{
  "id": 11793540,
  "name": "FRANKLIN CREDIT RECOVERY FUND, XXI, L.P., a Virginia Limited Partnership, Plaintiff-Appellant v. In the Matter of the Foreclosure of Deeds of Trust of: W. DEAN HUBER and wife, ELLEN B. HUBER; MICHAEL R. FERRARO and wife, SANDRA E. FERRARO, Defendants-Appellees",
  "name_abbreviation": "Franklin Credit Recovery Fund, XXI, L.P. v. Foreclosure of Deeds of Trust of Huber",
  "decision_date": "1997-08-05",
  "docket_number": "No. COA96-1297",
  "first_page": "187",
  "last_page": "190",
  "citations": [
    {
      "type": "official",
      "cite": "127 N.C. App. 187"
    }
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  "court": {
    "name_abbreviation": "N.C. Ct. App.",
    "id": 14983,
    "name": "North Carolina Court of Appeals"
  },
  "jurisdiction": {
    "id": 5,
    "name_long": "North Carolina",
    "name": "N.C."
  },
  "cites_to": [
    {
      "cite": "327 S.E.2d 890",
      "category": "reporters:state_regional",
      "reporter": "S.E.2d",
      "weight": 2,
      "year": 1985,
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    {
      "cite": "313 N.C. 330",
      "category": "reporters:state",
      "reporter": "N.C.",
      "case_ids": [
        4721088,
        4722128,
        4723161,
        4721278,
        4726335
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      "year": 1985,
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        "/nc/313/0330-01",
        "/nc/313/0330-02",
        "/nc/313/0330-04"
      ]
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    {
      "cite": "321 S.E.2d 545",
      "category": "reporters:state_regional",
      "reporter": "S.E.2d",
      "year": 1984,
      "opinion_index": 0
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    {
      "cite": "71 N.C. App. 209",
      "category": "reporters:state",
      "reporter": "N.C. App.",
      "case_ids": [
        8524769
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      "year": 1984,
      "opinion_index": 0,
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        "/nc-app/71/0209-01"
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    {
      "cite": "N.C. Gen. Stat. \u00a7 25-3-104",
      "category": "laws:leg_statute",
      "reporter": "N.C. Gen. Stat.",
      "year": 1995,
      "pin_cites": [
        {
          "page": "(a)"
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      "opinion_index": 0
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    {
      "cite": "N.C. Gen. Stat. \u00a7 25-3-303",
      "category": "laws:leg_statute",
      "reporter": "N.C. Gen. Stat.",
      "year": 1995,
      "pin_cites": [
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          "parenthetical": "emphasis added"
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  "analysis": {
    "cardinality": 387,
    "char_count": 7404,
    "ocr_confidence": 0.727,
    "pagerank": {
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      "percentile": 0.7699501013379545
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  "last_updated": "2023-07-14T19:43:16.540119+00:00",
  "provenance": {
    "date_added": "2019-08-29",
    "source": "Harvard",
    "batch": "2018"
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  "casebody": {
    "judges": [
      "Judges WYNN and MARTIN; John concur."
    ],
    "parties": [
      "FRANKLIN CREDIT RECOVERY FUND, XXI, L.P., a Virginia Limited Partnership, Plaintiff-Appellant v. In the Matter of the Foreclosure of Deeds of Trust of: W. DEAN HUBER and wife, ELLEN B. HUBER; MICHAEL R. FERRARO and wife, SANDRA E. FERRARO, Defendants-Appellees"
    ],
    "opinions": [
      {
        "text": "LEWIS, Judge.\nPlaintiff Franklin Credit Recovery. Fund appeals superior court orders denying its foreclosure petition and motion to reopen for additional evidence. We reverse.\nPlaintiff is the beneficiary of deeds of trust on properties owned by W. Dean Huber and his wife Ellen B. Huber, and Michael R. Ferraro and his wife Sandra E. Ferraro. The deeds secure a consolidation loan in the amount of $195,976.11, which is evidenced by a promissory note dated 30 October 1990 (\u201cpromissory note\u201d). The promissory note consolidates three pre-existing unsecured lines of credit executed by the partners of the partnership of Styles, Bloom, Huber, and Ferraro. The promissory note was executed by the partners and their wives due to an impending government take-over of First Federal Bank (\u201cFirst Federal\u201d), the original holder of the promissory note. Defendants were informed that due to the take over of First Federal they would either have to pay the three outstanding loans in full or refinance them. Defendants received no additional funds from the promissory note and the interest rate was slightly higher. Defendants failed to repay the promissory note on its due date. The Clerk of Wake County Superior Court entered an order dated 8 March 1996 authorizing the substitute trustee to proceed under the deeds of trust, and to give notice of and conduct foreclosure sales. Defendants appealed to the Superior Court of Wake County.\nIn superior court, defendants argued that the promissory note was not supported by valuable consideration because they did not receive any benefit in exchange for executing the note and that the pre-existing loans refinanced by the promissory note were not executed by the partnership. Further, defendants maintained that the spouses, Sandra Ferraro and Ellen Huber, signed only as accommodation makers; they received no benefit from signing the promissory note and owed nothing on previous debts of the partnership. The trial court, in an order dated 10 May 1996, reversed the decision of the clerk and denied plaintiff\u2019s petition to foreclose. By order entered 12 July 1996, the court denied plaintiffs motion to reopen the hearing for the taking of additional evidence.\nPlaintiff brings forth two assignments of error. Because we find merit in the first, we do not reach the second. Appellant contends that the trial court erred as a matter of law in denying its petition to foreclose. We agree.\nN.C. Gen. Stat. section 25-3-303 provides in pertinent part:\n(a) An instrument is issued or transferred for value if:\n(1) The instrument is issued or transferred for a promise of performance, to the extent the promise has been performed;\n(3) The instrument is issued or transferred as payment of, or as security for, an antecedent claim against any person, whether or not the claim is due;\n(b) \u201cConsideration\u201d means any consideration sufficient to support a simple contract. The drawer or maker of an instrument has a defense if the instrument is issued without consideration. If an instrument is issued for a promise of performance, the issuer has a defense to the extent performance of the promise is due, and the promise has not been performed. If an instrument is issued for value as stated in subsection (a) of this section, the instrument is also issued for consideration.\nN.C. Gen. Stat. \u00a7 25-3-303 (1995) (emphasis added).\nThe promissory note is a \u201cnegotiable instrument\u201d under N.C. Gen. Stat. Section 25-3-104(a). The promissory note, on its face, states: \u201can unconditional promise or order to pay a fixed amount of money with . . . interest or other charges described in the promise or order; that at the time it was issued it was payable \u2018to the order of First Federal; and that it was payable at a definite time.\u201d See N.C. Gen. Stat. \u00a7 25-3-104(a) (1995). Thus, if the instrument were given for value, as provided for in G.S. \u00a7 25-3-303(a), it was also issued with consideration as a matter of law. G.S. \u00a7 25-3-303(b). We find that the promissory note was given for value and therefore consideration was present as a matter of law.\nThe underlying transactions here qualify under G.S. \u00a7 25-3-303(a)(l) and (3). First, the note was issued as a replacement for the old loans; it was issued in exchange for First Federal\u2019s promise to refinance and cancel the old loans. Second, the promissory note was issued as \u201cpayment of, or as security for\u201d the antecedent debt of the old loans. Defendants argue that there is no antecedent debt for which they are jointly responsible; therefore, there was no consideration supporting their promise to pay the promissory note.\nDefendants do not appear to grasp the full import of the Uniform Commercial Code. Since the note signed by defendants is a negotiable instrument, it is governed by the provisions of the Uniform Commercial Code. G.S. \u00a7 25-3-104(a); International Minerals and Chemical Corporation v. Matthews, 71 N.C. App. 209, 321 S.E.2d 545 (1984), disc. rev. denied, 313 N.C. 330, 327 S.E.2d 890 (1985). There is no requirement that the antecedent claim be against the same person giving the instrument in payment. G.S. \u00a7 25-3-303. The antecedent claim discharged by the instrument can be against \u201cany person.\u201d Id. The Official Comment to G.S. \u00a7 25-3-303(a) specifically states: \u201cSubsection (a)(3) applies to any claim against any person. . . . [T]he provision is intended to apply to an instrument given in payment of or as security for the debt of a third person, even though no concession is made in return.\u201d G.S. \u00a7 25-3-303(a)(3) Official Comment n.4 (emphasis added). This language is clear.\nG.S. \u00a7 25-3-303(b) states that if an instrument is given for value it is also given for consideration. Here, we find that the promissory note was issued as payment of an antecedent claim (the old loans) and in exchange for the cancellation of such loans as set forth in G.S. \u00a7 25-3-303(a)(l) and (a)(3). Therefore, under those provisions, the promissory note was supported by consideration as a matter of law.\nAccordingly, the order is reversed.\nJudges WYNN and MARTIN; John concur.",
        "type": "majority",
        "author": "LEWIS, Judge."
      }
    ],
    "attorneys": [
      "Brooks, Pierce, McLendon, Humphrey & Leonard, L.L.P., by Jim W. Phillips, Jr., Randall A. Underwood, and Wayne A. Logan, for plaintiff-appellant.",
      "Clifton & Singer, L.L.P., by Richard G. Singer, for defendants-appellees W. Dean Huber and Ellen B. Huber.",
      "Gulley, Kuhn & Taylor, L.L.P., by David J. Kuhn, for defendants-appellees Michael R. Ferraro and Sandra E. Ferraro."
    ],
    "corrections": "",
    "head_matter": "FRANKLIN CREDIT RECOVERY FUND, XXI, L.P., a Virginia Limited Partnership, Plaintiff-Appellant v. In the Matter of the Foreclosure of Deeds of Trust of: W. DEAN HUBER and wife, ELLEN B. HUBER; MICHAEL R. FERRARO and wife, SANDRA E. FERRARO, Defendants-Appellees\nNo. COA96-1297\n(Filed 5 August 1997)\nNegotiable Instruments and Other Commercial Paper \u00a7 58 (NCI4th)\u2014 promissary note \u2014 old loans \u2014 refinancing and cancellation \u2014 consideration\nA negotiable promissary note executed by two business partners and their wives to refinance, pay and cancel three preexisting lines of credit executed by the partners was given for value so that consideration was present as a matter of law, even if there was no antecedent debt for which all makers were jointly responsible. N.C.G.S. \u00a7 25-3-303(a)(l) and (3).\nAppeal by plaintiff from orders entered 10 May 1996 and 12 July 1996 by Judge Narley L. Cashwell in Wake County Superior Court. Heard in the Court of Appeals 22 May 1997.\nBrooks, Pierce, McLendon, Humphrey & Leonard, L.L.P., by Jim W. Phillips, Jr., Randall A. Underwood, and Wayne A. Logan, for plaintiff-appellant.\nClifton & Singer, L.L.P., by Richard G. Singer, for defendants-appellees W. Dean Huber and Ellen B. Huber.\nGulley, Kuhn & Taylor, L.L.P., by David J. Kuhn, for defendants-appellees Michael R. Ferraro and Sandra E. Ferraro."
  },
  "file_name": "0187-01",
  "first_page_order": 223,
  "last_page_order": 226
}