Lowe v. Peeler

277 S.E.2d 102 (1981)

J. D. LOWE v. Marlene G. PEELER.

No. 8027SC862.

Court of Appeals of North Carolina.

April 21, 1981.

*103 No counsel for plaintiff-appellee.

Yelton, Farfour & McCartney by Leslie A. Farfour, Jr., Shelby, for defendant-appellant.

*104 HEDRICK, Judge.

We note at the outset that neither the record nor the brief submitted by defendant offers us any explanation as to the difference in amount between the announced verdict and the judgment.

We also note that the trial judge in the present case apparently not only directed a verdict ex mero motu, but did so in favor of the party with the burden of proof. Without passing upon the propriety of the court's rather unusual action, we proceed to examine the merits of the second assignment of error brought forward by defendant.

Defendant contends by this assignment of error that the court erred in entering a judgment directing a verdict for plaintiff. She argues that the jury should have been allowed to determine whether defendant signed the notes as an accommodation party under G.S. § 25-3-415. We agree.

G.S. § 25-3-415 in pertinent part provides:

(1) An accommodation party is one who signs the instrument in any capacity for the purpose of lending his name to another party to it. . . . . . (5) An accommodation party is not liable to the party accommodated, ...

The Official Comment to G.S. § 25-3-415 in pertinent part provides: "Under subsection (3) except as against a holder in due course without notice of the accommodation, parol evidence is admissible to prove that the party has signed for accommodation."

In the present case, defendant admitted the execution of the notes and presented evidence tending to show that at the time her father, Van Peeler, and plaintiff executed the original notes in May 1976, defendant's only involvement with her father's businesses was as a stockholder of Carolina Game Farm, and that she did not begin handling bookkeeping duties for Carolina Game Farm until sometime after her father's death. Her evidence also tended to show that she had no knowledge of the notes executed by her father and plaintiff prior to September 1976 when plaintiff first requested her signature on the renewal notes. Defendant then testified with respect to her signing of the notes as follows:

Mr. Wright [officer of the bank which was payee on the notes] had told me that I needed to sign the note or they would have to execute judgment against the collateral of J. D. Lowe [plaintiff]. . . . . . I signed the note because Mr. Lowe and Mr. Wright told me to.... . . . . . Mike Wright called me and told me I needed to come down and sign the note since my father died and if I didn't come down and sign it, they would be forced to sell Mr. Lowe's collateral. J. D. Lowe also called me and told me I needed to sign the note because they were going to sell his collateral if I didn't. I went down and signed it. I did not intend to incur any liability financially to J. D. Lowe.... I signed this note in order to prolong it so that I could have a chance to get my father's estate closed and to come to some settlement with Mr. Lowe and Mr. McCraw [business associate of Van Peeler and plaintiff] with regard to the estate. . . . . . When I first signed the note, I did not realize that I was obligating myself to the bank for that money. I was told that they needed my signature because my father was dead and they wanted me to come and sign it in his place. Mike Wright and J. D. Lowe told me that. . . . . . I talked with J. D. Lowe prior to signing this note. J. D. Lowe told me that this was the note that he and my father had entered into together and that he had collateral against this note. I signed this note just to give J. D. Lowe more time until the other things involved with the estate were settled. . . . . . *105 I thought I was signing the note just to put my name on it so J. D. Lowe could have more time and have it renewed. They called me to come down and put my name on the note in place of my father's. I was not the executrix of the estate....

We are of the view that the evidence is sufficient to require submission of the case to the jury on the issue of whether defendant signed the notes as an accommodation maker. Since the jury could find based upon the evidence that defendant had signed as an accommodation maker, thus preventing defendant from being liable to plaintiff, G.S. § 25-3-415(5), the court erred in directing a verdict for plaintiff.

Reversed and remanded.

ARNOLD and WEBB, JJ., concur.