HENDERSON COUNTY, NC - COURT - J.D. Reynolds v. B.M. Edney, Aug 1861
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J.D. REYNOLDS v. B.M. [Balis McKendrick] EDNEY,
North Carolina State Supreme Court, August Term, 1861, p407:

Regarding the Estate of John B. Woodfin
It is a rule of law that one liable in case another does not pay, is entitled
to notice of the default of the primary debtor, before suit can be brought
against him, and it forms no exception to the rule, that such primary debtor
was insolvent at the date of the original transaction, or became so
afterwards.

This was an action on the case, tried before Judge Dick, at the Spring Term,
1861, of Henderson Superior Court.

The action was brought on the following undertaking, endorsed on a judgment
rendered in favor of the plaintiff against one John B. Woodfin, to wit: "I
guaranty the within judgment in consideration of six months forbearance from
the 12th of October, 1855, Signed B.M. Edney."

The judgment and the written agreement above set out, were both made at the
same time, to wit, 12th of October, 1855. It was not paid by Woodfin, who died
insolvent in Tennessee before the suit was brought against the defendant, and
was insolvent in fact, at the date of the judgment, but no notice was proved
to have been given the defendant of Woodfin's failure to pay, previously to
the suit's being brought. The insolvency of Woodfin was insisted on by the
plaintiff's counsel, as an exception to the general rule, as to notice in such
cases. The Court held the position well taken, and instructed the jury
accordingly, who found a verdict for the plaintiff. Defendant's counsel
excepted. Judgment for plaintiff, and appeal by the defendant.

No counsel appeared for the plaintiff in this Court. Gaither, for the
defendant.

JUDGE C.J. PEARSON wrote the majority decision: It is a general rule that one
who undertakes, collaterally, to pay a debt, is not liable to an action,
unless he has notice of the failure to pay by the party who is primarily
liable, as in the case of a guarantor, or the maker of a bill of exchange, or
the endorser of a bill or promissory note, or a surety in respect to a co-
surety.

This rule is founded, not merely on the consideration, that the party, thus
secondarily liable, is entitled to notice, in order that he may take measures
to indemnify or secure himself, but on the further ground, that one ought not
to be sued or subjected to the payment of costs, unless he is in default, by
neglecting or refusing to pay a debt after he has received notice of the
default of the party who was bound to pay in the first instance; for, until
notice, he may reasonably presume that the debt has been paid, and,
consequently, is not in default.

We are not aware of any authority for making an exception to this rule, where
the party, primarily liable, is insolvent, either at the date of the original
transaction, or becomes so afterwards, and it is clearly against principle and
in conflict with one of the grounds on which the rule is founded. Indeed, in
all of the cases, the necessity of giving notice, is treated as a condition
precedent to the liability, of the party who is to become bound in the second
instance, which is in no case dispensed with, except on the ground of fraud;
as if one draws a bill without having funds in the hands of the drawee; cite:
Parsons on Contracts.


This Court is of opinion that the plaintiff could not sustain his action
without proof that he had given notice to the defendant of the default of John
B. Woodfin, so as to have offered an opportunity to the defendant of paying
the debt without cost, and putting him in default by failing to do so.

Venire de novo. 
PER CURIAM, Judgment Reversed, in favor of B.M. Edney.