Whitten v. Bob King's AMC/Jeep, Inc.

226 S.E.2d 530 (1976)

30 N.C. App. 161

Jerry W. WHITTEN v. BOB KING'S AMC/JEEP, INC. and R. L. King, Jr.

No. 7621SC125.

Court of Appeals of North Carolina.

July 21, 1976.

*532 Henry C. Frenck, Winston-Salem, for plaintiff-appellant.

White & Crumpler by Fred G. Crumpler, Jr., G. Edgar Parker and Michael J. Lewis, Winston-Salem, for defendants-appellees.

BRITT, Judge.

By his sole assignment of error plaintiff contends the trial court erred in entering *533 summary judgment in favor of defendants. We agree with the trial court with respect to the corporate defendant but hold that the court erred in entering summary judgment in favor of defendant King.

Summary judgment is appropriate ". . . 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". G.S. 1A-1, Rule 56(c). In ruling on a motion for summary judgment, the court does not resolve issues of fact and must deny the motion if there is any genuine issue of material fact. Singleton v. Stewart, 280 N.C. 460, 186 S.E.2d 400 (1972). The party moving for summary judgment has the burden of establishing the lack of a genuine issue of material fact, and the papers supporting the movant's position are closely scrutinized while the opposing papers are indulgently treated. Van Poole v. Messer, 19 N.C.App. 70, 198 S.E.2d 106 (1973); Miller v. Snipes, 12 N.C.App. 342, 183 S.E.2d 270 (1971), cert. denied, 279 N.C. 619, 184 S.E.2d 883 (1971).

When the stated principles are applied to the case at bar, we think the corporate defendant clearly established that as to it defendant King had no authority to make the alleged contract, and plaintiff offered nothing of substance to show that he did have that authority. Therefore, we hold that entry of summary judgment in favor of corporate defendant was proper. However, application of the same principles lead us to a different conclusion with respect to defendant King.

To say that the alleged written contract is unclear and ambiguous would be an understatement. It begins by saying that plaintiff was investing $5,000 in the corporation headed by defendant King. It then states that money was "loaned" to defendant King but in the same sentence refers to the issuance of stock. The succeeding three sentences appear to relate to stock in the corporation and the amount of stock that plaintiff would be entitled to receive.

In 2 Strong, N.C. Index 2d, Contracts § 12, pp. 311-12, we find: "Where the language of a contract is plain and unambiguous the construction of the agreement is a matter of law for the court, and a patent defect or omission cannot be cured by matters outside the instrument. However, if the contract terms are ambiguous, extrinsic evidence relating to the agreement may be competent to clarify its terms, and to have its meaning ascertained by the jury under proper instructions by the court."

Plaintiff contends that under his agreement with defendant he is entitled to stock in defendant corporation for his $5,000; defendant King contends that the $5,000 was a loan. Due to the ambiguity of the written contract, we hold that a genuine issue of material fact is raised and extrinsic evidence relating to the agreement would be competent to clarify its terms.

That brings us to the question of defendant King's liability. In 19 Am.Jur.2d, Corporations § 1348, p. 752, we find: "The general rule of agencythat one who undertakes to act without authority or who exceeds the authority actually delegated to him is personally responsible to the person with whom he is dealingis applicable to unauthorized contracts entered into by officers and agents of corporation. . . ."

The stated rule applies here unless the last sentence in the alleged contract absolves defendant King of all liability. That sentence reads: ". . . This holds no responsibility over Mr. King personally but only to the Corporation of Triangle Motor Sales Inc."

We think the meaning of the quoted sentence is ambiguous and raises another issue of material fact should the jury first determine that the transaction constituted an agreement to convey stock and not a loan. Considered in the context of the overall transaction, and particularly the indication that plaintiff was "investing" $5,000 in the corporation, the sentence is capable of the construction that its purpose was to insure that plaintiff would not expect defendant *534 King, individually, to repay the $5,000 should the investment prove unsound.

We have not attempted to suggest all issues that might arise in the trial of this action. We have merely pointed out two genuine issues of material fact that appear from the materials presented at the hearing on defendants' motions for summary judgment.

For the reasons stated, the judgment with respect to corporate defendant is affirmed. As to defendant King, the judgment is vacated and the cause is remanded for further proceedings consistent with this opinion.

Judgment vacated and cause remanded.

BROCK, C. J., and MARTIN, J., concur.