Annotate this Case

138 S.E.2d 782 (1964)

263 N.C. 37

Frederick WARNER and wife, Elizabeth L. Warner, John Xenakis and wife, Georgia Xenakis, William H. Haggard and wife, Blanche Haggard, v. W & O, INCORPORATED and Frederick Steiner.

No. 101.

Supreme Court of North Carolina.

November 25, 1964.

*785 James S. Howell and Harold K. Bennett, Asheville, for appellants.

John S. Stevens and William M. Styles, Asheville, for appellees.

RODMAN, Justice.

The quoted findings listed by the court as facts are, in reality, legal conclusions determinative of the rights of the parties. Plaintiffs' exceptions to the findings and their assignments of error necessitate an examination of the facts, those stipulated and found by the court, to ascertain if the quoted conclusions are correct. The listing of what is in reality a legal conclusion as a fact, when contrary to the facts stipulated and not supported by the evidence, has no efficacy.

The finding that the validity of the permit to build had been judicially determined by judgment entered by Judge Martin, on November 30, 1962, finds no support in the record. No judgment bearing that date appears in the record. The parties, in their briefs, indicate that the judgment to which the finding relates is the judgment entered in the proceedings initiated by plaintiffs Warner to review by certiorari the Board of Adjustment's refusal, on September 10, 1962, to vacate the permit issued August 8, 1962. For the purpose of this opinion, we act upon the assumption that Judge Martin, when called upon to review the action of the Board of Adjustment, concluded that the reason then assigned for reversing the Board of Adjustment did not show invalidity on September 10, the date the Review Board acted. The reason then assigned for reversing the action of the Board of Adjustment was that the permit was invalid because the proposed building violated the provisions of the ordinance relating to properties classified in zone RA-8. The Board of Adjustment was not called upon to rule on the right of W & O to obtain a building permit because it was not a property owner, or its right to act on the permit after the ordinance was amended. A judgment rendered in the proceedings for certiorari is not determinative of the questions presented in this action.

The parties have not seen fit to incorporate in the record the zoning ordinance. There is nothing in the evidence to show what the ordinances provide with respect to the right of an optionee to apply for a permit for the construction of a building. Our statute, G.S. § 160-126, requires the owner of the property to obtain a permit before constructing or repairing a building. But there is nothing in this case which requires us to determine whether the word "owner," as there used, would exclude a lessee, or one having an option, to purchase. For present purposes, we assume that an optionee is within the class that might apply for, and obtain, a building permit.

Accepting as correct defendants' contention that the permit was valid on August 8, 1962, when issued, we are brought to the crucial question: Did that permit create a vested right denying to the city the power to amend its ordinances by enlarging the area of zone RA-10?

The permit created no vested right; it merely authorized permittee to act. If he, at a time when it was lawful, exercised the privilege granted him, he thereby acquired a property right which would be protected; but he could not remain inactive and thereby deny to the municipality the right to make needed changes in its ordinances. It is not necessary for the permittee to show that the construction authorized by the permit has been completed before the ordinance is amended. He is protected if, acting in good faith, he has made expenditures on the faith of the permit at a time when the act was lawful. Stowe v. Burke, 255 N.C. 527, 122 S.E.2d 374; In re Appeal of W. P. Rose Builders' Supply Co., 202 N.C. 496, 163 S.E. 462; 101 C.J.S. Zoning § 243, pages 1006-1007, 58 Am.Jur. 1041.

Expenditures made for architect's drawings, so that W & O might apply for a *786 permit, were manifestly not made in reliance on the permit thereafter issued. The parties stipulated: "That on the date of September 13, 1962, the date that Ordinance 462 was adopted rezoning subject property, and on the date of September 28, 1962, the effective date of said rezoning ordinance, no construction work had been done on subject property; except for certain clearing and grubbing operations." This stipulation must be interpreted in the light of the testimony of defendants' witness, Steiner, the only witness to testify with respect to the work. He testified he engaged "a tree man to eliminate the trees on the property that would encroach upon the building site, which consists of approximately six to seven trees that we had eliminated. * * I would say he dropped the trees, and at the time that the trees were dropped and had fallen on the ground he was stopped from doing any further work." The record shows the work was stopped by a restraining order issued and served on September 27, 1962. Nowhere is there any estimate of the cost of doing this work. The evidence discloses that the expenditures could not have cost any substantial sum. They were made at a time when the permittee knew that the city had adopted an ordinance prohibiting the construction of apartment buildings in the area. It appears from Steiner's testimony that this work was done on September 27, just one day before the amended ordinance became effective. Steiner, the agent for W & O and in charge of its operations, was aware of the opposition to the construction of the apartment house, the effort to revoke the permit, and the application of protesting citizens to the City Council for an amendment of the ordinance.

The court found as a fact that defendants "obligated themselves for the purchase price of the land in complete good faith, and without notice or knowledge of any opposition to the erection of the proposed buildings." Plaintiffs excepted to and assigned the foregoing finding as error, because the parties had expressly stipulated there was no written notice of the election to purchase; notice of the election to purchase was given verbally in May, 1962; and the deeds executed pursuant to the notice were dated September 26, 1962, and October 9, 1962.

No contract to buy or sell land can be enforced unless in writing and signed by the party to be charged, G.S. § 22-2. A written option offering to sell, at the election of the optionee, can become binding on the owner by verbal notice to the owner, Kottler v. Martin, 241 N.C. 369, 85 S.E.2d 314; but a parol acceptance by the optionee is not sufficient to repel the statute of frauds and bind the optionee. Burriss v. Starr, 165 N.C. 657, 81 S.E. 929; Hall v. Misenheimer, 137 N.C. 183, 49 S.E. 104; Love v. Atkinson, 131 N.C. 544, 42 S.E. 966; Improvement Co. v. Guthrie, 116 N.C. 381, 21 S.E. 952; Love v. Welch, 97 N.C. 200, 2 S.E. 242; Mizell v. Burnett, 49 N.C. 249; Carr v. Rawlings, 158 Ga. 619, 123 S.E. 875; Imholz v. Southern Oil Corporation of America, Tex.Civ.App., 134 S.W.2d 301; James, Option Contracts, pp. 187-189, Ann.Cas.1913A, 1042; 30 A.L.R.2d 974; 49 Am.Jur. 691; 37 C.J.S. Frauds, Statute of § 180c, page 664. It follows as a matter of law from the stipulated facts that W & O could not have been compelled to purchase and pay for the property because of their verbal acceptance. The ordinance had been amended before the deeds were executed; it became effective only two days after the first deed was dated, and was in effect prior to the date of the second deed.

The fact that plaintiffs obtained a restraining order on September 27, 1962, forbidding defendants from proceeding with the construction of the proposed building, did not enlarge their rights. They knew that the ordinance prohibiting the construction would become effective the following day. The law accords protection to nonconforming users who, relying on the authorization given them, have made substantial expenditures in an honest belief that the project would not violate declared public *787 policy. It does not protect one who makes expenditures with knowledge that the expenditures are made for a purpose declared unlawful by duly enacted ordinance. Lee v. Board of Adjustment, 226 N.C. 107, 37 S.E.2d 128, 168 A.L.R. 1; nor does it protect one who waits until after an ordinance has been enacted forbidding the proposed use and, after the enactment, hastens to thwart the legislative act by making expenditures a few hours prior to the effective date of the ordinance, Stowe v. Burke, supra.