#### MATTIE B. HARPER v. OAK RIDGE SUPPLY COMPANY et al.

(Filed 25 October, 1922.)

Fraud — Corporations—Officers—Directors—Evidence—Verdicts—Trials.

Evidence that the directors of the defendant corporation sent an agent to the plaintiff and secured a loan of money she had received upon an insurance policy on the life of her husband; that the plaintiff was inexperienced in business affairs and relied upon the assurance of the representative that the loan would be amply secured, and the directors individually liable therefor; that theretofore the banks had lent the corporation money upon its note with the individual endorsements of the directors, but at this time had refused to further do so, and that the money obtained from the plaintiff was upon the unendorsed and unsecured note of the corporation, which was soon thereafter thrown into the hands of a receiver and its assets bought in by the directors at a small per cent of its true valuation, is sufficient to sustain a verdict of the jury finding fraud on the part of the individual directors, defendants in the action, and a judgment that the plaintiff recover of them in her action.

Appeal by tbe individual defendants from Lyon, J., at June Term, 1922, of LeNOIR.

Civil action, instituted against tbe Oak Ridge Supply Company, a corporation, and its four directors, W. J. Grady, J. P. Turner, Joseph C. Maxwell, and Don Maxwell, individually, to recover tbe sum of $3,400, and interest tbereon, as evidenced by tbe promissory note of tbe defendant corporation; tbe directors being individually joined as defendants *205upon tbe alleged ground of false and fraudulent representations and conduct in tbe procurement of said loan and its subsequent conversion by tbem.

Upon denial of liability on tbe part of tbe individual defendants, there was a verdict and judgment in favor of' tbe plaintiff, from wbicb tbe individual defendants appealed.

Rouse & Rouse and Sutton <& Greene for plaintiff.

H. D. Williams and Dawson & Wallace for defendants.

Stacy, J.

Tbe defendants rely chiefly upon their exception to tbe refusal of tbe court to grant their motion for judgment as of nonsuit, made first at tbe close of tbe plaintiff’s evidence, and again renewed at tbe close of all tbe evidence. Tbe first exception has been waived by tbe defendants. Smith v. Pritchard, 173 N. C., 720. They bad tbe right to rely on tbe weakness of tbe plaintiff’s evidence when she rested her case; but, having elected to offer testimony in their own behalf, they did so cum onere, and only their exception noted at tbe close of all tbe evidence may now be urged or considered. C. S., 567. Blackman v. Woodmen of World, ante, 75; S. v. Killian, 173 N. C., 792.

Viewing tbe evidence in its most favorable light for tbe plaintiff, tbe accepted position on a motion of this kind, we find tbe following facts sufficiently established, or as reasonable inferences to be drawn from tbe testimony:

I. That for a long time it bad been tbe custom and habit of tbe Oak Ridge Supply Company, a mercantile corporation, to borrow such money as it required in its business from banks upon tbe personal endorsement of its directors, defendants herein.

2. That in April, 1920, finding tbe company embarrassed for lack of funds, and being unable to secure further accommodations from tbe banks, tbe directors decided to endeavor to secure a loan from tbe plaintiff.

3. That acting upon this decision of tbe directors, J. 0. Maxwell sent Mrs. Gertrude Rouse, who bad been an employee of tbe Oak Ridge Supply Company, and who was acquainted with its usage and custom in borrowing money, to see if Mrs. Harper would lend tbe company her insurance money.

4. That Mrs. Harper told Mrs. Rouse she bad $3,400 insurance money left her by her husband, and wbicb she would lend to tbe company on good security. Mrs. Rouse communicated this information by letter to Mr. Maxwell.

5. That thereupon Mr. Maxwell sent Miss Jennie Maxwell, who was tbe secretary and treasurer of tbe company, to see when they could get tbe money.

*2066. Tbat Mrs. Harper said they could get tbe money, and asked about tbe security. Sbe wanted to know wbat kind of note. Miss Maxwell told ber it would be an endorsed note, and tbat tbe directors would be individually responsible for its payment.

7. Tbat tbe plaintiff was a widow, inexperienced in business, and did not know it was necessary for tbe directors to put tbeir names on ber note in order to become personally and individually responsible for its payment.

8. Tbat Josepb C. Maxwell went to tbe plaintiff’s bouse tbe next day and delivered to ber tbe company’s unsecured note for $3,400. On being asked by ber if it was all right, be replied tbat so far as be knew it was.

9. Tbat upon being thus assured, Mrs. Harper took tbe 6 per cent interest-bearing note and parted witb ber money by endorsing and delivering to Mr. Maxwell ber certificates of deposit, wbicb bore only 4 per cent interest.

10. That this money was deposited in banks to tbe credit of tbe company, and was paid out on its debts.

11. Tbat tbe Oak Ridge Supply Company shortly thereafter was thrown into tbe bands of receivers at tbe instance of tbe defendants, Turner and Grady, and upon a sale by tbe receivers all tbe assets of tbe company were bought in by them at 25 cents on tbe dollar.

12. Tbat appellants deliberately threw tbe company into tbe bands of a receiver and bought in tbe assets for much less than tbeir true value.

13. Tbat at tbe time this money was borrowed from Mrs. Harper, tbe Oak Ridge Supply Company was insolvent, and tbe directors knew, or by the exercise of reasonable and proper care could and should have known of its insolvency.

14. Tbat tbe directors, defendants herein, knew this money was being obtained on tbe note of tbe insolvent corporation, although tbey, through tbeir agent, bad promised tbe plaintiff an endorsed note, and although tbey knew, through tbeir agent, tbat tbe plaintiff was relying on tbeir personal security, and although tbey also knew, through tbeir agent, tbat tbe plaintiff bad been promised, and was expecting to receive, good security, such as tbe banks bad been in tbe habit of receiving.

Upon these “fourteen points,” we think tbe jury were fully warranted in finding, as tbey did, tbat tbe plaintiff was induced to part witb ber money by tbe false and fraudulent representations of tbe individual defendants, or, at least, tbat such misrepresentations were made as to render tbe individual defendants personally liable in an action like tbe present.

We have discovered no sufficient reason for disturbing tbe result of tbe trial, and tbe judgment will be affirmed.

No error.