Deans v. Layton

• Citation: 366 S.E.2d 560,89 N.C.App. 358
• Decision Date: 05 April 1988
• Docket Number: No. 877SC923,877SC923
• Court: Court of Appeal of North Carolina (US)
• Parties: Claude E. DEANS and wife, Murveree F. Deans v. Ben J. LAYTON.

Page 560

366 S.E.2d 560

89 N.C.App. 358

Claude E. DEANS and wife, Murveree F. Deans v. Ben J. LAYTON.

No. 877SC923.

Court of Appeals of North Carolina.

April 5, 1988.

Poyner and Spruill by Charles T. Lane, Ernie K. Murray, Rocky Mount, and Susan K. Nichols, Raleigh, for plaintiffs-appellees.

Thomas W. King, Rocky Mount, for defendant-appellant.

PARKER, Judge.

On appeal defendant raises five assignments of error for consideration by this Court: (i) the trial court's denial of defendant's motion to dismiss and entry of summary judgment for plaintiffs where the contract was signed only by Claude E. Deans and the land was owned by plaintiffs as tenants by the entirety; (ii) the trial court's granting of plaintiffs' motion for summary judgment where defendant's affirmative defenses of mutual mistake, misrepresentation, and lack of consideration raised genuine issues of material fact; (iii) the trial court's granting of plaintiffs' motion for summary judgment where plaintiff Murveree F. Deans never served defendant with a complaint but only proceeded upon a theory of adoption of the amended complaint of Claude E. Deans; (iv) the trial court's order requiring defendant to pay to plaintiffs interest at the judgment rate from 15 May 1985 until the date of closing where the contract contained no term regarding interest; and (v) the trial court's order granting specific performance where plaintiffs had an adequate remedy at law. We shall address these five issues seriatim.

I.

The first issue raised by this appeal is whether a paper writing memorializing a contract for the purchase and sale of land that names as vendor only one of the two tenants by the entirety is enforceable against the vendee. We hold that where, as in this case, there is uncontradicted evidence that the cotenant signing the contract was acting as agent for the non-signing cotenant, the contract is binding and enforceable against the vendee.

The case of Reichler v. Tillman, 21 N.C.App. 38, 203 S.E.2d 68 (1974), addresses the issue of the binding effect of a contract for the purchase and sale of land where only one of the two tenants by the entirety was named in and signed the contract. In Reichler, plaintiff-vendees sued defendants husband and wife for specific performance of a contract for the purchase and sale of land held by defendants as tenants by the entirety. The contract did not mention defendant-wife, and defendant-wife never signed the contract. Id. at 39, 203 S.E.2d at 69. Defendant-wife pled the statute of frauds and moved the court for summary judgment in her favor. Id. at 39-40, 203 S.E.2d at 69-70. This Court reversed the trial court's order granting partial summary judgment in favor of defendant-wife. Id. Treating the trial court's ruling as a judgment on the pleadings because the record on appeal contained only the pleadings, this Court held that the trial court erred in ordering entry of judgment for defendant-wife where plaintiffs could show that defendant-husband was authorized by his wife to act as her agent in contracting to sell the land belonging to both as tenants by the entirety. Id. at 40-41, 203 S.E.2d at 70-71.

In the instant case, both plaintiffs submitted affidavits stating that plaintiff Murveree F. Deans expressly authorized plaintiff Claude E. Deans to act as her agent in all matters regarding the sale of the tract of land that is the subject of the contract in controversy; that plaintiff Claude E. Deans executed the contract both on his own behalf and as agent for plaintiff Murveree F. Deans; and that upon being informed of the execution of the contract, plaintiff Murveree F. Deans expressly consented to and ratified the execution of the contract by plaintiff Claude E. Deans as her agent. Defendant has presented no forecast of evidence that might controvert the statements in plaintiffs' affidavits.

Although defendant assigns as error both the denial of his motion to dismiss plaintiffs' complaint pursuant to G.S. 1A-1, Rule 12(b)(6), and the allowance of plaintiffs' motion for summary judgment pursuant to G.S. 1A-1, Rule 56, these questions may be treated as one since where matters outside the pleadings are before the court, a motion to dismiss may be treated as a motion for summary judgment. G.S. 1A-1, Rule 12(b). A motion for summary judgment is properly granted "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that any party is entitled to a judgment as a matter of law." G.S. 1A-1, Rule 56(c). A defendant may prevail on a motion for summary judgment by proving that an essential element of plaintiff's claim is nonexistent, that plaintiff cannot produce evidence to support an essential element of his claim, or that plaintiff cannot surmount an affirmative defense which would bar the claim. Bernick v. Jurden, 306 N.C. 435, 440-441, 293 S.E.2d 405, 409 (1982). When the plaintiff moves for summary judgment, plaintiff must establish that the facts as to each essential element of his claim are in his favor and that there is no genuine issue of material fact with respect to any essential element. Development Corp. v. James, 300 N.C. 631, 637, 268 S.E.2d 205, 209 (1980); Federal Land Bank v. Lieben, 86 N.C.App. 342, 345, 357 S.E.2d 700, 702-703 (1987). Once movant has met his burden, the "adverse party may not rest upon the mere allegations or denials of his pleading, but his response ... must set forth specific facts showing that there is a genuine issue for trial." G.S. 1A-1, Rule 56.

In the case before us, defendant has failed to rebut plaintiffs' evidence to support the agency relationship alleged in plaintiffs' amended complaint and has failed to show the existence of any material issue of fact as to agency. Defendant's first assignment of error is overruled.

II.

Defendant's second assignment of error on this appeal is that the trial court erred in granting plaintiffs summary judgment because defendant's affirmative defenses of mutual mistake, misrepresentation, and lack of consideration raised genuine issues of material fact. We shall address each of these affirmative defenses separately.

A.

Regarding the defense of mutual mistake, our Supreme Court has stated the following:

"The formation of a binding contract may be affected by a mistake. Thus, a contract may be avoided on the ground of mutual mistake of fact where the mistake is common to both parties and by reason of it each has done what neither intended. Furthermore, a defense may be asserted when there is a mutual mistake of the parties as to the subject matter, the price, or the terms, going to show the want of a consensus ad idem. Generally speaking, however, in order to affect the binding force of a contract, the mistake must be of an existing or past fact which is material; it must be as to a fact which enters into and forms the basis of the contract, or in other words it must be of the essence of the agreement, the sine qua non, or, as is sometimes said, the efficient cause of the agreement, and must be such that it animates and controls the conduct of the parties."

MacKay v. McIntosh, 270 N.C. 69, 73, 153 S.E.2d 800, 804 (1967) (quoting 17 Am.Jur.2d, Contracts § 143 (1964)). However, a party who assumes the risk of mistake regarding certain facts may not seek to rescind a contract merely because the facts were not as he had hoped. Financial Services v. Capitol Funds, 288 N.C. 122, 139, 217 S.E.2d 551, 562, 77 A.L.R.3d 1036, 1053 (1975); Howell v. Waters, 82 N.C.App. 481, 488, 347 S.E.2d 65, 70 (1986), disc. rev. denied, 318 N.C. 694, 351 S.E.2d 747 (1987).

A party assumes the risk of mistake where:

(a) the risk is allocated to him by agreement of the parties, or

(b) he is aware, at the time the contract is made that he has only limited knowledge with respect to the facts to which the mistake relates but treats his limited knowledge as sufficient, or

(c) the risk is allocated to him by the court on the ground that it is reasonable in the circumstances to do so.

Howell v. Waters, 82 N.C.App. at 488, 347 S.E.2d at 70 (quoting Restatement (Second) Contracts § 154 (1979)).

In this case, the discovery materials and affidavits presented to the trial court showed that both defendant and plaintiff Claude E. Deans were experienced in matters involving the purchase and sale of land and that each had been involved previously in residential land development. In his deposition, defendant stated that he inspected the property with plaintiff Claude E. Deans in December of 1984. He described this meeting as follows:

[W]e were checking out, talking about the land. It was raining, and it was very wet, and I know I remember asking him about some old bull grass there. First I asked him if that had been tested or if that would pass the perk test. And he had told me on this one--now this is not exact words, but this is what was brought up, or said, or meant to be, or my understanding of it. He said that it had been approved, that there was a map that had been drawn off with 104 lots and that's what he was selling me on the hundred and something acres. It's supposed to have been so many acres, 108 I believe, 104.

When asked to describe the land, defendant stated,

I believe it had grown cotton on top of the hill on the left. And on the right side it was weed, and grass, and bull grass in there. And I particularly asked Mr. Deans about that, because I was wondering why that hadn't been tended with the other tended. And if you go there today, I think you'll find the stalks and all still there from that time. He assured me--and we went on up on top of a hill now--that he has three mobile homes sitting up there. And then in front of those mobile homes is just as pretty a land that you can ask for, and we drove up that far. And the land on the left and some of it on the right where the hill kind of slopes over a little...