                    IN THE COURT OF APPEALS OF TENNESSEE

                                             AT KNOXVILLE                              FILED
                                                                                     September 30, 1998

                                                                                      Cecil Crowson, Jr.
                                                                                       Appellate C ourt Clerk


FIRST AMERICAN NATIONAL                                  )        BRADLEY CIRCUIT
BANK,                                                    )
                                                         )        NO. 03A01-9805-CV-00157
       Plaintiff/Appellant                                        )
                                                         )        HON. JOHN B. HAGLER
v.                                                       )        JUDGE
                                                         )
KRISTE CHEATHAM,                                         )
                                                         )
       Defendant/Appellee                                )        AFFIRMED


India M. Henson and Shelley D. Rucker, Chattanooga, for Appellant.

Rex A. Wagner, Cleveland, for Appellee.



                                                  OPINION

                                                                  INMAN, Senior Judge

       This is an action against a purported guarantor of a debt which was evidenced by a

promissory note executed by Janet Bacon pursuant to a personal line of credit extended to her.1

       In a banking transaction with the plaintiff on September 2, 1986, Janet Bacon and her

daughter, Kriste Bacon Cheatham [defendant], opened a joint checking account with right of

survivorship. Each signed a signature card, on which was printed:

       Each depositor shall be responsible for all debts and obligations incurred by a
       Depositor under any Personal Line of Credit Agreement or any other open-end
       credit plan applicable to the account. [our emphasis]

       On July 1, 1987, Janet Bacon’s application for a personal line of credit was approved by

the plaintiff. Printed checks were issued to Ms. Bacon, bearing her name alone.

       The defendant did not participate in the application, had no notice of it, and received no

benefits from it. Ms. Bacon utilized the credit line as a revolving account for four years, and

eventually defaulted.




       1
           The actio n was co mme nced in th e Gene ral Session s Court o n a “swo rn accou nt.”
         The plaintiff insists that Ms. Cheatham is liable as surety for Ms. Bacon because of the

card provision which we have recited. To add palatability to its insistence, plaintiff argues that

the line of credit - which was extended to Ms. Bacon more than one year after the joint account

was opened - was merely an “extension” of the joint checking account. This argument arises

from the language “any other open-end credit plan applicable to the account,” absent which the

plaintiff’s action could not withstand even casual scrutiny, and is allegedly buttressed by the fact

that the checks issued to Ms. Bacon for withdrawal of funds from the credit line bore the same

account number as the joint deposit. The latter account represented funds owned by the two

depositors, while the former represented funds owned by the bank.2

         Each party filed a motion for summary judgment,3 and the briefs do not suggest a disputed

issue of material fact exists.

         Janet Bacon, by affidavit, testified that the debt was hers alone, and that she alone drew

checks against the line of credit, and that her daughter signed the signature card solely for

survivorship purposes. This was not refuted.

         The trial judge granted the motion of the defendant, stating that “the creation of such

ruinous liability for the debts of another must be attended by far greater notice of danger,

formality of instrument, detail of terms, and recitation of conditions than is even hinted in this

case.” It is difficult to disagree with this rationale simply as a matter of principle, but we think

the peculiar circumstances activate T.C.A. § 47-4-401(b), which provides that “a customer is not

liable for the amount of the overdraft if the customer neither signed the item nor benefitted from

the proceeds of the item.” While an overdraft in the traditional sense is not involved in the case

at Bar, since Ms. Bacon executed a promissory note for the funds and was discharged in

bankruptcy, we think the analogy is appropo.

         The judgment is affirmed at the costs of the appellant.


                                                           _______________________________
                                                           William H. Inman, Senior Judge
CONCUR:


         2
            The ev idence d oes not ind icate that the b ank app roved th e line of cre dit to Ms. B acon on the strength
of any su retyship o r guaran ty of her d aughter . This theo ry of reco very ap pears to h ave bee n develo ped in
hindsigh t.
         3
         Neither party claims the existence of a disputed issue of material fact, and each concedes the case may
be disposed of by summary judgment pursuant to Byrd v. H all, 847 S.W.2d 20 8 (Tenn. 1993).

                                                            2
_______________________________
Houston M. Goddard, Presiding Judge



_______________________________
Charles D. Susano, Jr., Judge




                                      3
