{
  "id": 8520126,
  "name": "PIEDMONT BANK AND TRUST COMPANY v. OBIE STEVENSON and SHIRLEY M. STEVENSON",
  "name_abbreviation": "Piedmont Bank & Trust Co. v. Stevenson",
  "decision_date": "1986-02-04",
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    "judges": [
      "Judge BECTON concurs in the result.",
      "Chief Judge HEDRICK dissents."
    ],
    "parties": [
      "PIEDMONT BANK AND TRUST COMPANY v. OBIE STEVENSON and SHIRLEY M. STEVENSON"
    ],
    "opinions": [
      {
        "text": "PARKER, Judge.\nPlaintiff has brought forward three assignments of error, namely, the trial court\u2019s denial of its motion for summary judgment; the trial court\u2019s admission of parol evidence which contradicted the terms of the guaranty; and the trial court\u2019s granting of Mrs. Stevenson\u2019s motion for directed verdict and denial of plaintiffs motion at the close of plaintiffs evidence. We consider the issue raised by the third assignment of error first.\nIn an action on a contract, the intention of the parties to the contract must be determined from the language of the contract, the purpose and subject matter of the contract and the situation of the parties. Adder v. Holman & Moody, Inc., 288 N.C. 484, 219 S.E. 2d 190 (1975). When the language of the contract is clear and unambiguous, construction of the agreement is a matter of law for the court. Brokers, Inc. v. High Point City Board of Education, 33 N.C. App. 24, 234 S.E. 2d 56, disc. rev. denied, 293 N.C. 159, 236 S.E. 2d 702 (1977), and the court cannot look beyond the terms of the contract to determine the intentions of the parties. Renfro v. Meacham, 50 N.C. App. 491, 274 S.E. 2d 377 (1981). However, when there is ambiguity in the language used, the intent of the parties is a question for the jury and parol evidence is admissible to ascertain that intent. Root v. Allstate Insurance Co., 272 N.C. 580, 158 S.E. 2d 829 (1968).\nWhether or not the language of a contract is ambiguous or unambiguous is a question for the court to determine. Applying the rules of construction that words are to be given their usual and ordinary meaning and all the terms of the agreement are to be reconciled if possible, we find that the guaranty agreement in the instant case is not clear and unambiguous. Certain language such as \u201ccontinuing unconditional guaranty\u201d and \u201call Obligations of Customer\u201d indicates that the guaranty was intended to cover future loans to Stevenson, but the phrase \u201carising hereunder\u201d could be interpreted to limit the guaranty to loans given contemporaneously with the execution of the guaranty. The language \u201cthis Guaranty is being given in order to induce PB&T ... to purchase or discount Acceptances, Accounts, Chattel Paper, Checks, Contracts, Contract Rights ... or any other instruments of indebtedness . . . upon which Customer is or may be liable . . .,\u201d is consistent with future advances or extension of a line of credit, but the limitation of the maximum amount of liability to exactly $5,642.67 implies an intention to guarantee only a single loan transaction. Limitations as to amount beyond which a guarantor will not be liable are held to indicate a continuing guaranty where that amount is left blank in the instrument, or where the amount is some arbitrary figure. See generally 38 Am. Jur. 2d Guaranty \u00a7 25 (1968), and cases cited therein.\nIn the instant case, Mrs. Stevenson\u2019s defense raises two questions. First, was the guaranty intended to be a specific guaranty guaranteeing only the $5,642.67 loan or was it intended to be a continuing guaranty covering future loans. Second, was the Bank estopped by Mrs. Stevenson\u2019s conversation with Beaver and his response. If the answer to the first question is that the guaranty was a specific guaranty, that answer is outcome determinative, and the estoppel question need not be decided.\nOn a motion for directed verdict, the evidence must be viewed in the light most favorable to the party opposing the motion and the opponent is entitled to every reasonable inference which may be legitimately drawn from the evidence and all conflicts in the evidence resolved in favor of the opponent. Potts v. Burnette, 301 N.C. 663, 273 S.E. 2d 285 (1981).\nWe are not unmindful of the rule that a contract is to be construed against the party drafting the document. Similarly, we recognize that there is authority that construction of contracts of adhesion, such as the one at issue in this case, is for the court when the underlying facts are not in dispute. See 3 Corbin on Contracts \u00a7\u00a7 554, 559 (C. Kaufman Supp. 1984). However, our research discloses that in this jurisdiction, except in construing insurance contracts, our courts have submitted the question of intent in an ambiguous contract to the jury. As stated in Hite v. Aydlett, 192 N.C. 166, 170, 134 S.E. 419, 421 (1926):\n\u201cIt is a well-established general rule that if the parties reduce their entire contract or agreement to writing, whether under seal or not, the court will not hear parol evidence to vary or change it, unless for fraud, mistake or the like; but ... if the writing itself leaves it doubtful or uncertain as to what the agreement was, parol evidence is competent, not to contradict, but to show and make certain what was the real agreement between the parties; and in such a case what was meant, is for the jury, under proper instructions from the court.\u201d Davis, J., in Cumming v. Barbour, 99 N.C., 332.\nSee also Root, supra; Silver v. Board of Transportation, 47 N.C. App. 261, 267 S.E. 2d 49 (1980). In view of the foregoing, the question of the parties\u2019 intent, i.e., whether the guaranty covered only the one loan or future loans to Stevenson was for the jury. The directed verdict was, therefore, improvidently granted.\nFor purposes of the new trial, we note that with respect to the estoppel issue, the evidence as to whether Mrs. Stevenson had her conversation with Beaver before or after the loan at issue was made raised a question of fact for the jury. As our ruling on the third assignment of error has also disposed of plaintiffs arguments in its first and second assignments of error, these assignments are overruled.\nNew trial.\nJudge BECTON concurs in the result.\nChief Judge HEDRICK dissents.",
        "type": "majority",
        "author": "PARKER, Judge."
      },
      {
        "text": "Judge BECTON\nconcurring in the result.\nHesitantly, I concur in the result. Although the facts and equities tend to favor the defendant, it is not our task, considering the facts of this case, to determine the intent of the parties, to resolve the estoppel issue, or, in any way, to weigh the facts. Those matters are for a jury which may very well rule for the defendant.",
        "type": "concurrence",
        "author": "Judge BECTON"
      },
      {
        "text": "Chief Judge Hedrick\ndissenting.\nThis case was heard in the Court of Appeals on 23 September 1985. I received the majority opinion authored by Judge Parker and concurred in by Judge Becton on 30 January 1986. My analysis of the majority opinion together with the record in this case compels me to the conclusion that the directed verdict for defendant Shirley Stevenson was proper. The guaranty agreement, bearing no date, in my opinion, clearly and unambiguously obligated defendant to pay only $5,642.67, the amount of the indebtedness written into the agreement. Furthermore, I believe that the evidence that defendant obtained from the bank manager the amount due on all of her husband\u2019s notes and obligations, borrowed that amount of money from the bank, secured that obligation on a second deed of trust on her home and paid all of her husband\u2019s obligations, such evidence being uncontroverted and said facts being admitted by the bank\u2019s manager, is sufficient to discharge defendant from any obligations under the \u201cso-called\u201d guaranty agreement. It is inconceivable to me that the bank is not estopped to collect more from this defendant as a. matter of law.\nI vote to affirm.",
        "type": "dissent",
        "author": "Chief Judge Hedrick"
      }
    ],
    "attorneys": [
      "Clontz and Clontz by Ralph C. Clontz, III for plaintiff-appellant.",
      "Roger Lee Edwards for defendant-appellee."
    ],
    "corrections": "",
    "head_matter": "PIEDMONT BANK AND TRUST COMPANY v. OBIE STEVENSON and SHIRLEY M. STEVENSON\nNo. 8522DC155\n(Filed 4 February 1986)\nGuaranty \u00a7 1\u2014 guaranty agreement \u2014 intention of parties \u2014 jury question\nThe question of whether the parties intended an ambiguous guaranty agreement to cover only one loan or to also cover further loans was for the jury.\nJudge Becton concurring in the result.\nChief Judge Hedrick dissenting.\nAppeal by plaintiff from Fuller, Judge. Judgment entered 20 August 1984 in District Court, Iredell County. Heard in the Court of Appeals 23 September 1985.\nThis is a civil action instituted by Piedmont Bank and Trust Company (herein the Bank) to recover the outstanding indebtedness on a negotiable promissory note executed by defendant Obie Stevenson (herein Stevenson) on 24 July 1979 in the principal amount of $4,188.73. This loan was the third renewal of a note executed by Stevenson on 24 May 1978 in the principal amount of $4,500.00. The 24 July 1979 note was payable in ninety (90) days. Stevenson defaulted on this obligation; the record does not reveal whether or not Stevenson was served with process.\nDefendant Shirley Stevenson (herein Mrs. Stevenson) and Stevenson were husband and wife at the time the note which is the subject of this lawsuit was signed. They were divorced in October 1981. On or about 16 September 1977, the same day that Stevenson executed a promissory note for $5,642.67, Mrs. Stevenson executed an \u201cUnconditional Guaranty.\u201d Under the guaranty, Stevenson was the primary obligor, Mrs. Stevenson was the guarantor and the Bank was the obligee. The document was labeled Unconditional Guaranty and contained the following language:\nWhereas, the above Primary Obligor(S) (hereinafter collectively termed \u201cCustomer\u201d) desire(s) to obtain extensions of credit and/or a continuation of credit extensions and/or to engage in business transactions and enter into various contractual relationships and otherwise to deal with Piedmont Bank & Trust Company (hereinafter termed \u201cPB&T\u201d); and\nWHEREAS, PB&T is unwilling to extend or continue to extend credit to and/or to engage in business transactions and enter into various contractural [sic] relationships with, and otherwise to deal with Customer; unless it receives an unconditional and continuing, joint and several guaranty from the above identified, undersigned GuARANTOR(S) (hereinafter collectively termed \u201cGuarantor\u201d), covering all \u201cObligations of Customer,\u201d as hereinafter defined.\nNow, THEREFORE, in consideration of the promises and of other good and valuable consideration, and in order to induce PB&T from time to time, in its soles [sic] discretion, to extend or continue to extend credit (with or without security) to and/or to engage in business transactions and enter into various contractual relationships with Customer, (Without limiting the generality of the foregoing, this Guaranty is being given in order to induce PB&T to lease and/or sell real, personal and/or mixed property to Customer, to purchase or discount any Acceptances, Accounts, Chattel Paper, Checks, Contracts, Contract Rights, Drafts, General Intangibles, Instruments, Investment Securities, Land Contracts, Purchase Money Security Agreements (Conditional Sale Contracts of real and/or personal property), Real and/or Personal Property Leases, or any other instruments or evidence of indebtedness (with or without recourse) upon which Customer is or may be liable as maker, co-maker, indorser, acceptor, guarantor, surety or otherwise) and otherwise to deal with Customer; Guarantor (jointly and severally, if more than one) hereby absolutely and unconditionally guarantees to PB&T and its successors and assigns the due and punctual payment of all liabilities and obligations of said Customer to PB&T, primary or secondary (whether by way of indorsement or otherwise), whether now existing or hereunder arising, whether arising out of contract(s), tort(s) or otherwise, whether created directly with PB&T or acquired by PB&T through assignment, indorsement or otherwise; whether matured or unmatured; whether absolute or contingent; as and when the same become due and payable (whether by acceleration or otherwise), in accordance with the terms of any such instruments, accounts receivable and other security agreements, land and/or other contracts, drafts, leases, chattel paper, debts, obligations or liabilities evidencing any such indebtedness, obligations or liabilities, including all renewals, extensions and/or modifications thereof (all liabilities and obligations of the Customer to PB&T, including all of the foregoing, being hereinafter collectively termed \u201cObligations of Customer\u201d); provided, however, that if and and [sic] only if an amount is here specified; to wit:\n_($5642.67),\n(Leave blank, if liability hereunder is unlimited) then, the maximum liability, jointly and severally, of the undersigned Guarantors hereunder, at any one time outstanding, with respect to the aggregate principal amount of the \u201cObligations of Customer,\u201d shall not exceed the sum of money above specified, plus all interest or Finance Charges, Costs of Court and the reasonable attorneys\u2019 fees of PB&T.\nUnder the covenants and agreements, the guaranty provided among other things that (i) the guarantor waived notice of extensions of credit by the Bank, (ii) the guaranty shall remain a continuing guaranty of payment and (iii) the guarantor could terminate the guaranty by written notice to an officer of the Bank actually involved in the transactions with respect to all obligations arising more than five (5) banking days after receipt of said notice by the Bank officer.\nIn the years preceding 1977, the Bank had made numerous loans to Stevenson dating back to 1964. Mrs. Stevenson had cosigned on some of the previous loans, but plaintiff asked her to sign a guaranty in connection with this 16 September 1977 loan. There was some evidence that the $5,642.67 note was the consolidation of a prior loan with a new loan. The uncontradicted evidence was that the $5,642.67 loan was fully paid and that no part of the loan which is the subject matter of this lawsuit was an extension or renewal of that loan. David Brown (herein Brown), the loan officer who handled Stevenson\u2019s transactions, testified that the Bank was not extending a line of credit to Stevenson when the guaranty was executed.\nAccording to Mrs. Stevenson\u2019s testimony, on or before 24 May 1978, she went to her regular branch of the Bank and after being told that both Brown and Bobby Setzer, the people with whom she usually dealt were no longer at that branch, she spoke with Daniel Beaver (herein Beaver), an assistant vice president and loan officer. Mrs. Stevenson asked what her husband\u2019s balance was, and informed Beaver that she was obtaining a second mortgage to pay off the loan and that once it was paid, she would not be responsible for any more loans to Stevenson. According to Mrs. Stevenson, Beaver indicated that this course of action would be \u201cokay.\u201d The second mortgage was obtained and the Bank paid in full. Beaver testified that Mrs. Stevenson said that she and Stevenson were taking out or had taken out a second mortgage to pay off the debt, and she would not be liable on any more loans unless she personally came in and signed.\nIn the meantime, unbeknownst to Mrs. Stevenson, her husband was talking with Brown and through him obtained the $4500 loan which is the subject of this suit. According to Brown, he did not learn until after the loan to Stevenson had been made that Mrs. Stevenson had told Beaver she would not be liable on any more loans with Stevenson.\nPrior to trial, both parties moved for summary judgment and both motions were denied. At trial plaintiff called Mrs. Stevenson as a witness; and at the close of plaintiffs evidence, defendant Mrs. Stevenson moved for directed verdict, which was granted. The Bank appeals.\nClontz and Clontz by Ralph C. Clontz, III for plaintiff-appellant.\nRoger Lee Edwards for defendant-appellee."
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