SOUTHERN AUTO FINANCE COMPANY v. Pittman

117 S.E.2d 423 (1960)

253 N.C. 550

SOUTHERN AUTO FINANCE COMPANY, a Limited Partnership by Franklin S. Clark, Sole General Partner, v. T. G. PITTMAN and Jane Lassiter Aman.

No. 609.

Supreme Court of North Carolina.

December 14, 1960.

*424 Henry L. Anderson and Franklin S. Clark, Fayetteville, for plaintiff appellee.

Wiley Narron and L. Austin Stevens, Smithfield, for defendants appellants.

RODMAN, Justice.

The court gave peremptory instructions with respect to issues 2, 3, 4, and 5. Defendants assign these instructions as error.

Defendants, having admitted the execution of the note and lien, had the burden of establishing their plea of payment. Schwabenton v. Security National Bank, 251 N.C. 655, 111 S.E.2d 856; Cline Paving Co. v. Southland Speedways, Inc., 250 N.C. 358, 108 S.E.2d 641.

To show payment defendants rely on a check for $3,000, dated 30 September 1959, drawn by Tommy Pittman on First-Citizens Bank & Trust Co., payable to plaintiff's order. This statement appears on the check:

"This check is in payment of items as per statement following. Endorsement of Payee will constitute a receipt in full when check is paid. "Tom G. Pittman 59 Buick 4 dr. LaSabre"

Tommy Pittman, defendants' witness, testified: "When I issued the check to Southern Auto Finance Company on the Buick, my intention was for the check to pay the account off. When I gave a check for an automobile I considered whatever lien against it would be paid. They accepted it with that understanding. When I gave the $3,000 check, I was holding the title certificate * * * This $3,000 check has not been paid in actual cash, maybe, not at the bank. The bank has not paid it * * * The car was paid off as far as I was concerned. I knew the check had not been paid. I did not get any money from my father to pay the car off. I didn't have any money * * *"

When plaintiff received the check, it made an entry on its books showing payment of the note. "It was a bookkeeping entry which was subsequently changed."

George Fisher, employee of plaintiff, witness for defendants, testified: "Tommy Pittman forwarded a check into our office *425 to pay off said account. After we received this check, the account was paid off. We had never had a bad check on him before. The check wasn't paid. Check was marked returned at request of the maker. Tommy Pittman was a used car dealer and sold automobiles and discounted them with Southern Auto Finance Company. He received money, wrote receipts and payments and turned the money in to us. He collected a number of installment payments on various vehicles. Whenever money was collected, he sent the money into the office by check with Tommy Pittman or Tommy's Supreme Service the maker."

It is argued that Tommy Pittman was an agent with express or implied authority to collect, and because of such authority, his worthless check given to his principal is a valid payment, releasing the maker from liability. The facts do not call for an application of the law relating to agency. The evidence completely negatives the idea that T. G. Pittman ever paid anything. He did not act in reliance upon his son's right to collect for plaintiff. He cannot benefit from the gratuitous act of a third person which was a mere colorable payment. Even a debtor cannot discharge his liability to his creditor by giving his check, which he knows to be worthless because of lack of funds, or, as in this case, because of instructions given the bank not to pay. Paris v. Carolina Builders Corp., 244 N.C. 35, 92 S.E.2d 405; Wilson v. Commercial Finance Co., 239 N.C. 349, 79 S.E.2d 908. Such worthless paper is no consideration for a release of the debt. If debts could be discharged in such manner, public confidence in all commercial paper would indeed be shaken.

The court was correct in holding there was no evidence of payment, and because there was no evidence of payment, plaintiff was entitled on the admissions to peremptory instructions on the second and third issues.

G.S. § 20-50 requires the owner of a motor vehicle to be operated on the highways to be registered with the Department of Motor Vehicles. When registered, the Department issues a certificate of title showing "all liens and encumbrances upon the vehicle therein described." G.S. § 20-57(d).

The title certificate endorsed to defendant Aman when she purchased from T. G. Pittman did not show any liens against the vehicle; but the lien held by plaintiff was then properly recorded in Johnston County. If, as defendants contend, G.S. § 20-57 supplanted and removed motor vehicles used on the highways from the provisions of our registration statute, G.S. § 47-23, the court was in error in giving peremptory instructions in plaintiff's favor on the fourth and fifth issues.

The position now taken by defendants was presented, considered, and decided adversely to their contention more than a quarter of a century ago. Carolina Discount Corporation v. Landis Motor Co., 190 N.C. 157, 129 S.E. 414. The conclusion then reached is inherent in our subsequent decisions. Whitehurst v. Garrett, 196 N.C. 154, 144 S.E. 835; M. & J. Finance Corp. v. Hodges, 230 N.C. 580, 55 S.E.2d 201. The interpretation given in 1925 has not been rejected by the Legislature. If public policy now requires a different system of establishing ownership and encumbrances on motor vehicles, such policy must be declared by the Legislature. It can enact laws to accomplish that purpose. We have neither the power nor the desire to usurp its prerogative.

No error.