First Federal Sav. & Loan Ass'n of New Bern v. Branch Banking & Trust Co.

• Decision Date: 11 October 1972
• Docket Number: No. 39,39
• Court: North Carolina Supreme Court
• Parties: FIRST FEDERAL SAVINGS & LOAN ASSOCIATION OF NEW BERN, North Carolina v. BRANCH BANKING & TRUST COMPANY, a banking corporation, et al.

Page 683

191 S.E.2d 683

282 N.C. 44

FIRST FEDERAL SAVINGS & LOAN ASSOCIATION OF NEW BERN, North Carolina v. BRANCH BANKING & TRUST COMPANY, a banking corporation, et al.

No. 39.

Supreme Court of North Carolina.

Oct. 11, 1972.

Barden, Stith, McCotter & Sugg by Laurence A. Stith, New Bern, for plaintiff.

Ward, Tucker, Ward & Smith by David L. Ward, Jr., and J. Troy Smith, Jr., New Bern, for defendants.

LAKE, Justice.

The question for decision is whether the record before us will support summary judgment for the defendant. Rule 56(c) provides that upon motion for summary judgment such judgment shall be rendered 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.'

Paragraph (e) of this rule provides that when a motion for summary judgment is made and supported as provided in Rule 56, 'an adverse party may not rest upon the mere allegations or denials of his pleading, but his response, by affidavits or as otherwise provided in this rule, must set forth specific facts showing that there is a genuine issue for trial.' This paragraph of the rule then provides that if the adverse party 'does not so respond, summary judgment, If appropriate, shall be entered against him.' (Emphasis added.)

The plaintiff, though served with notice of the defendants' motion for summary judgment 17 days before the opening of the session at which the motion was heard, and though appearing at such hearing, filed no counter affidavit or other evidence and did not seek a continuance, as permitted by paragraph (f) of this rule, in order to permit the obtaining of affidavits, the taking of depositions or the filing of interrogatories. Thus, the question is whether summary judgment is appropriate, that is, whether the pleadings, together with the affidavit of Hanover's counsel, including the attachment thereto, show (1) that there is no genuine issue as to any material fact, and (2) that Hanover is entitled to a judgment as a matter of law.

Summary judgment is a drastic remedy. Its purpose is not to provide a quick and easy method for clearing the docket, but is to permit the disposition of cases in which there is no genuine controversy concerning any fact, material to issues raised by the pleadings, so that the litigation involves questions of law only. See: Kessing v. National Mortgage Corp., 278 N.C. 523, 180 S.E.2d 823.

Irrespective of who has the burden of proof at trial upon issues raised by the pleadings, upon a motion for summary judgment the burden is upon the party moving therefor to establish that there is no genuine issue of fact remaining for determination and that he is entitled to judgment as a matter of law. Phillips, 1970 Supplement to McIntosh, North Carolina Practice and Procedure, 2d Ed., 1660.10. Dean Phillips also says in section 1660.5 of this supplement, 'If the movant's forecast (of evidence which he has available for presentation at trial) fails to do this, summary judgment is not proper, whether or not the opponent responds.' Thus, as Judge Morris said for the Court of Appeals in Pridgen v. Hughes, 9 N.C.App. 635, 177 S.E.2d 425, 'The evidentiary matter supporting the moving party's motion may not be sufficient to satisfy his burden of proof, even though the opposing party fails to present any competent counter-affidavits or other materials.'

Paragraph (e) of Rule 56 provides that affidavits filed in support of a motion for summary judgment 'shall be made on personal knowledge, shall set forth such facts as would be admissible in evidence, and shall show affirmatively that the affiant is competent to testify to the matters stated therein.' The affidavit of Mr. Ward, counsel for Hanover, which, together with an attached and incorporated affidavit by Agnes L. Coate made in another action, and a copy of the draft, is the sole support for Hanover's motion for summary judgment, does not meet the requirements of this portion of Rule 56. It does not show affirmatively that Mr. Ward is competent to testify, of his own personal knowledge, concerning the matters therein stated. The far greater probability is that his account of the delivery of the draft to Geraldine M. Stallings, of its deposit with the plaintiff and of the procedure followed in making the charge-back are based on hearsay. Clearly, the attached and incorporated affidavit of Agnes L. Coate concerning the forgery of Winter Park's indorsement is, as to Mr. Ward, hearsay. The Coate affidavit was prepared for and was filed in a different action between Winter Park and the present plaintiff. Nothing in the Ward affidavit brings the Coate affidavit within any exception to the hearsay rule. Thus, Mr. Ward, if called as a witness at the trial of the present action, would not be competent to testify to the fact of the alleged forgery. Since the affidavit filed by Hanover does not comply with Rule 56(e), the granting of its motion for summary judgment was error.

To send this action back to the superior court for further proceedings on that ground alone would merely invite a renewal of the motion for summary judgment, supported by affidavits from persons competent to testify concerning the matters set forth in the Ward affidavit. Consequently, we observe that, had the affiant Ward been competent to testify of his personal knowledge to all matters set forth in his affidavit and in the attachment thereto, the entry of a summary judgment in favor of Hanover upon such affidavit would not be appropriate for the further reason that it does not show 'there is no genuine issue as to any material fact' and that Hanover 'is entitled to a judgment as a matter of law.' While the Ward affidavit, if not subject to the above mentioned objections, considered in conjunction with the silence of the plaintiff, would have been sufficient to show that there is no genuine issue as to the fact of the forgery of the purported indorsement by Winter Park, or as to the facts that the draft was collected and then charged back by the respective banks, the establishment of these facts would not entitle Hanover to a judgment as a matter of law, there being other material issues raised by the pleadings and not touched by the Ward affidavit.

The complaint, liberally construed, alleges that Hanover, the drawee of the draft, negligently failed to give the plaintiff notice within a reasonable time of the plaintiff's lack of title to the draft due to the forgery of the indorsement of Winter Park and that, by reason of such negligence by Hanover and the charge-back, the plaintiff has been damaged. Hanover, in its answer, denies this allegation and affirmatively alleges that it exercised due diligence following its ascertainment of the forgery of the indorsement, issued notices of dishonor and charged the draft back through commercial channels. Upon these conflicting allegations, an issue of fact arises. The affidavit on which Hanover relies in its motion for summary judgment does not state when Hanover discovered the forgery of the indorsement or how soon thereafter it notified the collecting bank, the intermediate bank or the plaintiff. Nothing in Hanover's affidavit relates to whether Geraldine M. Stallings withdrew the amount credited to her account by the plaintiff before or after Hanover discovered the forgery of the Winter Park indorsement.

Again, construing the complaint liberally, it alleges that by virtue of the indorsement by Geraldine M. Stallings the plaintiff became the absolute owner of the draft. The answer of Hanover denies this allegation, thus raising an issue of law and of fact. Upon its appeal, both in the Court of Appeals and in this Court, the plaintiff contends that Geraldine M. Stallings had, at least, some interest in the draft, which interest passed to the plaintiff by her indorsement and subsequent withdrawal of the credit given her by the plaintiff. Nothing in Hanover's affidavit touches upon the extent of the interest, if any, which Geraldine M. Stallings had in the proceeds of the draft and which, by her indorsement, she transferred to the plaintiff...