Court Opinion

ID: 8893049
Source: CourtListenerOpinion
Date Created: 2022-11-26 23:30:27.638877+00
Date Added: 2024-06-11T17:07:19.059579
License: Public Domain

Judge Wynn
dissenting.
I respectfully dissent because I disagree with the majority’s conclusion that the guaranty contract in the instant case binds Mr. Myers only if he “received a personal benefit from plaintiff’s extension of credit or was an officer of the corporation receiving the credit.” I find that the contract establishes an unconditional personal obligation on the part of Mr. Myers to guarantee repayment to plaintiff for credit extended to Rocky River Real Estate Co. (Rocky River). Contracts of guaranty and contracts of suretyship are two methods in which a party can become obligated on a debt.
A guaranty is a promise to answer for the payment of a debt or the performance of some duty in the event of the failure of another person who is himself primarily liable for such payment or per*534formance. A surety is a person who is primarily liable for the payment of the debt or the performance of the obligation of another. While both kinds of promises are forms of security, they differ in the nature of the promissor’s liability. A guarantor’s duty of performance is triggered at the time of the default of another. On the other hand, a surety is primarily liable for the discharge of the underlying obligation, and is engaged in a direct and original undertaking which is independent of any default.
Hofler v. Hill, 311 N.C. 325, 332, 317 S.E.2d 670, 674 (1984) (quoting Branch Banking & Trust Co. v. Creasy, 301 N.C. 44, 52-53, 117 S.E.2d 117, 122 (1980)).
In the instant case, the relevant contract language reads as follows:
In consideration of credit being extended by Morrison Brothers to me/us/it, I and/or we certify the truthfulness and veracity of the statement appearing on opposite side, and I and/or we guarantee and bind ourselves to the faithful payment of all amounts pur-' chased or now owing by us or either of us, or any other person, firm or corporation for our benefit.
This contract was signed by Kathy Gordon Peyton and Mr. Myers. Mr. Myers argued before the trial court that his signature was a forgery. The trial court, however, found as fact that Mr. Myers executed the contract and this finding is supported by credible evidence.
The contractual language provides that in exchange for the credit provided by plaintiff to Rocky River, Ms. Peyton and Mr. Myers “guarantee and bind ourselves to the faithful payment of all amounts purchased or now owing.” This language is simply an unconditional promise by Ms. Peyton and Mr. Myers to repay any debt incurred by Rocky River.
The majority, however, construes this language to mean that Mr. Myers would be bound by the guaranty only “if he received a personal benefit from plaintiffs extension of credit.” I cannot discern this meaning from the language.1 Rather, it is my view that this language simply provides that Mr. Myers and/or Ms. Peyton guarantee payment *535of “all amounts purchased or now owing” (1) by both of them — “us” or either of them — “either of us”, or (2) by any other entity that purchases or owes such amounts for Myers/Peyton’s benefit — “any other person, firm or corporation for our benefit”.
In further support of my contention that this contract provides for an unconditional promise of payments, the contract provides:
If credit is extended to a corporation in which we, or I am an officer, or in which an interest exists I and/or we will personally faithfully guarantee the payment of all credit extended to said corporation.
(Emphasis added). I read this sentence to mean that Mr. Myers and/or Ms. Peyton also agreed to guarantee amounts owed by a corporation in which either is an officer or has an interest in.
In sum, because Ms. Peyton and Mr. Myers made an unconditional promise to repay plaintiff for any credit which it extended, I believe that the trial court correctly found that Rocky River, Ms. Peyton and Mr. Myers were jointly and severally liable to plaintiff. I, therefore, vote to affirm that part of the trial judge’s ruling.
I, however, find error regarding another issue presented in this case which is not reached by the majority regarding the payment of late charges. Plaintiff concedes that the trial judge erred in awarding late charges at an interest rate of 18% because the contract did not provide an interest rate in the event of default. Therefore, this matter should be remanded to the trial court to modify his judgment and award interest at the legal rate. For the foregoing reasons, I respectfully dissent.

. The majority’s footnote suggests that this dissent supports a benefit analysis. Instead, the focus here is that Mr. Myers incurred a personal obligation to repay plaintiff for credit extended to Rocky River. This contention is further supported by noting that Rocky River possessed no assets of its own, therefore, Ms. Peyton and Mr. Myers had to make personal guarantees to repay plaintiff in order for it to give Rocky River a line of credit.