{ "id": 11650345, "name": "BARCLAYS BANK PLC, Plaintiff Appellant v. MARK JOHNSON, Defendant Appellee", "name_abbreviation": "Barclays Bank PLC v. Johnson", "decision_date": "1998-04-30", "docket_number": "No. COA97-849", "first_page": "370", "last_page": "374", "citations": [ { "type": "official", "cite": "129 N.C. App. 370" } ], "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": "220 S.E.2d 595", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1975, "pin_cites": [ { "page": "599" } ], "opinion_index": 0 }, { "cite": "289 N.C. 63", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8566657 ], "year": 1975, "pin_cites": [ { "page": "68" } ], "opinion_index": 0, "case_paths": [ "/nc/289/0063-01" ] }, { "cite": "487 S.E.2d 548", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1997, "opinion_index": 0 }, { "cite": "346 N.C. 280", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 139620, 139372, 139535, 139646, 139327 ], "year": 1997, "opinion_index": 0, "case_paths": [ "/nc/346/0280-03", "/nc/346/0280-01", "/nc/346/0280-04", "/nc/346/0280-05", "/nc/346/0280-02" ] }, { "cite": "479 S.E.2d 478", "category": "reporters:state_regional", "reporter": "S.E.2d", "pin_cites": [ { "page": "485" } ], "opinion_index": 0 }, { "cite": "125 N.C. App. 1", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 11864953 ], "pin_cites": [ { "page": "11" } ], "opinion_index": 0, "case_paths": [ "/nc-app/125/0001-01" ] }, { "cite": "191 S.E.2d 683", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1972, "pin_cites": [ { "page": "690", "parenthetical": "holding that draft was not negotiable because \"it was payable to . . . two named payees without the addition of the words 'or order,' or any similar words of negotiability\"" } ], "opinion_index": 0 }, { "cite": "282 N.C. 44", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8562635 ], "year": 1972, "pin_cites": [ { "page": "54", "parenthetical": "holding that draft was not negotiable because \"it was payable to . . . two named payees without the addition of the words 'or order,' or any similar words of negotiability\"" } ], "opinion_index": 0, "case_paths": [ "/nc/282/0044-01" ] }, { "cite": "239 S.E.2d 621", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1977, "pin_cites": [ { "page": "623", "parenthetical": "holding that a note payable neither to order nor to bearer is not negotiable as \"[s]pecificity on the face of the instrument is required\" under N.C.G.S. \u00a7 25-3-104" } ], "opinion_index": 0 }, { "cite": "34 N.C. App. 714", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8551765 ], "year": 1977, "pin_cites": [ { "page": "716", "parenthetical": "holding that a note payable neither to order nor to bearer is not negotiable as \"[s]pecificity on the face of the instrument is required\" under N.C.G.S. \u00a7 25-3-104" } ], "opinion_index": 0, "case_paths": [ "/nc-app/34/0714-01" ] }, { "cite": "N.C. Gen. Stat. \u00a7 25-3-109", "category": "laws:leg_statute", "reporter": "N.C. Gen. Stat.", "year": 1986, "opinion_index": 0 }, { "cite": "N.C. Gen. Stat. \u00a7 25-3-104", "category": "laws:leg_statute", "reporter": "N.C. Gen. Stat.", "weight": 2, "year": 1986, "pin_cites": [ { "page": "(1)" }, { "page": "(1)" } ], "opinion_index": 0 }, { "cite": "N.C. Gen. Stat. \u00a7 25-3-302", "category": "laws:leg_statute", "reporter": "N.C. Gen. Stat.", "year": 1986, "pin_cites": [ { "page": "(1)" } ], "opinion_index": 0 }, { "cite": "486 S.E.2d 465", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1997, "pin_cites": [ { "page": "467" } ], "opinion_index": 0 }, { "cite": "126 N.C. App. 661", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 11712602 ], "year": 1997, "pin_cites": [ { "page": "665" } ], "opinion_index": 0, "case_paths": [ "/nc-app/126/0661-01" ] }, { "cite": "N.C. Gen. Stat. \u00a7 25-3-101", "category": "laws:leg_statute", "reporter": "N.C. Gen. Stat.", "year": 1986, "pin_cites": [ { "page": "et seq." } ], "opinion_index": 0 } ], "analysis": { "cardinality": 452, "char_count": 8554, "ocr_confidence": 0.773, "pagerank": { "raw": 4.643594115661138e-08, "percentile": 0.2913283747430835 }, "sha256": "419687ef1acfa17e2775a525e343e10770e3f42e66aad38843841fb01de1f47e", "simhash": "1:8978056770851f22", "word_count": 1441 }, "last_updated": "2023-07-14T18:14:06.814789+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [ "Judges WYNN and JOHN concur." ], "parties": [ "BARCLAYS BANK PLC, Plaintiff Appellant v. MARK JOHNSON, Defendant Appellee" ], "opinions": [ { "text": "McGEE, Judge.\nDefendant executed a promissory note for $28,979.15 on 27 January 1993 in favor of Healthco International, Inc. to secure payment for dental supplies defendant purchased from Healthco for his dental practice. The pertinent language of the note provided that it was:\n[p]ayable in zzzzzzz, Successive Monthly Installments of $ - Each, and in 11 Successive Monthly Installments of $2,414.92 Each thereafter, and in a final payment of $2,415.03 thereafter. The first installment being payable on the _day of_19_, and the remaining installments on the same date of each month thereafter until paid.\nThe blank indicating the date of the initial installment payment was never filled in by either party.\nBarclays Bank purchased this note on 5 February 1993. Defendant made six payments on the note with the first payment being on 22 March 1993. Defendant then defaulted on the note by failing to make the remaining six payments. Barclays Bank filed a complaint on 18 April 1995 seeking payment of the balance owed on the note. Defendant filed an answer alleging as a defense the failure of consideration as Healthco International did not complete delivery of the dental supplies purchased by defendant. The answer further alleged that Barclays Bank was not a holder in due course as the note was incomplete on its face, and Barclays Bank knew or should have known of this defect. Both parties filed motions for summary judgment. In a judgment entered 11 April 1997 the trial court entered summary judgment for defendant and denied summary judgment for Barclays Bank. Barclays Bank appeals from this judgment.\nI.\nThe main issue in this case is whether Barclays Bank, as purchaser of the promissory note, is a holder in due course and thus immune from the defense of failure of consideration asserted by defendant. This question is determined by whether the promissory note constitutes a negotiable instrument even though it does not state that it is payable on demand or at a definite time.\nThis case is governed by the pre-amended Article 3 of our Uniform Commercial Code, N.C. Gen. Stat. \u00a7 25-3-101 et seq. (1986), since the promissory note was executed prior to 1 October 1995. Kane Plaza Associates v. Chadwick, 126 N.C. App. 661, 665, 486 S.E.2d 465, 467 (1997). A holder in due course is one who takes an instrument for value, in good faith and without notice that it is overdue or has been dishonored or of any defense against or claim to it on the part of any person. N.C. Gen. Stat. \u00a7 25-3-302(1) (1986). One may only be a holder in due course of a negotiable instrument. See N.C. Gen. Stat. 25-3-102(l)(e) (1986) (defining instrument as \u201cnegotiable instrument.\u201d)\nOne of the requirements of a \u201cnegotiable instrument\u201d under N.C. Gen. Stat. \u00a7 25-3-104(1) (1986) is that it be \u201cpayable on demand or at a definite time.\u201d An instrument is \u201cpayable at a definite time\u201d if by its terms it is payable:\n(a) on or before a stated date or at a fixed period after a stated date; or\n(b) at a fixed period after sight; or\n(c) at a definite time subject to any acceleration; or\n(d) at a definite time subject to extension at the option of the holder, or to extension to a further definite time at the option of the maker or acceptor or automatically upon or after a specified act or event.\n(2) An instrument which by its terms is otherwise payable only upon an act or event uncertain as to time of occurrence is not payable at a definite time even though the act or event has occurred.\nN.C. Gen. Stat. \u00a7 25-3-109 (1986).\nBarclays Bank argues that the note is a negotiable instrument even though it does not state that it is payable on demand or at a definite time. We disagree. Historically, our courts have required strict compliance with the requirements set out under the Uniform Commercial Code defining negotiable instruments. Gray v. American Express Co., 34 N.C. App. 714, 716, 239 S.E.2d 621, 623 (1977) (holding that a note payable neither to order nor to bearer is not negotiable as \u201c[s]pecificity on the face of the instrument is required\u201d under N.C.G.S. \u00a7 25-3-104); See also Savings & Loan Assoc. v. Trust Co., 282 N.C. 44, 54, 191 S.E.2d 683, 690 (1972) (holding that draft was not negotiable because \u201cit was payable to . . . two named payees without the addition of the words \u2018or order,\u2019 or any similar words of negotiability\u201d). The drafters of the Code encouraged the courts to strictly interpret the definitional requirements to the extent that \u201cin doubtful cases the [court\u2019s] decision should be against negotiability.\u201d Official Comment to N.C.G.S. \u00a7 25-3-104 (1986); Knight Publishing Co. v. Chase Manhattan Bank, 125 N.C. App. 1, 11, 479 S.E.2d 478, 485 (\u201cCourts should not change express provisions of the UCC by judicial construction\u201d), disc. review denied, 346 N.C. 280, 487 S.E.2d 548 (1997). In this case it is undisputed that the note did not state either that it was payable on demand or at a definite time. For this reason, we hold that the note does not meet the requirements of N.C. Gen. Stat. \u00a7 25-3-104(1) for negotiability. Accordingly, Barclays Bank does not qualify as a holder in due course of a negotiable instrument and is not immune from the defense of failure of consideration.\nII.\nWe further reject Barclays Bank\u2019s argument that defendant waived his right to contest whether the note was enforceable. To prove that a party has waived his right to assert a defense, the opposing party must produce evidence that there was \u201can intention to relinquish a right, advantage, or benefit... expressed or implied from acts or conduct that naturally lead the [opposing] party to believe that the right has been intentionally given up.\u201d Klein v. Insurance Co., 289 N.C. 63, 68, 220 S.E.2d 595, 599 (1975). In this case, the only evidence submitted by Barclays Bank that defendant waived his right to assert the defense of failure of consideration is that defendant made the initial six payments on the note. This argument is flawed as defendant\u2019s grounds to contest payment upon the note for failure of consideration did not arise until June 1993 when Healthco International, Inc. failed to make two deliveries of the dental supplies. Defendant ceased to make payments on the note shortly thereafter when he did not make the September 1993 payment. Rather than evidencing a waiver of the defense of consideration, defendant\u2019s initial six payments on the note evidenced a good faith intent to comply with the contract. Accordingly, the trial court\u2019s entry of summary judgment in favor of defendant and denial of summary judgment in favor of Barclays Bank were proper.\nWe dismiss Barclays Bank\u2019s remaining arguments as they are not necessary to dispose of this appeal.\nAffirmed.\nJudges WYNN and JOHN concur.", "type": "majority", "author": "McGEE, Judge." } ], "attorneys": [ "Smith Debnam Hibbert, L.L.P., by Caren D. Enloe and Byron L. Saintsing, for plaintiff appellant.", "Browder & McGrath, by J. Tyrone Browder for defendant appellee." ], "corrections": "", "head_matter": "BARCLAYS BANK PLC, Plaintiff Appellant v. MARK JOHNSON, Defendant Appellee\nNo. COA97-849\n(Filed 30 April 1998)\n1. Negotiable Instruments and Other Commercial Paper \u00a7 10 (NCI4th)\u2014 action on note \u2014 not payable on demand or at definite time \u2014 summary judgment for defendant\nThe trial court did not err in an action seeking payment of the balance owed on a note by granting summary judgment for defendant where it was undisputed that the note did not state either that it was payable on demand or at a definite time. The note does not meet the requirements of the preamended N.C.G.S. \u00a7 25-3-104(1) for negotiability, plaintiff does not qualify as a holder in due course, and plaintiff is not immune from the defense of failure of consideration.\n2. Negotiable Instruments and Other Commercial Paper \u00a7 97 (NCI4th)\u2014 note \u2014 partial payment \u2014 not waiver of defense of failure of consideration\nThe trial court did not err by entering summary judgment in favor of defendant and denying summary judgment for plaintiff in an action to collect the balance due on a note where plaintiff contended that defendant waived his right to contest whether the note was enforceable by making the initial six payments on the note. Defendant\u2019s grounds to contest payment for failure of consideration did not arise until two deliveries of dental supplies were not made; rather than evidencing a waiver of the defense of consideration, the initial six payments evidenced a good faith intent to comply with the contract.\nAppeal by plaintiff from judgment entered 11 April 1997 by Judge Catherine C. Eagles in Stokes County Superior Court. Heard in the Court of Appeals 25 February 1998.\nSmith Debnam Hibbert, L.L.P., by Caren D. Enloe and Byron L. Saintsing, for plaintiff appellant.\nBrowder & McGrath, by J. Tyrone Browder for defendant appellee." }, "file_name": "0370-01", "first_page_order": 410, "last_page_order": 414 }