Johnston v. Branch Banking Co.

McMEANS, J. This suit was brought by the Branch Banking Company against F. W. Johnston, as maker, and the Wilson Grocery Company, as indorser, on four certain promissory notes for the sum of $1,250, each dated May 30, 1908, and payable on the 25th day *194 of July, August, September, and October, 1908, respectively. Tbe case was tried before a jury, and, after tbe evidence was all in, tbe court instructed a verdict in favor of appellees and against F. W. Jobnston, as maker, and tbe Wilson Grocery Company, as indorser, for tbe sum of $5,854.15, being the amount of tbe principal and accrued interest due upon tbe four notes sued upon, and upon wbicb verdict tbe court rendered judgment against said Jobnston and Wilson Grocery Company, and in favor of appellees, and in favor of tbe Wilson Grocery Company against Jobnston for tbe sum above named. From tbis judgment, appellant, Jobnston, after bis motion for a new trial bad been overruled, bas appealed. [1] Appellant, by bis first assignment of error, complains of tbe action of tbe court in refusing to sustain bis general demurrer to plaintiffs’ petition. Tbe petition alleges, in substance, tbe following: In February, 1908, James Mulligan owed tbe Wilson Grocery Company $5,000 on open account, for tbe payment of wbicb account appellant, F. W. Jobnston, and Grommett Bros., were responsible. About that time James Mulligan and appellant, Jobnston, in payment of tbis account, executed and delivered to tbe Wilson Grocery Company tbeir note for tbe principal sum of $5,000 payable to tbe order of tbe Wilson Grocery Company and due May 1, 1908. The Wilson Grocery Company indorsed said note, and sold it to the Branch Banking Company, and was credited with the proceeds. When this note became due James Mulligan was insolvent. By agreement with tbe bank, then made, James Mulligan and appellant Jobnston executed four notes all dated May 30, 1908, each for the principal sum of $1,250, payable July 25, August 25, September 25, and October 25, 1908, respectively, all being payable to the order of Branch Banking Company, and these notes were prior to tbeir delivery indorsed by tbe Wilson Grocery Company. These notes were taken by the Branch Banking Company in payment of tbe $5,000 note above mentioned, wbicb was surrendered by tbe bank to Mulligan. James Mulligan died in June, 1909, insolvent. Tbe Branch Banking Company had been demanding payment of said four notes prior to tbis time, and on March 30, 1909, it was agreed between tbe Banking Company and tbe Grocery Company that, if tbe Grocery Company would pay $2,000 on its general indebtedness to tbe bank, its indebtedness at that time being $10,000, including that evidenced by tbe four notes of Jobnston and Mulligan, and give its note for tbe balance of tbe indebtedness of tbe Wilson Grocery Company to tbe Branch Banking Company, including that evidenced by tbe four notes sued on, and leave tbe four notes sued on with tbe bank as collateral security for tbe indebtedness of the Wilson Grocery Company to tbe bank, tbe bank would carry tbe matter in that shape, and that tbis was done. It alleged the maturity of tbe notes and the failure of Jobnston and the Grocery Company to pay same after due demand. Tbe prayer was for judgment against appellant Jobnston, as maker, and against tbe Wilson Grocery Company, as indorser, for its debt evidenced by tbe four notes, and for interest and costs. We think tbe petition is good as against a general demurrer, and tbe assignment and tbe several propositions thereunder are overruled. Appellant’s fourth assignment of error is as follows: “Tbe trial court erred in its charge to tbe jury in instructing tbe jury to return a verdict in favor of tbe plaintiff against each of tbe defendants, F. W. Johnston and Wilson Grocery Company, for tbe amount sued for, because, under the pleadings of tbe parties, the only law applicable to tbis cause was tbe law of Texas, and the evidence showed that the notes sued on bad been issued by James Mulligan and F. W. Jobnston, payable to tbe plaintiff Branch Banking Company, but, before delivery to tbe payee, they bad been indorsed by tbe defendant Wilson Grocery Company; that, after tbeir maturity, they had been paid by the Wilson Grocery Company, and then reissued by said Wilson Grocery Company, and placed with said 'plaintiff as collateral security, to secure an indebtedness of said Wilson Grocery Company, and it being tbe settled law of Texas that an indorser of promissory notes prior to delivery is a surety, and upon payment by such surety such notes are extinguished, and cannot be reissued, that such right of reissuance after such payment being permitted by tbe statutes of North Carolina, but not by tbe statutes of Texas, nor the law of Texas, and said North Carolina statutes were not pleaded by plaintiff nor either defendant.” [2] It may be stated by way of explanation that the notes sued on were executed in North Carolina, and that at the date of tbeir execution and delivery tbe Wilson Grocery Company and tbe Branch Banking Company did business in that state, and tbe appellant, Johnston, and James Mulligan both resided there. Tbe vice in this assignment is in- assuming that at tbe time tbe Wilson Grocery Company executed and delivered its note to tbe bank for tbe amount of its indebtedness, including that evidenced by its indorsement of tbe four notes sued on, that said four notes were thereby paid off and discharged, and the appellant Jobnston relieved of all liability thereon. It is not true, as assumed in said assignment, that it was intended by tbe Wilson Grocery Company in executing said note and by tbe Branch Banking Company in accepting tbe same to discharge tbe appellant Jobnston from liability, because all tbe testimony shows that tbe Banking Company in accepting said note took same as further security and in continuation of tbe liability of tbe Wilson Grocery Company; nor is it true, as assumed in said assignment, that the Wilson Grocery Company in the execution of its note for tbe *195 amount of its indebtedness to the bank took up the notes of appellant Johnston, and then reissued the same and placed the same as collateral security with said bank to secure its indebtedness. The only evidence which lends support to appellant’s contention in this regard is the testimony of O. P. Dickinson, who testified that during a conversation related by him, J. 0. Hales, president of the Branch Banking Company, stated that these four notes had been paid; that the Wilson Grocery Company had paid the said notes to the Branch Banking Company. But this witness, upon cross-examination, stated that Hales had explained to him that the Wilson Grocery Company gave a new note to take the place of the four notes sued on, but that said notes had never been out of the possession of the Branch Banking Company, but had been held by said bank as collateral security to the note given by the Wilson Grocery Company above referred to, and other indebtedness due from said company to said bank. We think that under the undisputed evidence the court did not err in instructing a verdict for the appellee, and the assignment is overruled. [3, 4] Appellant’s second and third assignments, which are grouped, complain of the admission in evidence, over his objection, of the testimony of certain witnesses introduced for the purpose of proving the laws of North Carolina and the decisions construing same relative to reissuance of promissory notes by parties to same who are secondarily liable thereon, who have paid such notes and reissued same; the objection being that the pleadings of plaintiff did not authorize the introduction of such proof. We think the objection was well made, and should have been sustained. However, in view of our finding to the effect that the court, under the pleadings and proof, properly instructed a verdict for the plaintiff, the error in admitting the proof is wholly immaterial. We find no error in the record, and the judgment of the court below is affirmed. Affirmed.