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The wife executed a durable Power of Attorney appointing her husband as attorney in fact. The Power of Attorney contained a restriction which stated that the powers “shall not be exercised until a physician has certified that I am no longer able to handle my affairs.”

The lender made numerous commercial loans to business operated by the husband. These loans contained guarantees by the wife which were executed by the husband exercising the Power of Attorney.

The accounts went into default and after foreclosure the lender sued the wife and other guarantees to recover the deficiencies.

The NC Court of Appeals held that recovery could not be made against the wife because there was no evidence that the wife had been certified incompetent by a physician at the time the guaranty agreements were executed by the husband.

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