Saieed v. . Abeyounis

Winborne, J. These questions present in the main the points for decision on this appeal: 1. Where judgment is rendered on a debt evidenced by note for which judgment debtors — two as principals and one as surety — are liable, is *647 paid in part with money advanced for tbe purpose by the surety and is canceled without assignment pro tanto to a trustee for his benefit as provided by statute, Public Laws 1919, ch. 194; C. S., 618, may the surety maintain an action against principals for recovery of money advanced ? 2. If so, will a payment made by one of the principals to surety in partial reimbursement for moneys so advanced have the effect of'tolling the three-year statute of limitations, C. S., 441, as to either or both principals ? 3. Are the issues submitted sufficient? The answer is “Yes” as to all questions and both parties. 1. The rule is that a judgment merges the debt upon which it is based and becomes the only evidence of the existence of the debt that can be used in court. Gibson v. Smith, 63 N. C., 103; Trust Co. v. Boykin, 192 N. C., 262, 134 S. E., 643. However, when in an action to recover on contract for an indebtedness evidenced by note, judgment is rendered against both principals and surety thereto, the relative liability thereon of the principals and surety inter sese continues the same as on the note. As a general rule the surety who pays the principal debt on which he is himself bound, either by judgment or otherwise, without procuring an assignment to a trustee for his benefit, thereby satisfies the original obligation and can sue only as a creditor by simple contract. Bank of Davie v. Sprinkle, 180 N. C., 580, 104 S. E., 477, and cases cited. In the case before us defendant Richard admits that he signed the note to Hannan as principal. The verdict of jury establishes that defendant Abeyounis was also principal thereto. All parties appear to concede that plaintiff was surety to the indebtedness represented by that note. Therefore, applying the above principle to this factual situation, upon rendition of judgment, the note merged therein and, while the judgment became the only legal evidence of the indebtedness, the status of liability of defendants as principals and plaintiff as surety inter sese remains the same. Hence, when the judgment was paid in part by money advanced by plaintiff and in part by mortgage security of defendant Richard, and canceled without assignment thereof as provided by statute, Public Laws 1919, ch. 194; C. S., 618, the original debt, which merged into the judgment, was extinguished and plaintiff as surety became the contract creditor of the defendants as principal debtors to the extent of the amount of money advanced by him. 2. The decisions of this Court adhere to the principle that a part payment by one joint debtor before the applicable statute of limitations has run against the demand will start the statute anew as well against the co-obligor as against him who made the payment. McKeethan v. Atkinson, 46 N. C., 421; Wilfong v. Cline, 46 N. C., 500; Lowe v. Sowell, *648 48 N. C., 67; Green v. Greensboro Female College, 83 N. C., 449; 35 Am. Rep., 579; Campbell v. Brown, 86 N. C., 376; 41 Am. Rep., 464; Wood v. Barber, 90 N. C., 76; Moore v. Goodwin, 109 N. C., 218, 13 S. E., 772; Moore v. Beaman, 111 N. C., 328, 16 S. E., 177, from tbe date of tbe payment. Supply Co. v. Dowd, 146 N. C., 191, 59 S. E., 685. See, also, Battle v. Battle, 116 N. C., 161, 21 S. E., 177, and Kilpatrick v. Kilpatrick, 187 N. C., 520, 122 S. E., 377. However, snob “partial payment is allowed tbis effect only wben it is made under sucb circumstances as will warrant tbe clear inference tbat tbe debtor recognizes tbe debt as tben existing and bis willingness, or at least bis obligation, to pay tbe balance.” Battle v. Battle, supra. See, also, Hewlett v. Schenck, 82 N. C., 234; Supply Co. v. Dowd, supra. In applying these principles to tbe present case it is pertinent to note these uncontroverted facts: Plaintiff advanced tbe $500, by check dated 1 August, 1935, payable to defendant Abeyounis, for tbe use of defendants in paying off tbe Hannan judgment and tbe judgment was canceled on tbe same day. In a settlement on 20 April, 1937, plaintiff owed defendant Abeyounis a balance of $117.24 for goods bought on account, tbe last item of which was on 30 November, 1936. Tbis action was commenced on 2 May, 1939. It is further noted tbat in tbis connection and on tbe trial below plaintiff on tbe one band offered evidence tending to show tbat at tbe time of tbe settlement on 20 April, 1937, tbe defendant Abeyounis agreed tbat said balance should be applied as of 30 November, 1936, on tbe check plaintiff gave in advancing tbe $500. Tbe defendants on tbe other band offered evidence tending to show and contended tbat no sucb agreement was made, and tbat plaintiff still owed tbe balance to defendant Abeyounis. In tbe light of these facts and these contentions and regarding tbe second issue, tbe court charged tbe jury in compliance with tbe above principles as applicable to tbe facts as tbe jury should find them to be. Defendant, however, contends tbat tbe court erred in a portion of tbe charge on tbe quantum of proof required on tbis issue. When tbe detached portion of tbe charge to which exception is taken is read in connection with tbat which preceded and with tbat which followed, it is patent tbat tbe jury could not have misunderstood tbe rule tbat burden of proof was upon the plaintiff to satisfy tbe jury by tbe greater weight of tbe evidence. 3. Defendant Abeyounis also assigns as error tbe refusal of tbe court to submit issues tendered by him. Tbe issues submitted are sufficient to present to tbe jury proper inquiries as to all determinative facts in dispute as well as to afford tbe parties opportunity to introduce all pertinent evidence and to apply it fairly. Hence, there is no error in refusing to *649 submit tbe issues so tendered. Hill v. Young, ante, 114, 6 S. E. (2d), 830, and cases cited. All other exceptions, after careful consideration, are likewise found to be without merit. The ease appears to have been fairly presented to the jury. In the judgment thereon we find No error.