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Fuller v. Southland Corp.

Filed: May 4, 1982.


Appeal by defendant from Griffin, Judge. Judgment entered 4 December 1980 in Superior Court, Mecklenburg County. Heard in the Court of Appeals 14 January 1982.

Hill, Judge. Judge Becton concurs. Judge Hedrick concurs in result.


Plaintiffs, doing business as Fuller & Bost, a general partnership, acquired sites, built, and leased 7-Eleven stores to defendant. The course of business established by the parties required defendant to inspect and formally accept the buildings. Plaintiff Fuller testified that defendant "then prepare[s] this form setting forth the terms of the lease and when the lease is to commence. This is signed, in this particular instance, by Mr. Bost and myself as lessor and I think Mr. Jack Dold, who was the Division Manager for the lessor [sic] and this triggered the rent payments."

Pursuant to this course of business, on 30 March 1972, defendant approved plaintiffs' acquisition of a site in Tega Cay, South Carolina, for the construction of a 7-Eleven store. According to their instructions from defendant, plaintiffs "were to duplicate what we had done in Kings Grant [in Charleston, South Carolina], that is, a 7-Eleven store, and additional space beside it to be used as a liquor store and to be leased by The Southland Corporation. This we did."

A lease for the 7-Eleven store was fully executed on 24 May 1972. Defendant accepted the 7-Eleven store, occupied it, and began to pay the rent due. J.L. "Pete" Overton, then defendant's real estate manager for the southern division, testified that he signed a blank lease for the liquor store because "Mr. Fuller told me he needed something to show to his finance people and asked me if I would sign a lease, that's all he needed it for, it was for finance purposes and I told him I would." Plaintiff Fuller described the signatures on that document:

That is not Penny Hawkins' signature on the lease agreement. I was aware of that at the time I received it. I was almost finished with construction when we received the lease agreement and we were trying to close out our permanent loan and we needed the executed lease for the loan.

The lease given to plaintiffs for loan purposes had a term of 20 years with two five-year options. The rent was $400 per month. However, no description of the property was attached. Overton stated, "I do not see any difference in that document from what I understood the terms of the lease agreement to be."

Plaintiff Fuller wrote a note to Overton on 7 July 1972, stating, "Attached are legal discriptions [sic] for the Liquor Stores that we are proposing for Kings Grant in Charleston and Tega Cay in York County, S.C. As a matter of information, the same discriptions [sic] apply for the 7/11 stores. Give my regards to Claudia. Hope to see you soon." Attached to the note was a metes and bounds description entitled "Legal Description: Liquor Store/Tega Cay/York County, S.C." and a boundary survey of the Tega Cay Property.

On 26 February 1973, Overton sent the following letter to plaintiff Fuller: "This will verify that the Southland Corporation will lease a 40 X 40 building adjacent to the 7-Eleven store at Tega Cay, South Carolina. The monthly rental will be $400.00 and the term of lease will be 20 years." However, plaintiffs never received any rent on the liquor store from defendant. Plaintiffs received a letter dated 18 December 1974 from defendant's real estate representative, David Laffitte, stating, in part, as follows:

It has long been a policy of The Southland Corporation that new store sites are not finally approved unless and until the lease agreement or contract of sale has been properly executed by an authorized corporate officer. These documents should bear our corporate seal. Terms of these instruments must be met, or waived by the corporate officer. If you purpose [sic] to sell, lease or build and lease for us, any funds you may spend prior to proper execution of an appropriate instrument are expended at your own risk and expenses.

Plaintiff Fuller testified that this letter first informed him "about the limited authority of a real estate representative and about the need for an officer to sign a lease, I had never been informed of that, not prior to that letter."

Plaintiff's first notification that defendant did not intend to honor the terms of the 26 February 1973 letter was a letter to plaintiff Fuller on 6 January 1975, in which Dold wrote, "We are

not interested in the extra space at Tega Cay at this time. The area has not developed as projected and our 7-Eleven store there is marginal. Without the rent abatement clause, we would be losing a considerable amount of money."

Plaintiffs attempted to rent the liquor store to others; a lease was entered into for one year, April 1979 through March 1980, but it was not renewed. Plaintiff Fuller testified that defendant owes Fuller & Bost $27,200 in rent for the liquor store at Tega Cay.

In its first argument, defendant assigns error to the judge's failure to grant its motion for summary judgment. Defendant argues that the judge erroneously considered certain affidavits and exhibits filed in support of plaintiff's summary judgment motion which, if excluded, would have compelled the granting of its motion.

Initially, defendant challenges the affidavit of Overton on the grounds that it "fails to state that it is made on personal knowledge, it sets forth facts that would not be admissible into evidence, and it fails to show affirmatively that he [Overton] would be competent to testify to the material matters stated therein." Although G.S. 1A-1, Rule 56(e) states that affidavits in support of a motion for summary judgment must have these elements, we do not interpret the rule to require that such affidavits specifically state the elements as defendant suggests; it is sufficient that the affidavits can be interpreted so as to comply upon their faces. Middleton v. Myers, 41 N.C. App. 543, 255 S.E.2d 255 (1979).

Here, paragraph 16 of Overton's affidavit states the following, in part:

He executed the aforementioned Lease Agreement regarding the liquor store, in behalf of the defendant, over the blank beneath which appears the title "Vice President." He was not a vice president of the defendant at that time. He did not sign Penny Hawkins' name thereto; however, he believes that ...

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