Sykes v. Everett

Citation83 S.E. 585,167 N.C. 600
Decision Date25 November 1914
Docket Number(No. 317.)
PartiesSYKES et al. v. EVERETT.
CourtUnited States State Supreme Court of North Carolina
1. Appeal and Error (§ 260*)—Necessity of Exception—Evidence.

Where there was no exception to the admission of evidence, its admissibility could not be considered on appeal.

[Ed. Note.—For other cases, see Appeal and Error, Cent. Dig. §§ 1503-1515; Dec. Dig. § 260.*]

2. Bills and Notes (§ 281*)—Indorsement —Bona Fide Holder.

Where a payee or regular Indorsee of a note writes his name on the back, the law, as between him and a bona fide holder for value and without notice, implies that he intended to assume the liability of an indorser.

[Ed. Note.—For other cases, see Bills and Notes, Cent. Dig. § 627; Dec. Dig. § 281.*]

3. Evidence (§ 444*)—Parol Evidence to Vary Writing—Indorsement of Note.

The payee of notes, holding assignments of the maker's claim against an estate as collateral security, who for valuable consideration indorsed the notes and transferred the collateral, upon an agreement with the indorsee that if the maker did not pay, and the money was not realized on the assignments of the maker's interest in the estate, the indorser would be ultimately responsible for payment, but should not be called upon for payment before the estate was exhausted, in a suit by a second indorsee after maturity with notice of equities, might by parol explain such agreement varying the contract of indorsement from that implied by the mere indorsement, though as against remote parties without notice parol evidence to vary the indorsement would be inadmissible.

[Ed. Note.—For other cases, see Evidence. Cent. Dig. §§ 1929-1944, 2049; Dec. Dig. § 444.*]

4. Assignments fob Benefit of Cbeditobs (§ 184*)—Title of Assignee—Equities.

An assignee under.a general assignment, while a purchaser for value under Revisal 1905, §§ 900, 961, relating to conveyances void as against creditors, takes the property subject to any equity, or other right, attached to it in the hands of the assignor.

[Ed. Note.—For other cases, see Assignments for Benefit of Creditors, Cent. Dig. §§ 555-571; Dec. Dig. § 184.*]

5. Bills and Notes (§ 351*)—Assignment After Maturity—Equities.

One taking a note by assignment after maturity takes it with notice of all equities, and other rights of the indorser, and subject to them.

[Ed. Note.—For other cases, see Bills and Notes, Cent. Dig. §§ 878-881, 8S2V2-885; Dec. Dig. § 351.*]

6. Pledges (§ 55*)—Collateral Security— Action on Principal Debt.

The taking of collateral security does not suspend the right of action upon the principal debt, in the absence of any stipulation to that effect.

[Ed. Note.—For other cases, see Pledges, Cent. Dig. §§ 140-151; Dec. Dig. § 55.*]

7. Bills and Notes (§ 295*)—Contract of Indorsement — "Guaranty""Guaranty of Collection."

The stipulation of the payee of notes, indorsing them and transferring the collateral securing them, that he should not be liable until the collateral had been exhausted, was a valid agreement in the nature of a "guaranty of collection, " which is a promise to pay the debt on condition that the person guarantied diligently prosecute the principal debtor for recovery of the debt without success; a "guaranty" being a promise to answer for the payment of some debt or the performance of some duty in case of the failure of another person who is in the first instance liable to such payment or performance.

[Ed. Note.—For other cases, see Bills and Notes, Cent. Dig. § 606; Dec. Dig. § 295.*

For other definitions, see Words and Phrases, First and Second Series, Guaranty; Guaranty of Collection.}

8. Bills and Notes (§ 295*)—Contract of Indorsement—"Guaranty of Payment."

An indorser's "guaranty of payment" is an absolute promise to pay the debt at maturity if not paid by the principal debtor, when the guarantee may bring an action at once against the guarantor.

[Ed. Note.—For other cases, see Bills and Notes, Cent. Dig. § 666; Dec. Dig. § 295.*

For other definitions, see Words and Phrases, First and Second Series, Guaranty of Payment.]

9. Principal and Surety (§ 87*)—Liability —"Surety."

A "surety" is considered as a "maker" of a note, and undertakes primarily to pay if the debtor does not, and the debt becomes his own as between himself and the creditor when the debtor fails to pay it, and the creditor may sue upon it as soon as it becomes due and dishonored.

[Ed. Note.—For other cases, see Principal and Surety, Cent. Dig. § 121; Dec. Dig. § 87.*]

For other definitions, see Words and Phrases, First and Second Series, Surety.]

10. Bills and Notes (5 281*)—Contract of Indorsement—"Indorsee."

An "indorser" undertakes to pay if the debtor does not, after due notice of dishonor.

[Ed. Note.—For other cases, see Bills and Notes, Cent. Dig. § 627; Dec. Dig. § 281.*

For other definitions, see Words and Phrases, First and Second Series, Indorser.]

11. Bills and Notes (§ 305*)—Indorsement —Suit by Creditor—Resobt to Collateral.

Where the payee of notes, secured by assignments of collateral, indorsed them with an agreement that the indorsee should not proceed against him until the collateral was exhausted, the rule that a creditor having collateral security for his note may, notwithstanding, sue the debtor without first resorting to and exhausting the collateral, did not apply.

[Ed. Note.—For other cases, see Bills and Notes, Cent. Dig. § 724; Dec. Dig. § 305.*]

12. Bills and Notes (§ 305*)—Liability of Indorser—Extension of Time.

In such case, where the time was as definitely fixed as was practicable, the parties not knowing exactly when the collateral would be exhausted, where the stipulation for the exhaustion of collateral was founded upon a sufficient consideration, the doctrine as to the extension of time for payment, where there was no consideration therefor, was not applicable.

[Ed. Note.—For other cases, see Bills and Notes, Cent. Dig. § 724; Dec. Dig. § 305.*]

13. Bills and Notes (§ 491*)—Liability of Indorsee—Burden of Proof.

In such case, the burden of proving that it would be futile to proceed further upon the collateral because of the insolvency of the estate, and interest in which was pledged as security, was upon the indorsee, and not upon the indorser.

[Ed. Note.—For other cases, see Bills and Notes, Cent. Dig. §§ 1643-1648; Dec. Dig. § 491.*]

14. Bills and Notes (§ 514*) — Action Against Indorser1—Evidence.

In such case, what the indorser said as to the time within which the estate could be settled and the collateral realized upon was immaterial, where there was no allegation of proof that there was any false and fraudulent representation as to such time.

[Ed. Note.—For other cases, see Bills and Notes, Cent Dig. §§ 1782-1799; Dec. Dig. § 514.*]

Appeal from Superior Court, Durham County; Lyon, Judge.

Action by R. H. Sykes and W. P. Clements against R. O. Everett. Judgment for plaintiffs, and defendant appeals. Reversed, and action dismissed.

This action was brought to recover the sum of $10,144.50, as due upon four several notes indorsed in blank by the defendant. The case was referred to Hon. Howard A. Foushee, who made his report, in which, after finding the facts and stating his conclusions of law therefrom, he recommended that judgment be rendered in favor of the plaintiffs, and against the defendant, for $10,144.-50, the amount due on the notes, with interest on $7,144.50 from March 20, 1911, and on $3,000 until paid, together with the costs of the action, and further recommended that no execution be issued on said judgment until May 1, 1915, and that the three F. A. Moore notes, and the assignment from him securing the same, and the Louis Moore note with the assignment securing the same, should all be delivered by the said trustee to the clerk of the superior court of Durham county, state of North Carolina, to be held by him until such time as said R. O. Everett pays said judgment, at which time the same shall be delivered to him. Defendant excepted to the conclusions of law of the referee.

The material facts are as follows: On the 20th day of March, 1911, F. A. Moore executed and delivered to the defendant, R. O. Everett, three demand notes aggregating $7,144.50, and the same are set out in the record. As stated, the notes were payable on demand and were secured by an assignment of an interest of F. A. Moore in his share and portion of the estate of John Annin of New York City. This assignment, which was deposited with R. O. Everett as collateral for the payment of said notes, in addition to transferring and assigning an interest to secure said notes, constituted and appointed the defendant, R. O. Everett, or any person whom he might substitute as his lawful attorney, to collect said interest in said estate and apply the same to the discharge of said indebtedness. On the 8th day of April, 1911, Louis Moore executed and delivered to R. O. Everett and G. C. Farthing his promissory note for $3,000, payable on the 1st day of September, 1911, and to secure said indebtedness transferred and assigned to R. O. Everett an interest in the estate of John Annin, and appointed R. O. Everett, or any person whom he might substitute as attorney, to collect the same and discharge said indebtedness. The Louis Moore note and the assignment appear in the record. On or about the 11th day of April, 1911, R. O. Everett, by indorsement, duly transferred and delivered to G. C. Farthing, for valuable consideration, the four notes above referred to, together with his interest in said assignments (which were given as collateral therefor). At the time these four notes were so indorsed and transferred to G. C. Farthing, there was an agreement between R. O. Everett and G. C. Farthing that, if F. A. Moore and Louis Moore did not pay and the money was not realized on the assignments of their interest in the Annin estate, R. O. Everett would be ultimately responsible for the payment of said notes, but he would not be called, upon to pay the same until the estate of John Annin had been...

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