First Nat. Bank v. Pegram
| Decision Date | 14 April 1896 |
| Parties | FIRST NAT. BANK OF WINSTON v. PEGRAM et al. |
| Court | North Carolina Supreme Court |
Appeal from superior court, Forsyth county; Brown, Judge.
Action by the First National Bank of Winston against T. H. Pegram Jr., and others, on a promissory note. Judgment in favor of defendants, and plaintiff appeals. Affirmed.
A surety on a note given to a bank by a third person in renewal of a prior note on which such surety was also an indorser may show, as against the bank, that, at the time he signed such renewal, its cashier informed him that the bank had sufficient funds of the maker to pay such renewal note; that its execution was a matter of form necessary only to keep the bank accounts straight; and that the bank would not hold him liable thereon.
Watson & Buxton and Jones & Patterson, for appellant.
Glenn & Manly and A. E. Holton, for appellees.
This action was brought to recover the amount alleged to be due on a note executed by the defendant T. H. Pegram, Jr., to L. W Pegram and T. H. Pegram, and by the payees indorsed to the plaintiff. The defendant T. H. Pegram, in his answer admitted the execution of the note, but averred that when Alspaugh, cashier of the plaintiff bank, requested him to renew the old note, he at first refused to do so, but, on being told by Alspaugh that there was in the bank a fund which had been deposited by the assignee of the principal or the note (the defendant T. H. Pegram, Jr.), sufficient to pay the note in full, but that the matters had not been fully arranged, and that it was necessary to renew the note to keep the bank matters straight, and that he would incur no liability on the note, he signed the same as surety. He further averred that he had since learned that the statement was untrue, and that there was a large balance due on said note to the plaintiff, and that the defendant was fraudulently, induced to sign the note, thinking that, from the statement made to him, it was only an accommodation to the plaintiff, and that he would suffer no liability. Other defenses were set up by the defendants L. W. Pegram and T. H. Pegram (T. H. Pegram, Jr., did not answer); but it will not be necessary to notice them, as they were not supported by testimony. The plaintiff tendered the following issues, which his honor declined to give, and an exception was entered: In their stead, the following was submitted to the jury: "(2) At the time of execution of the renewal note sued on, did Alspaugh, cashier of plaintiff bank, represent and state to T. H. Pegram, Sr., that there was enough money on deposit in the bank to pay this note, and that his signing it was a mere form, and that the bank would not hold him (Pegram, Sr.) liable for it?" Answer: "Yes."
The defendants T. H. Pegram and L. W. Pegram testified to the alleged conversation between Alspaugh and T. H. Pegram at the time of the execution of the note; and Alspaugh denied that part of the conversation which concerned the plaintiff's exemption from liability on the note. His honor was right in refusing to submit the issues tendered by the plaintiff, and to instruct the jury as the plaintiff requested. If it was lawful for the defendant T. H. Pegram to give in evidence the conversation which he alleged he had with Alspaugh, the cashier of the bank, at the time of the execution of the note, for the purpose of proving that he was not liable on the note, it was not necessary that the intent of Alspaugh should have been fraudulent, or that his representations should have been false to his knowledge. It was not a question of fraud which was to be tried, but the question whether or not oral testimony could be allowed to explain and to change the effect of the defendant's indorserment of the note.
But the plaintiff insists that in no aspect of the case ought the defendant to be exempted from liability, even...
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