Raleigh Banking & Trust Co. v. Safety Transit Lines, Inc.

• Decision Date: 14 May 1930
• Docket Number: 263.
• Citation: 153 S.E. 158,198 N.C. 675
• Parties: RALEIGH BANKING & TRUST CO. v. SAFETY TRANSIT LINES, Inc.
• Court: North Carolina Supreme Court

153 S.E. 158

198 N.C. 675

RALEIGH BANKING & TRUST CO. v. SAFETY TRANSIT LINES, Inc.

No. 263.

Supreme Court of North Carolina

May 14, 1930

Appeal from Superior Court, Wayne County; Harris, Judge.

Action by the Raleigh Banking & Trust Company against the Safety Transit Lines, Inc., in which action receivers for defendant were appointed. From a judgment sustaining report of receivers disallowing claim of W. A. Royall and others claimants appeal.

Remanded with directions.

Ordinarily lessee's positive repudiation of lease or denial of liability thereunder works breach thereof as matter of law.

A jury trial was waived and the trial judge found the facts. The facts so found are substantially as follows:

(1) On June 12, 1925, the Corporation Commission made an order that all motor vehicle carriers operating to, from, and through the city of Goldsboro should establish and maintain in said city a Union Station so centrally located as to best serve the public.

(2) On July 12, 1925, W. A. Royall, a citizen of Goldsboro, and the owner of a certain lot therein, made a proposed contract of lease with the Safety Transit Lines, Inc., Seashore Transportation Company, both North Carolina corporations George B. Patrick and John A. Vinson, trading as Patrick & Vinson, and Ashley Southerland and Malcolm Southerland trading as Southerland Bros., the owners of all bus lines entering the city of Goldsboro.

(3) By the terms of said contract Royall proposed to lease to said transportation companies for a period of ten years a certain lot of land owned by said Royall, to be used as a bus station. This lease was signed by S. T. Gresham for and in behalf of Safety Transit Lines, but was not signed by any of the other parties. Gresham was president of the Safety Transit Lines, and stated to Royall prior to signing the agreement that the Safety Transit Lines, Inc., "would be responsible for the lease regardless of the other signatures. Gresham, as president of Safety Transit Lines, Inc., also advised Royall that he had made arrangements with the other parties who were using the bus station on the basis of the old bus station." Whereupon Royall did not secure the signatures of other parties using the bus station.

(4) The corporate seal of the Safety Transit Lines was omitted from said contract, and it was not attested by the secretary of the corporation. There was no evidence that said Gresham as president was authorized to enter into said contract or execute the same. After the execution of the agreement, Royall proceeded to construct on his property a building especially designed as a bus station at an approximate cost of $51,000. Gresham, president of the Safety Transit Lines, Inc., frequently visited the bus station and consulted with Royall and the architect directing its construction. Certain modifications and changes were made in the station under a verbal agreement between Royall and Gresham as president of said corporation, to the effect that the annual rental would be increased by 10 per cent. by reason of enlarging the building and certain other changes and improvements. The architect's drawings of the changes were submitted to Gresham and approved by him in writing as president of Safety Transit Lines, Inc.

(5) Subsequently, to wit, on January 22, 1929, Royall and wife executed a lease for said bus station to the Safety Transit Lines, Inc., and Seashore Transportation Company, providing for a certain annual rental. This lease was never submitted to, or approved by, the Seashore Transportation Company or Patrick and Vinson or Southerland Bros., and was never executed by Seashore Transportation Company. However, said lease was duly executed by Royall and his wife and signed: "Safety Transit Lines, Inc. by-S. T. Gresham, President: Attest: S. H. Hassenger." The lease was duly acknowledged by Royall and wife before a notary public, who took the private examination of Mrs. Royall. The following certificate appears on the lease: "North Carolina, County of Wake. This the 23 day of January 1929, before me, a Notary Public, personally came S. T. Gresham, who being by me duly sworn, says that he is president of the Safety Transit Lines, Inc., and that the seal affixed to the foregoing instrument in writing is the corporate seal of said company, and that said writing was acknowledged and sealed by him in behalf of said corporation by its authority duly given, and the said S. T. Gresham acknowledged the said writing to be the act and deed of said corporation. Witness my hand and notarial seal, this the 23 day of January, 1929. W. F. Black, Notary Public."

However, the seal of the corporation was not affixed to the foregoing paper writing, and it was never submitted to the stockholders or directors of the Safety Transit Lines, Inc., for their approval. Gresham, president of Safety Transit Lines, advised Royall that he wanted the station there and would pay the rent, and that he had a verbal agreement with other bus companies using the bus station for a partial contribution to the expense thereof.

Upon the foregoing the court found that the proposed contract was never completed, and that the paper writing did not become a contract between the parties or binding upon either party.

(6) The court further found that the bus station since its completion has been under the control and management of the four bus companies operating into the city of Goldsboro, and that "under the order and direction of the Corporation Commission the said bus lines verbally agreed to the contract for rental and division of the rent, and that they selected a manager for the bus station, who has had active charge and management thereof since completion and who apportioned and collected the rents from each of said bus companies and paid said rent to said Royall and Graves J. Smith, trustee for said Royall." Thereafter the Safety Transit Lines, Inc., was placed in the hands of receivers, but said receivers immediately after receivership denied any obligations under said contract.

(7) The receivers sold the property of the Safety Transit Lines to W. Bond Collins and his associate, Safety Transit Company, and at the same time assigned all title and interest in said lease to Safety Transit Company. Collins and Safety Transit Company are solvent.

(8) The court further found that the receivers never acquired an interest in said contract, or that whatever interest the receivers had in said property was assigned to Safety Transit Company. The court further found that, if there was a contract existing, there had been no breach of same upon the part of Safety Transit Lines, Inc., or its receivers.

(9) The court further found that the reasonable rental value of the bus station during the remaining period of the lease was $125 a month.

Subsequent to September 16, 1929, the purchaser of Safety Transit Lines to wit, Safety Transit Company, notified Royall that it denied all liability under the alleged lease, if any such lease existed. Royall filed a claim with the receivers of Safety Transit Lines, Inc., for $18,071.10 upon...