Jones v. Ashford

• Decision Date: 30 June 1878
• Court: North Carolina Supreme Court
• Parties: RACHEL JONES v. JOHN ASHFORD.

79 N.C. 172

RACHEL JONES

v.JOHN ASHFORD.

Supreme Court of North Carolina.

June Term, 1878.

CIVIL ACTION, tried at Spring Term, 1877, of SAMPSON Superior Court, before Segmour, J.

On the 6th of March, 1869, the defendant sold and conveyed to one B. L. Scott a tract of land. Scott gave his note for the purchase money, and secured its payment by a mortgage on the land. On the 15th of May thereafter, the defendant assigned the note to the plaintiff without endorsement, and at the same time gave the plaintiff a paper writing in the nature of a guaranty, by which the defendant agreed to guarantee the payment of the note in case the plaintiff failed to collect it.

At the time of the assignment, the defendant proposed to John H. Jones, the agent of plaintiff, who arranged the matter with defendant for his mother, to transfer the note and mortgage without any guaranty, which was declined by Jones, who said that he preferred the guaranty of defendant to the mortgage, and thereupon the assignment was made with the guaranty as aforesaid.

The plaintiff obtained judgment on the note, and sold Scott's equity of redemption under an execution issuing thereon for $84, and then brought this action on the guaranty for the balance due on the note.

On the trial the only question was,--whether the rights of the defendant under the mortgage passed to the plaintiff by virtue of the assignment of the note, and if so, whether the plaintiff could maintain this action without and before a foreclosure of the mortgage. The question was reserved, and after a verdict for plaintiff, His Honor being of opinion with plaintiff, gave judgment accordingly, and the defendant appealed.

Messrs. W. S. & D. J. Devane, and D. L. Russell, in their argument for plaintiff , cited 2, Parson's on Notes and Bills, 142; Day v. Elmore, 4 Wis., 215; 1 Jones on Mortgages, § 817, and authorities there cited.

Messrs. Battle & Mordecai, for defendant : The mortgage passed to plaintiff, Hyman v. Devereux, 63 N. C., 624; Miller v. Hoyle, 6 Ire. Eq., 269. Diligence of plaintiff before guarantor liable, Addison on Contracts, § 1125; Towns v. Farrar, 2 Hawks, 166; Eason v. Dixon, 2 Dev. & Bat., 78; and Court can declare as matter of law that plaintiff has not used due diligence, Battle v. Little, 1 Dev., 381.

FAIRCLOTH, J.

The defendant held a promissory note against one Scott, secured by a mortgage on real estate. He transferred said note for value to the plaintiff without endorsement, and at the same time agreed in writing “to guarantee the payment of the aforesaid note to the said Jones, and in case she fails to recover the money on said note, that I (he) will pay to her the principal and interest and costs due thereon.” At the time of the transfer, the defendant proposed to plaintfff to transfer the note and mortgage without any guaranty, but the plaintiff declined this arrangement, saying, that she preferred the guaranty of defendant to the mortgage. Judgment and execution were had on the note against Scott, under which only $84 could be realized, and this amount is credited by plaintiff on her claim. She now demands payment from the guarantor, and he insists that she was bound to foreclose said mortgage before calling on him.

The first question discussed in this Court was whether the mortgage, under the circumstances in this case, passed to the plaintiff with the transfer of the note. It is well settled that the assignment of a note passes to the assignee the mortgage or any other collateral security, unless the parties agree otherwise. Hyman v. Devereux, 63 N. C., 624.

Without discussing the question, we will assume that the mortgage and all the rights and remedies thereunder did pass to the guarantee and consider the main question, which is,--has the guarantee performed the condition precedent to her right to sue the...