{ "id": 8561053, "name": "STILLWELL ENTERPRISES, INC., Plaintiff v. INTERSTATE EQUIPMENT COMPANY, Original Defendant and Third-Party Plaintiff v. THE TRAVELERS INDEMNITY COMPANY, and ROBERT D. KELLY, Third-Party Defendants", "name_abbreviation": "Stillwell Enterprises, Inc. v. Interstate Equipment Co.", "decision_date": "1980-06-03", "docket_number": "No. 92", "first_page": "286", "last_page": "295", "citations": [ { "type": "official", "cite": "300 N.C. 286" } ], "court": { "name_abbreviation": "N.C.", "id": 9292, "name": "Supreme Court of North Carolina" }, "jurisdiction": { "id": 5, "name_long": "North Carolina", "name": "N.C." }, "cites_to": [ { "cite": "254 S.E. 2d 770", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1979, "opinion_index": -1 }, { "cite": "41 N.C. App. 204", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8548576 ], "year": 1979, "opinion_index": -1, "case_paths": [ "/nc-app/41/0204-01" ] }, { "cite": "17 A.L.R. 2d 288", "category": "reporters:specialty", "reporter": "A.L.R. 2d", "opinion_index": 0 }, { "cite": "233 S.E. 2d 393", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1977, "opinion_index": 0 }, { "cite": "292 N.C. 265", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8568579, 8568676, 8568622, 8568499, 8568541 ], "year": 1977, "opinion_index": 0, "case_paths": [ "/nc/292/0265-03", "/nc/292/0265-05", "/nc/292/0265-04", "/nc/292/0265-01", "/nc/292/0265-02" ] }, { "cite": "230 S.E. 2d 559", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1977, "opinion_index": 0 }, { "cite": "31 N.C. App. 634", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8551739 ], "year": 1977, "opinion_index": 0, "case_paths": [ "/nc-app/31/0634-01" ] }, { "cite": "226 S.E. 2d 837", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1976, "opinion_index": 0 }, { "cite": "30 N.C. App. 385", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8554336 ], "year": 1976, "opinion_index": 0, "case_paths": [ "/nc-app/30/0385-01" ] }, { "cite": "253 S.E. 2d 613", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1979, "opinion_index": 0 }, { "cite": "40 N.C. App. 726", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8553037 ], "year": 1979, "opinion_index": 0, "case_paths": [ "/nc-app/40/0726-01" ] }, { "cite": "188 S.E. 2d 281", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1972, "opinion_index": 0 }, { "cite": "281 N.C. 300", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8574896 ], "year": 1972, "opinion_index": 0, "case_paths": [ "/nc/281/0300-01" ] }, { "cite": "118 N.E. 2d 142", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 1954, "pin_cites": [ { "parenthetical": "lease of personalty is not such \"evidence of indebtedness\" as to make it subject to state intangibles tax" } ], "opinion_index": 0 }, { "cite": "161 Ohio St. 73", "category": "reporters:state", "reporter": "Ohio St.", "case_ids": [ 1700543 ], "year": 1954, "pin_cites": [ { "parenthetical": "lease of personalty is not such \"evidence of indebtedness\" as to make it subject to state intangibles tax" } ], "opinion_index": 0, "case_paths": [ "/ohio-st/161/0073-01" ] }, { "cite": "409 U.S. 1048", "category": "reporters:federal", "reporter": "U.S.", "case_ids": [ 6470113, 6470179, 6470404, 6470307, 6470503, 6470026, 6469848, 6469949, 6470655 ], "opinion_index": 0, "case_paths": [ "/us/409/1048-04", "/us/409/1048-05", "/us/409/1048-07", "/us/409/1048-06", "/us/409/1048-08", "/us/409/1048-03", "/us/409/1048-01", "/us/409/1048-02", "/us/409/1048-09" ] }, { "cite": "462 F. 2d 724", "category": "reporters:federal", "reporter": "F.2d", "case_ids": [ 1338654 ], "year": 1972, "opinion_index": 0, "case_paths": [ "/f2d/462/0724-01" ] }, { "cite": "228 S.E. 2d 459", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1976, "opinion_index": 0 }, { "cite": "290 N.C. 660", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8563214, 8563151, 8563125, 8563098, 8563070 ], "year": 1976, "opinion_index": 0, "case_paths": [ "/nc/290/0660-05", "/nc/290/0660-04", "/nc/290/0660-03", "/nc/290/0660-02", "/nc/290/0660-01" ] }, { "cite": "225 S.E. 2d 623", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 2, "year": 1976, "opinion_index": 0 }, { "cite": "29 N.C. App. 731", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8557147 ], "weight": 2, "year": 1976, "opinion_index": 0, "case_paths": [ "/nc-app/29/0731-01" ] }, { "cite": "187 S.E. 2d 752", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1972, "opinion_index": 0 }, { "cite": "281 N.C. 140", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8574023 ], "year": 1972, "opinion_index": 0, "case_paths": [ "/nc/281/0140-01" ] }, { "cite": "183 S.E. 2d 859", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 2, "year": 1971, "pin_cites": [ { "page": "859, 860" } ], "opinion_index": 0 }, { "cite": "12 N.C. App. 481", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8550527 ], "weight": 2, "year": 1971, "pin_cites": [ { "page": "482, 483" } ], "opinion_index": 0, "case_paths": [ "/nc-app/12/0481-01" ] }, { "cite": "127 S.E. 629", "category": "reporters:state_regional", "reporter": "S.E.", "year": 1925, "pin_cites": [ { "parenthetical": "promissory note" } ], "opinion_index": 0 }, { "cite": "189 N.C. 549", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8654632 ], "year": 1925, "pin_cites": [ { "parenthetical": "promissory note" } ], "opinion_index": 0, "case_paths": [ "/nc/189/0549-01" ] }, { "cite": "35 S.E. 592", "category": "reporters:state_regional", "reporter": "S.E.", "year": 1900, "pin_cites": [ { "parenthetical": "deed of trust; such a provision provides an \"opportunity for oppression\"" } ], "opinion_index": 0 }, { "cite": "126 N.C. 300", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8659455 ], "year": 1900, "pin_cites": [ { "parenthetical": "deed of trust; such a provision provides an \"opportunity for oppression\"" } ], "opinion_index": 0, "case_paths": [ "/nc/126/0300-01" ] }, { "cite": "23 S.E. 257", "category": "reporters:state_regional", "reporter": "S.E.", "year": 1895, "pin_cites": [ { "parenthetical": "deed of trust; \"Such stipulations are in the nature of forfeitures and encourage litigation.\"" } ], "opinion_index": 0 }, { "cite": "117 N.C. 235", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8652966 ], "year": 1895, "pin_cites": [ { "parenthetical": "deed of trust; \"Such stipulations are in the nature of forfeitures and encourage litigation.\"" } ], "opinion_index": 0, "case_paths": [ "/nc/117/0235-01" ] }, { "cite": "16 S.E. 850", "category": "reporters:state_regional", "reporter": "S.E.", "year": 1893, "pin_cites": [ { "parenthetical": "promissory note" } ], "opinion_index": 0 }, { "cite": "112 N.C. 671", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8651687 ], "year": 1893, "pin_cites": [ { "parenthetical": "promissory note" } ], "opinion_index": 0, "case_paths": [ "/nc/112/0671-01" ] }, { "cite": "16 S.E. 325", "category": "reporters:state_regional", "reporter": "S.E.", "year": 1892, "opinion_index": 0 }, { "cite": "111 N.C. 340", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8651306 ], "year": 1892, "opinion_index": 0, "case_paths": [ "/nc/111/0340-01" ] }, { "cite": "150 S.E. 32", "category": "reporters:state_regional", "reporter": "S.E.", "year": 1929, "opinion_index": 0 }, { "cite": "197 N.C. 572", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8630410 ], "year": 1929, "opinion_index": 0, "case_paths": [ "/nc/197/0572-01" ] }, { "cite": "200 S.E. 2d 40", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 2, "year": 1972, "pin_cites": [ { "page": "42", "parenthetical": "construing liberally the allowance of counsel fees under G.S. 6-21.1" } ], "opinion_index": 0 }, { "cite": "284 N.C. 236", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8560879 ], "weight": 2, "year": 1972, "pin_cites": [ { "page": "239" } ], "opinion_index": 0, "case_paths": [ "/nc/284/0236-01" ] }, { "cite": "143 S.E. 254", "category": "reporters:state_regional", "reporter": "S.E.", "year": 1928, "opinion_index": 0 }, { "cite": "195 N.C. 644", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8631205 ], "year": 1928, "opinion_index": 0, "case_paths": [ "/nc/195/0644-01" ] }, { "cite": "70 S.E. 2d 578", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1952, "opinion_index": 0 }, { "cite": "235 N.C. 446", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8625413 ], "year": 1952, "opinion_index": 0, "case_paths": [ "/nc/235/0446-01" ] }, { "cite": "227 S.E. 2d 120", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 2, "year": 1976, "pin_cites": [ { "page": "123" }, { "page": "124" } ], "opinion_index": 0 }, { "cite": "30 N.C. App. 272", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8553705 ], "weight": 2, "year": 1976, "pin_cites": [ { "page": "276" }, { "page": "276" } ], "opinion_index": 0, "case_paths": [ "/nc-app/30/0272-01" ] }, { "cite": "239 S.E. 2d 574", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1977, "opinion_index": 0 }, { "cite": "34 N.C. App. 503", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8550169 ], "year": 1977, "opinion_index": 0, "case_paths": [ "/nc-app/34/0503-01" ] }, { "cite": "225 S.E. 2d 553", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1976, "opinion_index": 0 }, { "cite": "290 N.C. 286", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8560962 ], "year": 1976, "opinion_index": 0, "case_paths": [ "/nc/290/0286-01" ] }, { "cite": "254 S.E. 2d 770", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1979, "pin_cites": [ { "page": "775" } ], "opinion_index": 0 }, { "cite": "41 N.C. App. 204", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8548576 ], "year": 1979, "pin_cites": [ { "page": "211-12" } ], "opinion_index": 0, "case_paths": [ "/nc-app/41/0204-01" ] } ], "analysis": { "cardinality": 943, "char_count": 22211, "ocr_confidence": 0.777, "pagerank": { "raw": 9.92294000531107e-07, "percentile": 0.9824682828998911 }, "sha256": "da53214b9771dcd7af0c054d2ae30d27f69fbc8f5023e9cd26a858e6f2a3db2e", "simhash": "1:bd694579040da66e", "word_count": 3577 }, "last_updated": "2023-07-14T20:04:36.297481+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [], "parties": [ "STILLWELL ENTERPRISES, INC., Plaintiff v. INTERSTATE EQUIPMENT COMPANY, Original Defendant and Third-Party Plaintiff v. THE TRAVELERS INDEMNITY COMPANY, and ROBERT D. KELLY, Third-Party Defendants" ], "opinions": [ { "text": "EXUM, Justice.\nThe sole question presented by this appeal is whether a contract for the lease of specific goods may be deemed \u201cevidence of indebtedness\u201d within the meaning of G.S. 6-21.2. We hold that it may and reverse the decision of the Court of Appeals to the contrary.\nThe original plaintiff, Stillwell Enterprises, Inc., instituted this action against original defendant Interstate Equipment Co., on 22 July 1976, seeking damages alleged to have resulted when a pushloading road scraper leased by Equipment Co. to Stillwell broke in two. Defendant Equipment Co. filed answer denying liability to Stillwell and asserting an affirmative counterclaim for the recovery of rental arrearages, sales taxes, repair charges, and attorneys\u2019 fees allegedly due under the terms of the lease agreement. By way of third-party action defendant sought also to recover from third-party defendant Robert Kelly on a guaranty executed by Kelly for Stillwell\u2019s performance under the lease. Defendant dismissed its action against the other third-party defendant, the Travelers Indemnity Company, before the matter was heard in the trial court.\nAfter reviewing the express terms of the lease and the affidavits submitted by defendant, the trial court entered summary judgment dismissing plaintiff\u2019s claims and allowing defendant\u2019s counterclaim for a total of $24,804.68, including an amount of $2,929 for attorneys\u2019 fees. Summary judgment was also entered for a lesser amount against third-party defendant Robert Kelly. On appeal, the Court of Appeals affirmed the trial court\u2019s decision in all respects except for the entry of the award for defendant\u2019s attorneys\u2019 fees. Defendant\u2019s appeal to this Court challenges the validity of that decision.\nDefendant first contends that since plaintiff failed to address or argue the issue of attorneys\u2019 fees in its brief to the Court of Appeals, the Court of Appeals erred in disallowing ex mero motu defendant\u2019s recovery thereof. Rule 28(a) of the North Carolina Rules of Appellate Procedure clearly specifies that the scope of appellate review \u201cis limited to questions . . . presented in the several briefs.\u201d (Emphasis supplied.) Thus under this Rule plaintiff\u2019s failure to present and argue in its brief the propriety of the trial court\u2019s judgment as to attorneys\u2019 fees precluded plaintiff from obtaining relief on this point in the Court of Appeals as a matter of right. State v. McMorris, 290 N.C. 286, 225 S.E. 2d 553 (1976); Love v. Pressley, 34 N.C. App. 503, 239 S.E. 2d 574 (1977). Nevertheless, the Court of Appeals, in the exercise of its general supervisory powers under G.S. 7A-32(c) or pursuant to App. R. 2, could consider on its own initiative the question of the attorneys\u2019 fees award and give relief as a matter of appellate grace. The Court of Appeals having considered the question, it is now properly before this Court by virtue of our further review and the arguments directed to the issue in the parties\u2019 new briefs. App. R. 16.\nThe lease contract provided for monthly rental payments by plaintiff lessee to defendant lessor in the amount of $7,000. Paragraph 21 of the contract further provided that \u201c[t]he lessee further agrees to pay to lessor a reasonable attorney\u2019s fee if the obligation evidenced hereby be collected by an attorney at law after maturity.\u201d Based upon this provision, Judge Thornburg\u2019s entry of summary judgment against plaintiff on defendant\u2019s counterclaim for past due lease payments included an award for attorney\u2019s fees. The Court of Appeals vacated this award on the grounds that the lease was not the type of agreement which would entitle defendant to recover for attorneys\u2019 fees under the general provisions of G.S. 6-21.2. We disagree.\nAs was stated by Chief Judge (now Justice) Brock in Supply, Inc. v. Allen, 30 N.C. App. 272, 276, 227 S.E. 2d 120, 123 (1976), \u201c[t]he jurisprudence of North Carolina traditionally has frowned upon contractual obligations for attorney\u2019s fees as part of the costs of an action.\u201d Certainly in the absence of any contractual agreement allocating the costs of future litigation, it is well established that the non-allowance of counsel fees has prevailed as the policy of this state at least since 1879. See Trust Co. v. Schneider, 235 N.C. 446, 70 S.E. 2d 578 (1952); Parker v. Realty Co., 195 N.C. 644, 143 S.E. 254 (1928). Thus the general rule has long obtained that a successful litigant may not recover attorneys\u2019 fees, whether as costs or as an item of damages, unless such a recovery is expressly authorized by statute. Hicks v. Albertson, 284 N.C. 236, 200 S.E. 2d 40 (1972). Even in the face of a carefully drafted contractual provision indemnifying a party for such attorneys\u2019 fees as may be necessitated by a successful action on the contract itself, our courts have consistently refused to sustain such an award absent statutory authority therefor. Howell v. Roberson, 197 N.C. 572, 150 S.E. 32 (1929); Tinsley v. Hoskins, 111 N.C. 340, 16 S.E. 325 (1892).\nIn Tinsley v. Hoskins, supra, this Court held void and unenforceable a stipulation in a promissory note awarding the prom-issee \u201cthe usual collection fee\u201d in the event of collection of the note by legal process. The opinion in Tinsley indicated that the Court viewed such a provision as an oppressive penalty, a shield for usury, and a device which tended to promote litigation. The Tinsley rationale was subsequently applied in Brisco v. Norris, 112 N.C. 671, 16 S.E. 850 (1893) (promissory note); Williams v. Rich, 117 N.C. 235, 23 S.E. 257 (1895) (deed of trust; \u201cSuch stipulations are in the nature of forfeitures and encourage litigation.\u201d); Turner v. Boger, 126 N.C. 300, 35 S.E. 592 (1900) (deed of trust; such a provision provides an \u201copportunity for oppression\u201d); Finance Co. v. Hendry, 189 N.C. 549, 127 S.E. 629 (1925) (promissory note); and Howell v. Roberson, supra, (promissory note). Furthermore, although Tinsley and its progeny represent cases adjudicating the validity of attorneys\u2019 fees provisions incorporated in promissory notes or security instruments, statements from more recent case law clearly indicate that such provisions are generally deemed unenforceable without regard to the type of instrument in which they appear. Thus, the Court of Appeals in Credit Corp. v. Wilson, 12 N.C. App. 481, 183 S.E. 2d 859 (1971), aff\u2019d 281 N.C. 140, 187 S.E. 2d 752 (1972), cited Tinsley for the proposition that \u201cprovisions calling for a debtor to pay attorney\u2019s fees incurred by a creditor in the collection of a debt were contrary to public policy and, therefore, unenforceable\u201d and concluded that \u201c[i]t is our view . . . that sound public policy continues to bar the enforcement of such provisions unless the same are clearly and expressly authorized by statute.\u201d 12 N.C. App. at 482, 483, 183 S.E. 2d at 859, 860. See also Construction Co. v. Development Corp., 29 N.C. App. 731, 225 S.E. 2d 623, cert. denied, 290 N.C. 660, 228 S.E. 2d 459 (1976), expressly rejecting the argument that the common law of this state permitted the contractual allocation of attorneys\u2019 fees (in contracts other than notes or security instruments) that may be required by litigation based on the contract.\nWe conclude, therefore, that the provision in Paragraph 21 of the lease contract between plaintiff and defendant, allowing the lessor reasonable attorneys\u2019 fees should the lease obligation be collected by an attorney after maturity, can be enforced only to the extent that the same is expressly allowed by statute. The question before us, then, is whether the lease contract sub judice is the type of agreement contemplated within the terms of G.S. 6-21.2. That statute provides in pertinent part:\n\u201cObligations to pay attorneys\u2019 fees upon any note, conditional sale contract or other evidence of indebtedness, in addition to the legal rate of interest or finance charges specified therein, shall be valid and enforceable, and collectible as part of such debt, if such note, contract or other evidence of indebtedness be collected by or through an attorney at law after maturity, subject to the following provisions:\n* * * *\n(2) If such note, conditional sale contract or other evidence of indebtedness provides for the payment of reasonable attorneys\u2019 fees by the debtor, without specifying any specific percentage, such provisions shall be construed to mean fifteen percent (15%) of the \u2018outstanding balance\u2019 owing on said note, contract or other evidence of indebtedness.\n* * * *\n(4) As to conditional sale contracts and other such security agreements which evidence both a monetary obligation and a security interest in or a lease of specific goods, the \u2018outstanding balance\u2019 shall mean the \u2018time price balance\u2019 owing as of the time suit is instituted by the secured party to enforce the said security agreement and/or to collect said debt.\n(5) The holder of an unsecured note or other writing(s) evidencing an unsecured debt, and/or the holder of a note and chattel mortgage or other security agreement and/or the holder of a conditional sale contract or any other such security agreement which evidences both a monetary obligation and a security interest in or a lease of specific goods, or his attorney at law, shall, after maturity of the obligation by default or otherwise, notify the maker, debtor, account debt- or, endorser or party sought to be held on said obligation that the provisions relative to payment of attorneys\u2019 fees in addition to the \u2018outstanding balance\u2019 shall be enforced and that such maker, debtor, account debtor, endorser or party sought to be held on said obligation has five days from the mailing of such notice to pay the \u2018outstanding balance\u2019 without the attorneys\u2019 fees. If such party shall pay the \u2018outstanding balance\u2019 in full before the expiration of such time, then the obligation to pay the attorneys\u2019 fees shall be void, and no court shall enforce such provisions.\u201d\nIt is apparent that G.S. 6-21.2 varies the well-established rule voiding attorneys\u2019 fees obligations only in the case of \u201cobligations to pay attorneys\u2019 fees upon any note, conditional sale contract, or other evidence of indebtedness . . . .\u201d (Emphasis supplied.) A contract for the lease of personalty does not constitute, without more, a \u201cnote\u201d or \u201cconditional sale contract.\u201d The question remains, however, whether such a contract may be deemed an \u201cevidence of indebtedness\u201d within the meaning of the statute.\nIn the absence of express legislative guidance, the statutory expression \u201cevidence of indebtedness\u201d is not a well-defined term of art in today\u2019s jurisprudence. The proper scope of the term\u2019s application must therefore be gleaned from the context of the statute in which it appears and the factual circumstances surrounding the instrument or transaction to which it is sought to be applied. Cf., United States v. Austin, 462 F. 2d 724 (10th Cir. 1972), cert. denied, 409 U.S. 1048 (loan commitment letter representing enforceable obligation constitutes an \u201cevidence of indebtedness\u201d and hence a \u201csecurity\u201d for purposes of a prosecution for securities fraud); Columbus and Southern Ohio Electric Co. v. Peck, 161 Ohio St. 73, 118 N.E. 2d 142 (1954) (lease of personalty is not such \u201cevidence of indebtedness\u201d as to make it subject to state intangibles tax). In the instant case, as in any case involving statutory construction, we must give that interpretation to the term at issue which best harmonizes with the language, spirit, and intent of the act in which it appears. Stevenson v. City of Durham, 281 N.C. 300, 188 S.E. 2d 281 (1972).\nChapter 562 of the 1967 Session Laws, of which G.S. 6-21.2 is but a part, was enacted to amend certain provisions of the State\u2019s Uniform Commercial Code \u201cand other related statutes.\u201d The totality of the 1967 amendment package became effective \u201con the same date as the Uniform Commercial Code, and the fact that the provisions of this act were enacted at a later date than the Uniform Commercial Code shall not be considered in construing the provisions contained herein . . . .\u201d 1967 Session Laws, c. 562, s. 10. Although G.S. 6-21.2 was not itself codified as a constituent section of Chapter 25 of the General Statutes (the Uniform Commercial Code), we believe its legislative history clearly demonstrates that it was intended to supplement those principles of law generally applicable to commercial transactions. As with the Uniform Commercial Code in general, it would appear that some of the purposes underlying the enactment of G.S. 6-21.2 are \u201cto simplify, clarify, and modernize the law governing commercial transactions\u201d among the various jurisdictions, and \u201cto permit the continued expansion of commercial practices through custom, usage, and agreement of the parties . . . .\u201d G.S. 25-l-102(2)(a) and (b). (Emphasis supplied.) By its limited allowance of that which was formerly prohibited under the common law of this state, ie., the contractual allocation of attorneys\u2019 fees incurred in an action on the debt evidenced in the contract itself, G.S. 6-21.2 clearly validates a new form of contractual remedy. The statute, being remedial, \u201cshould be construed liberally to accomplish the purpose of the Legislature and to bring within it all cases fairly falling within its intended scope.\u201d Hicks v. Albertson, supra, 284 N.C. at 239, 200 S.E. 2d at 42 (construing liberally the allowance of counsel fees under G.S. 6-21.1).\nWith these considerations in mind, we think the term \u201cevidence of indebtedness\u201d in G.S. 6-21.2 is intended to encompass more than security agreements or traditional debt financing arrangements. It is of course clear that a \u201cnote\u201d or \u201cconditional sale contract\u201d is the most common type of \u201cevidence of indebtedness\u201d contemplated by the statute; indeed, it is in connection with these types of agreements that attorneys\u2019 fee provisions are most commonly employed. However, the express terms of Section 5 of the statute, along with the terms employed in other provisions, demonstrate that G.S. 6-21.2 applies not only to notes and conditional sale contracts, but also to such \u201cother evidence of indebtedness\u201d as \u201cother writing(s) evidencing an unsecured debt\u201d or \u201cany other such security agreement which evidences both a monetary obligation and ... a lease of specific goods.\u201d G.S. 6-21.2(5). (Emphasis supplied.) We agree, therefore, with Chief Judge (now Justice) Brock\u2019s statement in Supply, Inc. v. Allen, supra, 30 N.C. App. at 276, 227 S.E. 2d at 124, that \u201c[t]hese provisions indicate, either explicitly or implicitly, that an evidence of indebtedness ... is a writing which acknowledges a debt or obligation and which is executed by the party obligated thereby.\u201d More specifically, we hold that the term \u201cevidence of indebtedness\u201d as used in G.S. 6-21.2 has reference to any printed or written instrument, signed or otherwise executed by the obligor(s), which evidences on its face a legally enforceable obligation to pay money. Such a definition, we believe, does no violence to any of the statute\u2019s specific provisions and accords well with its general purpose to validate a debt collection remedy expressly agreed upon by contracting parties.\nViewed in light of this definition, defendant\u2019s lease agreement with plaintiff is obviously an \u201cevidence of indebtedness.\u201d The contract acknowledges a legally enforceable obligation by plaintiff-lessee to remit rental payments to defendant-lessor as they become due, in exchange for the use of the property which is the subject of the lease. The contract, including the provision in Paragraph 21 for attorneys\u2019 fees, is in writing and is executed by the parties obligated under its terms. Plaintiff has made no assertion that the contract represents anything less than an arm\u2019s length transaction consummated by mutual agreement between the parties. There is no contention that plaintiff was not afforded the requisite notice under G.S. 6-21.2(5). Under these circumstances, we see no reason why the obligation by plaintiff to pay attorneys\u2019 fees incurred by defendant upon collection of the debts arising from the contract itself should not be enforced to the extent allowed by G.S. 6-21.2. Accordingly, the decision of the Court of Appeals vacating Judge Thornburg\u2019s award to defendant of attorneys\u2019 fees should be and is hereby\nReversed.\n. Rule 2 of the North Carolina Rules of Appellate Procedure provides that:\n\u201cTo prevent manifest injustice to a party, or to expedite decision in the public interest, either court of the appellate division may, except as otherwise expressly provided by these rules, suspend or vary the requirements or provisions of any of these rules in a case pending before it upon application of a party or upon its own initiative . . . .\u201d (Emphasis supplied.)\n. In Construction Co. v. Development Corp., supra, 29 N.C. App. 731, 225 S.E. 2d 623, the Court of Appeals held that a construction contract did not provide \u201cevidence of indebtedness\u201d within the contemplation of G.S. 6-21.2 so as to allow enforcement of an attorneys\u2019 fee provision contained in the contract. More recently, in Systems, Inc. v. Yacht Harbor, Inc., 40 N.C. App. 726, 253 S.E. 2d 613 (1979), the Court of Appeals refused to enforce a fee provision embodied in a lease for personal property on the grounds that the lease contract was not an \u201cevidence of indebtedness\u201d and that \u201conly agreements intended as security are covered\u201d under the statute. Both of these cases were cited by the Court of Appeals in the present case as support for its conclusion that defendant\u2019s contract \u201cis not an evidence of indebtedness within the meaning of G.S. 6-21.2.\u201d 41 N.C. App. at 211-12, 254 S.E. 2d at 775. However, we note that the discussion in Construction Co. v. Gibson, 30 N.C. App. 385, 226 S.E. 2d 837 (1976) clearly applied the provisions of G.S. 6-21.2 to a simple contract. And in Leasing, Inc. v. Dan-Cleve Corp., 31 N.C. App. 634, 230 S.E. 2d 559, cert. denied, 292 N.C. 265, 233 S.E. 2d 393 (1977), the opinion definitely indicated that the statute was applicable to a lease for personalty which was not in itself a conditional sale contract. These latter decisions by the Court of Appeals appear to be in conflict with those relied upon by that court in the instant case.\n. It should be noted that, contrary to North Carolina\u2019s traditional disallowance of contractual attorneys\u2019 fees, the majority of other jurisdictions now hold that a stipulation in a note or other evidence of indebtedness for a reasonable attorneys\u2019 fee is a valid and enforceable agreement. See generally Annotation, Validity of provision in promissory note or other evidence of indebtedness for payment, as attorneys\u2019 fees, expenses, and costs of collection, of specified percentage of note.\u201d 17 A.L.R. 2d 288 (1951 and Supplement).\n. It is unclear just what the legislature intended by the use of the term \u201csecurity agreement\u201d in this context. The ordinary contract for a lease of personalty does evidence \u201cboth a monetary obligation\u201d (the promise by the lessee to pay rent) \u201cand ... a lease of specific goods.\u201d That fact alone, however, does not technically render the contract a \u201csecurity agreement.\u201d Only if the lease is one intended for security will the agreement creating it be deemed a \u201csecurity agreement.\u201d See G.S. 25-1-201(37); 25-9-105(l)(h).", "type": "majority", "author": "EXUM, Justice." } ], "attorneys": [ "Raymer, Lewis, Eisele & Patterson, by Douglas G. Eisele, Attorneys for defendant appellant and third-party plaintiff appellant.", "Smith, Currie & Hancock, by Bert R. Oastler, Attorneys for plaintiff appellee.", "Coward, Coward, Jones & Dillard, by Roger L. Dillard, Jr., Attorneys for Robert D. Kelly, third-party defendant appellee." ], "corrections": "", "head_matter": "STILLWELL ENTERPRISES, INC., Plaintiff v. INTERSTATE EQUIPMENT COMPANY, Original Defendant and Third-Party Plaintiff v. THE TRAVELERS INDEMNITY COMPANY, and ROBERT D. KELLY, Third-Party Defendants\nNo. 92\n(Filed 3 June 1980)\n1. Appeal and Error \u00a7\u00a7 5.1, 45.1\u2014 failure to present question in brief \u2014 no relief as matter of right \u2014 relief as matter of appellate grace\nPlaintiffs failure to present and argue in its brief to the Court of Appeals the propriety of the trial court\u2019s judgment as to attorney fees precluded plaintiff from obtaining relief on this point in the Court of Appeals as a matter of right; however, the Court of Appeals, in the exercise of its general supervisory powers under G.S. 7A-32(c) or pursuant to Appellate Rule 2, could consider on its own initiative the question of the attorney fees award and give relief as a matter of appellate grace.\n2. Attorneys at Law \u00a7 7\u2014 recovery of attorney fees \u2014 necessity for statute\nA successful litigant may not recover attorney fees, whether as costs or as an item of damages, unless such a recovery is expressly authorized by statute.\n3. Attorneys at Law \u00a7 7.4\u2014 attorney fees \u2014meaning of \u201cevidence of indebtedness\u201d\nThe term \u201cevidence of indebtedness\u201d as used in G.S. 6-21.2 refers to any printed or written instrument, signed or otherwise executed by the obligor(s), which evidences on its face a legally enforceable obligation to pay money.\n4. Attorneys at Law \u00a7 7.4\u2014 attorney fees \u2014 provision in lease of personalty\nA contract for the lease of personalty constitutes an \u201cevidence of indebtedness\u201d within the meaning of G.S. 6-21.2 since the contract acknowledges a legally enforceable obligation by the lessee to remit rental payments to the lessor as they become due in exchange for the use of the property which is the subject of the lease. Therefore, a provision of the lease allowing the lessor reasonable attorney fees should the lease obligation be collected by an attorney after maturity is enforceable under the provisions of G.S. 6-21.2.\nDEFENDANT appeals from a decision of the Court of Appeals by Judge Erwin, Judges Parker and Harry Martin concurring, vacating that part of an order entered by Judge Thornburg at the March 1978 Special Session of JACKSON Superior Court which allowed defendant summary judgment against plaintiff for defendant\u2019s attorneys\u2019 fees on defendant\u2019s counterclaim. The decision of the Court of Appeals is reported at 41 N.C. App. 204, 254 S.E. 2d 770 (1979). This Court granted defendant\u2019s petition for discretionary review pursuant to G.S. 7A-31 on 23 August 1979. The case was docketed and argued as No. 97, Fall Term 1979.\nRaymer, Lewis, Eisele & Patterson, by Douglas G. Eisele, Attorneys for defendant appellant and third-party plaintiff appellant.\nSmith, Currie & Hancock, by Bert R. Oastler, Attorneys for plaintiff appellee.\nCoward, Coward, Jones & Dillard, by Roger L. Dillard, Jr., Attorneys for Robert D. Kelly, third-party defendant appellee." }, "file_name": "0286-01", "first_page_order": 318, "last_page_order": 327 }