Bank of Chapel Hill v. Rosenstein

ClaRicsoN, J. Tbe first issue submitted to tbe jury is as follows: “Did tbe Bank of Chapel Hill have notice at tbe time of taking tbe note and deed of trust that Abrabam Rosenstein was claiming no interest in the-property, but be was bolding same as trustee?” On conflicting evidence, tbe jury answered this issue “Yes,” in favor of Abrabam Rosenstein. From tbe record, none of tbe evidence introduced on tbe part of Abrabam Rosenstein bearing on this issue was objected to by tbe plaintiff except tbe following: “Q. Mr. Copeland, that was tbe understanding at tbe time tbe loan was made that Dr. Abrabam Rosenstein was to sign tbe deed of trust, tbe note, and tbe notes to tbe bank? A. Yes, sir. Motion to strike out answer; motion overruled. Q. And was to be responsible of course to tbe extent of tbe land secured by tbe deed of trust, and to that extent only? A. That was my understanding, yes, sir. Motion to strike out answer; motion overruled.” Tbe question was leading, but from tbe evidence that bad theretofore been introduced on tbe subject, we do not think that it was prejudicial. There was other evidence of like import, unobjected to by plaintiff, for example, Abrabam Rosenstein testified, in part: “All I know of tbe real estate transactions is that my father and Eric Copeland asked me to accommodate them as trustee in this matter so that my mother and Ernest Booth’s wife would not have to sign deed for any transaction. In those days, real estate was booming and in ease they wanted to make a transaction quick, we would not have to call upon their wives to sign tbe deed. It was my understanding I would be a trustee simply and purely. I didn’t have any interest in tbe property and didn’t know anything about it, and it was simply a matter of accommodation for my father and Mr. Copeland. At tbe time I signed tbe notes, it was my understanding that I was just a trustee and bad no responsibility whatever beyond tbe value of tbe property. I have never paid any interest on any of tbe notes and never received any benefit from tbe land.” *533 Eric Copeland testified, in part: “We told Mr. Hogan (casbier of the plaintiff’s bank) that he, Abraham Rosenstein, had no interest in the property and was signing as a convenience and accommodation to the other owners, and he was not responsible for the property or anything. We had to have the money to buy the property. That at the time the loan was secured the financial condition of N. Rosenstein and Booth was good. Dr. Abraham Rosenstein did not pay any part of the interest on the note to the Bank of Chapel Hill.” The other exceptions and assignments of error made by plaintiff and to the charge of the court below we think unnecessary to consider. The admission of this evidence was the “milk in the cocoanut.” Was evidence of this collateral agreement competent? We think so. In Justice v. Coxe, 198 N. C., 263 (265-6-7), speaking to the subject, is the following: “Parol evidence offered by defendant for the purpose of showing all the terms of the contract between plaintiff and defendant with respect to the transaction of which the execution of the notes was only a part, was admissible and competent for that purpose. Crown Co. v. Jones, 196 N. C., 208, 145 S. E., 5. The agreement shown by the evidence does not contradict, add to, alter, or vary the terms of the notes. . . . The contract, which defendant alleged in his answer was entered into by and between him and the plaintiff contemporaneously with the execution of the notes, was, in effect, that defendant should be discharged of liability upon his conveyance of the land to George W. Knight, Edward Higgins, and Samuel Puleston, and upon their assumption of the notes. Parol evidence to show this contract was admissible upon the principle on which Bank v. Winslow, 193 N. C., 470, 137 S. E., 320, was decided. In the opinion in that case it is said, ‘The law is firmly established that parol evidence is inadmissible to contradict or vary the terms of a negotiable instrument, but this rule does not apply to a parol agreement made contemporaneously with the writing providing a mode of payment.’ Nor does the rule apply to such parol agreement providing for discharge of the maker otherwise than by payment.” Stack v. Stack, 202 N. C., 461; Wilson v. Allsbrook, 203 N. C., 498; Trust Co. v. Wilder, 206 N. C., 124; Galloway v. Thrash, ante, 165. The plaintiff contends that the original note was paid by renewals from time to time. We cannot so hold. The substitution of a new endorser who acquired another endorser’s interest in the land was done by consent of all. This action is between the original parties. If the note had been transferred in due course, another principle would apply. In Grace v. Strickland, 188 N. C., 369 (372), we find the following: “In 8 C. J., 443 (656), it is said: ‘Where a note is given merely in renewal of another note, and not in payment, the renewal does not extinguish the original debt nor in any way change the debt, except by *534 postponing tbe time of payment.’ Bank v. Bridgers, 98 N. C., 67. If tbe second note be given and accepted in payment of tbe debt, and not in renewal of tbe obligation, a different principle will apply. Wilkes v. Miller, 156 N. C., 428; Collins v. Davis, 132 N. C., 106; Smith v. Bynum, 92 N. C., 108. Tbe first note was surrendered, it is true, but tbe plaintiffs’ admission that tbe note sued on was accepted in renewal is inconsistent witb any suggestion tbat tbe original debt was thereby extinguished.” For tbe reasons given, we see no prejudicial or reversible error on tbe record. No error.