Fidelity & Cas. Co. of N. Y. v. Nello L. Teer Co., 670

• Decision Date: 12 June 1959
• Docket Number: No. 670,670
• Citation: 109 S.E.2d 171,250 N.C. 547
• Court: North Carolina Supreme Court
• Parties: FIDELITY AND CASUALTY COMPANY OF NEW YORK v. NELLO L. TEER COMPANY.

Page 171

109 S.E.2d 171

250 N.C. 547

FIDELITY AND CASUALTY COMPANY OF NEW YORK v. NELLO L. TEER COMPANY.

No. 670

Supreme Court of North Carolina.

June 12, 1959

Bryant, Lipton, Strayhorn & Bryant, Durham, for plaintiff, appellant.

Basil M. Watkins, Charles B. Nye, and E. L. Haywood, Durham, for defendant, appellee.

RODMAN, Justice.

When plaintiff, by its reply, challenged defendant's plea of accord and satisfaction, it did not, nor does it now, claim that it was induced to accept the check for $70,438.21 by fraud or mistake.

Section II of the answer alleged the check on its face computed the amount owing and paid in this manner:

                "As per agreed statement as of
                 9-1-53 between Mr. Adair
                 and Mr. McGarry                            $86,371.38
                "Less deductions as per
                 letter of 2-27-54               3,433.17
                 Less deductions as per
                 letter of 2-27-54              12,500.00    15,933.17
                                                           -----------
                                                           $70.438.21"
                

and on the reverse carried this statement:

'In full payment and satisfaction of all amounts owing to The Fidelity & Casualty Company of New York to date of September 1, 1953, (but not including any amounts owing on policies written by The Fidelity & Casualty Company of New York and in effect between the dates of September 1, 1953 and December 31, 1953) on account of policies of insurance issued by The Fidelity & Casualty Company of New York for the account of Nello L. Teer, Individually, Nello L. Teer, Inc., Mecklenburg Construction Company, Nello L. Teer Company, a partnership, and Nello L. Teer Company, a corporation, less the sum of $12,500 for return of premiums due said companies or individual or any of them, as per letter of February 27, 1954.'

Plaintiff, in its reply, says:

'Though it is admitted that defendant's check in the amount of $70,438.21 contained thereon the language as set forth in paragraph 2 of the further answer and defense it is specifically denied that said check was accepted by the plaintiff in full and complete settlement of said account, but on contrary it was known to the defendant at that time and at all times prior thereto and subsequent thereto that a dispute existed concerning an item of $12,500 and that the check in question did not constitute settlement of said item. Except as herein admitted, the allegations contained in Paragraph II of the further answer and defense are denied.'

Whether denominated accord and satisfaction or compromise and settlement, the executed agreement terminating or purporting to terminate a controversy is a contract, to be interpreted and tested by established rules relating to contracts. Dobias v. White, 239 N.C. 409, 80 S.E.2d 23.

Here the asserted contract is in writing. Its language (the check and accompanying letter) is plain and unambiguous. Its construction and effect are questions for the court. Neither party can obtain an interpretation and result contrary to the express language of a contract by the assertion that it does not truly express his intent. Barham v. Davenport, 247 N.C. 575, 101 S.E.2d 367; De Bruhl v. State Highway & Public Works Comm., 245 N.C. 139, 95 S.E.2d 553; Howland v. Stitzer, 240 N.C. 689, 84 S.E.2d 167; Jones v. Palace Realty Co., 226 N.C. 303, 37 S.E.2d 906; Coppersmith & Sons v. Aetna Ins. Co., 222 N.C. 14, 21 S.E.2d 838; Brock v. Porter, 220 N.C. 28, 16 S.E.2d 410.

Plaintiff has not by exception challenged the third finding of fact. The intent with which plaintiff accepted the check was immaterial. The reason assigned in the answer to repel defendant's plea is not now assigned as error.

Plaintiff's version of the question for decision is stated in its brief as: 'Can a sham or frivolous claim constitute the basis of a valid accord and satisfaction or compromise and settlement so as to bar an insurance company from collecting the balance due on insurance premiums from its insured?'

The reference in the question to a sham or frivolous claim has reference to the sum of $12,500 shown on the face of the check as a deduction. The question as stated assumes the asserted right to the credit is frivolous, a fact not established, and one which the court was not specifically requested to determine.

Plaintiff did request the court to find: 'That there was never any dispute between the plaintiff and the defendant as to the remaining amount of $12,500. This amount was claimed by the defendant, Nello L. Teer Company, from W. P. Farthing, t/a Fidelity Insurance Agency, or Fidelity Insurance Agency of Durham, Inc., and was never in controversy between the plaintiff and the defendant in this action. ' The court declined to make the requested finding but to the contrary made Finding No. 2 set out above. That finding, considered in the light of all the evidence, negatives the assertion that defendant was acting in bad faith or that his claim was frivolous.

The evidence is sufficient to establish these facts: Plaintiff had been writing various types and kinds of insurance protecting defendant for many years. In the summer of 1953 defendant notified plaintiff it would cease to insure with it. Beginning in the fall of 1953 numerous conferences were held to...