Investment Properties of Asheville, Inc. v. Allen

BRITT, Judge. Although defendant raises several questions on appeal, the major question presented for our consideration is: Did the trial court err in denying defendant’s motion for a directed verdict on the ground that plaintiffs failed to show sufficient evidence for the jury to find that Dr. Charles Norburn was acting as defendant’s agent? We answer in the negative and hold that there was sufficient evidence to present a jury question. The appointment of an agent and the scope of his authority may be established by conduct as well as by words of the principal. Lee’s N. C. Law of Agency and Partnership, 3rd Ed., [409] Sec. 7, p. 13. The authority of the principal given to the agent may be conferred by the course of dealing between the principal and agent. Katzenstein v. Railroad Co., 84 N.C. 688 (1881). The principal is responsible for acts of the agent within the scope of his “apparent authority” unless the party dealing with the agent knows he is acting in excess of his actual authority. Research Corporation v. Hardware Co., 263 N.C. 718, 140 S.E. 2d 416 (1965). The evidence in the case at hand portrayed a close business as well as personal relationship between defendant and her brother, Dr. Norburn. Defendant was quite sick during the spring and summer of 1965; she was over 75 and separated from her husband. Defendant stated that her brother had no legal interest in the land involved; that she was aware of a paper writing dated May 10, 1965 (the lease agreement) and that “[t]hey told me it was not a good lease.” She was also aware of the negotiations concerning the erection of the motel complex that Dr. Norburn was conducting on her behalf and Dr. Norburn was reporting to her about the negotiations from time to time. Also, Dr. Norburn had the lease prepared that was eventually signed with the corporation that put a motel on the property, and defendant signed the lease stating at the trial that “He (Dr. Norburn) didn’t tell me so much, but I knew what was going on.” The evidence further showed: Dr. Norburn was actively seeking to consummate a lease agreement on property in which he had no legal interest between defendant, the owner of the property, and Dr. Logan Eobertson of the corporate plaintiff. Dr. Norburn prepared, or had prepared, a lease which was signed by defendant, but said lease was not in sufficient form to acquire financing for the anticipated motel. Further negotiations continued until an impasse was reached and the land was leased to another corporation who erected a motel on the land. During the negotiations, defendant knew of the situation generally if not as to specific details and she trusted her brother “to go ahead and do what he thought best.” Dr. Norburn took defendant to see the property several times while it was being graded. Also during this time Dr. Norburn gave a written guaranty stating that he would stand personally liable for the cost of grading the land in the event a lease could not be procured. Considering all of the evidence in the light most favorable to plaintiffs, we think there was enough to submit the issue of [410] agency to the jury for their consideration. Even if one is not the agent of another, if the other person permits the alleged agent to clothe himself with the ordinary external evidence of agency the principal will be bound to a third person relying upon such appearance. The principal is estopped from denying the agent’s authority. Jones v. Bank, 214 N.C. 794, 1 S.E. 2d 135 (1939). We have carefully considered the other assignments of error brought forward and argued in defendant’s brief but conclude that no error, properly assigned, is sufficient to justify a new trial. No error. Judge Brock concurs. Judge Vaughn dissents.