Case ID: nc_128/html/0150-01.html
Source: Caselaw Access Project
Author: {"author": "Cook, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

SMITH v. CARR.
    (Filed April 23, 1901.)
    PRINCIPAL AND SURETY — Contribution — Presumption ■ — ■ Parol Evidence.
    
    Co-principals and co-sureties are presumed to assume egual liability, but this presumption may be rebutted by parol evidence.
    ActioN by J aim W. Smith, against J. S. Carr and the Golden Belt Hoisery Company, heard by Judge W. A. Holes and a jury, at October Term, 1900, of Durham County Superior Oourt. Eroui a judgment for the defendant, the plaintiff appealed.
    
      Boone, Bryant & Biggs, for the plaintiff.
    
      Nanning & Foushee, Guthrie é Guthrie, for the defendant Cari’.
   Cook, J.

A careful investigation of the exceptions taken to the charge given to the jury by his Honor, and his refusal to give the instructions prayed for, fails to discover any error The counter-claim, which-is the subject of this controversy now before us, pleaded by defendant C'arr, grows out of a loan of $10,000 made to' the; defendant company by the Wachovia National Bank upon the suretyship and endorsement, of plaintiff and defendant Carr, who were stockholders and officers of said company. The original sum (as was evidenced by their note) was reduced to $3,500 by payments made by the company. Eor this residue, a renewal note was given by the company and signed by plaintiff and Carr in -the following form and words:

“Durham, N. C., Dec. 17, 1897. Eour montos after date we, Golden Belt Hosiery Company, promise to pay to the order of J. A. Gray, Cashier, thirty-five hundred dollars., with interest after maturity until paid, interest to be paid semiannually, in advance, negotiable ■ and payable 'at Wachovia National Bank, Winston, N. O'., for value received. The parties agree to take no advantage of any agreement for indulgence after maturity.

“GoldeN Belt Hosiery OompaNy.
“J. Oti-to Lukseord,
"Secretary and Treasurer.
“J. S. Carr,
“J. W. SMITH.
On back: “J. S. Can*, J. W. Smith.”

Upon its maturity the company was unable to pay, and defendant C'arr paid it out of his own money, and in this action demands’ of S'm'ith one-lralf of the sumí so paid by him, in contribution of the moiety due to -Mm as a co-surety Smith. denies h'is liability to Carr upon two grounds, viz: First, that when he signed the original note for $10,000 with Oarr and at his request, C'arr promised to hold him harmless from loss, and, secondly, that by the form and terms of said note Carr is not a co-surety with him, but a co-principal with the company.

The questions of fact involved in these two contentions were submitted to the jury upon the evidence introduced pro and con (to which there, was no exception) and found in favor of defendant Carr, which is conclusive, and the verdict must stand unless the jury were erroneously instructed by the Court.

Tihe 1st, 2d, 3d, 4th aud 8th exceptions taken to the charge of the Court relate to the joint ability; the 5th, 6th and 9th, for refusing to give instructions as prayed for, relate to the same subject. The charge as excepted to fully appears in the following paragraph:

“As to the counter-claim: The law presumes that persons wh'O' engage in a common venture assume an equal liability; and it appearing that the defend'ant Clarr and the plaintiff Smith formed and organized the defendant Golden Belt Hosiery Company as a corporation, and when the said corporation required money to carry on or enlarge its business, signed and endorsed notes and drafts for the ‘benefit and accomodation of said corporation without consideration or benefit moving to either one of them, then there is nresumiption of law that each assumed a. common and equal liability; and if one has paid a larger share than one-h'alf, the other is liable in such sum -as -will make him equal. It is admitted that tire Golden Belt Hosiery Company is the principal debt- or, and the plaintiff, in order to rebut the presumption of co-surety ship-, must prove to the satisfaction of the jury that he is supplemental surety, that he signed the note, not for the accommodation of the principal, but for the accommodation of the defendant. Cam”, or at the request of and by agreement with the defendant Carr, that be, the said Carr, would pro-teot the plaintiff from any liability on slaid notes, and unless the plaintiff lilas so satisfied the jury, they will answer the issne ‘Yes,’ and proceed ’to' 'ascertain the amount.”

The comreotneiss of this charge can not be successfully challenged. The form and m’anner in which the note- was drawn and signed wore not conclusive as to' the relations of the parties to the contract. Upon the face of the note, they both appear to he co-principals and co-endorsers — their liability was assumed gratuitously; and the fact that Carr was the first to sign does not put upon him a greater burden than upon him who signed next, “and,” as is said by Halt,, J., in Daniel v. McRae, 9 N. C., on page 601, “on that account when made, -a prius or poslerius gave no rule of liability.” However, their relations to it, whether as principal or surety, when questioned, become a matter of fact to be established by evidence, either written or oral, and found by the jury.

In Williams v. Glenn, 92 N. C., 253, the note (under seal) was made witib “Williams as principal” and Boyden and Glenn “as sureties ’’ yet as. between tibe obligors the Court held that parol evidence was admissible to show that Boyden and Glenn were co-principals, and that the rule of contribution obtained 'among them. While all of the makers may appear as principals upon the face of the paper, or some principals and some sureties, yet it may be shown that while appearing- as principals they were in fad sureties, or some principals and others sureties; and upon the establishment of the fact of cosuretyship, the right of contribution follows.

The rule of contribution is founded upon the m'axim that “equality is equity,” and not upon contract. It is a rule of common justice whereby parties who undertake to account for the default or miscarriage of another, should equally bear 'the burden imposed by a failure of their principal. As between them, there is to agreement implied, but am equitable presumption raised by the fact of the payment by one, that the others will equalize the burden thus borne by him, by paying to him such sum as will make the loss equal upon each, which can be rebutted by showing that there was an agreement, whether'verbal or written, to the contrary (Brand on Suretyship and Guaranty, Yol. 1, sec. 261) as was charged by bis Honor, of svliicli the plaintiff can not complain, as it was one of his positive contentions.

As to. ihe question raised by the seventh exception: We are unable to see that these two notes have any relevancy other than as evidence in corroboration of plaintiff’s testimony concerning the special 'agreement, alleged to. have been made when he signed the original note for $10,000, and for that purpose they wore submitted to. tire jury, and the jury were so charged by the Court. They show upon their face that Carr signed as co-principal and also as co-endorser with plaintiff, which was- some evidence in corroboration of Smith’s testimony as to the alleged special agreement. Their materiality, however, is limited to the evidence'. They are not subjects of this Controversy. The counter-claim is not based upon them, but upon the $3,500 note. They appear to have been the means by which the defendant Oarr raised the money with which lie paid off the $3,500 note; he has paid these two ruóte», and no loss has or cam befall Smith on their account. They bear no relation to the subject of the counter-claim. If Oarr had raised the money upon his note with the endorsements of strangers to this 'transaction., and with that money had paid off the $3,500 note, surely -the relations between Smith and Carr would have remained unchanged. And the same effect would have existed had Oarr paid the note in full when due out of his oiwn money without the intervention of a loan from or by any one at all.

The questions of fact have been found by the jury, and, no error appearing in the charge or rulings of his Honor, the judgment entered below must be

Affirmed.