Colvin v. Glover

McCulloch, C. J. Appellee sued appellants, G. B. Colvin and P. M. Day, as joint makers with one P. M. Belongy of a negotiable promissory note to appellee for the sum of $300, bearing date of January 18, 1916 and payable nine months after date, with interest from date at ten per cent, per annum. Belongy was not sued, and appellants defended on the ground that they signed the note as sureties for Belongy, and that they were discharged by reason of an extension of time of payment granted by appellee to Belongy. They defended also on the ground that they were discharged by the failure and neglect of appellee to make demand for payment and give notice of nonpayment. There was a trial of the issues before a jury, but the court directed a verdict in favor of appellee. This appeal tests the question of legal sufficiency of the evidence. Appellants signed the note on its face with Belongy, but the testimony tends to show that they joined in the execution of the note merely as sureties for Belongy, the principal, and that appellee was apprised of that fact. The evidence to that effect was competent. Vestal v. Knight, 54 Ark. 97. Appellee testified that about a week before the note became due Belongy came to him 'and stated that he wanted to pay $30 on the note and procure a little more time, and that he (appellee) told Belongy that the proposed agreement would be satisfactory to him and that he could pay the money into a certain bank where the note had been left. Appellee was asked to state when the payment of $30 was made, and his answer was that he did not know. There is an endorsement on the note showing the payment of the $30, but it is not disclosed from the endorsement when the payment was made, nor is there any other testimony tending to establish the date of this payment. Neither Belongy nor any one connected with the bank where the payment was made testified in the case. An extension of time of payment to the principal without the consent of the sureties operates as a discharge of the latter from further liability, but such extension must have been for a definite time and upon valid consideration. At least such was the settled law in this State prior to the enactment of the Negotiable Instruments Law, Acts 1913, p. 1060. Thompson v. Robinson, 34 Ark. 44; Vaughan v. Vernon, 82 Ark. 28; Kissire v. Plunkett-Jarrell Grocer Co., 103 Ark. 43; Thornton v. Bowie, 123 Ark. 463. Payment of interest in advance of maturity constitutes sufficient consideration for an extension of the time of payment. Vestal v. Knight, supra. The difficulty with the defense of appellants is that they failed to prove the essential facts constituting it. In other words, they failed to prove that there was an extension for a definite time based on sufficient consideration. The burden of proof was on them to show this. Appellee testified that there was an agreement for an extension, but he did not know when the money was paid, and there is no other testimony on that subject. Therefore, the jury could not have drawn the inference that the amount was paid before maturity. Neither was there any testimony sufficient to specify the length of the extension of time. Appellee merely testified that he agreed to give more time, and was willing to do so if the interest should he paid. There was no evidence to support a finding in favor of appellants on this issue, and the court was correct in withdrawing it from the consideration of the jury. In this view of the testimony it is unnecessary for us to determine the effect of section 119 of the Negotiable Instruments Law, supra, as changing the law with respect to discharge of sureties. Appellants rely as to the other defense on section 7(8 of the act of February 21, 1913 (Acts 1913, page 260), known as the Negotiable Instruments Law, which reads as follows: “Where there are several persons, not partners, primarily liable on the instrument, and no place of payment is specified, presentment must be made to them all.” The contention is that appellants were in fact sureties, and, as the note did not specify the place of payment, demand and notice were essential to fix liability on them. Such is not the effect of the section above quoted, which was not intended to enlarge the requirements for demand and notice, but to specify the conditions on which they are required. The requirement under this section is that where demand and notice are essential to establish liability and there are several persons primarily liable, the presentment must be to each of them, but it does not make presentment to one who is primarily liable essential. On the contrary, another section (section 70) expressly provides that presentment is not necessary in order to charge the party primarily liable. A contract of suretyship is not a collateral one, but the liability of the surety is primary and absolute, and demand and notice are not essential to the creation of liability. Killian v. Ashley, 24 Ark. 511; Heise v. Bumpass, 40 Ark. 545. If appellants had not signed the note after delivery their liability would only have been collateral as endorsers, and presentment to the principal and notice to them would have been essential to establish liability; but according to the undisputed evidence they signed the note before delivery and were primarily and absolutely liable as sureties. ' The judgment was correct on the undisputed evidence, and the same is affirmed.