Wrenn v. Lawrence Cotton Mills, Inc.

• Court: North Carolina Supreme Court
• Writing for the Court: ADAMS, J.
• Citation: Wrenn v. Lawrence Cotton Mills, Inc., 150 S.E. 676, 198 N.C. 89 (N.C. 1929)
• Decision Date: 11 December 1929
• Docket Number: 514.
• Parties: WRENN v. LAWRENCE COTTON MILLS, Inc., et al.

150 S.E. 676

198 N.C. 89

WRENN v. LAWRENCE COTTON MILLS, Inc., et al.

No. 514.

Supreme Court of North Carolina

December 11, 1929

Appeal from Superior Court, Rowan County; Stack, Judge.

Action by H. E. Wrenn, successor to Kelly & Wrenn, against the Lawrence Cotton Mills, Incorporated, and others. Judgment for defendants, and plaintiff appeals. No error. The following verdict was returned:

1. Did the defendants execute and deliver to Kelly & Wrenn the five promissory notes, as alleged in the complaint? Answer Yes (by consent).

2. Is the plaintiff the owner of said notes, as alleged in the complaint? Answer: Yes (by consent).

3. Is the plaintiff's alleged cause of action barred by the statute of limitations, as alleged in the answer? Answer Yes.

4. What amount, if anything, is plaintiff entitled to recover? Answer: Nothing.

R. Lee Wright, of Salisbury, for appellant.

John C Busby and W. T. Shuford, both of Salisbury, for appellees.

ADAMS J.

On November 29, 1920, the Lawrence Cotton Mills, Inc., executed and delivered to the firm of Kelly & Wrenn, of Waco, Tex., five promissory notes each in the sum of $5,000, payable respectively 6, 9, 12, 15, and 24 months after date, with interest at 6 per cent. from date until paid. Each note was indorsed by the defendants C. I. Jones, H. N. Fairley, and H. S. Blackmer, and was duly assigned to the plaintiff by Kelly & Wrenn, who dissolved copartnership in June, 1921. On the back of the first note the following payments are indorsed: $538.70 on November 1, 1921; $500 on December 22, 1922; $250 on March 10, 1923; $250 on June 10, 1923. No other payments were made on any of the notes. In 1921 Lawrence Cotton Mills, Inc., became and has since been insolvent. The present action, which is prosecuted against the indorsers, was commenced September 4, 1928. The defendants pleaded the three-year statute of limitations. Each note contains the following stipulation: "The drawers and endorsers and all sureties hereto severally waive presentment for payment, protest, and notice of protest, and non-payment of this note, and all defenses on the ground of any extension of the time of its payment that may be given by the holder or holders to them or either of them. Witness our hands and seals."

The jury were instructed if they believed all the evidence to answer the third issue, "Yes," and the fourth, "Nothing." The plaintiff excepted. Judgment was given for the defendants, and plaintiff appealed upon error assigned.

The plaintiff's evidence (none was introduced by the defendants) consists of the notes, certain admissions in the pleadings, and the depositions of three nonresident witnesses. It is not denied that the plaintiff is the owner and holder of the notes.

The plaintiff offered evidence tending to prove that the defendants orally agreed when the notes were executed to "remain liable and responsible until the notes were paid." The proposed testimony was properly excluded. The notes constitute the written contract of the parties, and the plaintiff sought to vary the written terms by parol.

The Negotiable Instrument Law was ratified on March 8, 1899. Pub. Laws 1899, c. 733. Before this date our decisions were generally to the effect that when third persons wrote their names on the back of a negotiable instrument before delivery to the payee, the original parties as between themselves could show their intent and the nature of their obligation--whether they had affixed their signatures as joint promisors, as guarantors, or as indorsers. Lilly v. Baker, 88 N.C. 151; Barden v. Hornthal, 151 N.C. 8, 65 S.E. 513. But a complete change was wrought by the enactment of the new law, which provides that a person who writes his name upon an instrument otherwise than as maker, drawer, or acceptor is deemed to be an indorser, unless he clearly indicates by appropriate words his intention to be bound in some other capacity. C. S. § 3044. See, also, C. S. § 3045. These sections supersede the former law. Daniel on Negotiable Instruments (6th Ed.) 806; Brannan's Neg. Instruments Law (4th Ed.) 588. In Fourth Nat. Bank v. Wilson, 168 N.C. 557, 84 S.E. 866, the court, after pointing out the change referred to, remarked that the purpose of these sections is to fix the status of the defendants as indorsers.

The plaintiff proposed to change this status by oral testimony that the defendants indorsed the notes as comakers, or guarantors, or sureties; but in the case last cited the court said that one of the objects of the statute is to exclude parol evidence to the effect that the status of the parties is otherwise than as fixed by the law. We are not at liberty to give the indorsement an effect which in terms the statutes reject. The principle is restated and sustained in Meyers Co. v. Battle, 170 N.C. 168, 86 S.E. 1034; Busbee v Creech, 192 N.C. 499, 135 S.E. 326, and it is clearly sustained by the weight of authority elsewhere. Brannan's Neg. Instruments Law (4th Ed.) 578, 589; 5 Uniform Laws, Annotated, 307. It is not the purpose of the statutes to prevent the defendants from showing that they are...