Waddell v. Hood Ex Rel. Peoples Bank of Burnsville

Beogden, J". Were the defendants Wheeler and Thompson endorsers or sureties on the note held by plaintiff ? It is to be noted that this suit is brought on a $10,000 promissory note, executed by the Peoples Bank of Burnsville and payable to the plaintiff. A collateral note of A. G. Wilson in the sum of $10,000, payable to G. D. Bailey, was recited in the original note. The plaintiff alleged that this collateral note, or Wilson note, was endorsed by the officers and directors of the bank, including the defendants Thompson and Wheeler. The evidence tended to show that these defendants endorsed the note pursuant to a resolution adopted by the officers and directors, reciting the execution of the note, and that “it is understood and agreed between the maker and endorsers that they are all jointly and severally liable for the payment of said note.” Consequently, it appears that the plaintiff alleged that the defendants are endorsers, and the resolution by which the relationship of surety is sought to be established described the defendants as endorsers. C. S., 3044, provides that “a person placing his signature upon an instrument otherwise than as maker, drawer or acceptor, is deemed to be an endorser, unless he clearly indicates by appropriate words his intention to be bound in some other capacity.” The question then occurs: How shall such “intention to be bound in some other capacity” be established? The statute expressly prescribes that such intention must be clearly indicated “by appropriate words.” This Court has held that the “appropriate words” clearly indicating the “intention to be bound in some other capacity” must appear in the *253 note itself or by some sufficient writing attached to the note and becoming an essential and integral part thereof. This idea was expressed in Busbee v. Creech, 192 N. C., 499, 135 S. E., 326, as follows: “Parol evidence is not competent to show that the liability of one whose name is written on the back of a note as an endorser is primary, and not secondary, for the purpose'of sustaining the contention that notice of dishonor by nonpayment is dispensed with. The liability of one who has endorsed a note, where it is contended that such liability is other than that of an endorser, must be determined by appropriate words contained in the note.” This utterance is fully supported by Dillard v. Mercantile Co., 190 N. C., 225, 129 S. E., 598; Wrenn v. Cotton Mills, 198 N. C., 89, 150 S. E., 676; Hyde v. Tatham, 204 N. C., 160, 167 S. E., 626. See, also, Commercial Security Co. v. Main Street Pharmacy, 174 N. C., 655, 94 S. E., 298. Applying the law to the facts, as disclosed by the record, it would seem manifest that the defendants must be deemed to be endorsers. The record discloses that all payments on the original note were made by the bank and that more than three years have elapsed since the maturity of the note, and that no notice was given the defendants. Therefore, as the defendants are endorsers and not sureties, the statute of limitations constitutes a defense in the absence of a waiver in the face of the note, and the ruling of the trial judge was correct. Barber v. Absher Co., 175 N. C., 602, 96 S. E., 43; Dillard v. Mercantile Co., supra; Bank v. Hesse, ante, 71. Affirmed. SoheNCK, J., took no part in the consideration or decision of this case.