Carolina Eastern, Inc. v. Benson Agri Supply, Inc. ( 1984 )

310 S.E.2d 393 (1984)

CAROLINA EASTERN, INC.
v.
BENSON AGRI SUPPLY, INC., Donald Parker, Executor of the Estate of William Michael Matthews, Deceased, and Janet J. Matthews.

No. 8311SC13.

Court of Appeals of North Carolina.

January 17, 1984.

Harris, Cheshire, Leager & Southern by Samuel R. Leager, Raleigh, for plaintiff-appellant.

Clifton & Singer by Benjamin F. Clifton, Jr., Raleigh, for defendant-appellees.

VAUGHN, Chief Judge.

Defendants' motion for a directed verdict tests the legal sufficiency of plaintiff's evidence to take the case to the jury and support a verdict for plaintiff. Wallace v. Evans, 60 N.C.App. 145, 298 S.E.2d 193 (1982). A directed verdict, thus, is proper when plaintiff's evidence is insufficient to establish a valid contract. See, e.g., Stewart v. Insurance Co., 20 N.C.App. 25, 200 S.E.2d 434 (1973), cert, denied, 284 N.C. 623, 202 S.E.2d 278 (1974). Since consideration is essential to a valid guaranty contract and since we find no evidence of consideration supporting the guaranty agreements hereunder, we hold that the trial court was correct in granting defendants' motion for a directed verdict.

A guaranty contract is supported by sufficient consideration if it is based on a benefit passing to the guarantor or a detriment to the guarantee. Lowndes v. McCabe Fertilizer Co., 157 S.C. 371, 154 S.E. 641 (1930). When the guaranty, as in this case, involves a pre-existing debt, it must be supported by some new consideration other than the original debt. Id. Plaintiff contends that the guaranty contracts were supported by consideration in the form of plaintiff's forbearance to sue until 3 April 1981, almost fourteen months after the execution of said guaranty contracts. We find no merit in plaintiff's contention.

The guaranty contracts stipulated that the consideration therefore was plaintiff's extension of credit to defendant corporation for goods sold. Plaintiff, however, did not sell any goods nor extend any credit to defendant corporation after the guaranty contracts were executed. Defendants received no benefit; plaintiff suffered no detriment. Plaintiff contends, nevertheless, that it extended credit and, therefore, consideration by its forbearance to sue. We disagree. The contract terms regarding consideration were clear and unambiguous. We are, therefore, powerless to interpolate into the contract the condition or stipulation that "credit" included plaintiff's willing forbearance to sue. Proffitt v. Sitton, 244 S.C. 206, 136 S.E.2d 257 (1964).

Although forbearance may constitute valid legal consideration, it must be based on a promise to forbear made at the time of the parties' contract. Duncan & Shumate v. Heller, 13 S. Ct. 94 (1879); McCelvy v. Noble, 47 S.C.L. 330 (1866); Thomas v. Croft, 32 S.C.L. 40 (1846). Plaintiff hereunder presented no evidence of an agreement that would have prevented plaintiff from bringing suit earlier. It is incumbent upon plaintiff to prove the consideration supporting a guaranty contract for a pre-existing debt; the law does not presume such consideration. Lowndes v. McCabe Fertilizer Co., supra. Plaintiff, not having proved any agreement to forbear, failed to prove the consideration essential to the underlying contract. A directed verdict, therefore, in defendants' favor was entirely proper.

At trial, the court sustained defendants' objection when plaintiff's witness was asked why plaintiff waited so long to bring suit. Plaintiff contends that the trial court erred in excluding such testimony. The Record shows that the witness would have testified that plaintiff waited to sue

(b)ecause our company had a very long standing relationship with Mr. Matthews, and, of course, we had tried to work with them any way we possibly could to, not only for our benefit of the debt but hopefully, you know, to work with them in the future and we did not begin legal action because we were relying on their guaranty to protect the old debt.

We agree with plaintiff that the excluded testimony was competent and should have been admitted. Nevertheless, its exclusion was harmless error. The excluded testimony did not infer any agreement to forbear made by plaintiff at the time the guaranty contracts were executed. It did not establish the necessary element of consideration to show the contracts' validity and change the results at trial.

Affirmed.

HILL and BECTON, JJ., concur.