Does the agreement in the face of the note, “the subscribers and endorsers hereof agree to remain and continue bound, . . . notwithstanding any extension or extensions for the time of payment of it, or any part of it,” deprive the defendant of the defense of the statute of limitations when it is found as a fact that the maker paid interest on the note to' 28 January, 1931, and it appears that the suit was duly instituted on 9 September, 1932 ?
C. S., 3092, Michie’s Code of 1931, provides that: “Where the waiver is embodied in the instrument itself it is binding upon all parties, but where it is written above the signature of the endorser it binds him only.” C. S., 3102, provides that a person secondarily liable on negotiable instruments is discharged “by any agreement binding upon the holder to extend the time of payment or to postpone the holder’s right to enforce the instrument, unless made with the assent of the party secondarily liable,” etc.
There are several cases in this jurisdiction which discuss the effect of extension agreements embodied in the face of negotiable instruments, notably: Bank v. Johnston, 169 N. C., 526, 86 S. E., 360; Gillam v. Walker, 189 N. C., 189, 126 S. E., 424; McInturff v. Gahagan, 193 N. C., 147, 136 S. E., 339; Wrenn v. Cotton Mills, 198 N. C., 89, 150 S. E., 676; Corporation Commission v. Wilkinson, 201 N. C., 344; Trust Co. v. Clifton, 203 N. C., 483, 166 S. E., 334; Franklin v. Franks, 205 N. C., 96, 170 S. E., 113; Rasberry v. West, 205 N. C., 406, 171 S. E., 350. Referring to such extension agreements in the Wilkinson case, supra, this Court said: “In order to bind the endorsers two things are essential to such an agreement: (1) waiver of the defense that the time of payment has been extended; (2) mutual assent to a definite time when payment is to be made.” Also, in Wrenn v. Cotton Mills, supra, the principle is thus stated: “An endorser is, of course, entitled to notice of dishonor; and it may be conceded that by the terms of this contract the defendants waived such notice; also that they waived defenses based upon an extension of the time of payment. The latter waiver, however, imports a legal extension of time which would be effective against the defendants. Granting that the time of payment may be extended by a definite and binding oral agreement, ... we are confronted by the *76general rule that such an agreement must fix a definite time when payment is to be made. The time thus agreed on should be as definite as that which is required when the note is originally executed, the elements of the agreement being certainty, mutuality, and consideration.” The last utterance of the Court is found in Rasberry v. West, supra, which held that the assent of the parties to' an extension of time was binding. The Court remarked that “the plaintiff cannot disregard the express provision of a contract and thereby procure the discharge of a note and the cancellation of her mortgage.”
In the case at bar the judge found that the maker paid interest on the note for definite periods of time, to wit, four months, as will appear by reference to said findings, “and that on or about 1 January, 1931, the principal paid the interest thereon to 28 January, 1931, extending the maturity date thereof to said date.”
Ordinarily payments made by a principal will not deprive an endorser of the benefit of the defense of the bar of the statute of limitations. Houser v. Fayssoux, 168 N. C., 1, 83 S. E., 692; Franklin v. Franks, 205 N. C., 96. This principle, however, does not apply when the endorser has consented in the body of the instrument itself to such extensions: Provided, of course, that such extensions are for definite periods of time. Revell v. Thrash, 132 N. C., 803, 44 S. E., 596. It is contended by the defendant that the Thrash case, supra, is overruled by Trust Co. v. Clifton, supra, and Franklin v. Franks, supra. This contention, however, cannot be sustained for the reason that in the Franks case, supra, there was no express waiver in the body of the instrument itself, and in the Olifton case, supra, the waiver of extension was not in the body of the instrumenf, but was contained in an independent contract of guaranty upon the back of the instrument; nor was there “evidence that said note was extended or renewed from time to time.”
The plaintiff was not required to exhaust the collateral security before instituting suit against the defendant. In the first place, the judge has found, without exception, that the collateral was worthless, and in the second place the holder of a note has the right to pursue his remedy to collect his debt, nothing else appearing, because “the debt is the primary obligation between the parties, and the note is primary evidence of the debt.” Brown v. Turner, 202 N. C., 227, 162 S. E., 608.
Upon careful consideration of the entire record the Court is of the opinion that the trial judge ruled correctly.
Affirmed.