{
  "id": 8548847,
  "name": "NORTH CAROLINA EQUIPMENT COMPANY v. JAMES L. DeBRUHL, d/b/a Lafayette Transportation Service",
  "name_abbreviation": "North Carolina Equipment Co. v. DeBruhl",
  "decision_date": "1976-01-07",
  "docket_number": "No. 7510SC602",
  "first_page": "330",
  "last_page": "333",
  "citations": [
    {
      "type": "official",
      "cite": "28 N.C. App. 330"
    }
  ],
  "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": [],
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  "last_updated": "2023-07-14T22:58:46.500479+00:00",
  "provenance": {
    "date_added": "2019-08-29",
    "source": "Harvard",
    "batch": "2018"
  },
  "casebody": {
    "judges": [
      "Judges Britt and Vaughn concur."
    ],
    "parties": [
      "NORTH CAROLINA EQUIPMENT COMPANY v. JAMES L. DeBRUHL, d/b/a Lafayette Transportation Service"
    ],
    "opinions": [
      {
        "text": "ARNOLD, Judge.\nThe question presented by this appeal is whether the trial court erred in its holding that defendant was not liable on the note.\nG.S. 25-3-403(2) provides as follows:\n\u201cAn authorized representative who signs his own name to an instrument\n(b) except as otherwise established between the immediate parties, is personally obligated if the instrument names the person represented but does not show that the representative signed in a representative capacity, or if the instrument does not name the person represented but does show that the representative signed in a representative capacity.\u201d [Emphasis added.]\nThis action involves the immediate parties to the transaction. The exception to the above general principle [\u201cexcept as otherwise established between immediate parties\u201d] allows the introduction of parol evidence to establish the requisite agency status to avoid personal liability.\n\u201cWhen the plaintiff who sues the agent personally is one who dealt directly with the agent, and the signature either names the principal or indicates the representative capacity, section 3-403(2) (b) permits the agent to introduce parol evidence of his agency status to avoid personal liability.\u201d J. J. White and Robert S. Summers, Uniform Commercial Code \u00a7 13-5, p. 406.\nThe defendant in the instant case introduced parol evidence of his agency status and the trial judge, as trier of fact, made findings substantially consistent with defendant\u2019s evidence. The trial judge concluded that plaintiff \u201cknew or should have known that James L. DeBruhl was acting for and as President of Lafayette Transportation Service, Inc.\u201d He further concluded that \u201cJames L. DeBruhl did not intend to sign and did not sign the note and Security Agreement as an individual but as President of Lafayette Transportation Service, Inc.\u201d Defendant presented ample competent evidence upon which the trial court could base its findings and conclusions.\nFurthermore, we do not see merit in plaintiff\u2019s contention that LaFayette Transportation Service is merely defendant\u2019s alter ego. Plaintiff\u2019s evidence establishes that defendant\u2019s den is the corporate office, that defendant has not read the corporate by-laws, and that he is not familiar with the corporation\u2019s tax matters. This is not sufficient evidence to show that the corporation was \u201cignored as a separate entity,\u201d and it is insufficient to apply the alter ego doctrine and hold defendant personally liable.\nWe find no prejudicial error, and the judgment of the trial court is\nAffirmed.\nJudges Britt and Vaughn concur.",
        "type": "majority",
        "author": "ARNOLD, Judge."
      }
    ],
    "attorneys": [
      "Allen, Steed and Pullen, P.A., by Arch T. Allen III, for plaintiff appellant.",
      "McCoy, Weaver, Wiggins, Cleveland and Raper, by Elmo R. Zumwalt III, for defendant appellee."
    ],
    "corrections": "",
    "head_matter": "NORTH CAROLINA EQUIPMENT COMPANY v. JAMES L. DeBRUHL, d/b/a Lafayette Transportation Service\nNo. 7510SC602\n(Filed 7 January 1976)\n1. Corporations \u00a7 25; Uniform Commercial Code \u00a7 29 \u2014 signing note for corporation \u2014 parol evidence\nParol evidence was admissible to show that defendant signed a note and security agreement, \u201cLaFayette Transportation Service,\u201d with defendant\u2019s name signed thereunder, as agent for LaFayette Transportation Service, Inc., a duly organized corporation, and the evidence supported the court\u2019s determination that defendant was not individually liable on the note and security agreement. G.S. 25-3-403 (2)(b).\n2. Corporations \u00a7 1\u2014 alter ego of individual \u2014 insufficiency of evidence\nEvidence that a corporate office is the den in defendant\u2019s home, that defendant has not read the corporate by-laws, and that he is unfamiliar with the corporation\u2019s tax matters did not establish that the corporation was merely defendant\u2019s alter ego and that he was individually liable on a note which he executed for the corporation.\nAppeal by plaintiff from Smith, Judge. Judgment entered 16 April 1975 in Superior Court, Wake County. Heard in the Court of Appeals 22 October 1975.\nPlaintiff brought this action to obtain a deficiency judgment after the sale of collateral securing a note, and also to collect an account. Defendant denied personal liability on the note and the account and alleged that the debtor was a corporation, LaFayette Transportation Service, Inc., of which he was president.\nPlaintiff attempted to establish that it sold a dragline and front end loader to defendant and that defendant executed a note to plaintiff for $22,390.80 as payment for the equipment. The note was signed as follows:\n\u201cLaFayette Transportation Service (Seal)\n\u201cx(s) James L. DeBruhl (Seal)\u201d\nAlso a security agreement was executed giving plaintiff a purchase money security interest in the equipment to secure payment . of the note. The security agreement was signed in a similar manner, and the ledger card for the account designated the debtor as \u201cLafayette Transportation Service.\u201d\nUpon default of the note, leaving an unpaid balance of $18,390.80, notice of public sale was given and public sale was held. The equipment was sold for $5,000.00, leaving a balance of $13,390.80. There was also owed plaintiff the sum of $620.11 \u25a0on an account, giving plaintiff a claim for $14,010.91.\nDefendant\u2019s evidence tended to show that he purchased the equipment as an agent on behalf of LaFayette Transportation Service, Inc., a duly oraganized corporation, with articles of incorporation, a corporate seal, four directors, and a corporate bank account.\nDefendant introduced into evidence an earlier note executed to plaintiff and signed in the following manner:\n\u201cLaFayette Transportation Ser. Inc. (Seal)\nBy James DeBruhl (Seal)\u201d\nOn cross-examination, defendant stated that he had never read the by-laws of LaFayette Transportation Service, Inc., and that LaFayette\u2019s corporate office was in the den of defendant\u2019s home.\nThe court held that defendant had made the purchases as president of LaFayette Transportation Service, Inc., and not in his individual capacity. From the judgment plaintiff appealed to this Court.\nAllen, Steed and Pullen, P.A., by Arch T. Allen III, for plaintiff appellant.\nMcCoy, Weaver, Wiggins, Cleveland and Raper, by Elmo R. Zumwalt III, for defendant appellee."
  },
  "file_name": "0330-01",
  "first_page_order": 358,
  "last_page_order": 361
}