Saieed v. Abeyounis

• Decision Date: 08 June 1940
• Docket Number: 313.
• Citation: Saieed v. Abeyounis, 217 N.C. 644, 9 S.E.2d 399 (N.C. 1940)
• Parties: SAIEED v. ABEYOUNIS et al.
• Court: North Carolina Supreme Court

9 S.E.2d 399

217 N.C. 644

SAIEED v. ABEYOUNIS et al.

No. 313.

Supreme Court of North Carolina

June 8, 1940

Civil action commenced May 2, 1939, to recover for money allegedly expended for use and benefit of defendants.

Plaintiff alleges these facts: That prior to January 17, 1929 plaintiff became surety on note for $2,000 bearing interest from date, executed by defendants to one Isaac Kannan; that upon failure to pay the note at maturity, Kannan instituted an action and obtained judgment in Superior Court of Wake County against plaintiff and defendants for the principal sum of said note, with interest from its date, which judgment was duly docketed in Superior Court of Pitt County, North Carolina, on June 30, 1933; that prior to August 1, 1935 upon Kannan commencing to press defendants and plaintiff for payment of said judgment, plaintiff paid by check to defendant B. G. Abeyounis for the use and benefit of defendants and for the purpose of satisfying said judgment the sum of $500, which, together with a certain mortgage then executed by defendant A. Richard to said Kannan, paid and satisfied said judgment and same was duly cancelled on August 1, 1935; that though plaintiff has made frequent demands upon defendants for reimbursement of said amount of $500 defendant Richard has failed and refused to pay any part thereof, but defendant Abeyounis, recognizing his liability to plaintiff in said amount, authorized plaintiff to credit on the back of the check, as of November 30, 1936, the sum of $117.24 representing the value of merchandise theretofore sold to plaintiff by Abeyounis; and that there is due and owing to plaintiff by defendants the balance of $422.76 with interest from November 30, 1936.

Defendant B. G. Abeyounis in answer filed denies the material allegations of the complaint and avers: That both he and plaintiff signed the note of A. Richard to Isaac Kannan as sureties; that plaintiff thought that he was relieved of the effect and lien of the Kannan judgment on account of certain bankruptcy proceedings filed by him, but that it turned out that he was not released and discharged therefrom; that thereupon plaintiff, becoming anxious to have the judgment cancelled, approached the defendant and "agreed that he would pay $500 on said judgment if he could be released and discharged from the same"; and asked this defendant to negotiate for compromise and cancellation of the judgment; that pursuant thereto he took the matter up with Kannan, who finally agreed to accept $500 and a second mortgage on land from A. Richard for $1,750 in settlement and cancellation of the judgment; that thereupon plaintiff turned over to this defendant his check for $500 and this defendant paid Kannan $500 and A. Richard executed the mortgage; and that thereupon the judgment was cancelled on August 1, 1935.

Defendant Abeyounis further denies that he is liable to and that he has recognized any liability to plaintiff on account of said payment of $500 on the Kannan judgment. Furthermore, the defendant Abeyounis pleads the three-year statute of limitations in bar of any recovery by plaintiff in this action, and sets up counterclaim for the recovery of $117.24 with interest from November 30, 1937, alleged to be due for merchandise sold by him to plaintiff from time to time.

Defendant A. Richard by answer filed admits that he was principal in note to Kannan, but denies any liability to plaintiff by reason of the payment of the $500. He likewise pleads the three-year statute of limitations in bar of plaintiff's right to recover in this action.

The parties introduced evidence tending to support their respective contentions.

Upon the issues submitted the jury rendered verdict as follows:

1. Did the defendant B. G. Abeyounis sign the Kannan note as principal, as alleged in the complaint? Answer: Yes.

2. Is the plaintiff's cause of action barred by the three-year statute of limitations? Answer: No.

3. What amount, if any, is the plaintiff entitled to recover of the defendants? Answer: $422.76, plus interest.

4. What amount, if any, is the defendant B. G. Abeyounis entitled to recover of the plaintiff on his counterclaim? Answer: Nothing.

From judgment in favor of the plaintiff against the defendants in the sum of $422.76, with interest from November 30, 1936, the defendants appeal to Supreme Court and assign error.

Julius Brown, of Greenville, for appellant Abeyounis.

Gaylord & Harrell and Chas. H. Whedbee, all of Greenville, for appellant Richard.

Albion Dunn, of Greenville, for appellee.

WINBORNE Justice.

These questions present in the main the points for decision on this appeal:

1. Where judgment is rendered on a debt evidenced by note for which judgment debtors--two as principals and one as surety--are liable, is paid in part with money advanced for the purpose by the surety and is cancelled without assignment pro tanto to a trustee for his benefit as provided by statute, P.L.1919, Chap. 194, C.S. § 618, may the surety maintain an action against principals for recovery of money advanced?

2. If so, will a payment made by one of the principals to surety in partial reimbursement for moneys so advanced have the effect of tolling the three-year statute of limitations, C.S. § 441, as to either or both principals?

3. Are the issues submitted sufficient?

The answer is "Yes" as to all questions and both parties.

1. The rule is that a judgment merges the debt upon which it is based and becomes the only evidence of the existence of the debt that can be used in court. Gibson v. Smith, 63 N.C. 103; Branch Banking & Trust Co. v. Boykin, 192 N.C. 262, 134 S.E. 643. However, when in an action to recover on contract for an indebtedness evidenced by note, judgment is rendered against both principals and surety thereto, the relative liability thereon of the principals and surety inter sese continues the same as on the note.

As a general rule the surety who pays the principal debt on which he is himself...