1 The actio n was co mme nced in th e Gene ral Session s Court o n a “swo rn accou nt.” 

# FILED September 30, 1998 Cecil Crowson, Jr. Appellate C ourt Clerk 

### IN THE COURT OF APPEALS OF TENNESSEE AT KNOXVILLE

FIRST AMERICAN NATIONAL ) BRADLEY CIRCUIT BANK, ) ) NO. 03A01-9805-C V-00157 Plaintiff/Appell

ant )

) HON. JOHN B. HAGLER v. ) JUDGE ) KRISTE CHEATHAM, ) ) Defendant/Appellee ) AFFIRMED

India M. Hens

on and Shelley

D. Rucker, Chatta

nooga, for Appe

llant. Rex A. Wagner, Cleveland, for Appellee.

O P I N I O N

INMAN, Senio r Judge This is an action against a purp ort ed gu aran tor of a d ebt whi ch w as ev ide nced by a promissory

note executed by Janet Bacon pursuant to a personal line of credit extended

to her. 1 Ina banking transaction with the plaintiff on Septemb er 2, 1986, Janet Bacon and her daughter, Kriste Bacon Cheatham [defendant], opened a joint checking account with right of survivorship. Each signed a signature card, on which was printed: Eachdepositor shall be

responsible for a

ll debts and obliga

tions incurred by

a De positorunder any Pe

rsonal Line of

Credit Agreeme

nt or any other ope n-en d credit plan applica

ble to the account. [our emphasis] OnJuly 1, 1987, JanetBacon’s application for a personal line of cr edit was approved by the plaintiff. Printed checks were issued to Ms. Bacon, bearing her name alone. The defendant did not

participate in the application, had no notice of it, and received no benefitsf rom it. Ms. Bacon utilized the credit line as a revolving account for four y ears, and eventually defaulted.2 The ev idence d oes not ind icate that the b ank app roved th e line of cre dit to Ms. B acon on the strength of any su retyship o r guaran ty of her d aughter . This theo ry of reco very ap pears to h ave bee n develo ped in hindsigh t.

3 Neither party clai

ms the existence of a di sputed issue of materi al fact, and each concedes the case may be disposed of

by summary judgment pursuant to Byrd v. H all, 847 S.W.2d 20 8 (Tenn. 1993). 2 The plaintiff insists

that Ms. Cheatham is liable as surety for Ms. Bacon because of the card provision which we have recited. To add palatability to its insistence, plaintiff argues that the line of credit - which was extended to Ms. Bacon more than one year after the joint account
was opened - was merely an “extension ” of the joint checking account. This argument arises from the language “any other open-e nd credit plan applicable to the account,” absent which the plaintiff’s action could

not withstand even casualscrutiny, and is allegedly buttresse d by the fact that the checks issued to Ms. Bacon for withdrawal of funds from the credit line bo

re the same account number as the joint deposit. The latter account repr esented fun ds owned by the two depositors, while the former represented funds owned by the bank.2 Eachparty filed a motion

for summary

judgment, 3 and the briefs do n ot suggest a disputed issue of material

fact exists. Janet Bacon, by affidavit, testified that the debt was hers alone, and that she alone drew checks against the line

of credit, and tha

t her daughte

r signed th

e signature card solely for survivorship purposes. This was not refuted. The trial judge gr

anted the motion of t he defendant, stating that “the creation of such ruinous liability for the debts of another must be attended by fa r greater notice o f danger, formality of instrument, deta

il of terms, and re

citation of conditi

ons than iseven hintedin this case.” It is d

ifficult to disag

ree with this

rationale simply

as a matter of principle, but we think the peculiar circumstances activate T.C.A. § 47-4-401(b), which provides that “a customer is not liable for the amount of the overdraft if the customer neither signed the item nor benefitted from the proceeds of the item.” While an overdraft in the traditional sense is not involved in the cas

e at Bar, since Ms. Bacon ex ecuted a promisso ry note for

the funds and was d

ischarged in bankruptcy, we think the analogy is appropo. The judgment is a

ffirmed at the co

sts of the appella

nt.

_______________________________ William H . Inman, Seni or Judge CONCUR:3

_______________________________ Houston M. Goddard, P residing J udge

_______________________________ Charles D. S usano, Jr ., Judge