Dry v. Reynolds

• Decision Date: 10 January 1934
• Docket Number: No. 431.,431.
• Citation: 172 S.E. 351,205 n.c. 571
• Court: North Carolina Supreme Court
• Parties: DRY. v. REYNOLDS et al.

172 S.E. 351

205 n.c. 571

DRY.

v.REYNOLDS et al.

No. 431.

Supreme Court of North Carolina.

Jan. 10, 1934.

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

Action by G. W. Dry against G. D. R. Reynolds and another. From an adverse judgment, defendant J. C. Parker appeals.

Affirmed.

The plaintiff declared on the following promissory note:

"Albemarle N. C, May 12, 1923.

"$500.00.

"On or before the 12th day of May, 1924, I, we, or either of us, promise to pay to the order of G. W. Dry, the sum of Five Hundred and 00/100 Dollars, negotiable and payable at the Stanly Bank & Trust Company, Albemarle, N. C, with interest at the rate of six per cent per annum from date, payable annually until paid, and the securities and endorsers hereby waive protest, notice of protest and notice of nonpayment hereof, and guarantee the payment of this note at maturity or any time thereafter, and consent that the time of payment be extended without notice hereof.

"G. D. B. Reynolds [Seal.]

"J. C. Parker, Surety [Seal.]

"Witness: J. R. Price."

Seven issues were submitted, the first three of which were answered by consent, the fourth, fifth, and sixth upon the evidence, and the seventh by the court without objection after the others had been answered by the jury:

"1. Did the defendant, G. D. B. Reynolds, execute the note as alleged? Answer: Yes (by consent).

"2. Did the defendant, J. C. Parker, sign said note as surety, as alleged? Answer: Yes (by consent).

"3. Did the plaintiff fail to present the note for payment to the Stanly Bank & Trust Company at maturity, as alleged in the answer? Answer: Yes (by consent).

"4. Did the defendant, G. D. B. Reynolds, have on deposit in the Stanly Bank & Trust Company funds of sufficient amount "to pay the note in controversy, principal and interest, on the day it became due? Answer: Yes.

"5. Did the defendant, G. D. B. Reynolds, authorize the Stanly Bank & Trust Company to pay out of his funds in said bank to his credit the note of plaintiff if it should be presented on the day it became due for payment? Answer: No.

"6. Is plaintiffs cause of action as against J. C. Parker barred by the three-year statute of limitations? Answer: No.

"7. What amount, if any, is now due plaintiff on said note? Answer: ----"

Upon the verdict as returned, the court rendered judgment against the defendants for $500, with interest from May 12, 1928. The defendant Parker excepted and appealed upon assigned error.

Brown & Brown, of Albemarle, for appellant.

T. B. Mauney, of Albemarle, for appellee.

ADAMS, Justice.

The note was signed by Reynolds as principal and by Parker as surety. Judgment was recovered against both parties, and the surety only appealed. The appellant excepted to the court's refusal to dismiss the action and to instructions given the jury, but he bases his appeal principally on sections embraced in article 7 of the Negotiable Instruments Law. C. S. § 3051 et seq. Section 3009 provides that, where the instrument is made payable at a bank, it is equivalent to an order to the bank to pay the same for the account of the principal debtor thereon. Reynolds had on deposit in the Stanly Bank & Trust Company funds sufficient to pay the note with interest at the date of maturity, and the plaintiff failed to present the note at that time for payment by the bank. The appellant's contention is that in legal effect the note was paid, and that both parties were discharged, there being an intimation that the plaintiff's failure to present the note for payment was itself a discharge.

In Nichols v. Pool, 47 N. C. 23, the note sued on was payable at the Branch Bank of the State of North Carolina at Elizabeth City. The court (Pearson, J.) said: "The maker of a note owes the debt without any conditions about it. Why should the creditor agree to abridge his rights and have a condition precedent imposed on him, by force of which, he will lose the entire debt, if he fails to demand it at a particular time and place? Upon what ground could a debtor ask, or a creditor submit to have any such restriction? If such is the intention of the parties, it ought to be expressed in unequivocal words, as T promise to pay, etc., provided, or upon condition, or if this note is presented for pay ment at the bank in Elizabeth City, on the day it falls due'; because the relation of creditor and debtor forbids the idea that the parties intend to make a condition precedent, whereby the debt will be lost unless demanded at a given time and place; consequently, a construction, by which the words 'payable at, etc' are by implication made to have this effect, and are converted into a condition precedent, is against the reason of the thing." The court declared the effect to be that the creditor did not lose his debt by failing to apply for it at the precise time and place, but might afterwards bring suit, and that the debtor might defeat the action by bringing into court the money he had deposited, or, if it was lost by failure of the bank, he might put the loss on the creditor because of his laches in failing to present the note for payment. This case was decided on principles of the common law, but the Negotiable Instruments Law contains an accordant section (C. S. § 3051) to the effect that presentment for payment is not necessary in order to charge the person primarily liable on the instrument. The person primarily liable on an instrument is the...