Econo-Travel Motor Hotel Corp. v. Taylor, ECONO-TRAVEL

• Docket Nº: ECONO-TRAVEL
• Citation: 271 S.E.2d 54, 301 N.C. 200
• Case Date: October 07, 1980
• Court: United States State Supreme Court of North Carolina

Page 54

271 S.E.2d 54 301 N.C. 200, 30 UCC Rep.Serv. 1319 ECONO-TRAVEL MOTOR HOTEL CORPORATION, Plaintiff,
v.
John M. TAYLOR, Edgar M. Holt and Charles P. Fletcher, T/A
Taylor-Holt- Fletcher, a partnership and John M. Taylor,
Barbara B. Taylor, Edgar M. Holt, Gustana Holt, Charles P.
Fletcher and Juanita U. Fletcher, Individually, Defendants,
and
Charles P. FLETCHER and wife, Juanita U. Fletcher, Third
Party Plaintiffs,
v.
FOREMANS, INC. T/A Allstate Building Supply and Clay B.
Foreman, Jr., Third Party Defendants. No. 20. Supreme Court of North Carolina. Oct. 7, 1980.

Defendant-appellants Charles P. Fletcher and Juanita U. Fletcher were the only defendants to file answer and appear in this action. In their answer they denied plaintiff's allegation that it was the owner and holder of the note sued upon. Defendant-appellants moved for summary judgment, which was granted by the trial court on 26 September 1978.

Plaintiff offered no evidence in response to defendants' summary judgment motion, choosing to rely on its pleadings and the exhibits, stipulations, and deposition testimony placed into evidence by defendants.

The evidence presented by defendant-appellants at the summary judgment hearing established the following additional facts: The partnership of Taylor-Holt-Fletcher was formed for the purpose of dealing in real estate. The promissory note sued upon represented a loan for the construction of an Econo-Travel Motor Hotel in Elizabeth City, North Carolina, which the partnership was undertaking to build pursuant to licensing agreements with Econo-Travel Corporation. The loan agreement provided that Southern Mortgage Company would make advances to defendants as needed during construction, not to exceed the $375,000.00 principal amount of the note. The loan was secured by the note and a deed of trust on the motel property.

Defendant-appellant Charles P. Fletcher withdrew from the partnership on 10 September 1973. As of that date, Southern Mortgage Company had advanced $110,000.00 to defendants. [301 N.C. 202] On 19 September 1973, plaintiff, Charles P. Fletcher, and the remaining partners, Holt and Taylor, entered into a release agreement whereby Fletcher assigned all of his rights in the licensing agreements with plaintiff to Holt and Taylor, and Fletcher was released from all obligations under those agreements.

Upon default on the promissory note, foreclosure proceedings were instituted on 16 May 1974, and after sale, upset bid, and resale, the property represented by the deed of trust was sold for $315,050.00, of which $310,584.95 was applied to the outstanding indebtedness of the note. In its action for a deficiency judgment, plaintiff demanded $76,534.35 plus interest, representing the balance owing on the note.

The Court of Appeals reversed Judge Walker's order granting summary judgment for defendants on the ground that defendants, as the party moving for summary judgment, had failed to meet their burden of establishing that no genuine issue existed as to any material fact in the case. Defendants' petition to this Court for discretionary review pursuant to G.S. 7A-31 was allowed 6 May 1980.

Wilson & Ellis by J. Kenyon Wilson, Jr., and M. H. Hood Ellis, Elizabeth City, for defendants-appellants.

Page 57

Walker & Romm by Wilton F. Walker, Currituck, and Robert E. Brown, Norfolk, Va., for plaintiff-appellee.

COPELAND, Justice.

The sole...