Court Opinion

ID: 9572383
Source: CourtListenerOpinion
Date Created: 2023-08-21 20:41:18.02707+00
Date Added: 2024-06-11T12:32:42.356786
License: Public Domain

Justice MARTIN
dissenting.
I respectfully dissent. This case was tried by Judge Long, sitting without a jury. He had the duty to pass upon the credibility of the witnesses, to accept or reject testimony. He had to resolve any contradictions in the evidence, and the ultimate issue was for him to find. Cogdill v. Highway Comm. and Westfeldt v. Highway *354Comm., 279 N.C. 313, 182 S.E. 2d 373 (1971); Knutton v. Cofield, 273 N.C. 355, 160 S.E. 2d 29 (1968); Reynolds Co. v. Highway Commission, 271 N.C. 40, 155 S.E. 2d 473 (1967); McCallum v. Insurance Co., 262 N.C. 375, 137 S.E. 2d 164 (1964); Boylan-Pearce, Inc. v. Johnson, Commissioner of Revenue, 257 N.C. 582, 126 S.E. 2d 492 (1962).
The majority opinion found that there is evidence in the record to support findings of fact upholding a conclusion that no condition precedent existed. It then determined that Judge Long failed to make sufficient findings of fact to support the legal conclusion that there was not a condition precedent to defendant’s liability under the guaranty agreement. I consider the findings by Judge Long to be sufficient. Judge Long found as facts, inter alia, the following:
(1) On or before February 15, 1977, the defendants, Phillip H. Pell and O. M. Needham, Jr., had negotiated several loans from the plaintiff, Farmers Bank, for a corporation named Ned-Pell Distributors, Inc., of which they were the principle [sic] stockholders. The notes were signed by officers of the corporation.
(2) Shortly before February 15, 1977, the defendants, Phillip H. Pell and O. M. Needham, Jr., informed R. W. Smith, Vice-President of Farmers Bank, that they wished to sell their stock in the corporation to Michael T. Brown, and inquired whether the bank would continue to extend its previous line of credit to the corporation under the new stockholder, if the new stockholder, Michael T. Brown, his wife, Brenda M. Brown, and his mother-in-law, Vida M. Mc-Canless, signed the corporate notes as makers, and if the defendants, Phillip H. Pell and O. M. Needham, Jr., signed a guaranty of payment of such indebtedness. R. W. Smith informed the defendants, Phillip H. Pell and 0. M. Needham, Jr., that the bank would continue to extend credit under such arrangement.
(3) On or about February 15, 1977, the bank prepared a new note in the amount of Seventy-Five Thousand Dollars .($75,000.00) to consolidate old notes signed by corporate officers. The new note was signed by officers of the corporation *355and by Michael T. Brown (Individually) in the presence of R. W. Smith. Michael T. Brown then took the note from the bank to have it signed by Brenda M. Brown and Vida M. Mc-Canless. Michael T. Brown later returned the note to the bank bearing the purported signatures of Brenda M. Brown and Vida M. McCanless.
(4) As a part of this same transaction, the defendants, Phillip H. Pell and O. M. Needham, Jr., signed a loan guaranty agreement on February 14, 1977, jointly and severally guaranteeing full and prompt payment of any indebtedness of Ned-Pell Distributors, Inc., to Farmers Bank, to the extent of Seventy-Five Thousand Dollars ($75,000.00), plus interest, and all costs, expenses and reasonable attorney’s fees incurred in endeavoring to collect said indebtedness or in enforcing the guaranty agreement.
It is not required that the judge find all evidentiary facts, but only those material and ultimate facts from which it can be determined whether they are supported by the evidence and whether such facts support the conclusions of law and the judgment. Quick v. Quick, 305 N.C. 446, 290 S.E. 2d 653 (1982). The facts found show:
(1) Prior to 15 February 1977 defendants had established a line of credit with plaintiff with the notes being executed by the corporate defendant.
(2) Pell and Needham advised plaintiff that they wished to sell their stock in defendant corporation to Brown and inquired whether the bank would continue to extend the line of credit to the corporation if Brown, his wife, and Mrs. McCanless executed the notes as makers and defendants signed a guaranty of such indebtedness.
(3) The bank agreed to this arrangement.
(4) The bank prepared a note to consolidate old notes executed by the corporation. This note was signed by the corporation and by Brown individually.
(5) Brown then took the note from the bank to have it signed by Mrs. Brown and Mrs. McCanless.
*356(6) Brown later returned the note to the bank with the purported signatures.
(7) As a part of the same transaction, Pell and Needham signed the loan guaranty agreement in question.
These facts support the conclusion that there was no condition precedent requiring plaintiff to secure valid indorsements by Mrs. Brown and Mrs. McCanless on the note. The note was to replace previous notes executed by Pell and Needham. The bank did not give the note to Brown as its agent to get the signatures. Brown “took the note from the bank” to have it signed. Had there been a condition precedent as argued by defendants, the bank would never have allowed defendants (whose corporate debt was being extinguished by the new note) to secure the signatures required. The actions of the parties speak louder than their words. Powers v. Sternberg, 213 N.C. 41, 195 S.E. 88 (1938). The judgment complies with Rule 52(a)(1) of the North Carolina Rules of Civil Procedure.
The court’s finding that plaintiff would continue to extend credit to the corporation if Brown and his wife and Mrs. Mc-Canless signed the notes as makers and if defendants would execute a guaranty, is a far cry from a finding that defendants would not be liable unless plaintiff got Mrs. Brown and Mrs. Mc-Canless to indorse the notes. The scheme presented to the plaintiff was for the protection of the bank and not to benefit Pell and Needham. The purpose of the proposition was to determine the conditions under which the bank would extend credit to the corporation, not to establish conditions under which Pell and Needham would guarantee the loan. Pell and Needham were trying to entice the bank to extend the credit so they could sell the corporation and eliminate the liability on the notes then outstanding. Defendants and Brown were seeking to satisfy the plaintiff’s conditions to extend credit to the corporation, not to protect Pell and Needham.
The majority apparently orders the case remanded to the superior court for a new hearing. At the very most, the case might be remanded for additional findings of fact.
I find the judgment of Judge Long to be proper and vote to affirm the decision of the Court of Appeals.
*357Chief Justice Branch and Justice Exum join in this dissenting opinion.