Watson v. . Holton

20 S.E. 183, 115 N.C. 36

• Court: Supreme Court of North Carolina
• Decided: September 5, 1894
• Status: Published

Opinion

Burwell, J.:

It is charged against the defendant that he loaned out his ward’s money upon bond without sufficient security, contrary to the provisions of section 1592 of The Code. In Boyette v. Hurst, 1 Jones’ Eq., 166, it is said that the policy of this statute “ is to require the investment to be secured by the bond or note of some person in addition to the borrower.” Hence it was there decided that a note signed by a firm as a principal debtor, and. one of the members of it as surety, did not fill the requirement of the law, for in such case the surety was one of the borrowers. No person “in addition to the borrower” had become responsible for the payment of the note. If the firm, the borrower, became insolvent, the pretended surety also became insolvent. This sound principle does not fit our case, for here there is a person “in addition to the borrower,” who has become responsible for the loan. The borrower might become insolvent without involving the surety in his ruin.

Affirmed.