MacKay v. McIntosh

153 S.E.2d 800 (1967) 270 N.C. 69

Noel C. MacKAY
v.
Callie C. McINTOSH.

No. 281.

Supreme Court of North Carolina.

April 12, 1967.

John E. McDonald, Jr., Charlotte, for plaintiff appellant.

Hedrick, McKnight & Parham, Charlotte, for defendant appellee.

BOBBITT, Justice.

The only question presented by plaintiff's exception to the judgment is whether error of law appears on the face of the record proper. 1 Strong, N.C. Index, Appeal and Error § 21. Since the court's factual findings with reference to mutual mistake support the judgment, this exception is without merit.

Plaintiff's remaining exceptions consist of the objections set forth in the appeal entries to the effect that the findings of fact are not supported by the evidence. Upon waiver of jury trial, the court's findings of fact, if supported by competent evidence, have the force and effect of a verdict. Textile Insurance Co. v. Lambeth, 250 N.C. 1, 108 S.E.2d 36; Priddy v. Kernersville Lumber Co., 258 N.C. 653, 129 S.E.2d 256.

"An exception that the evidence is insufficient to support the findings of the trial court, without exception to a particular finding, is * * * broadside and ineffectual." 1 Strong, N.C.Index, Appeal and Error § 22. While this deficiency in plaintiff's exceptions is sufficient ground for dismissal thereof, we have elected to consider whether the evidence is sufficient to support the court's factual findings.

At the trial before Judge Hasty, no objection to the admission of evidence was interposed by plaintiff. Indeed, the adverse examination of defendant, whose testimony as to Mrs. Cooper's representations and her reliance thereon strongly supports the court's factual findings, was offered in evidence by plaintiff.

The writing (Exhibit A) consists of an offer addressed by defendant to Florida Realty Company "as agent." A condition thereof is that "the owners" be able to convey a good and marketable title, and that the property be "free and clear of all encumbrances except: zoning, restrictive covenants, easements of record and utility rights of way, if any"; etc. The quoted excerpts are printed portions of a form used by Florida Realty Company. The signature of plaintiff appears below that of defendant and after the word "Accepted." Plaintiff's name does not appear in the body of the contract. Appended to said contract is a receipt issued October 7, 1965, signed in the name of Florida Realty Company by Sarah C. Cooper, acknowledging the payment by defendant of the sum of $100.00 as a deposit and part payment on the purchase price of the property. To the left and below Mrs. Cooper's signature on said receipt these words appear: "Bill C. McKeon, Co-operating broker."

Plaintiff testified the offer signed by defendant was brought to him by McKeon; that he read it and signed it; that the subject of zoning was not mentioned; that he did not know defendant and had no direct dealings with her; that both Mrs. Cooper and McKeon were employees of Florida Realty Company; and that he had signed an agreement to pay each of these real estate agents one thousand dollars as commission for the sale of the property.

There is evidence that McKeon drafted the contract (filled in the blanks) and obtained defendant's signature thereto; that plaintiff knew the property was not zoned for business; that he thought the property was zoned O-6; that in fact it was zoned R-9MF (multiple family) and was being used for an office building in violation of the applicable zoning restriction; that the building was separated by a parking lot from property zoned for business and being used for business purposes by "a Burger King"; and that the fair market value of the subject property, if it were zoned for business, would be substantially more than its fair market value when zoned R-9MF. (Note: It is stated in the case on appeal that plaintiff later sold the subject property for $14,388.58.)

There was ample evidence to support Judge Hasty's factual findings that defendant's sole interest in the subject property was for use by her for a retail store and that defendant so advised Mrs. Cooper; that defendant was induced to sign the writing by Mrs. Cooper's representation that the property was in a zone where use thereof for a retail store was permitted; and that both Mrs. Cooper and defendant acted pursuant to their mistaken belief that this representation was true when in fact it was false.

Under "Assignments of Error," plaintiff contends (1) "there was nothing to indicate that the real estate agent had any authority beyond the normal restrictive powers of a real estate agent," and (2) "the written contract clearly showed that the zoning was not guaranteed by the seller and was not a condition of the contract." It is well established that "(a)ssignments of error unsupported by an exception duly taken and preserved will not be considered on appeal." Hicks v. Russell, 256 N.C. 34, 39, 123 S.E.2d 214, 218, and cases cited; King v. Snyder, 269 N.C. 148, 151, 152 S.E.2d 92, 94. Apart from this procedural deficiency, we find no merit in these contentions.

Plaintiff's testimony establishes clearly that he had appointed McKeon and Mrs. Cooper as his agents to sell the subject property, and that the negotiations with defendant were conducted on behalf of plaintiff by Mrs. Cooper. Nothing in the offer signed by defendant indicates any restriction upon Mrs. Cooper's authority as agent for the seller. Nor does plaintiff's testimony indicate that he attempted to place any restriction upon her authority to act for him.

All statements and declarations "made by the agent within the scope of his employment and with the actual or apparent authority of the principal are binding upon the principal and he is responsible therefor. A principal cannot repudiate statements made by his agent in the course of the employment, and fairly within the line of his real or apparent authority, and he is bound by the agent's material representations of fact to the same extent as if he had made them himself." 3 Am.Jur.2d, Agency § 264. As to the applicability of this rule to real estate agents, see Restatement (Second) of Agency § 258, comment b (1958). Whether unauthorized representations made by Mrs. Cooper could be enforced against plaintiff is not presented. In the present factual situation, it would be unconscionable to allow plaintiff to profit by defendant's reasonable reliance upon the unintentional false representations made by his agent in her negotiations in his behalf with defendant.

Plaintiff contends an oral agreement in conflict with the writing should be disregarded. This contention is based on a misconception of defendant's position.

"The parol evidence rule presupposes the existence of a legally effective written instrument. It does not in any way preclude a showing of facts which would render the writing inoperative or unenforceable. Thus it may be proved that * * * there was such mistake as to prevent the formation of a contract or make it subject to reformation or rescission." Stansbury, N.C. Evidence (Second Edition), § 257. "(P)arol evidence is admissible to show a mutual mistake as to the existence of the subject matter of an agreement which prevents the formation of a contract." 17 Am.Jur.2d, Contracts § 144, p. 492.

Defendant does not seek to contradict the writing or to enforce a parol agreement. She contends that, since both Mrs. Cooper and defendant negotiated and acted in the honest but mistaken belief the subject property was in fact zoned for business, no contract, either written or oral, resulted; and that, there being no agreement, she is not obligated to purchase property which cannot be used for a retail store.

"The formation of a binding contract may be affected by a mistake. Thus, a contract may be avoided on the ground of mutual mistake of fact where the mistake is common to both parties and by reason of it each has done what neither intended. Furthermore a defense may be asserted when there is a mutual mistake of the parties as to the subject matter, the price, or the terms, going to show the want of a consensus ad idem. Generally speaking, however, in order to affect the binding force of a contract, the mistake must be of an existing or past fact which is material; it must be as to a fact which enters into and forms the basis of the contract, or in other words it must be of the essence of the agreement, the sine qua non, or, as is sometimes said, the efficient cause of the agreement, and must be such that it animates and controls the conduct of the parties." 17 Am.Jur.2d, Contracts § 143.

In our opinion, and we so hold, whether the subject property was within the boundaries of an area zoned for business is a factual matter; and, under the evidence, the mutual mistake as to this fact related to the essence of the agreement.

We have considered Josefowicz v. Porter, 32 N.J.Super. 585, 108 A.2d 865, a decision cited and relied upon by plaintiff. The decision is factually distinguishable, and no allegations or evidence as to misrepresentations or mutual mistake were involved.

The conclusion reached is that the evidence fully supports Judge Hasty's findings and judgment. For the reasons stated, the judgment of the court below is affirmed.

Affirmed.