"[B]y showing mode of payment and discharge as contemplated by the parties, other than that specified in the instrument. Bank v. Rosenstein, 207 N.C. 529, 177 S.E. 643; Kindler v. Trust Co., 204 N.C. 198, 167 S.E. 811; Wilson v. Allsbrook, 203 N.C. 498, 166 S.E. 313; Stockton v. Lenoir, 198 N.C. 148, 150 S.E. 886; Bank v. Winslow, 193 N.C. 470, 137 S.E. 320."
Notes could not be collected a second time by the canning company, nor would plaintiff be a bona fide purchaser for value if, when he took the notes, he knew of the assignment of the crop and the provision for payment of the note from the proceeds of the crop. A somewhat analogous question arose under different facts in National Bank of Suffolk v. Winslow, 193 N.C. 470 ( 137 S.E. 320). In that case the holder of a note had actual notice of an agreement that provided that the note was to be paid from the proceeds of a peanut crop raised by the maker and in indorser's hands, and it was held that the holder's rights were subject to the agreement, and the holder could not recover against the maker of the note.
While this provision is in writing — having been inserted in the note — it is the holding with us that "parol evidence is admissible to show an agreed mode of payment and discharge other than that specified in the bond." Brown on Parol Evidence, 117; Bank v. Winslow, 193 N.C. 470, 137 S.E. 320; Typewriter Co. v. Hardware Co., 143 N.C. 97, 55 S.E. 417. In Evans v. Freeman, 142 N.C. 61, 54 S.E. 847, the alleged agreement was, that the note "should be paid out of the proceeds of the sale of the stock-feeder."
"[B]y showing mode of payment and discharge as contemplated by the parties, other than that specified in the instrument. Bank v. Rosensteis, 207 N.C. 529, 177 S.E. 643; Kisdler v. Trust Co., 204 N.C. 198, 167 S.E. 811; Wilson v. Allsbrook, 203 N.C. 498, 166 S.E. 313; Stockton v. Lenoir, 198 N.C. 148, 150 S.E. 886; Bank v. Winslow, 193 N.C. 470, 137 S.E. 320."
However, the jury did not accept the defendant's contention in respect of the mode of payment. See Evans v. Freeman, 142 N.C. 61, 54 S.E. 847; Bank v. Winslow, 193 N.C. 470, 137 S.E. 320. In the light of the theory of the trial, as announced in the pleadings and pursued on the hearing, the case presents little more than controverted issues of fact, determinable alone by the jury.
ll, 160 So. 224; Reiniger v. Besley, 141 P. 574; Bennett v. Tillmon, 44 P. 80; Braley v. Henry, 71 Cal. 480, 60 Am. Rep. 543, 11 P. 385, 12 P. 623; Howard v. Stratton, 64 Cal. 487, 2 P. 263; Pyskatz v. Sobusick, 145 A. 58; Clement v. Houch, 113 Iowa 504, 85 N.W. 765; Randolph Bank v. Osburn, 207 Iowa 729, 223 N.W. 493; Murdy v. Kiles, 101 Iowa 549, 70 N.W. 714; Moore v. Altweyer, 202 N.W. 214; Owensboro Wagon Co. v. Wilson, 79 Kan. 633, 101 P. 4; Johnson v. Burnham, 115 A. 261; McGuennes v. Kyle, 208 Mass. 443, 94 N.E. 700; Mitchell v. Sleman, 5 Md. 376; Bowkar v. Johnson, 17 Mich. 42; Germania Bank v. Osburn, 81 Minn. 272, 83 N.W. 1084; Teidt v. Johnson, 151 Minn. 288, 186 N.W. 179; Henry Lbr. Co. v. Schobrich, 198 N.W. 406; Roe v. Bank, 67 S.W. 303; New York Life Ins. Co. v. Smucker, 106 Mo. App. 304, 80 S.W. 278; Allen v. Hardware Co., 118 S.W. 1157; Bennett v. Tillman, 18 Mont. 28, 44 P. 80; Mitchell v. Lath, 160 N.E. 646, 162 N.E. 511; Evans v. Freeman, 142 N.C. 661, 54 S.E. 847; National Bank v. Winslow, 193 N.C. 470, 137 S.E. 320; Smith Premier Typewriter Co. v. Hardware Co., 143 N.C. 97, 55 S.E. 417; Smith v. Page Trust Co., 195 N.C. 183, 141 S.E. 575; Kernodle v. Williams, 153 N.C. 475, 69 S.E. 431; Kernodle v. Kernodle, 174 N.C. 441, 93 S.E. 956; Powell v. Security Bank, 141 Okla. 169, 284 P. 5; Palestine Drug Co. v. Boggs, 29 P.2d 56; Vincent v. Russell, 201 P. 433; Send v. Flogg, 168 P. 300; Barnes v. Shelton, 16 S.C.L. 33, 18 Am. Dec. 642; Martin v. Home Bank, 92 S.C. 226, 75 S.E. 404; National Loan Bank v. Tolbert, 124 S.E. 772; Nalle v. Gates, 20 Tex. 315; Robe v. Yett, 164 S.W. 30; Clayton v. Western National Wall Paper Co., 146 S.W. 695; Goldstein v. Union National Bank, 216 S.W. 409; Hansen v. Yturria, 48 S.W. 795; Dooley v. Gray, 54 S.W.2d 556; Vance v. Snyder, 6 W. Va. 24; Jarrett v. Nickell, 9 W. Va. 345; Roy v. Jerd, 146 A. 250; Citizens Savings Bank v. Paradis, 146 A. 3; Jones v. Key, 16 Wis. 562; Evans v. Freeman, 54 S.E. 847. There are also many other cases in which it is announced that as
Third, by showing mode of payment and discharge as contemplated by the parties, other than that specified in the instrument. Bank v. Rosenstein, 207 N.C. 529, 177 S.E. 643; Kindler v. Trust Co., 204 N.C. 198, 167 S.E. 811; Wilson v. Allsbrook, 203 N.C. 498, 166 S.E. 313; Stockton v. Lenoir, 198 N.C. 148, 150 S.E. 886; Bank v. Winslow, 193 N.C. 470, 137 S.E. 320. Fourth, by showing that one, ostensibly a joint promisor or obligor, is in fact a surety.
Crown Co. v. Jones, 196 N.C. 208, 145 S.E. 5. The agreement shown by the evidence does not contradict, add to, alter, or vary the terms of the notes. . . . The contract, which defendant alleged in his answer was entered into by and between him and the plaintiff contemporaneously with the execution of the notes, was, in effect, that defendant should be discharged of liability upon his conveyance of the land to George W. Knight, Edward Higgins, and Samuel Puleston, and upon their assumption of the notes. Parol evidence to show this contract was admissible upon the principle on which Bank v. Winslow, 193 N.C. 470, 137 S.E. 320, was decided. In the opinion in that case it is said, `The law is firmly established that parol evidence is inadmissible to contradict or vary the terms of a negotiable instrument, but this rule does not apply to a parol agreement made contemporaneously with the writing providing a mode of payment.' Nor does the rule apply to such parol agreement providing for discharge of the maker otherwise than by payment.
Third, by showing mode of payment and discharge as contemplated by the parties, other than that specified in the instrument. Kindler v. Trust Co., 204 N.C. 198, 167 S.E. 811; Wilson v. Allsbrook, 203 N.C. 498, 166 S.E. 313; Stockton v. Lenoir, 198 N.C. 148, 150 S.E. 886; Bank v. Winslow, 193 N.C. 470, 137 S.E. 320. Viewed in the light of the foregoing authorities, and the principles they illustrate, it would seem that the ruling of the Superior Court is well supported, in tendency at least, if not directly, by the decisions on the subject.
This controversy is between the original parties to the notes described in the complaint. The only question of law is whether the defense pleaded in the answer classifies the case in the line represented by Hilliard v. Newberry, 153 N.C. 104, 68 S.E. 1056; Boushall v. Stronach, 172 N.C. 273, 90 S.E. 198; Mfg. Co. v. McCormick, 175 N.C. 277, 95 S.E. 555; Bank v. Andrews, 179 N.C. 341, 102 S.E. 414, or the line represented by Evans v. Freeman, 142 N.C. 61, 54 S.E. 847; Bank v. Winslow, 193 N.C. 470, 137 S.E. 320; Justice v. Coxe, 198 N.C. 263, 151 S.E. 252; Stack v. Stack, 202 N.C. 451, 163 S.E. 589. Liberally construed, the defendants allege that they executed the notes as trustees for the plaintiff, receiving no consideration, and with the agreement that the notes were to be paid out of the proceeds of the sale of land.