Kindler v. Wachovia Bank & Trust Co.

*201 AdaMS, J. Tbe decisive question is whether the evidence excepted to should have been excluded. The plaintiff admitted his endorsement of the note. He did not indicate by appropriate words his intention to be bound in any other capacity; he entered into a substantive agreement and incurred the liability of a general endorser. By his endorsement without qualification he warranted to all subsequent holders in due course that the instrument was genuine and .in all respects what it purported to be, that he had a good title to it, that all prior parties had capacity to contract, and that the instrument was valid and subsisting. He also engaged that on due presentment the note should be .paid according to its tenor, and if dishonored and the necessary proceedings were taken he would pay the amount of the note to the holder or to any subsequent endorser who might be compelled to pay it. S. S., 3044, 3045, 3047; Perry v. Taylor, 148 N. C., 362; Bank v. Crafton, 181 N. C., 404; Trust Co. v. York, 199 N. C., 624; Bay v. Livingston, ante, 1. The endorsement of the plaintiff was neither special nor restrictive nor qualified, nor conditional. Can he release himself from the legal consequences of his endorsement by proof of a parol agreement with the defendant that by his endorsement he incurred no liability? No fraud or mistake is alleged. The endorsement itself imports liability. When a contract is reduced to writing parol evidence will not be heard to contradict, vary, or add to the written instrument. The principle is clearly set forth in Moffitt v. Maness, 102 N. C., 457, and has often been restated. Another principle is equally familiar. If a contract not required to b.e in writing is partly written and partly verbal the unwritten part may be proved if it does not contradict or vary the terms of the writing. Twidy v. Saunderson, 31 N. C., 5; Maligning v. Jones, 44 N. C., 368; Daughtry v. Boothe, 49 N. C., 87; Ray v. Blackwell, 94 N. C., 10; Sumner v. Lumber Co., 175 N. C., 654; Henderson v. Forrest, 184 N. C., 230; Stack v. Stack, 202 N. C., 461. The. plaintiff says that the latter principle is available to him because the written agreement is incomplete and evidence of all the terms is admissible. In proper cases it may be shown by parol evidence that an obligation was to be assumed only upon a certain contingency, or that payment should be made out of a particular fund or otherwise discharged in a certain way, or that specified credits should be allowed. Kerchner v. McRae, 80 N. C., 219; Braswell v. Pope, 82 N. C., 57; Kelly v. Oliver, 113 N. C., 442; Evans v. Freeman, 142 N. C., 61; Typewriter Co. v. Hardware Co., 143 N. C., 97; Garrison v. Machine Co., 159 N. C., 285; Thomas v. Carteret, 182 N. C., 374; Bank v. Winslow, 193 N. C., 470. *202 In Evans v. Freeman, supra, the plaintiff brought suit on a promissory note in the sum of $50.00 executed by the defendant and assigned by Askew, the payee, to the plaintiff. The defendant offered parol evidence that payment of the note was to be made out of proceeds arising from the sales of the patent right of an automatic stock-feeder and that if there were no sales there was to be no payment. The evidence was held to be competent; if there were no sales there was a total failure of consideration. Of like import are Quin v. Sexton, 125 N. C., 447 and Carrington v. Waff, 112 N. C., 115, which are typical of a long line of cases dealing with this principle. They differ from the case before us in the fact that the plaintiff's endorsement of the note was supported by a valuable consideration, the loan of five thousand dollars. The logical interpretation of the plaintiff’s evidence is this: that the note was to be paid out of the proceeds of Jackson’s collateral securities and that the plaintiff was to be relieved of any liability growing out of bis endorsement — that although the law imposed liability by the terms of the written contract he could establish his exemption from liability by parol evidence contradicting the writing by which the liability was imposed. This evidence was tantamount to proof that in no event could the defendant be held liable on his endorsement. A similar defense against liability on a note was made in Bank v. Moore, 138 N. C., 529, and the Court said: “The only defense attempted amounts in substance to this: That though the defendant executed his note and received a valuable consideration there was an understanding and agreement at the time that payment should never be enforced or demanded. All the authorities are agreed that such a defense is not open to the defendant.” In accord with the ruling that parol evidence is competent in proof of an agreement that a debt is to be paid from a particular fund, we think the plaintiff may testify as to the agreed mode of payment; but his testimony that in no event should he be liable is in direct contra- . diction of the terms of his endorsement and should have been excluded. There is intimation in the record that the collaterals referred to are not available for the payment of the note. "Whether this is true we have no means of knowing, but according to the evidence as it now appears the plaintiff cannot maintain his absolute exemption from all liability. Reference is made to the plaintiff’s loss of right to file a lien against the property of Jackson, but he had ample opportunity to protect himself by a qualified endorsement of the note. For error in the admission of evidence the defendant is entitled to a New trial.