Cabarrus Bank & Trust Co. v. Chandler, 63 N.C. App. 724

Cabarrus Bank & Trust Co. v. Chandler

63 N.C. App. 724 | N.C. Ct. App. | 1983

VAUGHN, Chief Judge.

The sole issue on appeal is whether the lack of registration of Burris’ power of attorney invalidates his authority to sign his wife’s name on the promissory note to plaintiff. If such signature was unauthorized, defendant contends that Melanie Burris is not liable on the debt, and that defendant, therefore, as guarantor of a joint debt, is not liable either. We affirm the trial court order granting plaintiff summary judgment. We hold that Burris had authority to sign his wife’s name on the note, and that, therefore, defendant is liable for the full amount of the debt.

A power of attorney is an instrument in writing granting power in an agent to transact business for his principal. NCNB v. Hammond, 298 N.C. 703, 260 S.E. 2d 617 (1979); Howard v. Boyce, 266 N.C. 572, 146 S.E. 2d 828 (1966). Melanie Burris executed a written power of attorney in 1979 which gave her husband authority to sign her name on the June 6, 1980, promissory note to plaintiff.

Although G.S. 47-115.1(d) states that “no power of attorney executed pursuant to the provisions of this section shall be valid but from the time of registration thereof in the office of the register of deeds . . .” and although Melanie Burris’ power of attorney specifically incorporated G.S. 47-115.1, we interpret the recording provision to apply only in cases where a competent *727principal later becomes incompetent. If the principal is competent, as was Melanie Burris, then a power of attorney, if in writing, is effective without the necessity of recordation. NCNB v. Hammond, supra; see O’Grady v. First Union National Bank, 35 N.C. App. 315, 241 S.E. 2d 375, reversed, 296 N.C. 212, 250 S.E. 2d 587 (1978). In Hammond, the Supreme Court stated: “G.S. 47-115.1 codifies a particular subset of powers of attorney — those powers of attorney which may be continued in effect in the event of incapacity or mental incompetence of the principal . . .” 298 N.C. at 713, 260 S.E. 2d at 624, 625. The purpose of G.S. 47-115.1 is to render a power of attorney, executed by a competent principal, effective, notwithstanding the later incompetence of the principal. See Act of May 3, 1961, ch. 341, 1961 N.C. Laws 501.

G.S. 47-115 states: “Any instrument, in writing, executed by an attorney-in-fact, shall be good and valid as the instrument of the principal . . .” Since the power of attorney, executed in 1979, was in writing, and since Melanie Burris was competent in 1979 and in 1980, when the promissory note was executed, Melanie Burris is liable for the debt as if she had signed the note herself.

Pursuant to G.S. 25-3-401, individuals are liable on an instrument if their signatures appear thereon. The Burris’ signatures appeared on the promissory note, and, thus, they were jointly liable for the debt when they filed for bankruptcy on March 5, 1981.

Defendant contracted to pay the full amount of the debt in the event of bankruptcy of the primary debtor. Pursuant to his contract and pursuant to G.S. 25-3-416, which provides that a guarantor becomes absolutely liable upon default, defendant is liable to plaintiff for the full amount of the debt. We therefore affirm the order entering summary judgment in favor of plaintiff.

Affirmed.

Judges HILL and BECTON concur.