Court Opinion

ID: 1332909
Source: CourtListenerOpinion
Date Created: 2013-10-30 05:32:34.640563+00
Date Added: 2024-06-11T15:24:29.942315
License: Public Domain

291 S.E.2d 892 (1982)
AMERICAN TRAVEL CORPORATION
v.
CENTRAL CAROLINA BANK & TRUST COMPANY.
No. 8110SC753.
Court of Appeals of North Carolina.
June 1, 1982.
*894 Reynolds & Howard by Ted R. Reynolds and E. Cader Howard, Raleigh, for plaintiff-appellee.
Stubbs, Cole, Breedlove, Prentis & Poe by Richard F. Prentis, Jr., Durham, for defendant-appellant.
Edmund D. Aycock, General Counsel, Raleigh, for The North Carolina Bankers Ass'n, amicus curiae.
Sanford, Adams, McCullough & Beard by E. D. Gaskins, Jr. and William George Pappas, Raleigh, for United Carolina Bank, amicus curiae.
HARRY C. MARTIN, Judge.

PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT
Under the authority of Carr v. Carbon Corp., 49 N.C.App. 631, 272 S.E.2d 374 (1980), disc. rev. denied, 302 N.C. 217, 276 S.E.2d 914 (1981), a motion for summary judgment denied by one superior court judge may not be allowed by another superior court judge on identical legal issues. See also Biddix v. Construction Corp., 32 N.C.App. 120, 230 S.E.2d 796 (1977). This rule is based on the premise that no appeal lies from one superior court judge to another. Moreover, as pointed out in Carr, to allow an unending series of motions for summary judgment "would defeat the very purpose of summary judgment procedure, to determine in an expeditious manner whether a genuine issue of material fact exists and whether the movant is entitled to judgment on the issue presented as a matter of law." 49 N.C.App. at 634, 272 S.E.2d at 377.
The above-stated rule does not apply to interlocutory orders given in the progress of the cause. Id. Plaintiff contends that because it first moved for partial summary judgment on the issue of liability, the order denying the motion was interlocutory and the subsequent motion for summary judgment on the issues of liability and damages was properly granted. We disagree. "An order is merely interlocutory if it does not determine the issue but directs some further proceeding preliminary to a final decree." Id. at 633, 272 S.E.2d at 376 (emphasis ours). Whereas an order denying summary judgment on the issue of liability may be interlocutory in the sense that it is not immediately appealable, "[s]uch a ruling is determinative as to the issue presented." Id. In his order denying plaintiff's motion *895 for summary judgment, Judge Preston determined as a matter of law that plaintiff was not entitled to judgment on the issue of liability. Yount v. Lowe, 288 N.C. 90, 218 S.E.2d 563 (1975). The issue may not be relitigated by way of a second motion for summary judgment before a different judge. The trial court erred in granting summary judgment for plaintiff.
We believe that both the language and the policy behind N.C.R.Civ.P. 56 contemplate a single hearing on a motion for summary judgment involving the same case on the same legal issues. Rule 56(c) provides that judgment shall be rendered if pleadings and other supporting materials show that there is no genuine issue as to any material fact and "that any party is entitled to judgment as a matter of law." (Emphasis ours.) Rule 56(f) permits the opposing party to move for additional time to obtain affidavits or complete discovery essential to justify his opposition. Moreover, "[o]rdinarily it is error for a court to hear and rule on a motion for summary judgment when discovery procedures, which might lead to the production of evidence relevant to the motion, are still pending and the party seeking discovery has not been dilatory in doing so." Conover v. Newton, 297 N.C. 506, 512, 256 S.E.2d 216, 220 (1979). Generally, motions for summary judgment should not be decided until all parties are prepared to present their contentions on all the issues raised and determinable under Rule 56. Piecemeal litigation of motions for summary judgment is to be avoided.

DEFENDANT'S MOTION FOR SUMMARY JUDGMENT
Defendant argues that it is entitled to summary judgment based on the issue of ratification. We note at the outset that plaintiff is in error in assuming that defendant must have acted in a commercially reasonable manner before being permitted to take advantage of this defense. While it is true that a bank must act in good faith and in accordance with reasonable commercial standards in order to raise a negligence defense under N.C.G.S. 25-3-406, N.C.G.S. 25-3-404 does not require such a showing:
Unauthorized signatures.(1) Any unauthorized signature is wholly inoperative as that of the person whose name is signed unless he ratifies it or is precluded from denying it ....
(2) Any unauthorized signature may be ratified for all purposes of this article.
The facts of this case, in addition to raising issues of preclusion or estoppel, raise a separate issue of ratification under an agency theory.
Under N.C.G.S. 25-3-419 an instrument is converted when it is paid over a forged or unauthorized endorsement. Logically, when an unauthorized signature is ratified, it becomes authorized and conversion is no longer possible. Ratification is defined as "the affirmance by a person of a prior act which did not bind him but which was done or professedly done on his account, whereby the act, as to some or all persons, is given effect as if originally authorized by him." Restatement (Second) of Agency § 82 (1958). "Ratification requires intent to ratify plus full knowledge of all the material facts." Contracting Corp. v. Bank of New Jersey, 69 N.J. 352, 361, 354 A.2d 291, 296 (1976). It "may be express or implied, and intent may be inferred from failure to repudiate an unauthorized act... or from conduct on the part of the principal which is inconsistent with any other position than intent to adopt the act." Id. Upon a showing of ratification, defendant would be entitled to judgment as a matter of law. Id.
In support of its defense of ratification, defendant offers the following:
1. Mr. Breshears testified that at the time of the initial meetings with CCB, he was not operating under the terms of the 12 June 1974 contract and had never intended to do so. About a month after the contract was signed, he "wrote to Mr. Hentz and explained to him that certain things were not correct and were not feasible to even conduct business ... and how we would have to operate. I did not tell this to CCB at the time of the meeting in 1976 or at any time, until two years later."
*896 2. The same bookkeeper worked for the Group Travel division and ATC.
3. Beginning in 1976 a series of memos from Mr. Hentz to Mr. Breshears indicated that ATC was concerned that Mr. Breshears was making unauthorized use of his position as president. A memorandum dated 8 September 1977 stated that:
There may have been previous occasions where remittances from customers of American Travel have become deposited, or co-mingled in accounts not held in the name and control of American Travel Corporation. Specifically, to the account of Breshears Enterprises, Inc.... This memorandum is not to question motives nor condemn specific past practices; but in the conduct of all future business in behalf of American Travel Corporation the following guidelines must be invariably observed. [Emphasis ours.]
Not until after April 1978 was CCB made aware of the practices which ATC felt, in 1977, that it could not condemn.
Based on the foregoing, we can conclude that ATC had full knowledge of all the material facts with respect to Mr. Breshears's actions. However, to constitute ratification as a matter of law, the conduct must be consistent with an intent to affirm the unauthorized act and inconsistent with any other purpose. Restatement (Second) of Agency § 83 (1958). While it may be inferred that ATC's decision to postpone notifying the bank or dismissing Mr. Breshears was a calculated effort to overlook any alleged wrongdoing in order to reap the benefits of Mr. Breshears's business acumen, such inference raises questions of fact best left for jury determination. Defendant is therefore not entitled to summary judgment on the issue of ratification.
As a matter of law plaintiff is not entitled to recover the proceeds of check 36C. ATC drew this check, in the amount of $19,000, payable to CCB. Shortly after depositing the check in a Breshears Enterprises account, Mr. Breshears apologized to Mr. Hentz for the mistake and repaid the amount to ATC. Both Mr. Hentz and plaintiff's bookkeeper admitted that the amount had been repaid. Defendant is entitled to partial summary judgment with respect to plaintiff's claim based upon check 36C.

MOTION TO SET ASIDE ENTRY OF DEFAULT
Finally, defendant assigns as error the trial court's granting of plaintiff's motion to set aside entry of default against plaintiff on defendant's counterclaim for recoupment, which defendant alleges was a claim for affirmative relief to which no reply was filed.
Defendant's claim was denominated a "Second Defense and/or Equitable Set Off, Recoupment, or Counterclaim Based Upon Unjust Enrichment." We agree with plaintiff that the gravamen of defendant's claim is that plaintiff's damages should be reduced to the extent that the proceeds of the converted checks have been paid for the benefit of American Travel or others. Rather than seeking an affirmative recovery, defendant is seeking to mitigate plaintiff's damages.
To summarize our holding:
We affirm the setting aside of the entry of default against the plaintiff on defendant's second defense.
We reverse Judge Britt's summary judgment in favor of the plaintiff.
Defendant is entitled to summary judgment with respect to check 36C.
In all other respects we affirm the denial of summary judgment to the defendant.
MORRIS, C. J., and CLARK, J., concur.