Davis v. Alexander

• Decision Date: 12 December 1934
• Docket Number: 383.
• Parties: DAVIS v. ALEXANDER et al.
• Court: North Carolina Supreme Court

177 S.E. 417

207 N.C. 417

DAVIS v. ALEXANDER et al.

No. 383.

Supreme Court of North Carolina

December 12, 1934

Appeal from Superior Court, Iredell County; Harding, Judge.

Action by W. L. Davis, executor of J. M. Davis, deceased, against F B. Alexander, D. E. Turner, and another. From a judgment for plaintiff, second-named defendant appeals.

Reversed.

The plaintiff executor of J. M. Davis, deceased, brought this action against the defendants, to recover $1,008 with interest from January 1, 1933, on the following note "$800.00 Mooresville, N. C., January 1, 1923. Twelve months after date, without grace, for value received, we, or either of us, promise to pay to the order of C. M. Davis Executor J. M. Davis, Eight Hundred and No/100 ------ Dollars, Negotiable and payable at the First National Bank of Mooresville, N. C., with interest at six per cent per annum until paid. The drawers and endorsers severally waive presentment for payment, and notice of protest, and non-payment of this note, all defenses on the ground of any extension of the time of its payment that may be given by the holder or holders to them or either of them. F. B. Alexander (Seal), C. M. Alexander, (Seal), D. E. Turner, (Seal).

No. ------. Due January 1, 1924. P. O. Mooresville, N.C. The following credits appear on the back of said note: Received from F. B. Alexander interest to date Jan. 1, 1924. Received interest to date Jan. 1, 1925. Received interest from F. B. Alexander. Interest on note for 1926. Received of F. B. Alexander $50.00 Fifty Dollars on interest 3-5-30. Received $30.00 on interest 2-3-31."

The issue submitted to the jury and their answer thereto was as follows: "Are the defendants indebted to the plaintiff and, if so, in what amount? A. $1,008.00, with interest from January 1, 1933."

The court below charged the jury, in part, as follows:

"The plaintiff has offered the note in evidence, together with the credits thereon. The defendant has plead the statute of limitations. Now counsel for the defendant tell the Court in the trial of this case, at the conclusion of the evidence, that if the plaintiff's right to recover against the defendant is not barred by the three years statute of limitations that you may answer the issue, $1,008.00, with interest from January 1, 1933. The defendant has offered no evidence; it is not required to do so; therefore, the court charges you, Gentlemen of the Jury, upon all the evidence, if you believe it to be true, it would be your duty to answer the issue, $1,008.00, with interest from January 1, 1933."

The material exceptions and assignments of error made by defendant D. E. Turner are to the judgment as signed and overruling his demurrer to the evidence and for motion for judgment as of nonsuit at the close of plaintiff's testimony. The defendant D. E. Turner duly made exceptions and assignments of error and appealed to the Supreme Court.

Grier, Joyner & Hartness, of Statesville, for appellant D. E. Turner.

Buren Jurney, of Statesville, for appellee.

CLARKSON Justice.

The defendant D. E. Turner introduced no evidence and, at the close of plaintiff's evidence, made a motion in the court below for judgment as in case of nonsuit. C. S. § 567. This motion was overruled and in this we think there was error.

The note in controversy was dated January 1, 1923, due at twelve months, payable to plaintiff's testator, under seal and signed by F. B. Alexander, C. M. Alexander, and D. E. Turner, for $800.

F. B. Alexander paid the interest up to January 1, 1927, and, as to the payments being made within three years, there is no question by defendant Turner as to the statute of limitation. The defendant Turner (1) contended he was surety on the note under seal. (2) As to him, it is barred by the three-year statute of limitation. The credit of $50 on the note, March 5, 1930, was over three years from the previous payment of the note on which the interest was paid to January 1, 1927. The present suit was instituted on January 12, 1933.

The questions involved: Was the note under seal signed by D. E. Turner, under the facts and circumstances of this case, barred by the three-year statute of limitations? We think so.

Did a payment made by the maker of a note under seal, after three years, operate as a renewal to a surety on the note? We think not, under the facts and circumstances of this case.

N.C. Code 1931 (Michie), § 2977, is as follows: "The person primarily liable on an instrument is the person who by the terms of the instrument is absolutely required to pay the same. All other parties are secondarily liable."

C. S. § 3041, is as follows: "The maker of a negotiable instrument by making it engages that he will pay it according to its tenor, and admits the existence of the payee and his then capacity to indorse."

In Howell v. Roberson, 197 N.C. 572, 573, 574, 150 S.E. 32, 33, it is written, citing numerous authorities: "Under the law in this jurisdiction, all three who signed the note were joint makers and may be so held by the payee or holder of the note. C. S. §§ 2977, 3041. As among themselves, they may ordinarily show by parol their respective liability to each other on the note. Coprincipals and cosureties are presumed to assume equal liability, but this presumption may be rebutted by parol evidence." Raleigh Banking & Trust Co. v. York, 199 N.C. 625, 155 S.E. 263; Stanley v. Parker, 207 N.C. 159, 176 S.E. 279.

In Williams v. Glenn, 92 N.C. 253, 255, 256, 53 Am. Rep. 416, is the following: "In Robison v. Lyle, 10 Barb. (N. Y.) 512, it was held that 'as between the makers of a promissory note and the holders, all are alike liable, all are principals; but as between themselves, their rights depend upon other questions, which are the proper subject of parol evidence. On the trial of an action, therefore, between the signers of such a note, it is right to receive extrinsic proof to show which of the parties signed the note as principal and which as sureties.' To the same effect is Sisson v. Barrett, 2 Comst. [2 N. Y.] 406.

The distinction is this: As between the makers and payee of a note, it is made for the purpose of being the proof of the contract, and is the exclusive proof of the contract, and cannot be contradicted by extrinsic proof. The only exception to this rule, is in the class of cases like Welfare v. Thompson and the other cases of that character cited above. But as between the signers, it was not made or intended to be exclusive proof of the agreement or relation between them. That may be shown by parol proof. * * * The fact is not overlooked that the decisions cited are mostly upon matters arising upon promissory notes. But the same reasons apply with equal force to sealed instruments." Citing numerous authorities, 65 A. L. R. 823.

In Welfare v. Thompson, supra, at page 278 of 83 N.C. citing authorities, the exception is as follows: "We believe it is conceded that whenever it is proposed to prove that a co-promisor or co-obligor to a note or bond is surety only, the fact not appearing upon the face of the instrument, it is competent to show by parol that fact, and that the creditor knew at the time he received the note that he was surety." Hunter & Co. v. Sherron, 176 N.C. 226, 228, 97 S.E. 5; Kennedy v. Atlantic Trust & Banking Co., 180 N.C. 225, 229, 104 S.E. 464; Haywood v. Russell, 182 N.C. 711, 713, 110 S.E. 81; Chappell v. Surety Co., 191 N.C. 703, 708, 133 S.E. 21; Taft v. Covington, 199 N.C. 51, 153 S.E. 597; Barnes v. Crawford, 201 N.C. 434, 160 S.E. 464; Furr v. Trull, 205 N.C. 417, 171 S.E. 641.

The periods provided for the commencement of actions relative to this controversy are as follows: C. S. § 437, within ten years. "2. Upon a sealed instrument against the principal thereto."

C. S. § 441 is as follows: "Within three years an action-1. Upon a contract, obligation or liability arising out of a contract, express or implied, except those mentioned in the preceding sections."

In an action between sureties to a note, as between themselves this can be shown by parol. Gillam v. Walker, 189 N.C. 189, 126 S.E. 424. So as to an indorser (Dillard v. Mercantile Co., 190 N.C. 225, 129 S.E. 598), in these cases, the three-year statute of limitation...