MAS Corp. v. Thompson, 8218SC344

• Decision Date: 03 May 1983
• Docket Number: No. 8218SC344,8218SC344
• Citation: 302 S.E.2d 271,62 N.C.App. 31
• Parties: MAS CORPORATION, t/a and d/b/a Holiday-West Motel, Plaintiff, v. Ernest A. THOMPSON, t/a and d/b/a Thompson Sign Co., Defendant and Third-Party Plaintiff, v. Mahmood Ali SIDDIQUI and Shamshad Ali Siddiqui, Third-Party Defendant.
• Court: North Carolina Court of Appeals

Page 271

302 S.E.2d 271

62 N.C.App. 31

MAS CORPORATION, t/a and d/b/a Holiday-West Motel, Plaintiff, v. Ernest A. THOMPSON, t/a and d/b/a Thompson Sign Co., Defendant and Third-Party Plaintiff, v. Mahmood Ali SIDDIQUI and Shamshad Ali Siddiqui, Third-Party Defendant.

No. 8218SC344.

Court of Appeals of North Carolina.

May 3, 1983.

Hugh C. Bennett, Jr., High Point, for plaintiff and third-party defendants-appellants.

Stern, Rendleman & Klepfer by John A. Swem, Greensboro, for defendant-appellee.

VAUGHN, Chief Judge.

Appellants' first four arguments are that the trial court erred in denying their motions for summary judgment and directed verdict, and in granting defendant's motion for directed verdict on two of appellants' claims. The purpose of summary judgment is to bring litigation to an early decision on the merits without the delay and expense of trial when no material facts are at issue. McNair v. Boyette, 282 N.C. 230, 192 S.E.2d 457 (1972). That purpose cannot be served after there has been a trial. Denial of a motion for summary judgment, therefore, should not be reviewable on appeal from a final judgment rendered on a trial on the merits. See Parker Oil Co. v. Smith, 34 N.C.App. 324, 237 S.E.2d 882 (1977); Annot., 15 A.L.R.3d 899, 922 (1967). Appellants present identical arguments for the trial court's allegedly erroneous denial of their motions for summary judgment and directed verdict. We shall consider their argument only with respect to the denial of their motion for a directed verdict. Upon motion for a directed verdict, all the evidence which tends to support the nonmovants' case against it must be taken as true and viewed in the light most favorable to the nonmovant, the nonmovant is entitled to the benefit of every reasonable inference which may be reasonably drawn from the evidence, and the motion may be granted only if, as a matter of law, the evidence is insufficient to grant a verdict for the nonmovant. Kelly v. International Harvester Co., 278 N.C. 153, 179 S.E.2d 396 (1971). Any party may move for a directed verdict at the close of all the evidence. G.S. 1A-1, Rule 50(a). The court may direct a verdict for the party with the burden of proof when the credibility of the movant's evidence is manifest as a matter of law. North Carolina National Bank v. Burnette, 297 N.C. 524, 256 S.E.2d 388 (1979). Appellants assign as error the trial court's denial of their motion for a directed verdict on three grounds. They contend that their motion for directed verdict should have been granted because the contract required Thompson to use sections of the former Holiday Inns sign so as not to infringe on the Holiday Inns trademark.

The general rule is that when a written contract is unambiguous the interpretation is a question of law, but when the terms of the contract are ambiguous it is for the jury to ascertain the meaning. Goodyear v. Goodyear, 257 N.C. 374, 126 S.E.2d 113 (1962). The following language "It is understood that sections of the above described sign will be from former sign, used so as not to infringe on Holiday Inn trade-mark" is ambiguous for three reasons. First, there is no promise by either party. The sentence began "It is understood," which, when viewed in the light most favorable to Thompson, does not clearly indicate that Thompson was promising anything.

Second, there was conflicting evidence as to the parties' intentions. Obviously, a contract should be construed, whenever possible, to give effect to the intentions of the parties. Adder v. Holman & Moody, Inc., 288 N.C. 484, 219 S.E.2d 190 (1975). Thompson said, in his deposition, that he included that sentence for two reasons: to let Siddiqui know that the sign would contain used materials, and to let him know that the Holiday Inns trademark would not be used. According to Siddiqui, the sentence was included so as to hold Thompson responsible for furnishing signs satisfactory to Holiday Inns. Since there is conflicting evidence of the parties' intentions, the interpretation of the contract was a question of fact for the jury to decide.

Third, Siddiqui's subsequent conduct indicates he was engaged in a consistent pattern of misusing Holiday Inns trademarks. Subsequent conduct of the parties, after executing a contract, is admissible to show their intent. Heater v. Heater, 53 N.C.App. 101, 280 S.E.2d 19, review denied, 304 N.C. 194, 285 S.E.2d 99 (1981). Affidavits of two Holiday Inns employees show that in October 1980 and January 1981, more than a year after Siddiqui's franchise was terminated, Holiday Inns place mats, guest checks, towels, telephone facing strips, and commode cleanliness strips were found in Siddiqui's motel. These blatant infringements cast doubt on Siddiqui's assertion that Thompson promised not to infringe on the Holiday Inns trademark. Moreover, when Siddiqui asked Thompson to change the sign in December because of Holiday Inns' complaints he agreed to pay Thompson on a cost-plus basis, which indicates he did not consider Thompson liable for the infringements.

The above circumstances, which must be viewed in the light most favorable to Thompson, indicate there is ample evidence to grant a verdict in favor of the nonmovant, and the trial court did not err in denying the appellants' motions for a directed verdict.

Appellants argue that, notwithstanding any issues of material fact in the interpretation of the contract, their motion for directed verdict should have been granted because G.S. 25-2-312(3) requires Thompson to deliver the signs free from any claim of infringement. G.S. 25-2-312(3) provides:

Unless otherwise agreed a seller who is a merchant regularly dealing in goods of the kind warrants that the goods shall be delivered free of the rightful claim of any third person by way of infringement or the like but a...