Court Opinion

ID: 9849344
Source: CourtListenerOpinion
Date Created: 2023-09-24 04:38:37.781021+00
Date Added: 2024-06-11T09:19:18.557122
License: Public Domain

Justice Martin
dissenting in part.
I concur in the majority opinion with respect to the defendant Six Associates, Inc. Because I firmly believe that there is a factual question as to whether the contract with the defendant C. J. Kern Contractors, Inc. was under seal, I dissent from the holding of the majority opinion in favor of that defendant.
This is an appeal from entry of summary judgment against plaintiff. If there is a genuine issue of material fact, summary judgment cannot be allowed. Moore v. Fieldcrest Mills, Inc., 296 N.C. 467, 251 S.E. 2d 419 (1979). The contract in this case was prepared on a form of the American Institute of Architects. It recited that the contract was between Square D Company, as owner, and C. J. Kern Contractors, Inc., as contractor. It contains no reference to C. J. Kern individually or personally. The contract was executed by C. J. Kern Contractors, Inc., by C. J. Kern, President, and the corporate seal affixed.
This contract would have been valid without the affixing of the corporate seal. A corporation is not required to use its corporate seal except in those instances when an individual is required to use his seal. Mortgage Corp. v. Morgan, 208 N.C. 743, 182 S.E. 450 (1935); Warren v. Bottling Co., 204 N.C. 288, 168 S.E. 226 (1933). In fact, Square D Company, a corporation, did not use its corporate seal in executing the contract. Defendant’s use of its corporate seal was optional and not required to make the contract valid.
*431A seal appearing upon an instrument in the place where the seal belongs will, in the absence of proof otherwise, be valid as a seal. Bank v. Insurance Co., 265 N.C. 86, 143 S.E. 2d 270 (1965). The appearance of the seal on the subject contract is prima facie evidence of its effect as a seal. Whether the parties intended it to make the contract one under seal, a specialty, is a question for the jury. Id. This Court has not adopted the “extrinsic evidence” rule relied upon by the majority. Rather, the rule in North Carolina is that the use of a seal is prima facie evidence that it has the effect of a seal. Bank v. Insurance Co., 265 N.C. 86, 143 S.E. 2d 270.
The construction of a contract cannot be controlled by the uncommunicated intent of one of the parties. Such undisclosed intent is immaterial in the absence of fraud or mistake. Howell v. Smith, 258 N.C. 150, 128 S.E. 2d 144 (1962). It is not what either thinks, but what both agree. Prince v. McRae, 84 N.C. 674 (1881). It is the mutual intent of the parties that controls. Croom v. Lumber Co., 182 N.C. 217, 108 S.E. 735 (1921).
The “after the fact” affidavit of C. J. Kern as to his intent is certainly irrelevant to the issue. The “intent” of his company was never communicated to plaintiff or agreed to by plaintiff. Therefore, it is irrelevant and immaterial on the question of the effect of the use of the corporate seal. Howell v. Smith, 258 N.C. 150, 128 S.E. 2d 144. The trial court erred in its reliance upon the Kern affidavit. There being no competent evidence to the contrary, plaintiff has at least made out a jury case on the issue of whether the contract was a specialty under seal.
The majority’s reliance upon Blue Cross and Blue Shield v. Odell Associates, 61 N.C. App. 350, 301 S.E. 2d 459, cert. denied, 309 N.C. 319 (1983), is misplaced. Blue Cross is contrary to Bank v. Insurance Co., 265 N.C. 86, 143 S.E. 2d 270, and the cases cited therein. In Blue Cross the Court of Appeals failed to recognize and discuss the prima facie rule applied by this Court in Bank and the cited authorities. So does the majority here.
To follow Blue Cross would allow a corporation to pick and choose from the instruments it executes with its corporate seal those that it desires to treat as being under seal. Such rule places individuals at a decided disadvantage in dealing with corporations. Because corporations are only required to use their cor*432porate seals to the same extent as individuals use their seals, the use of the seal by corporations and individuals should have the same legal effect.
The contract here was not required to be under seal; the seal was not required to show that the contract was the act of the corporation and not Kern individually. Nevertheless, the defendant saw fit to affix its corporate seal. Under the prior authorities of this Court, this constitutes presumptive evidence that the contract was under seal. This is sufficient to survive the motion for summary judgment.