Lewis v. . Long

Shepherd, J. Whether a joint promisor may show by parol that he signed only as surety, has been the subject of conflicting decisions, both in England America. That he can do so in this State, where the payee has notice, is well settled. Capell v. Long, 84 N. C.. 16; Goodman v. Litaker, 84 N. C., 8; Welfare v. Thompson, 83 N. C., 276. But such a defence cannot be made against a bona fide holder without notice. Randolph Com. Paper, § 907; Daniel Neg. Inst., §1388; Edwards’ Bills and Notes, vol. 2, 692; Goodman v. Litaker, supra. The note sued upon was under seal, but was endorsed, and is “ to be regarded, so far as its negotiability is concerned, and its liability to be governed by the commercial law applicable to promissory notes, as if it were a promissory note not under seal.” Miller v. Tharel, 75 N. C., 150; Spence v. Tapscott, 93 N C., 246. *208 It was endorsed to Mrs. Cooper, and the law presumes that she took “ it for value and before dishonor, in the regular course of business.” Tredwell v. Blount, 86 N. C., 33. Mrs. Cooper being a bona fide holder, and, having no notice, would have been unaffected by the defence relied upon in this action. Does the fact that the plaintiff purchased from her after maturity (out without notice) put him in a worse position than that occupied by his assignor? Very clearly it does not. Mr. Randolph (supra), section 987, says : “ So a purchaser after maturity from a bona fide holder, who took the paper for value, before maturity, is entitled as a bona fide holder, before maturity, to the rights of his endorser.” To the same effect is Edwards, supra, vol. 2, 692, note; Daniel, supra, § 589. The cases of Harris v. Burwell, 65 N. C., 586, and Capell v. Long, supra, cited by the defendants, do not conflict with this view. In the former case the plaintiff purchased the note after maturity, and, therefore, took it subject to the defence of “ set-off,” which the maker had against his assignor at the time of the assignment. In Capell’s case the payee had notice, and assigned after maturity. In both of these cases, it was held that the purchasers took subject to any defence which existed against their assignors. In our case, as we have seen, no defence existed against Mrs. Cooper, the plaintiff’s assignor, and it is, therefore, clearly distinguishable. Error. Reversed.