.2d 726, we are concerned here only with the rulings below which relate to the defendant's plea in bar.

The validity of this plea was challenged by the plaintiffs at every crucial procedural stage of the proceedings belowfirst by demurrer ore tenus, next by objection and exception to the submission of the third issue, and finally by motion for directed verdict on the issue. The plaintiffs thus challenged (1) the sufficiency of the defendant's further answer to state a valid defense or plea in bar, and (2) the legal sufficiency of the evidence to support a verdict in favor of the defendant.

In gist, the defendant alleges: (1) that the plaintiffs were negligent in reposing confidence in bookkeeper Bennett by entrusting to him the handling of checks, and (2) that over a long period of time Bennett not only forged the checks here sued on but numerous others running into thousands of dollars, and that the plaintiffs should have discovered "these acts and omissions," and that their failure to do so was negligence barring recovery.

The allegation that the plaintiffs entrusted the" company's checks to bookkeeper Bennett, without further averment, falls short of charging negligence. California Stucco Co. v. Marine Nat. Bank, 148 Wash. 341, 268 P. 891, 67 A.L.R. 1531. See also Annotations: 31 A.L.R. 1068 and 67 A.L.R. 1535; Shives v. Sample, 238 N. C. 724, 79 S.E.2d 193.

Next, as to the allegation that Bennett forged numerous other checks, it is nowhere alleged (1) whether these acts were committed before or after those here complained of, (2) wherein the plaintiffs were negligent in supervising Bennett, or (3) that there was any causal connection between a failure to detect the other forgeries and the losses here sued on.

It necessarily follows that the challenged pleading fails to state facts sufficient to constitute a defense. The plaintiffs' demurrer ore tenus should have been sustained. The court below erred in overruling it.

In this view of the case we do not reach for decision the question of the sufficiency of the evidence to support the verdict in favor of the defendant on the third issue. Suffice it to say the defendant offered no evidence in support of the plea. It rested its defense upon the testimony of the plaintiffs' witnessesmainly that adduced on cross-examination. This was wholly insufficient to establish negligence in bar of recovery.

*885 The judgment below will be vacated, the verdict on the third and fourth issues set aside, and the cause remanded to the court below for further proceedings in conformity to law and the decision here reached.

Error and remanded.