Frederick M. WILSON
v.
J. A. TURNER, Jr.
No. 7526SC919.
Court of Appeals of North Carolina.
April 7, 1976. Certiorari Denied June 17, 1976.*540 Fairley, Hamrick, Monteith & Cobb by L. A. Cobb, Charlotte, for plaintiff-appellant.
*541 Grier, Parker, Poe, Thompson, Bernstein, Gage & Preston by Mark R. Bernstein and Fred C. Thompson, Jr., Charlotte, for defendant-appellee.
Certiorari Denied by Supreme Court June 17, 1976.
ARNOLD, Judge.
Since the particular note for which contribution is sought was executed following the effective date of Chapter 25 of the N.C. General Statutes, the liabilities of the parties will be determined by the Uniform Commercial Code.
It is maintained by plaintiff that the judgment for defendant was in error for two reasons. First, he contends that there was an agreement by which the parties agreed to be jointly and severally liable. Under the provisions of G.S. 25-3-414(2) indorsers are liable to one another in the order in which they indorse unless they agree otherwise. The order of indorsement is presumed to be the order in which the signatures appear on the instrument.
The trial court found as a fact that there was no agreement, written or oral, by which defendant agreed to be jointly liable with plaintiff. This finding is supported by competent evidence and it is conclusive on appeal. Coggins v. City of Asheville, 278 N.C. 428, 180 S.E.2d 149 (1971); Laughter v. Lambert, 11 N.C.App. 133, 180 S.E.2d 450 (1971). Plaintiff's first argument is without merit.
In his second argument plaintiff contends that the court erred in finding that he and defendant did not indorse the note as part of the same transaction. Plaintiff reasons that if he and defendant signed the note "as a part of the same transaction" they would be jointly and severally liable. He relies on G.S. 25-3-118(e) which reads as follows:
"Unless the instrument otherwise specifies two or more persons who sign as maker, acceptor, or drawer or indorser and as a part of the same transaction are jointly and severally liable even though the instrument contains such words as `I promise to pay.'"
According to plaintiff the loan transaction was not completed until the note was executed by the corporate maker, and indorsed by both plaintiff and defendant. It was intended from the beginning that both parties indorse the note, and thus, plaintiff argues, there was only one transaction.
Assuming arguendo that it was intended that both parties indorse the note before the loan was closed it does not follow that plaintiff and defendant indorsed the instrument "as part of the same transaction" within the meaning of G.S. 25-3-118(e). This statute has not changed the rule in North Carolina that a prior indorser is not entitled to recover from a subsequent indorser in the absence of an agreement otherwise establishing liability. (See Lancaster v. Stanfield, 191 N.C. 340, 132 S.E. 21 (1926).
The Official Comment to G.S. 25-3-118(e) declares that the statute "applies to any two or more persons who sign in the same capacity, whether as makers, drawers, acceptors, or indorsers. It applies only where such parties sign as part of the same transaction; successive indorsers are, of course, liable severally but not jointly." (Emphasis added)
Moreover, the North Carolina Comment to G.S. 25-3-118(e) provides that this section is not intended to affect the rules governing:
"(1) Contribution between parties jointly and severally liable.
(2) The order of liability of parties signing in different capacities or at different times. See North Carolina Comment to G.S. 25-3-414 (contract of indorser; order of liability)."
From the North Carolina Comment to G.S. 25-3-414(2) it is clear that the Uniform Commercial Code did not change the North Carolina rule relating to the presumption of liability between prior and subsequent indorsers:
*542 "This continues the rule of G.S. 25-74 (N.I.L. 68) that indorsers are presumed to be liable in the order in which their signatures appear on the instrument. However, parol evidence is admissible to show the true order of indorsement." Plaintiff's second argument is also without merit.
We hold that the conclusion by the trial court that plaintiff and defendant were indorsers and liable to each other in the order of their indorsement, according to G.S. 25-3-414, was correct. The judgment appealed from is
Affirmed.
MORRIS and HEDRICK, JJ., concur.