Farmers' Co-op. Fertilizer Co., Inc. v. Eason

• Decision Date: 21 September 1927
• Docket Number: 53.
• Parties: FARMERS' CO-OP. FERTILIZER CO., Inc., v. EASON et al.
• Court: North Carolina Supreme Court

139 S.E. 376

194 N.C. 244

FARMERS' CO-OP. FERTILIZER CO., Inc., v. EASON et al.

No. 53.

Supreme Court of North Carolina

September 21, 1927

Appeal from Superior Court, Edgecombe County; Nunn, Judge.

Action by the Farmers' Co-operative Fertilizer Company, Inc. against B. C. Eason and others. Judgment for plaintiff, and defendant named appeals. No error.

Where payment of note was extended "three of four years" in consideration of defendant's indorsement, action brought few months after three years held not barred by limitations.

The plaintiff is a corporation organized under the laws of West Virginia, with its principal office in the city of Richmond Va., and is engaged in selling fertilizer. The defendants J F. Eason, Jr. (referred to herein as J. F. Eason), and Mary Eason executed and delivered to the plaintiff the following promissory note:

"Richmond, Va., May 5, 1921.

On or before Jan. 1, 1922, after date, we promise to pay to Farmers' Co-operative Company, Inc., or order, five thousand one hundred, thirty-three and 59/100 dollars, $5,133.59, with interest at 6 per cent. from July 1, 1920. Negotiable and payable at the Merchants' National Bank, Richmond, Va.

The makers and endorsers of this note hereby waive presentation, , protest and notice of dishonor and the benefit of their homestead exemptions as to this obligation, and further agree to pay costs of collection, or an attorney's fee, in case payment shall not be made at maturity.

J. F. Eason, Jr.

Mary E. Eason."

The note was secured by a deed of trust on property owned by J. F. Eason in Emporia, Va. This deed of trust was subject to one of prior date in favor of other parties to whom J. F. Eason was indebted. After maturity demand was made for payment of the amount secured by each deed, J. F. Eason was in financial straits, and the evidence tends to show that on February 8, 1922, a parol agreement was made between the plaintiff (through its agent, B. D. Linney), J. F. Eason, and B. C. Eason to the effect that if B. C. Eason would indorse the note above set out, the plaintiff would give J. F. Eason and B. C. Eason three or four years before it would call on them for payment. Under these circumstances B. C. Eason wrote his name on the back of the note on February 8, 1922. The terms were substantially repeated in a letter from the plaintiff to B. C. Eason written March 23, 1922, in which it was said:

"As far as we are concerned, in view of your indorsement we are willing to give J. F. Eason, Jr., at least three or four years to pay his note."

The agreement with B. C. Eason was made at his home in Edgecombe county, N.C. Two credits are entered on the note: $68.25, paid February 23, 1924; and $1,164.14, credited on July 18, 1925, as the proceeds of the sale of the property. There was evidence that the credit of $68.24 was a payment made by J. F. Eason. Two issues were submitted to the jury: (1) In what amount, if any, is the defendant B. C. Eason indebted to the plaintiff? (2) Is the plaintiff's cause of action against the defendant B. C. Eason barred by the statute of limitations? The court instructed the jury if they believed the evidence to answer the first issue $5,133.59, with interest from July 1, 1920, less a credit of $68.25 as of February 23, 1924, and a credit of $1,164.14 as of July 18, 1925, and if they believed the evidence to answer the second issue "No." Judgment was rendered for the plaintiff, and the defendant B. C. Eason appealed upon errors assigned.

J. F. Eason and Mary Eason filed no answer, and as to them no issues were submitted.

H. H. Philips, of Tarboro, for appellant.

George M. Fountain, of Tarboro, for appellee.

ADAMS J.

The appellant takes the position that the contract purporting to extend the maturity of the note, even if sufficiently definite in point of time, was improperly admitted in evidence because it varied the terms of a written agreement. In this opinion we do not concur. If a contract is not within the statute of frauds the parties may elect to put their agreement in writing, or to contract orally, or to reduce some of the terms of writing and leave the others in parol. If a part be written and a part verbal, that which is written cannot ordinarily be aided or contradicted by parol evidence, but the oral terms if not at variance with the writing may be shown in evidence, and in such case they supplement the writing, the whole constituting one entire contract. Cherokee County v. Meroney, 173 N.C. 653, 92 S.E. 616, L. R. A. 1917F, 493.

The note sued on was executed by J. F. Eason and Mary E. Eason on May 5, 1921, and was made payable on January 1, 1922. It is admitted that B. C. Eason signed his name on the back of the note on February 8, 1922, several months after it had been delivered to the payee and more than a month after its maturity. B. C. Eason had nothing to do with the original execution of the note; but at the time his name was written on it an agreement was made between himself, his brother, and the plaintiff, by the terms of which the date of maturity was extended in consideration of the indorsed signature, which was the only written part of the alleged agreement. Was the plaintiff precluded from showing that part of the contemporaneous agreement which was in parol? The answer to this question is given in a number of our decisions. In Mendenhall v. Davis, 72 N.C. 150, it is said that when the payee or a regular indorsee of a negotiable note writes his name on the back of it, as between him and a subsequent bona fide holder for value the law implies that he intended to assume the well known liabilities of an indorser, and he will not be permitted to contradict the implication, but that this rule does not apply between the original parties to a contract which is not in writing, although the indorsement of one or more parties may be evidence that some contract was made. It must always be a question of fact as to what the agreement was when the signature was written. The principle is approved and stressed in the very clear statement in Hill v. Shields, 81 N.C. 250, 31 Am. Rep. 499:

"It is settled in this state, however, that parol testimony may be adduced under a blank indorsement to annex a qualification or special contract as between the immediate parties."

These and other decisions which follow the earlier cases of Love v. Wall, 8 N. C. 313, and Gomez v. Lazarus, 16 N.C. 205, are reviewed in Sykes v. Everett, 167 N.C. 600, 83 S.E. 585, 4 A. L. R. 751, in which the doctrine is reaffirmed; and among later cases are Lancaster v. Stanfield, 191 N.C. 340, 132 S.E. 121, and Trust Co. v. Boykin, 192 N.C. 262, 134 S.E. 643.

The appellant cites Smitherman v. Smith, 20 N.C. 86, and Terrell v. Walker, 66 N.C. 244, in support of his contention. In the former the defendant indorsed the note as payee and offered to prove that at the time of the indorsement it was verbally agreed between him and the indorsee that if he would execute a deed to the indorsee for a certain tract of land the latter would strike out the indorsement, and that he had executed the deed in pursuance of this agreement. On appeal the court held this evidence to be competent and said that it did not purport to set up by parol an executory contract variant from that which the law raised from the written indorsement; and in Terrell's Case the proposed evidence was rejected on the ground that while the note purported on its face to be payable at once, the alleged contract made it payable at the option of the maker.

But in the case before us the signature on the back of the note is not that of the payee, but of a third party who at the time he wrote his name entered into a supplemental parol agreement with the payee and the maker, the signature constituting one of its material elements. The evidence was not objectionable as varying the terms of the original contract, for the rule that parol evidence will not be admitted to vary a written contract does not apply when the modification takes place after the contract has been executed. McKinney v. Matthews, 166 N.C. 576, 82 S.E. 1036; Adams v. Battle, 125 N.C. 152, 84 S.E. 235; Harris v. Murphy, 119 N.C. 34, 25 S.E. 708, 56 Am. St. Rep. 656; 10 R. C. L. 1034.

True, in several of the cited cases the indorser offered evidence in defense to prove the contemporaneous parol agreement; but if the principle upon which such evidence admitted may be invoked in his defense, why should it not be admitted to establish his liability?

Other exceptions raise the question whether the contract based upon this evidence can be enforced. The appellant says that the time to which the maturity of the note was extended was not certain or definite and that the contract was therefore void. It becomes necessary, then, to ascertain whether his premise is correct, for it is elementary that one of the essential characteristics of bills and notes is certainty as to the time of payment-the word "certainty" permitting the operation of the rule that a thing is certain which can be made certain. 1 Parsons on Bills and Notes, 38; ...