High Point Bank & Trust Co. v. Morgan-Schultheiss, Inc.

• Decision Date: 15 June 1977
• Docket Number: MORGAN-SCHULTHEIS,No. 7618SC857,INC,7618SC857
• Citation: 33 N.C.App. 406,235 S.E.2d 693
• Court: North Carolina Court of Appeals
• Parties: HIGH POINT BANK AND TRUST COMPANY, Plaintiff, v., a corporation, Clarence V. Mattocks, Substituted Trustee, Evelyn H. Poston and Janice E. Poston, Defendants. Evelyn H. POSTON, Plaintiff, v., a North Carolina Corporation, Defendant.

Page 693

235 S.E.2d 693

33 N.C.App. 406

HIGH POINT BANK AND TRUST COMPANY, Plaintiff, v. MORGAN-SCHULTHEISS, INC., a corporation, Clarence V.

Mattocks, Substituted Trustee, Evelyn H. Poston

and Janice E. Poston, Defendants.

Evelyn H. POSTON, Plaintiff, v. MORGAN-SCHULTHEISS, INC., a North Carolina Corporation, Defendant.

No. 7618SC857.

Court of Appeals of North Carolina.

June 15, 1977.

Jenkins, Lucas, Babb & DeRamus by F. Gaither Jenkins and Judson D. DeRamus, Jr., Winston-Salem, for appellants, Evelyn H. Poston and Janice E. Poston.

Haworth, Riggs, Kuhn, Haworth & Miller by John Haworth, High Point, for High Point Bank & Trust Co., appellee.

Frank B. Wyatt, High Point, for Morgan-Schultheiss, Inc., appellee.

MORRIS, Judge.

It is apparent from the record that appellants have been represented throughout this litigation by a succession of attorneys. While each counsel undertaking to represent appellants has been able and competent, the entry and withdrawal of so many different attorneys would obviously account for the confused state of the record. It appears that counsel on appeal did not represent appellants until after the order of 2 August 1976 was entered but did prepare the last motion for extension of time, consolidation, and request for recommendation of the trial court to this Court.

We believe a more orderly procedure requires the disposition of the appeal in the case of High Point Bank and Trust Company v. Morgan-Schultheiss, Inc., Clarence V. Mattocks, Evelyn H. Poston, and Janice E. Poston. Appellants' only assignment of error as to this appeal is that the court erred in entering summary judgment.

As a part of their argument under this assignment of error, appellants contend that with respect to the proceedings of 7 April 1976 the hearing on the motion for summary judgment any order entered without the participation of their counsel was void. Appellants take the position that the court had the duty to see that their counsel of record had properly withdrawn pursuant to Rule 16 of the Superior and District Court Rules. Rule 16 provides:

"No attorney who has entered an appearance in any civil action shall withdraw his appearance, or have it stricken from the record, except on order of the court. Once a client has employed an attorney who has entered a formal appearance, the attorney may not withdraw or abandon the case without (1) justifiable cause, (2) reasonable notice to the client, and (3) the permission of the court."

As between the attorney and his client, the relationship may, in good faith, be dissolved at any time, but the attorney may not be released from litigation in which he appears for the client without first satisfying the court that his withdrawal therefrom is justified, and whether he is justified will depend on the circumstances of that particular situation. Smith v. Bryant, 264 N.C. 208, 141 S.E.2d 303 (1965).

The record indicates that the hearing on the motion for summary judgment was held at the 29 March 1976 Civil Session of Guilford Superior Court. The notice thereof indicated that the motion would be calendared for hearing at that session with the hearing to begin at 10 o'clock on 5 April 1976 or as soon thereafter as the matter could be heard. Prior to that time the only document indicating that appellants were represented by counsel was a stipulation extending the time to plead. This stipulation was signed by counsel for the bank and by Norman B. Smith, attorney for Evelyn H. Poston and Janice E. Poston. The stipulation is not dated, but it extended the time to file answer or otherwise plead to and including 29 March 1976. It was filed on 1 April 1976. Defendants Postons' answer was filed on 31 March 1976 and was signed by each of them without any indication that they were represented by counsel.

The transcript of the evidence taken at the hearing reveals that upon questioning by the court Janice Evelyn Poston testified: "We do not have an attorney." Evelyn H. Poston was examined by the court. She testified: "Our attorney at this point is Mr. Wesley Bailey of Winston, who could not be here this morning. Last evening Mr. Norman Smith told my daughter that the only reason he discontinued representing us was the fact that Mr. Roy Morgan and Mr. Schultheiss said they would sue him if he continued representing us. We have not paid Mr. Wesley Bailey a fee because we just talked by telephone. We first talked with Mr. Bailey yesterday. I am appearing today without counsel." Nowhere else in the record does Mr. Bailey's name appear. Nor does Mrs. Poston's testimony reveal an attorney-client relationship. Thereafter the Postons were apparently represented by Paul B. Stam, Sr., for a short while and then Renn Drum, Jr., for a short while. No order releasing any counsel appears of record. It is obvious that Mr. Smith withdrew from representing appellants, if he ever did in fact represent them for any purpose other than obtaining a stipulation for extension of time within which to plead, some time prior to the scheduled hearing. The motion for summary judgment was served on Mr. Smith as counsel for the Postons on 10 March 1976, but on 15 March 1976 the notice of hearing was served upon the Postons. This would indicate that the Postons were not then represented by Mr. Smith or any other counsel. The cross-claims of Morgan-Schultheiss were also served on the Postons individually. The answer of the Postons, although filed after the time for answer had expired, was signed by them and filed by them in propria persona on 31 March 1976. The record is clear that this is not a situation where counsel withdraws on the day of hearing and leaves the client surprised and without time to obtain counsel. Nor is there any indication that they were prejudiced by the fact that they were not represented by counsel. Mrs. Evelyn Poston testified that she is a graduate of Guilford College and Janice Poston testified that she had completed two years of college. Neither is uneducated and both are obviously women of intelligence. Neither asked for a continuance. Neither offered any complaint that they had no counsel. They proceeded to offer evidence with respect to the value of the land and with respect to the transaction with Morgan-Schultheiss and the events leading up to it.

Under the circumstances of this case, we are of the opinion that the court was under no duty to have appellants' "counsel of record" present or see that he had properly withdrawn pursuant to Rule 16. In this situation, there was no "counsel of record" within the contemplation of the rule. We note that counsel for appellants limits this contention to the bank case. There is nothing in the record of the Poston v. Morgan-Schultheiss case to indicate that Evelyn Poston had counsel for any purpose at all until after the summary judgment was entered. She signed and filed her own complaint attaching to it the exhibits she indicated would be attached and signed and filed the notice of lis pendens. Indeed, lack of counsel has not been an issue with either appellant until now. We hold that the argument is without merit.

We turn now to the substantive feature of appellants' assignment of error. At oral argument, counsel for appellants conceded that he could not with any authority argue that the plaintiff is not entitled to judgment against Morgan-Schultheiss in the sum of $60,000 plus interest and costs nor that it is not entitled to foreclosure under the terms of the deed of trust. He does argue that a genuine issue of fact exists with respect to the ownership of the acreage contending that the question of the intention of the parties to the absolute deed accompanied by the collateral written agreement to reconvey upon payment of a specified sum of money within a specified time should be submitted to the jury. This contention is based upon these grounds: (1) If the grantor remains in possession of the land, the factual presumption is raised that a mortgage and not an absolute deed was intended. (2) Appellants at all times prior to the execution of the instruments indicated they wanted a loan. (3) Appellants introduced evidence that the land was worth $150,000 and the $60,000 consideration paid by Morgan-Schultheiss was clearly inadequate. (4) Evidence, undisputed, showed the grantor to be in financial distress. (5) Where the agreement to reconvey accompanying the deed is written rather than oral, no fraud, mistake, undue influence or ignorance need be shown; and where the execution of a deed in absolute form and a written agreement to convey raise doubt and ambiguity, the transaction is construed to be a mortgage.

In support of its motion, plaintiff filed a copy of the deed from Evelyn H. Poston to Morgan-Schultheiss, a copy of the $60,000 note from Morgan-Schultheiss to the bank and a copy of the deed of trust securing the note. It also filed a copy of an agreement between Evelyn H. Poston and Morgan- Schultheiss. That agreement is a follows:

"NORTH CAROLINA

GUILFORD COUNTY

THIS AGREEMENT entered into this 30th day of July, 1974, by and between EVELYN H. POSTON, hereafter referred to as SELLER, and MORGAN-SCHULTHEISS, INC., a North Carolina Corporation, hereafter referred to as BUYER.

W I T N E S S E T H:

SELLER is the owner of her homeplace and approximately 25.8 acres on Vickery Chapel Road in Jamestown, North Carolina, and has this date delivered to BUYER a warranty deed for the same.

NOW, THEREFORE, for and in consideration of the sums to be paid and in further consideration of the mutual promises made each to the other, it is agreed:

(1) Upon the title to said lands being approved by BUYER'S attorney or by BUYER'S bank's attorney, BUYER shall secure a loan in the sum of $60,000.00 and give as security for the same a Deed of Trust on the land.

(2) All liens and encumbrances against said land, except for the Deed of Trust to Perpetual Savings & Loan Association, shall be paid and satisfied of record at time of closing.

(3) ...