Dyer v. Bray, 208 N.C. 248 (1935)

May 22, 1935 · Supreme Court of North Carolina

208 N.C. 248

W. P. DYER, JR., v. C. A. BRAY et al.

(Filed 22 May, 1935.)

Bills and Notes G a — Original note is not extinguished merely by execution of renewal note, and upon default holder may sue on original note.

Where a note is given in renewal of another note and not in payment thereof, the only effect of the transaction is to extend the time for payment, and the original note is not extinguished, and upon default, the payee may sue upon the original note, and in a suit on original notes in which the plaintiff introduces evidence of ownership, that the notes were due and unpaid, and that defendant executed same for value, and that .the original notes were not paid by the renewal notes, defendant’s motion as of nonsuit based solely upon the contention that plaintiff could declare only upon the renewal notes, should be overruled, plaintiff having made out a prima facie case. O. S., 3033, 3040.

Appeal by plaintiff from Sinlc, J., at January Term, 1935, of Guil-eokd.

Civil action to recover balance alleged to be due on four promissory notes aggregating $19,000.

Plaintiff offered tbe notes in evidence; proved tbeir execution by tbe defendants; showed that they were given for value; were presently due and unpaid, and adduced testimony to tbe effect that tbe plaintiff “is now tbe owner and bolder of those notes” — tbe notes sued upon.

Tbe defendants showed that tbe notes in suit bad been renewed by tbe execution of other notes, and contended that plaintiff could only declare upon tbe renewal notes and not upon tbe original ones.

In reply, plaintiff offered tbe bank note teller, who testified: “Tbe four notes, which I have identified as defendants’ Exhibits 2, 3, 4, and 5, came into tbe bank as renewal notes of those other notes, but tbe original notes were not turned loose, they were still held. . . . Tbe original notes were never surrendered; they were held.”

From a judgment of nonsuit entered at tbe close of all tbe evidence, tbe plaintiff appeals, assigning errors.

M. F. Douglas and R. M. Robinson for plaintiff.

Walter Siler and. Smith, Wharton & Hudgins for defendant Bray.

Stacy, C. J.

Where a note is given merely in renewal of another note and not in payment thereof, tbe effect is to extend tbe time for tbe payment of tbe debt without extinguishing or changing tbe character of tbe obligation, and, in case of default, tbe bolder may sue upon tbe original instrument. Bank v. Rosenstein, 207 N. C., 529.

Speaking to tbe subject in Grace v. Strickland, 188 N. C., 369, 124 S. E., 856, Adams, J., delivering tbe opinion of tbe Court, observed: “As applied to negotiable instruments, tbe word ‘renewal,’ or ‘renewed,’ signifies more tban tbe substitution of one obligation for another. It means tbe substitution in place of one engagement of a new obligation on tbe same terms and conditions — that is, tbe reestablishment of a particular contract for another period of time. Kedy v. Petty, 54 N. E. (Ind.), 798; National Bank v. Fickett, 50 S. E. (Ga.), 396; Griffin v. Long, 131 S. W. (Ark.), 672; Hyman v. Devereux, 63 N. C., 624; Kidder v. McIlhenny, 81 N. C., 123; Bank v. Hall, 174 N. C., 477. In 8 C. J., 443 (656), it is said: ‘Where a note is given merely in renewal of another note, and not in payment, tbe renewal does not extinguish tbe original debt nor in any way change tbe debt, except by postponing tbe time of payment.’ Bank v. Bridgers, 98 N. C., 67. If tbe second note be given and accepted in payment of tbe debt, and not in renewal of tbe obligation, a different principle will apply. Wilkes v. Miller, 156 N. C., 428; Collins v. Davis, 132 N. C., 106; Smith v. Bynum, 92 N. C., 108.”

Tbe plaintiff made out a prima facie case. C. S., 3033 and 3040; Bank v. Rochamora, 193 N. C., 1, 136 S. E., 259; Mayers v. McRimmon, 140 N. C., 640, 53 S. E., 447; Tyson v. Joyner, 139 N. C., 69, 51 S. E., 803.

It would seem, therefore, upon tbe record as presented, tbe question of liability was one for tbe jury. Hunt v. Eure, 189 N. C., 482, 127 S. E., 593.

There was error in dismissing tbe action as in case of nonsuit.

Reversed.