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REVELL V. THRASH.
To the same effect are Tiedeman on Com. Paper,
Sec. 424, and Daniel on Neg. Inst., Sec. 1318.
Now let us consider the evidence in this case with the law on the subject. The note matured on the 11th of June, 1893. According to the appellant's evidence there was a payment of $100 September, 11, 1893, (he said it was paid about six months after he bought it, which was ten years before he was testifying) and that he received $150 on the 27th of October, 1895, although the credit is entered on the note itself October 22, 1895. He further testified that in October, without naming the day, he received $10. That $10 specifically does not appear as a credit endorsed on the note, but the plaintiff admitted that it was embraced in a credit on the bond in these words, "Interest paid to December 29, 1895." He further testified that Cocke kept the interest paid up to the 29th December, 1895. It is evident from looking at the credit on the note from the complaint of the plaintiff and his own testimony that an explanation is necessary as to the intention of the parties as to the $10 interest payment. Now, when the plaintiff appellant received this $10 payment from Cocke accompanied by the words, "I want to pay some interest," what was meant by the transaction? It was not a question of law, it was a question of intention of the parties under all the evidence in the case, and it was for the consideration of the jury. The $10 having been paid as interest and credited as interest according to the calculation of the plaintiff, creditor, the interest was paid in advance and until December 29, 1895. When that credit was received the time of extension was definitely fixed to be as long as the amount would pay the interest, provided the jury should find from all the evidence that an extension of time was the intention of the parties. But the plaintiff contends in the last place that no harm or injury could or did come to the defendant if such extension of time did take place as is claimed by the de
REVELL V. THRASH.
fendant for the reason that before judgment could have been taken by the defendant against Cocke, if the defendant had paid the plaintiff the note and sued Cocke for money paid to his use, Cocke had died; and that if a judgment had been taken against Cocke's personal representative it would have given him no preference over Cocke's other creditors. In support of that proposition the plaintiff's counsel referred us to Daniel's Negotiable Instruments, Section 1319. In that section the general proposition is laid down that "If the time be definite and unconditional a day will suffice." The author, there, further says "the indulgence must be for a period longer than that which would be required by law for judgment to be obtained, otherwise, though upon a valid consideration, the surety will not be discharged." The author then cites as authority for that position Story on Promisory Notes, Sec. 415. That author says, there, that if the agreement for extension be of such a nature that the maker can by law (italics the writer's) obtain and entitle himself without the consent of the holder (as where the holder had been already discharged from the note in bankruptcy) there the agreement will not operate as a discharge of the endorsers for the reason that the endorsers can not under such circumstances be injured by the delay or if injured, it is by operation of law and not dependent upon the act of the holder. Thus, for example, if pending a suit on the note against the maker the holder should agree to give time to the maker for payment thereof short of the time within which judgment. should regularly be obtained against him, that would not be a discharge of the endorser." And that is the same example given by Daniel in Section 1319. But to show that it was not the intention of the author to vary the rule that if the time be definite and unconditional the shortness of time is immaterial, so that it be for a day or more, is clearly evidenced by the last few lines of Section 1319-"And the
REVELL V. THRASH.
general rule above stated applies only to cases where time has been given after suit brought and does not apply where time is given by contract before any action has been commenced." In Scott v. Fisher, 110 N. C., 311; 28 Am. St. Rep., 688, this court recognizes the principle that there must be a definite time fixed for the extension of credit, and holds that an agreement to extend the time for twenty to thirty days is definite as to twenty days, and therefore discharges the surety, citing Daniel on Negotiable Instruments, Sec. 1319. In Forbes v. Sheppard, 98 N. C., 111, the principal debtor paid to the creditor $25 for indulgence. The creditor tendered the money back to the debtor and commenced action on the same day of the receipt of the money against the principal debtor and the surety. The surety set up a release of himself because of this extension of time, and this court said: "The effect of a contract of forbearance to sue for a fixed and limited period founded on a sufficient consideration with the principal, without reserving the right to proceed against the surety and made without his assent, is too well settled to be further discussed;" and further, "inasmuch as no indulgence was in fact given, as suit was brought on the very day when the money was paid, in disregard of the contract, it occurred to us that it was thus virtually annulled, and no disability imposed on the surety to his disadvantage. But the authorities are to the contrary, and it is held that the exoneration grows out of the agreement to forbear and is not affected by the creditor's breach of it after it was made." In Pipkin v. Bond, 40 N. C., 91, the question before the court was whether there was an indulgence to the principal with the knowledge or consent of the plaintiff; and whether that was done upon an agreement for forbearance, "which legally or equitably put it out of the power of the creditors to enforce payment from the principal for some period." Chief Justice Ruffin, in delivering the opinion,
REVELL V. THRASH.
quoted with approval the language of Lord Eldon in Reese v. Barrington, 2 Vessey, Jr., 545, where the same question was involved, "It is the most evident equity that the creditor should not carry on any transaction without the privity of him who must necessarily have a concern in every transaction with the principal debtor;" and the Chief Justice further quoted from Lord Eldon in the same case, "He could not try the cause of inquiring what mischief the forbearance might have done to the surety; for that would go into a vast variety of speculation upon which no sound principal could be built." The same view is expressed in Daniel on Negotiable Instruments, Sec. 1313, where it is said, "The principle on which sureties are released is not a mere shadow without substance. It is founded upon a restriction of the rights of the sureties by which they are supposed to be injured. Therefore, when there is a legal impossibility of injury the principle does not apply. This was decided to be the case where the maker of a note was a discharged bankrupt, and an agreement between him and the holder for two months delay, although on a valid consideration, it was held did not discharge the endorser, because the latter could not by making payment have recourse against him. To discharge a surety by giving time to the principal, the creditor must put it out of his power for the time being to proceed against the principal."
In Swire v. Redmon, 1 Q. B. Div., 536 (1876), it is said: "In the immense majority of cases the act does not actually damage the surety of shilling, yet the doctrine is so firmly established that only legislative enactment can change it." No Error.
CONE v. HYATT.
CONE v. HYATT.
(Filed June 6, 1903.)
1. MORTGAGES-Trust Deeds-Foreclosure of Mortgages-Power of Sale -Limitations of Actions.
The power of sale in a deed of trust or mortgage is not barred by the statute of limitations though an action for foreclosure thereon is barred.
2. LIMITATIONS OF ACTIONS-Defenses-Waiver.
The defense that a claim is barred by the statute of limitation may be waived by a failure to set it up.
3. LIMITATIONS OF ACTIONS-Mortgages-Negotiable Instruments. Where a debt is made payable in two instalments, maturing at different times, the creditor may elect to wait to sue till the second instalment is due and the statute of limitations will not begin to run until that time.
4. LIMITATIONS OF ACTIONS—Payments—Partial Extension of Time. A partial payment of a note in order to stop the running of the statute of limitation must be made by some one authorized to make it.
CLARK, C. J., and DOUGLAS, J, dissenting.
ACTION by Moses C. Cone against J. L. Hyatt and others, heard by Judge W. A. Hoke and a jury, at December Term, 1902, of the Superior Court of YANCEY County.
This action was brought by the plaintiff against the defendant to recover certain lands described in the pleadings. All of the parties claimed under J. W. Young who, with his wife, on the 8th day of September, 1885, executed a deed of trust to C. E. Graham for the land to secure a debt due to the plaintiff of $1,800, which was evidenced by two notes, one for $800, payable in twelve months, and the other for $1,000, payable in eighteen months after said date, with power of sale to be exercised if the defendant failed to pay the said notes or any part thereof at maturity, the proceeds of sale to be applied to the payment of the notes, whether