{
  "id": 8552464,
  "name": "NORTH CAROLINA NATIONAL BANK v. G. C. WALLENS and wife, J. W. WALLENS, DONALD SCHAAF, and wife, DORIS SCHAAF v. SAMUEL LONGIOTTI",
  "name_abbreviation": "North Carolina National Bank v. Wallens",
  "decision_date": "1976-12-15",
  "docket_number": "No. 7615SC515",
  "first_page": "721",
  "last_page": "725",
  "citations": [
    {
      "type": "official",
      "cite": "31 N.C. App. 721"
    }
  ],
  "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": "133 S.E. 2d 159",
      "category": "reporters:state_regional",
      "reporter": "S.E.2d",
      "opinion_index": 0
    },
    {
      "cite": "260 N.C. 470",
      "category": "reporters:state",
      "reporter": "N.C.",
      "case_ids": [
        8575272
      ],
      "opinion_index": 0,
      "case_paths": [
        "/nc/260/0470-01"
      ]
    },
    {
      "cite": "176 S.E. 2d 161",
      "category": "reporters:state_regional",
      "reporter": "S.E.2d",
      "opinion_index": 0
    },
    {
      "cite": "277 N.C. 94",
      "category": "reporters:state",
      "reporter": "N.C.",
      "case_ids": [
        8561932
      ],
      "opinion_index": 0,
      "case_paths": [
        "/nc/277/0094-01"
      ]
    }
  ],
  "analysis": {
    "cardinality": 424,
    "char_count": 8999,
    "ocr_confidence": 0.681,
    "pagerank": {
      "raw": 1.8732967130979255e-07,
      "percentile": 0.7265690007409699
    },
    "sha256": "ad252c5293af1d09750f31c8d0ef5aecf99a04cdfa6068950173c8d6b60763ec",
    "simhash": "1:8baf3ece5c7391da",
    "word_count": 1489
  },
  "last_updated": "2023-07-14T16:36:26.493722+00:00",
  "provenance": {
    "date_added": "2019-08-29",
    "source": "Harvard",
    "batch": "2018"
  },
  "casebody": {
    "judges": [
      "Judges Britt and Martin concur."
    ],
    "parties": [
      "NORTH CAROLINA NATIONAL BANK v. G. C. WALLENS and wife, J. W. WALLENS, DONALD SCHAAF, and wife, DORIS SCHAAF v. SAMUEL LONGIOTTI"
    ],
    "opinions": [
      {
        "text": "VAUGHN, Judge.\nA complaint should not be dismissed for failure to state a claim unless it appears to a certainty that plaintiff is entitled to no relief under any state of facts which could be proved in support of the claim. Detailed fact pleading is not required. A pleading is sufficient if it gives enough notice of the events or transactions that produced the claim to enable the adverse party to understand the nature and basis of the claim, to file a responsive pleading, and, by using the rules provided for discovery, to get additional information needed for trial. Sutton v. Duke, 277 N.C. 94, 176 S.E. 2d 161.\nThe complaint, in pertinent part, is as follows:\nOn 23 July 1970, defendants unconditionally guaranteed and assumed primary liability \u201con any and all notes, drafts, debts, obligations and liabilities of Koretizing Mart of Chapel Hill, a partnership. . . Donald Schaaf and G. C. Wallens were the sole partners.\nOn account of that agreement, plaintiff did \u201cgrant and did make a loan to the said Koretizing Mart of Chapel Hill; that for and on account of the said value received, the defendant, G. C. Wallens, for and on behalf of the said Koretizing Mart of Chapel Hill, executed and delivered to the plaintiff a certain promissory note. . . .\u201d The note was dated 2 March 1973 and was in the amount of $76,370.25.\nKoretizing Mart of Chapel Hill \u201cdefaulted in payment of said note, whereby the plaintiff declared the entire unpaid balance due. . . .\u201d\nOn 27 March 1974, plaintiff notified defendants of \u201cthe default in said note, and demanded from defendants payment of the entire unpaid outstanding balance of . . . ($52,102.76) . . .; that payment was refused by the defendants and that the defendants have still refused and failed to pay the said indebtedness; that the amount of the said indebtedness now due the plaintiff is . . . ($52,102.76). . . .\u201d\nThe note and guaranty agreement referred to were made a part of the complaint. The note was signed \u201cG. C. Wallens.\u201d The name \u201cKoretizing Mart of Chapel Hill\u201d does not appear on the note.\nThe trial judge concluded that, since the signature of the partnership did not appear on the note, the partnership could not be liable, and, consequently, defendants are not liable on their guaranty of the debt of the partnership.\nThe judge apparently relied on the following section of the Uniform Commercial Code relating to negotiable instruments: \u201cNo person is liable on an instrument unless his signature appears thereon.\u201d G.S. 25-3-401(1). A partnership is a \u201cperson\u201d within the meaning of that section and \u201cinstrument\u201d means a negotiable instrument.\nThe enactment of the foregoing section made no real change in the law. North Carolina Comment on G.S. 25-3-401(1). The section replaced a former section of the Uniform Negotiable Instrument Law. In part, former G.S. 25-24 provided \u201cno person is liable on the instrument whose signature does not appear thereon. . . .\u201d\nThe Official Comment on G.S. 25-3-401 contains the following: \u201cNothing in this section is intended to prevent any liability arising apart from the instrument itself. The party who does not sign may still be liable, on the original obligation for which the instrument was given.\u201d\nThe case of Brewer v. Elks, 260 N.C. 470, 133 S.E. 2d 159 was decided prior to the repeal of former G.S. 25-24. In that case some, but not all, of the partners signed a note. The suit was against partners who did not sign. Plaintiff had been nonsuited at trial. The Supreme Court said:\n\u201cHere the note was not signed in the partnership name; it did not on its face purport to be for the benefit of the partnership. To establish liability, plaintiff must show that the partner was acting on behalf of the partnership in procuring the loan and was authorized to so act; or that the partners, with knowledge of the transaction, thereafter ratified the acts of their partner.\nPartnership contracts are not usually made in the names of the individual partners. The usual way for a partnership to indicate its liability for money borrowed is to execute the note in its name. Since the note here sued on was not executed in the name of the partnership, plaintiff had the burden of showing defendants Keel [nonsigning partners] had authorized the transaction.\u201d Brewer v. Elks, supra, at pp. 472, 473. (Emphasis added.)\nThe judgment of nonsuit was reversed because of other evidence offered by plaintiff. The court clearly held, however, that although the note \u201chere sued on was not executed in the name of the partnership,\u201d plaintiff could recover against the non-signing partners if he carried the burden of showing they authorized the \u201ctransaction.\u201d\nIn Brewer, as here, defendants\u2019 potential liability had to be based on something other than that of a party to the note. That a nonsigner is ordinarily not liable on an instrument which he has not signed \u201cdoes not mean that a nonsigner may not be liable under some principle of law. It only means that the liability of the nonsigner is not as a party to the instrument.\u201d 2 Anderson, Uniform Commercial Code, \u00a7 3-401:5 (2d ed., 1971). (Emphasis added.)\nThe code section does not affect the liability of a non-signer in connection with an original obligation for which the instrument was later given on other circumstances relating to the same transactions.\nWe conclude that the court erred in dismissing plaintiff\u2019s action. No insurmountable bar to recovery appears on the face of the complaint. The pleading gives defendants sufficient notice of the transactions that produced the claim to enable them to understand the nature and basis of the claim so that they can plead responsively.\nThe essence of the claim is that defendants promised plaintiff they would pay all debts of Koretizing Mart and, relying on that guarantee, plaintiff made a loan to Koretizing Mart which has not been paid. Plaintiff must, of course, prove that the loan was made to Koretizing Mart. Plaintiff must prove that the signing \u201cpartner was acting on behalf of the partnership in procuring the loan and was authorized to so act; or that the partners, with knowledge of the transaction, thereafter ratified the acts of their partner.\u201d Brewer v. Elks, supra.\nIt is true that the complaint also discloses that \u201con account of said value received\u201d (the loan) a note was signed by a partner; that the note was not signed in the name of the partnership; and that plaintiff seeks relief according to the terms of the note. We hold, however, that these allegations do not prevent plaintiff from attempting, in this action, to prove that defendants are liable on their guaranty for the original obligation (the alleged loan made to the partnership) for which the instrument was given. The judgment dismissing the action is reversed and the case is remanded.\nReversed and remanded.\nJudges Britt and Martin concur.",
        "type": "majority",
        "author": "VAUGHN, Judge."
      }
    ],
    "attorneys": [
      "Smith, Moore, Smith, Schell & Hunter, by Lorry B. Sitton and Thomas S. Stukes, for plaintiff appellant.",
      "Manning, Fulton & Skinner, by Thomas C. Worth, Jr., and Lawrence W. Hill, Jr., for defendant appellees."
    ],
    "corrections": "",
    "head_matter": "NORTH CAROLINA NATIONAL BANK v. G. C. WALLENS and wife, J. W. WALLENS, DONALD SCHAAF, and wife, DORIS SCHAAF v. SAMUEL LONGIOTTI\nNo. 7615SC515\n(Filed 15 December 1976)\nUniform Commercial Code \u00a7 28 \u2014 loan to partnership \u2014 no signature of partnership on note \u2014 liability of guarantors of partnership\nWhere plaintiff alleged that defendants unconditionally guaranteed and assumed primary liability for any debts of a named partnership, plaintiff loaned the partnership a named sum, and defendants executed a promissory note on behalf of the partnership, but the name of the partnership did not appear on the note, the trial court erred in concluding that, since the signature of the partnership did not appear on the note, the partnership was not liable, and, consequently, defendants were not liable on their guaranty of the debt of the partnership, and the court also erred in dismissing plaintiff\u2019s action, since plaintiff was entitled to recover, even without the signature of the partnership, if it proved that the signing partner was acting on behalf of the partnership in procuring the loan and was authorized to so act, or that the partners, with knowledge of the transaction, thereafter ratified the acts of their partner. G.S. 25-3-401.\nAppeal by plaintiff from Preston, Judge. Judgment entered 12 April 1976 in Superior Court, Orange County. Heard in the Court of Appeals 16 November 1976.\nOn 23 April 1974, plaintiff started this action to recover on an agreement wherein defendants agreed to guarantee and assume primary liability for any debts of Koretizing Mart of Chapel Hill, a partnership.\nThe only responsive pleading that appears of record is a motion to dismiss filed pursuant to Rule 12 (c) of the Rules of Civil Procedure. That motion to dismiss for failure to state a claim upon which relief can be granted was filed on 15 March 1976. On 12 April 1976, defendants\u2019 motion was allowed and judgment was entered dismissing the action.\nSmith, Moore, Smith, Schell & Hunter, by Lorry B. Sitton and Thomas S. Stukes, for plaintiff appellant.\nManning, Fulton & Skinner, by Thomas C. Worth, Jr., and Lawrence W. Hill, Jr., for defendant appellees."
  },
  "file_name": "0721-01",
  "first_page_order": 749,
  "last_page_order": 753
}