Welfare v. . Thompson

Ashe, J. There were two exceptions taken in the progress of the trial, first, to the admission of parol evidence to prove that the defendants C. M. Thompson, C. F. Lowe and F. M. Thompson were sureties to the note, and secondly, to the refusal of His Honor to give the'instructions prayed by plaintiff, to wit, that the statute of limitations was not a bar to any of the defendants, it being conceded that ten years had not expired after the execution of the note when the suit was brought. The authorities are very uncertain and conflicting upon the question whether or not it may be shown by parol that a joint promisor or obligor was in fact *278 a surety. Some of the authorities hold that in law it cannot, be done but is a defence available in equity- and the proof is admissible whenever equitable-pleas are allowed in courts of law, and especially in .our system where the distinctions, between actions at law and suits in equity are abolished. The current of authorities seems to incline to the conclusion that the testimony is admissible upon an equitable-principle of protecting the rights of the surety.. Some hold that to give this equitable protection to the surety, the holder or obligee must have had knowledge of the fact of surety-ship when he received the note or. it was delivered others, that it will be sufficient if that fact is brought to the knowledge of the holder.or obligee before any act complained of as endangering or injuring the rights of the assignee. Whatever importance may be attached to that distinction, we believe it is conceded that whenever it is proposed-to prove that a co-promisor- or co-obligor to a note or bond is surety only, the fact not appearing upon the face of the-instrument, it is competent to show by parol that fact, and that the creditor knew at the time he received the note that he was surety. . Brent on suretyship, §§ 17, 18, and cases-referred to in notes 2,. 3, 4 and 5. See also 2 Daniel on Negotiable Instruments, § 1338, and Parson’s Notes and Bonds, 233. The jury in our case, even if there be anything serious in-the distinction, has relieved us from the necessity of deciding that question by finding that the defendants C. M. Thompson, F. M. Thompson and C. F. Lowe were sureties to the single bill declared upon, and' that the obligee, the plaintiff, knew that they were sureties at the time he received the note and loaned the money for which it was given. There was no error in receiving the parol evidence.. And as to the other exception to the refusal of his Honor in giving the instructions prayed for, we are of the opinion that.his ruling was not erroneous. *279 The third chapter of Title IV of the Codé of,Civil Procedure in prescribing the limitations to actions divides them into several classes, to wit, ten years, seven years', six years, three years, one year, six months, and ten years in actions for' relief not otherwise provided for. The class of ten -years embraces “ An action upon a sealed instrument against the principals thereto.” By using the word “principal” and omitting “ sureties” the legislature evidently intended to make a distinction in the limitations to actions on sealed notes between principals and sureties; if not, why say “ An action upon a sealed instrument against the principals ”; if no such distinction had been intended they would havé said simply “ A action upon a sealed instrument ” and that would have embraced both principals and sureties. The class of .three years includes “An action upon a contract, obligation or liability arising out of a contract, express or implied,'except those mentioned in the preceding sections.” An'obligation is a sealed instrument, and by the provisions of the last recited section the three years limitation applies to all actions upon sealed instruments, other than those mentioned in the preceding sections; and one of those not mentioned in the preceding sections is an action upon a sealed instrument against the sureties thereto. Giving to the 3rd section of Title IV of the Code a fair and reasonable construction, we can come to no other conclusion than that three years was intended to be and is a bar to actions upon sealed notes against the sureties and this is so declared by Bynum, J., in Knight v. Braswell, 70 N. C., 709. The judgment is affirmed. No error. Affirmed.