North Carolina National Bank v. Corbett

156 S.E.2d 835 (1967) 271 N.C. 444

NORTH CAROLINA NATIONAL BANK
v.
Alva V. CORBETT, Administratrix of the Estate of J. N. Corbett, and Alva V. Corbett, Individually.

No. 192.

Supreme Court of North Carolina.

September 27, 1967.

Robert Calder, Wilmington, for defendant appellant.

Marshall & Williams, by Lonnie B. Williams, Wilmington, for plaintiff appellee.

HIGGINS, Justice.

The sole question discussed in appellant's brief and on the oral argument is this: Does the failure to insert in the guaranty a limitation on the guarantor's liability render the instrument void? In this instance the borrower was the husband of the guarantor. He was in the business of building houses. From time to time he needed advancements from his bank. Mr. and Mrs. Corbett held some, if not all, of their real estate as tenants by the entireties. Such real estate may not be held liable for the individual debts of either husband or wife. However, it is liable for the obligations of both. General Air Conditioning Co. v. Douglass, 241 N.C. 170, 84 S.E.2d 828. A contract may be understood and interpreted in the light of the relationship of the parties, and the purpose they sought to accomplish. "A contract may be explained by reference to the circumstances under which it was made and the matter to which it relates." Chew v. Leonard, 228 N.C. 181, 44 S.E.2d 869.

The guarantor in this action instructed the bank: "As an inducement to you to extend credit to J. N. Corbett * * and in consideration thereof, the undersigned hereby guarantees to you * * * the due and punctual payment of any and all notes, drafts, obligations, and indebtednesses of Borrower at any time, now or hereafter incurred with, or held by you with interest. * * * (T)he amount of principal at any one time outstanding for which the undersigned shall be liable as herein set forth shall not exceed the sum of $_____" The blank space and the antecedent wording provided the guarantor opportunity to limit her liability for her husband's debts. She executed the agreement without inserting any limitation. She cannot, thereafter, ex parte, alter the terms of the agreement. The guaranty is to pay the notes, etc. and in this particular instance only the one note of $2,000 appears to have been involved. The Court found on competent evidence the individual defendant had signed the guaranty. Its terms are clear, free of ambiguity. Consequently, there is nothing for the Court to construe. The meaning becomes a question of law. Parks v. Venters Oil Co., 255 N.C. 498, 121 S.E.2d 850; Muncie v. Travelers Ins. Co., 253 N.C. 74, 116 S.E.2d 474; Suits v. Old Equity Life Ins. Co., 249 N.C. 383, 106 S.E.2d 579.

In the record before us, we find

No Error.