Borden, Inc. v. Brower

193 S.E.2d 751 (1973) 17 N.C. App. 249

BORDEN, INC.
v.
James C. BROWER, t/a Harvest Milling Company.

No. 721SC130.

Court of Appeals of North Carolina.

January 17, 1973. Certiorari Allowed March 6, 1973.

LeRoy, Wells, Shaw, Hornthal & Riley, by L. P. Hornthal, Jr., Elizabeth City, for plaintiff appellee.

H. Wade Yates, Asheboro, for defendant appellant.

Certiorari Allowed by Supreme Court March 6, 1973.

PARKER, Judge.

If defendant's evidence was properly stricken, there remained no genuine issue as to any material fact and plaintiff was entitled to summary judgment as a matter of law. Thus, the question presented by this appeal is whether the trial court ruled correctly in striking defendant's affidavits. We hold that it did.

Affidavits filed in support of or in opposition to a motion for summary judgment "shall set forth such facts as would be admissible in evidence." G.S. § 1A-1, Rule 56(e). The converse of this requirement is that affidavits or other material offered which set forth facts which would not be admissible in evidence should not be considered when passing on the motion for summary judgment. In the present case we hold, as did the trial court, that the material facts set forth in defendant's affidavits were inadmissible in evidence because of the parol evidence rule.

In discussing this rule, Professor Stansbury said:

"The parol evidence rule, as customarily phrased, prohibits the admission of parol evidence to vary, add to, or contradict a written instrument. Notwithstanding this mode of expression, the rule is in reality not one of evidence but of substantive law. It does not place restrictions on the manner of proving a fact in issue, but declares certain facts to be legally ineffective and therefore not provable at all." Stansbury, N.C. Evidence 2d, § 251, p. 603.

The traditional phrasing of the rule has been much criticized, and the following has been suggested as to a more accurate statement: "Any or all parts of a transaction prior to or contemporaneous with a writing intended to record them finally are superseded and made legally ineffective by the writing." Chadbourn and McCormick, "The Parol Evidence Rule in North Carolina," 9 N.C.L. Rev. 151, at p. 152. However the rule be phrased, where the parties themselves have chosen to bring certainty to their affairs by reducing their agreement to writing, the purpose of the rule is to further that desirable objective. Troublesome questions may be presented in particular cases as to whether the parties did intend that their entire understanding be embodied in their writing, and it is difficult to reconcile all of the decided cases in this field. In the present case, however, we think that all circumstances, when viewed objectively, make it manifest that in this case the entire agreement of the parties was embodied finally in the note which is the subject of this action.

For years the parties had met annually, customarily in July and shortly after the close of plaintiff's fiscal year, for the purpose of going over the accounts between them and arriving at year-end settlements. "Where parties, who have had business dealings resulting in claims against each other, consider the claims in their entirety and have a complete accounting of all transactions between them, agreeing upon a final balance in favor of one or the other, such an agreement is certainly an account stated." Teer Co. v. Dickerson, Inc., 257 N.C. 522, 126 S.E.2d 500. Annually, after agreeing upon such an account stated, the parties embodied the results of their agreement in a written note, signed by defendant, in which he unequivocally promised to pay to plaintiff the amount which, by arriving at the account stated, he agreed he then owed. Such was the note here in suit. The obvious purpose of having annual settlement of accounts was to require each party to assert all claims against the other promptly and at a time when memories were fresh and evidence readily available. The obvious purpose of reducing the results of their settlement to writing in the form of a note was to bring certainty to their agreement and to avoid controversy over its terms. These desirable purposes are achieved by application of the parol evidence rule.

It is true that our Supreme Court has stated that "[i]n proper cases it may be shown by parol evidence that an obligation was to be assumed only upon a certain contingency, or that payment should be made out of a particular fund or otherwise discharged in a certain way, or that specified credits should be allowed." Kindler v. Wachovia Bank & Trust Co., 204 N.C. 198, 167 S.E. 811. Cases cited by appellant, such as National Bank v. Winslow, 193 N. C. 470, 137 S.E. 320 (held, parol evidence properly admitted to show oral agreement that note was to be paid from proceeds of sale of peanuts held in storage by payee) and Evans v. Freeman, 142 N.C. 61, 54 S. E. 847 (held, parol evidence should have been allowed to show oral agreement that a note given to purchase the right to sell a patented automatic stock feeder in Hertford County was to be paid from proceeds of sales of such stock feeders), were of this type. In those cases, however, the payment source was not yet liquidated at the time the notes were signed and the amount of the credits and dates payments would be received was not then known. In the case before us the defendant claims the right by virtue of parol agreement to be credited on his note for the amount of two customer notes, both of which were past due, for amounts ascertained, and which were in defendant's possession at the time he signed and delivered the note in suit. No future event was necessary for defendant to receive the credits to which he now claims by oral agreement he was then entitled. To allow the parol evidence under these circumstances would not supplement but would flatly contradict the clear obligation set forth in his written note.

We make no attempt to reconcile all prior decisions, as each case must of necessity be decided on its own facts. We do hold that where, as in the present case, the actions of the parties clearly manifest their intention that their entire agreement be included in the written note, the promise set forth in the note may not be contradicted or destroyed by parol testimony that the maker thereof would not be called upon to pay in accordance with its terms. This holding is consistent with the more recent expressions of our Supreme Court, such as contained in Consolidated Vending Co. v. Turner, 267 N.C. 576, 148 S.E.2d 531, and Bank v. Slaughter, 250 N.C. 355, 108 S.E.2d 594.

In passing, we note that defendant's own evidence discloses that Messersmith, the agent of plaintiff with whom defendant alleged he had the oral agreement, was no longer in plaintiff's employ at the time the note in suit was executed. (Second affidavit of Owen Messersmith, filed 6 July 1971.)

The judgment appealed from is

Affirmed.

BRITT and HEDRICK, JJ., concur.