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Farmers Bank v. Michael T. Brown Distributors Inc.

Filed: May 18, 1982.

FARMERS BANK, PILOT MOUNTAIN, NORTH CAROLINA
v.
MICHAEL T. BROWN DISTRIBUTORS, INC. (FORMERLY NED PELL DISTRIBUTORS, INC.); BRENDA M. BROWN, EXECUTRIX OF THE ESTATE OF MICHAEL BROWN; BRENDA M. BROWN; VIDA M. MCCANLESS; PHILLIP H. PELL; AND O. M. NEEDHAM, JR.



Appeal by defendants Pell and Needham from Long, Judge. Judgment entered 12 February 1981 in Superior Court, Surry County. Heard in the Court of Appeals 29 April 1982.

Martin (Robert M.), Judge. Judges Vaughn and Arnold concur.

Martin

The defendants first contend that the trial court erred in ruling that the contract between defendants Pell and Needham and plaintiff Bank did not include a condition precedent to the guaranty that the plaintiff must first obtain the valid signatures of all the other named defendants before the guaranty would be effective. We agree with plaintiff.

The trial court found as fact the following:

(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. McCanless, 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 O. 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 and 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. McCanless. 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.

The court further concluded as a matter of law "[t]hat valid signatures of Brenda M. Brown and Vida M. McCanless as co-makers or endorsers of the note were not a condition preceding which was communicated to the plaintiff so as to make the plaintiff responsible for obtaining these signatures and insuring their validity." The defendants except to this conclusion of law.

It is well settled in North Carolina that when the parties waive a trial by jury the duty falls upon the trial court to find the facts and the law in the case. The resolution of conflicting evidence is a matter for the court, and when the evidence is sufficient to support the findings and when error of law does not appear upon the face of the record proper, the court's findings of fact have the force and effect of a verdict by a jury and are conclusive on appeal. See Distributing Corp. v. Schofield, 44 N.C. App. 520, 261 S.E.2d 688 (1980); Fletcher v. Fletcher, 23 N.C. App. 207, 208 S.E.2d 524 (1974). The appellate court is bound by these findings where there is some testimony to support them, even if there is evidence to the contrary that would support a different

finding. Williams v. Insurance Co., 288 N.C. 338, 218 S.E.2d 368 (1975). In this case there was evidence consisting of Mr. R. W. Smith's testimony to support the court's finding that defendants told Smith that they would sign a guaranty in addition to the other signatures on the corporate note. This in turn supported the trial court's conclusion of law that the valid signatures of Brown and McCanless on the note were not a condition ...


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