Institution Food House, Inc. v. Circus Hall of Cream, Inc.

• Decision Date: 06 October 1992
• Docket Number: No. 5,No. 9125DC752,5,9125DC752
• Citation: 421 S.E.2d 370,107 N.C.App. 552
• Court: North Carolina Court of Appeals
• Parties: INSTITUTION FOOD HOUSE, INC. v. CIRCUS HALL OF CREAM, INC., d/b/a Circus Hall of Cream, and Wayne's Associates, Inc.

Page 370

421 S.E.2d 370

107 N.C.App. 552

INSTITUTION FOOD HOUSE, INC. v. CIRCUS HALL OF CREAM, INC., d/b/a Circus Hall of Cream No 5, and Wayne's Associates, Inc.

No. 9125DC752.

Court of Appeals of North Carolina.

Oct. 6, 1992.

Gaither, Gorham & Crone by J. Samuel Gorham, III, Hickory, for plaintiff-appellee.

Lewis E. Waddell, Jr., Newton, for defendant-appellant.

JOHNSON, Judge.

Plaintiff initiated this suit on 15 November 1989, seeking to recover upon an account which plaintiff alleged one or both defendants owed plaintiff the sum of $25,075.15, plus interest at the maximum legal rate from 21 July 1988. Plaintiff further sought to enforce the Attorney's Fee Provision of the credit application pursuant to N.C.Gen.Stat. § 6-21.2(5) (1986).

On 1 February 1990, Defendant-Wayne's Associates, Inc., answered plaintiff's complaint, specifically denying that it had done any business at Circus Hall of Cream, located on highway 64/70 in Hickory, North Carolina. Wayne's Associates asserted that it owed plaintiff nothing, and that it was a separate corporate entity. The trial court entered a judgment awarding plaintiff $25,075.15, plus interest from the filing of the action, and attorney's fees in the amount of $3,761.27. Defendant filed timely notice of appeal.

Plaintiff-appellee, Institution Food House, Inc., is a wholesale distributor of groceries and related items to restaurants and institutions. On approximately 28 March 1984, plaintiff-appellee received an account authorization and credit application to open an account for Circus Hall of Cream # 5, located on Highway 64/70, Hickory, North Carolina. The application provided that the bills should be sent to Circus Hall of Cream # 5, c/o Wayne's Associates, P.O. Box 5035, Hickory, NC 28601.

The credit application provided spaces for corporate, partnership, or proprietorship status. The corporate box was checked, and the following information given:

Corporation name and address:

Wayne's Associates, Inc., P.O. Box 5035, Hickory, N.C. 28601

Officers' names and addresses:

President-Wayne O. Hall, 934 19th Ave. N.W., Hickory, N.C.

Vice President-Nan W. Hall, 934 19th Ave. N.W., Hickory, N.C.

Secretary/Treasurer-Nan W. Hall, 934 19th Ave., N.W., Hickory, N.C.

Also on the front page of the application was the following paragraph:

I certify that this information is correct. The applicant shall be responsible for and shall reimburse IFH for all costs and expenses (including reasonable attorney's fees) incurred by IFH in connection with the collection of past due accounts. I understand the credit terms and will accordingly remit any balance due.

At the bottom of the page appeared the signature, "Nan W. Hall," situated on a line immediately above the words: "Authorized Signature (officer, partner, manager, etc.)."

The back of the application indicated that the trade name used for registration with the Sales and Use Tax Division was Wayne's Associates, Inc., and that the owner was Wayne O. Hall. The back was signed by Ms. Hall, who identified herself as the vice-president.

Wayne's Associates, Inc. was incorporated in 1968, with Wayne O. Hall as it president and general manager. Mr. Hall has operated ice cream shops, called Circus Hall of Cream, and sold ice cream equipment through Wayne's Associates since 1968. From 1975 through 1989, Nan W. Hall was vice-president and secretary of Wayne's Associates. She became a shareholder on 15 August 1985, but later transferred her stock back to Mr. Hall as a result of a divorce proceeding.

Circus Hall of Cream # 5 at the Highway 64/70 location opened for business in April of 1984. In July of 1984, it was incorporated as Circus Hall of Cream, Inc. Minutes of the first meeting of the board of directors reflect that Wayne's Associates, Inc. transferred certain assets to Circus Hall of Cream, Inc. on 30 June 1984, and that Circus Hall of Cream, Inc. assumed certain liabilities from Wayne's Associates, Inc. The difference between the value of assets transferred and the liabilities assumed, $75,000, was paid to Wayne's Associates, Inc. in the form of capital stock.

No notice was given to appellee of the assumption of corporate status. All checks received by appellee for merchandise sold to the Circus Hall of Cream Store located at Highway 64/70, before and after July, 1984, were embossed "Circus Hall of Cream," without any indication of incorporation.

Between 14 January 1988 and 15 August 1988, $25,075.15 in merchandise was sold and delivered by Institution Food House to the Circus Hall of Cream located on Highway 64/70. The account name on the statement was "Circus Hall of Cream." Plaintiff-appellee has not been paid for the merchandise delivered.

On appeal, defendant first argues that the trial court erred in finding as fact that in her capacity as vice-president and secretary of Wayne's Associates, Inc. and as manager of the 64/70 store, Nan W. Hall had the apparent authority to execute a credit authorization as an agent for Wayne's Associates, Inc., and that Wayne's Associates, Inc. ratified the contract.

Rule 52 of the North Carolina Rules of Civil Procedure, N.C.Gen.Stat. § 1A-1, Rule 52 (1990), provides in pertinent part:

(a) Findings.

(1) In all actions tried upon the facts without a jury or with an advisory jury, the Court shall find the facts specially and state separately its conclusions of law thereon and direct the entry of the appropriate judgment.

. . . . .

(c) Review on appeal.--When findings of fact are made in actions tried by the court without a jury, the question of the sufficiency of the evidence to support the findings may be raised on appeal whether or not the party raising the question has made in the trial court an objection to such findings or has made a motion to amend them or a motion for judgment, or a request for specific findings.

This Court held in General Specialties Co. v. Teer Co., 41 N.C.App. 273, 275, 254 S.E.2d 658, 660 (1979), that "[w]here the trial judge sits as the trier of facts, his findings of fact are conclusive on appeal when supported by competent evidence. This is true even though there may be evidence in the record to the contrary which could sustain findings to the contrary." The ruling of the trial court will not be disturbed on appeal "if there [is] any evidence to support the judgment." Whitaker v. Earnhardt, 289 N.C. 260, 265, 221 S.E.2d 316, 320 (1976).

Appellant's exception to the finding that Nan W. Hall had the apparent authority to execute the credit application as agent of Wayne's Associates, Inc. is not well-founded. A principal is bound by his agent's contract "when the agent acts within the scope of his or her actual authority; when a contract, although unauthorized, has been ratified; or when the agent acts within the scope of his or her apparent authority, unless the third person has notice that the agent is exceeding actual authority." Foote & Davies, Inc. v. Arnold Craven, Inc., 72 N.C.App. 591, 595, 324 S.E.2d 889, 892 (1985). "Apparent authority includes authority to do whatever is usual or necessary to transact the business an agent is employed to transact." Id. Apparent authority is determined by the unique facts of each case. Id. at 595, 324 S.E.2d at 893. Facts to be considered include "the ordinary course of business, the nature and reasonableness of the contract, the officer negotiating it, the size of the corporation, and the number of shareholders." Id.

Defendant-appellant contends that whether Nan Hall had apparent authority to bind the corporation is a question of fact for the jury because the evidence is conflicting. As stated above, however, if there is any competent evidence to support the trial judge's finding, it will not be disturbed on appeal. See Whitaker, 289 N.C. 260, 221 S.E.2d 316. In the case at bar, ...