Investment Properties of Asheville, Inc. v. Allen
| Decision Date | 09 May 1973 |
| Docket Number | No. 38,38 |
| Parties | INVESTMENT PROPERTIES OF ASHEVILLE, INC. and Baxter H. Taylor v. Martha Norburn Mead ALLEN. |
| Court | North Carolina Supreme Court |
Bennett, Kelly & Long by Harold K. Bennett, and Hendon & Carson, Asheville, for plaintiff appellees.
Williams, Morris & Golding by James F. Blue, III, Asheville, for defendant appellant.
In the light of the petition to rehear, the Court has reconsidered the record and reviewed all briefs which have been filed. The question which we re-examine is the sufficiency of the evidence to withstand defendant Allen's motions, made in accordance with G.S. § 1A--1, Rule 50, for a directed verdict and for judgment notwithstanding the verdict.
At the outset we note that at the same time plaintiffs filed this action against defendant Allen they also filed a separate suit against her alleged agent, Dr. Charles S. Norburn, to recover from him the cost of the grading which they had done on Allen's Action property. In that action plaintiffs alleged that on 17 June 1965 Norburn gave them his written agreement to 'stand personally liable' for the actual cost of conduit grading and preparing the Acton property owned by Martha Mead Allen, 'in case the lease is not continued after June 1, 1966,' and promised 'to pay in cash for this' or by the conveyance of 'the 734-acre tract in Ashe County.'
By consent of all the parties, Judge Martin consolidated the two cases for trial, and this case against Allen comes to us on the transcript of the consolidated trials.
In the Norburn case, the jury found that Dr. Norburn had received no consideration for his promise to pay the cost of grading Mrs. Allen's property in the event she refused to lease the lands to plaintiffs, and Judge Martin entered judgment that plaintiffs recover nothing of the defendant Norburn. Plaintiffs appealed as a matter of right, under G.S. § 7A--30(2), and we ordered a new trial because of an error in the judge's charge. See Investment Properties v. Norburn, 281 N.C. 191, 188 S.E.2d 342 (1972).
Upon the consolidation of the Allen and Norburn cases for trial, it was inevitable that plaintiffs would offer much evidence which was competent against Norburn but not against Allen. For instance, at the time the written agreement upon which plaintiffs sued Norburn was introduced in evidence as plaintiffs' Exhibit 10(P--10), it was admitted only as against Norburn. When an 'objection by Allen' was interposed to the admission of any evidence the ruling was either 'sustained', 'sustained as to Allen', or 'overruled'. Whatever the ruling ordinarily the witness proceeded to answer the question, and the court gave no instruction limiting the jury's consideration of the testimony. However, we doubt whether the confusion inherent in this situation could have been avoided in any event. We now find that in our first consideration of this defendant's appeal we considered evidence which had been admitted only against defendant Norburn.
Our re-examination of the record discloses that plaintiffs' evidence applicable to defendant Allen tends to show:
Dr. Charles Norburn and Mrs. Allen are brother and sister. At the time of the trial he was 80 years old, and she admitted to being 'older than Charles.' In 1965 she owned their parents' old homeplace, sometimes referred to as the Action property; at others, as the Norburn property. Plaintiffs, Investment Properties, Inc., and Baxter H. Taylor, as co-venturers and partners, desired to acquire this property by a long-term lease as the site of a motel complex. Dr. Logan Robertson, then vice-president of Investment Properties, undertook the task of procuring the lease. He was related to the Norburn family by marriage; his son was married to Dr. Charles Norburn's daughter and his sister, to Dr. Norburn's brother. Several months prior to 10 May 1965, Dr. Robertson requested Dr. Norburn to persuade Mrs. Allen (Martha) to lease the Acton property to plaintiffs.
In a deposition introduced by plaintiffs, Dr. Norburn testified that in his negotiations with his sister he was representing Dr. Robertson 'more than Martha,' but he 'wasn't going to see her cheated.' Mrs. Allen, in her deposition introduced by plaintiffs, testified that Dr. Norburn was 'certainly not acting as (her) agent' in connection with the lease of this property to plaintiffs; that she was renting the home and did not want to see the old homeplace destroyed and the hill removed. She wanted to keep the property as it was and continue to collect the rent. However, Dr. Norburn eventually convinced her that she should lease the property to plaintiffs.
On 10 May 1965 Mrs. Allen and Investment Properties, Inc., by its vice-president, Dr. Robertson, executed a contract whereby she leased 'the old Norburn homeplace' to the plaintiff corporation for a period of fifty years from that date at a rental of $1,000.00 per month, the first payment to be due 10 May 1966, or sooner if lessee began to receive income from the property before that date. Lessor retained the right to re-enter whenever any installment of rent became ten days in arrears. Upon re-entry, should the value of improvements made upon the property be less than $60,000.00, lessee bound itself to pay lessor the difference between that amount and the value of improvements actually made. Lessee assumed complete responsibility for the property, including the payment of all taxes and assessments, and acquired 'unrestricted control in grading, reshaping and development of this property.'
Dr. Robertson testified that about a month after the execution of the lease of 10 May 1965 (plaintiffs' Exhibit 7), he 'found out it was not a satisfactory loan instrument' and plaintiffs would not be able to finance the construction of the proposed motel complex, which the parties had contemplated plaintiffs would build upon the property, because the lease contained no clause subordinating Mrs. Allen's rights in the land to those of the lending institution; that prior to May 1965 he had not discussed with Dr. Norburn the matter of a subordination clause because he knew Dr. Norburn did not want to subordinate; that Dr. Norburn had told him 'he didn't want Martha to be in any jeopardy at all'; that upon learning subordination would be required for a construction loan, Dr. Robertson reported the situation to Dr. Norburn, and the two then conferred with an attorney about the matter; that Dr. Norburn wanted to convert the property to commercial use and 'felt' that they could work out 'a satisfactory lease.'
Thereafter Dr. Norburn consulted several attorneys and, after ascertaining that a 'subordination clause' would permit the lessees to finance the construction of the proposed motel by a first mortgage on the leased premises, he became 'so afraid of the whole business' that he demanded a guarantee which would protect Mrs. Allen from any loss.
In defendant's deposition, which plaintiffs offered in evidence, Mrs. Allen testified that she told Dr. Norburn positively she would not execute a new lease 'to these people' (plaintiffs); that she knew Dr. Norburn 'wanted to do something with the property but (she) told him not to lease it to Logan ((Dr. Robertson)).' In July 1965 Mrs. Allen had an operation which was followed by a lengthy convalescence.
Dr. Norburn, in his deposition which plaintiffs introduced, testified that Dr. Robertson 'came to (his) house day after day, with one proposition after another, trying to get (him) to get Martha to give (plaintiffs) another lease that would subordinate her property'; that plaintiffs proposed various 'guarantees' for Mrs. Allen's protection and they had a number of 'new leases' prepared; that Dr. Robertson 'promised a guarantee of the return of the property at the end of the lease, free and clear of debt' and that is what he told Dr. Norburn to tell Martha; that the lease Dr. Robertson later tendered merely provided that her property would revert to her at the end of any month the rent was not paid; that at one time Dr. Robertson proposed that plaintiffs themselves would put up one-third of the cost of the motel, but thereafter he withdrew this proposition. Dr. Norburn never agreed that any of plaintiffs' proposals were adequate to protect Mrs. Allen and none was ever shown to her. She knew nothing about any of them and at no time did Dr. Robertson or Mr. Taylor ever have any conversation with her about her property. She never executed any contract with plaintiffs except the lease of 10 May 1965.
On 5 June 1965, under a contract with plaintiffs, the Asheville Contracting Company (of which plaintiff Taylor was president) started grading defendant's property for the construction of the proposed motel. At that time Asheville Contracting Company also had a contract to do about three miles of grading and filling on Interstate Highway No. 40 near defendant's property. It was agreed between plaintiffs and Asheville Contracting Company that Asheville Contracting Company would use all surplus dirt from defendant's property on its I--40 project and that plaintiffs would not be charged for moving any surplus material so used. Before any grading began Dr. Robertson's son cleared the timber from the land and disposed of it as saw logs and pulpwood.
Plaintiff Taylor testified that grading was begun on defendant's property on 5 June 1965 and continued for about two weeks. At that time, culverts and drainage pipes were put in and filling was done on the western part of the property. Except for some seeding this was the only work for which Dr. Norburn was billed, and all this was done before or during the week ending 12 June 1965. Thereafter Taylor's crew moved off temporarily but came back on two occasions to grade the back part of the property. On these two occasions they removed surplus material, that is, material not needed for fills on defendant's property, to fills on I--40. No charge was made for the removal...
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