Rouse v. Wooten

• Decision Date: 20 March 1906
• Parties: ROUSE et al. v. WOOTEN.
• Court: North Carolina Supreme Court

53 S.E. 430

140 N.C. 557

ROUSE et al. v. WOOTEN.

Supreme Court of North Carolina

March 20, 1906

Appeal from Superior Court, Lenoir County; W. R. Allen, Judge.

Action by N. J. Rouse and another against Shade Wooten. From a judgment for plaintiffs, defendant appeals. Affirmed.

The action was brought to recover the amount of a note payable to the plaintiff and signed by E. A. Hinson as principal and the defendant as surety. The issues submitted to the jury with their answers thereto were as follows: ""(1) Did the defendant execute the note sued on for value? Ans. Yes. (2) If so, did he execute said note as surety? Ans. Yes. (3) If so, was this fact known to the plaintiff? Ans. Yes. (4) If so, was said note paid at maturity? Ans. No. (5) If so, did plaintiffs give notice to the defendant of the nonpayment of said note? Ans. No. (6) If not, did plaintiffs give such notice to defendant thereafter, and, if so, when? Ans. In doubt as to time, but about January after maturity of note." The execution of the note was admitted. There was no exception to evidence or to the charge of the court. The defendant moved for judgment upon the verdict, which motion was overruled and he excepted. Plaintiff then moved for judgment. His motion was allowed and judgment entered upon the verdict for him. Defendant excepted and appealed.

Wooten & Wooten and Shepherd & Shepherd, for appellant.

Loftin & Varser and G. V. Cowper, for appellees.

WALKER J.

The defendant's contention is that he was discharged from liability on the note by reason of the fact that he was not given due notice of its dishonor, and he relies upon section 2239 of the Revisal of 1905 to sustain his position. It appears from the face of the paper that it is a note and not a bill, and that defendant was not either a drawer or indorser, who are alone mentioned in that section. The jury in their verdict find that he was simply a surety. His counsel in their brief refer to section 2213 to show that defendant is not primarily liable on the note, but he is not in any sense an indorser, as he is a party to the note, and that section therefore has no bearing on the case. We infer from the course of the argument that some reliance was placed on section 2219, dispensing with presentment for payment where it is sought to charge the person primarily liable on a negotiable instrument, the argument deduced therefrom being that presentment is necessary where the party is secondarily liable and that defendant's liability is of that character. While we do not think the question is distinctly presented, as there is nothing in the verdict concerning presentment for payment, it is a matter of general importance, and we will therefore consider it.

The negotiable instrument law (chapter 54 of the Revisal of 1905), which is an admirable compilation of the principles relating to the subject, clearly points out the well-settled distinction between persons primarily liable and those secondarily liable on commercial paper. "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." Section 2342. A surety comes squarely within the definition of a person whose liability is primary, for he is, by the terms of the instrument, absolutely required to pay the same. In Shaw v. McFarlane, 23 N.C. 216, it is held that if two persons are bound by a bond or judgment for the payment of a sum of money, the one is liable to the creditor in the same manner and to the same extent as the other, though, as between themselves, they may stand as principal and surety. ""In respect to the creditor they are joint debtors fixed with the same obligations and what discharges one discharges the other and nothing less." A surety's obligation is thus defined in Brandt on Suretyship & Guaranty (3d Ed.)§ 2: "A surety is usually bound with his principal by the same instrument, executed at the same time and on the same consideration. He is an original promisor and debtor from the beginning, and is held ordinarily to know every default of his principal." Mfg. Co. v Kimmel, 87 Ind. 566. It is there further said that he is not entitled to presentment or to notice of dishonor and that he is in the first instance answerable for the debt for which he makes himself responsible and is directly and equally bound with his principal and must take notice of his default. Neal v. Freeman, 85 N.C. 441. The court, by Ashe J., in Williams v. Glenn, 92 N.C. 255, 53 Am. Rep 416, said: "As between the makers of a promissory note and the holder, all are alike liable and all are principals," citing Robison v. Lyle, 10 Barb. (N. Y.) 512. The court then proceeds to say that, as between themselves, the true relation of the parties as principal and surety may be shown and their rights depend upon principles other than those stated. The distinction between a primary and secondary liability is well stated and illustrated in Coleman v. Fuller, 105 N.C. 328, 11 S.E. 175, 8 L. R. A. 380, where it is said that a surety is bound with his principal as an original promissor, but the contract of a guarantor is his own separate contract and a warranty that what is promised by the principal shall be done and not merely an engagement jointly with the principal to do the thing. "The surety's promise is to pay a debt, which becomes his own when the principal fails to pay it." To the same effect are the cases of Woody v. Haworth (Ind. App.) 57 N.E. 272 and Nading v. McGregor (Ind.) 23 N.E. 283, 6 L. R. A. 686. So in Bell v. Howerton, 111 N.C. 70, 15 S.E. 891, the court declared the principle to be that "the duty of performing the contract, or seeing that it is performed, is on the surety, and that he cannot require the creditor to assume any part of the burden which he has made his own."

The question we now have before us was directly involved in Kearnes v. Montgomery, 4 W. Va. 29, and the court...