Volume 36 — North Carolina Court of Appeals Reports

1. Uniform Commercial Code 25 — certificate of deposit — governed by Uniform Commercial Code A certificate of deposit which certified that "Allstate Life Ins. Co. or Commissioner of Ins. of Alabama as their interest may appear . . ." had deposited with defendant's Charlotte office $100,000 which specified that payment could be obtained "upon surrender of [the] certificate properly endorsed twelve months after date . . ." and which provided that the certificate was automatically renewed for a like term and interest rate if not presented for payment<page_number>Page 19</page_number> within ten days after maturity was an instrument within the meaning of G.S. <cross_reference>25-9-105</cross_reference> (1)(g) and was therefore governed by the Uniform Commercial Code. 2. Rules of Civil Procedure 56.4; Uniform Commercial Code 25 — certificate of deposit — assignment — no issue of fact raised — summary judgment proper In an action to recover on a certificate of deposit issued by defendant to "Allstate Life Ins. Co. or Commissioner of Ins. of Ala." and allegedly assigned to plaintiff, summary judgment was properly entered for plaintiff, since evidence presented by plaintiff at the summary judgment hearing included its unverified complaint alleging that on 11 October 1975 All States assigned the certificate to plaintiff and that it was the lawful owner and holder of the certificate; a copy of the certificate attached to the complaint indicating on its face a valid assignment; and plaintiff's interrogatory and deposition of defendant, through one of its officers, in which defendant failed to offer any fact which would place the validity of the assignment in issue and failed to deny specifically the validity of the signature made in connection with the assignment. 3. Corporations 1.1; Rules of Civil Procedure 56.4 — one corporation as alter ego of another — no issue of fact raised — summary judgment proper In an action to recover on a certificate of deposit issued by defendant to "Allstate Life Ins. Co. or Commissioner of Ins. of Ala." and allegedly assigned to plaintiff, there was no merit to defendant's contention that its evidence raised an issue of fact as to whether All States was operating as the alter ego of Insurance Industries, Inc., a corporation which had borrowed $370,000 from defendant, and as to whether defendant was entitled to setoff All States' $100,000 certificate of deposit against Insurance Industries' $370,000 debt on the ground the two corporations were in effect one entity, since (1) defendant failed to show that All States was acting as the alter ego of Insurance Industries at the time the $370,000 loan was made to Insurance Industries or at the time the certificate of deposit was issued to All States or the Commissioner of Insurance of Alabama, and evidence for both plaintiff and defendant indicated that at the time of the $370,000 loan All States was not affiliated with or exercising control over Insurance Industries and that the certificate of deposit was issued to All States or the Commissioner of Insurance of Alabama pursuant to a statutory requirement placed on All States by the State of Alabama; (2) defendant failed to allege sufficient facts even to raise an inference of illegality or fraud on the part of All States or Insurance Industries in obtaining the $370,000 loan or the certificate of deposit; and (3) since the evidence presented by defendant was insufficient to raise the alter ego question, no mutuality of debts could be established between All States and defendant and the setoff against All States on Insurance Industries' debt was improper; moreover, defendant's argument that mutuality of debts was not required because of the fact that Insurance Industries and All States were insolvent was also without merit. 4. Rules of Civil Procedure 56.4 — certificate of deposit as security for loan — no issue of fact raised — summary judgment proper In an action to recover on a certificate of deposit issued by defendant to "Allstate Life Ins. Co. or Commissioner of Ins. of Ala." and<page_number>Page 20</page_number> allegedly assigned to plaintiff, there was no merit to defendant's contention that its evidence raised a question of fact as to whether the deposit by All States was security for a loan made by defendant to Insurance Industries, Inc., since the note in question did not list the certificate of deposit as security; plaintiff's evidence showed that the certificate was to fulfill an Alabama statutory posting requirement; and defendant's affidavit that All States' certificate of deposit was security for Insurance Industries' loan was incompetent, as it added to or varied the terms of the promissory note and certificate of deposit.

Rules of Civil Procedure 59 — injuries to pedestrian — new trial on damages issue — abuse of discretion In an action to recover for personal injuries sustained by plaintiff in a pedestrian-automobile accident where the jury awarded plaintiff $20,000, the trial court abused its discretion in setting aside the verdict on the issue of damages on the grounds that the verdict was against the greater weight of the evidence and that it was excessive, since plaintiff offered strong evidence, including that of medical experts, that he sustained a permanent injury, lost considerable wages, and endured pain and suffering; defendant offered very little evidence in opposition; the amount of the verdict was clearly within the maximum limit of a reasonable range, plaintiff having shown that he incurred medical expenses of $2,265 and lost $3,308 in wages and arguing that $14,355 was not unreasonable to compensate him for pain, suffering and permanent disability; and there was no appearance that the verdict was given under the influence of passion or prejudice. G.S. <cross_reference>1A-1</cross_reference>, Rule 59.

Physicians, Surgeons and Allied Professions 16.1 — surgery without consulting x-ray — summary judgment for surgeon improper In an action against defendant surgeon to recover damages for injury to plaintiff's finger, the trial court erred in entering summary judgment for defendant where plaintiff's complaint and deposition raised an issue as to whether defendant acted properly in attempting to remove a foreign body from plaintiff's finger without first consulting x-rays.

1. Appeal and Error 6.12 — partial summary judgment — immediate appeal Partial summary judgment was immediately appealable where it amounted to a final judgment that plaintiff is entitled to recover of defendant the sum of $21,500.73. 2. Insurance 2.6 — agent's right to commissions — improper conduct in sale of policies — summary judgment Summary judgment was improperly entered for plaintiff on his claim against defendant insurance company to recover commissions on premiums paid on policies sold by plaintiff and his sub-agents where summary judgment was based solely on defendant's answer to an interrogatory that it was holding over $23,000 in plaintiff's account, but defendant presented affidavits that plaintiff and his sub-agents sold a number of policies by use of misrepresentations, harassment and coercion in violation of the insurance laws of North Carolina, and plaintiff's contract of employment with defendant, which was attached to the complaint, contained provisions negating plaintiff's right to commissions when policies were secured in such manner.

Criminal Law 134.4, 144 — youthful offender — notice of appeal — subsequent finding of no benefit as "committed youthful offender" The trial judge's finding that defendant would receive no benefit from treatment and supervision as a "committed youthful offender" was effectual where it was entered before the term expired and on the same day and immediately after judgment and notice of appeal were entered, since the judgment remained in fieri until the expiration of the term despite the notice of appeal and could be modified in the trial judge's discretion.

Appearance 1.1 — notice of appeal given — jury trial demanded — general appearance When a party gives notice of appeal and demands trial by jury prior to contesting the court's jurisdiction over his person, he has made a general appearance under G.S. <cross_reference>1-75.7</cross_reference>, and the court therefore has jurisdiction over his person, even if service of process was defective.

1. Attorneys at Law 5.1 — errors in certifying title to real property — who may sue It is generally held that attorneys may be held liable for errors in certifying title to real property only to those to whom the certification is made and who enjoy privity of contract with such attorneys. 2. Attorneys at Law 5.1 — malpractice action — parties who may sue — contract action Claims for relief for attorney malpractice are actions sounding in contract and may properly be brought only by those who are in privity of contract with such attorneys by virtue of a contract providing for their employment. 3. Contracts 25.1; Attorneys 5.1 — attorneys' contract with corporation — individual not in privity with attorneys — malpractice action — complaint insufficient Complaint of the third party plaintiff was insufficient to state a claim upon which relief could be granted where the complaint alleged that, because the third party plaintiff served as either vice-president or consultant to the first which was represented by the third party defendant law firm, the attorneys were therefore the third party plaintiff's attorneys also and were liable to him if they failed properly to perform their duties as attorneys under their contract of employment, since one who is not a party to a contract may not maintain a claim for relief for its breach, and third party plaintiff did not allege facts establishing privity of contract with third party defendant attorneys.

1. Matter and Servant 10.2 — pursuit of workmen's compensation remedies — retaliatory discharge — failure to state claim for relief Plaintiff's allegation that his employer fired him in retaliation for his pursuit of remedies under the N.C. Workmen's Compensation Act failed to state a claim upon which relief could be granted since the allowance of such a claim would violate the long-standing rule that employment contracts of indefinite duration may be terminated with or without cause at the will of either party and would constitute judicial legislation. 2. Matter and Servant 10.2, 47 — pursuit of workmen's compensation remedies — retaliatory discharge — no "device" relieving employer of compensation obligations Alleged discharge of an employee in retaliation for his pursuit of remedies under the N.C. Workmen's Compensation Act would not constitute a "device" to relieve the employer of obligations under the Act within the meaning of G.S. <cross_reference>97-6</cross_reference>.

1. Deeds 20.7 — residential restrictions — use of lot for parking — no waiver or estoppel The use of a subdivision lot for parking by a plumbing company and, subsequently, a candle shop did not render invalid covenants restricting use of the lot to residential purposes or constitute a waiver or estoppel of the right of owners of other subdivision lots to enforce the restrictive covenants. 2. Deeds 20.1 — residential restrictions — use of lot for parking for fried chicken outlet The use of a subdivision lot as a parking area for a retail fried chicken outlet serving between 2,000 and 2,500 customers per week would constitute a violation of a covenant restricting use of the lot to residential purposes. 3. Deeds 20.8 — residential restrictions — changes outside restricted area The trial court erred in declaring subdivision residential restrictions null and void as to one subdivision lot because the neighborhood in which the lot is located has undergone such a radical, substantial and fundamental change from residential to business purposes as to render the property no longer suitable or valuable for residential purposes where the changes which have taken place in the area in question have occurred outside the restricted area. 4. Deeds 20.1 — restrictive covenants — effect of zoning A zoning ordinance will neither nullify nor supercede a valid restriction on the use of real property.

1. Searches and Seizure 11 — warrantless search of vehicle — probable cause Police officers had probable cause to conduct a warrantless search of a van in which defendants were riding, and items seized during the search were admissible in defendants' trial for armed robbery, where a grain company had been robbed; the robber had been described as five feet eight inches tall, weighing 170 to 180 pounds, and wearing black boots; a man fitting that description was seen leaving the crime scene wearing a faded blue sweat shirt, faded blue jeans, and black boots; he entered on the passenger's side a yellow van with a spare tire on the back bearing a license number beginning with AY9 and ending with either 86 or 66; a short while before the robbery, one defendant was seen driving the van; the police later spotted a yellow van with spare tire on the back bearing license number AY9 666; the van was occupied by defendants, one of whom was stocky, weighed 185 to 190 pounds, and was wearing a faded blue sweat shirt, faded blue jeans, and black boots. 2. Robbery 5.6 — aider and abettor — driver of getaway car — instructions — insufficient evidence — possession of recently stolen items The trial court erred in instructing that defendant could be found guilty of aiding and abetting the actual perpetrator of an armed robbery if defendant drove the getaway car where there was no evidence before the jury that defendant was near the scene of the crime, that a getaway car was used, or that the getaway car was driven by defendant, the defendant's possession of items recently stolen in the robbery being insufficient to support such instruction.

1. Constitutional Law 30 — failure to comply with discovery order — admissibility of evidence A written statement of a witness was not barred by the trial court's order restricting admission of evidence not given defendant pursuant to a pretrial discovery order, though the State failed to provide defendant with a copy of the statement prior to trial, since the court's order provided that such evidence could not be introduced without first obtaining permission of the court outside the presence and hearing of the jury, and the State, after mentioning the witness's statement, obtained permission to introduce it from the court during a conference at the bench. 2. Criminal Law 99.3 — failure to hear defendant on objection — no error There was no error prejudicial to defendant in the trial court's failure to hear him upon his objection to a line of questioning, since the court had just heard defendant on an objection to the same line of questioning. 3. Criminal Law 99.5 — court's use of word "harassed" — no expression of opinion The trial court's use of the term "harassed" in describing a witness for whom the State had requested permission to leave the courtroom is not approved by the Court on appeal, but its use did not amount to an expression of opinion necessarily harmful to defendant. 4. Criminal Law 99.10 — court's examination of defendant — error In a prosecution for felonious breaking and entering and felonious larceny where the indictment alleged that the crime took place on or about March 11 and defendant put on extensive evidence concerning his whereabouts on March 11, the trial court's questions, put to defendant after counsel for both defendant and the State had questioned him, as to his whereabouts on March <cross_reference>8-10</cross_reference> in no way clarified evidence about<page_number>Page 522</page_number> which defendant had been testifying, but instead amounted to a cross-examination of defendant which was calculated to impeach defendant and deprecate his testimony before the jury.

1. Divorce and Alimony 7 — divorce from bed and board — necessary findings and conclusions In an action for divorce from bed and board under G.S. <cross_reference>50-7</cross_reference>, the trial court should make adequate findings of fact (i.e. specific acts of misconduct) to support the conclusion of law that the noninjured party has (1) abandoned the family; (2) maliciously turned the other out of doors; (3) endangered the life of the other by cruel or barbarous treatment; (4) offered such indignities to the person of the other to render his or her condition intolerable; or (5) become an excessive user of alcohol or drugs so that the other's life is burdensome. 2. Divorce and Alimony 16 — alimony order — necessary findings and conclusions An order granting alimony must contain one of the ten grounds for alimony listed in G.S. <cross_reference>50-16.2</cross_reference> as a conclusion of law, and such conclusion must be supported by findings of fact, which findings usually will involve the actions of the supporting spouse. 3. Divorce and Alimony 18.10 — alimony pendente lite — necessary findings and conclusions In an order granting alimony pendente lite, the court must conclude as a matter of law that the party seeking alimony pendente lite (1) is the dependent spouse, (2) is a party in an action for absolute divorce, divorce from bed and board, annulment, or alimony without divorce, and (3) from all the evidence presented pursuant to G.S. <cross_reference>50-16.8</cross_reference> (f), (a) is entitled to the relief demanded in the action, and (b) is shown to lack sufficient means whereon to subsist during the prosecution or defense of the suit. Hence, findings of fact as to estates and earnings are necessary to conclude that the spouse is dependent and lacks sufficient resources with which to subsist during the litigation, and the court must also find that this spouse is plaintiff or defendant in one of the four listed actions and that the party has been heard orally, upon affidavit, verified pleading or other proof. 4. Divorce and Alimony 16, 18.10 — alimony and alimony pendente lite — necessary findings and conclusions In the case of both alimony and alimony pendente lite, the order concerning amount must be supported by a conclusion of law that such amount is necessary under the circumstances, and this conclusion of law must be supported by specific findings of fact as to estates, earnings, earning capacity, condition, accustomed standard of living of the parties, as well as other relevant factors. G.S. <cross_reference>50-16.5</cross_reference>. 5. Divorce and Alimony 25.11 — child custody order — necessary findings and conclusions An order awarding child custody must contain a conclusion of law that the award of custody to that particular party "will best promote the interest and welfare of the child," G.S. <cross_reference>50-13.2</cross_reference> (a), and such<page_number>Page 602</page_number> conclusion must be supported by findings of fact as to the characteristics of the competing parties, which findings may concern physical, mental, or financial fitness or any other factors brought out by the evidence and relevant to the issue of the welfare of the child. 6. Divorce and Alimony 24.9 — child support order — necessary findings and conclusions In orders of child support, the court should make findings of specific facts (e.g. incomes, estates) to support a conclusion as to the relative abilities of the parties to provide support, G.S. <cross_reference>50-13.4</cross_reference>. To determine the amount of support necessary to meet the reasonable needs of the child for health, education and maintenance (which are conclusions of law), the court must make findings of specific facts as to what past expenditures have been.

Criminal Law 75.14 — confession — mentally retarded defendant — knowing and intelligent waiver of counsel — insufficient findings The trial court's findings failed to support its conclusion that defendant knowingly and intelligently waived his right to counsel at his incustody interrogation, and the court erred in admitting defendant's confession in evidence, where the findings were to the effect that defendant was a twenty-year-old mentally retarded male who possessed the general understanding of a child of six to eight years of age; defendant had difficulty understanding the explanations of his rights by the officers; defendant might not have been able to understand the consequences of his right to an attorney or his right to remain silent; and defendant had an extreme desire to please everyone and might have been inclined to state that he understood his rights even when he did not.

Homestead and Personal Property Exemptions 6; Uniform Commercial Code 45 — personal property exemption — inapplicability to secured property A provision of a consumer loan security agreement by which the debtor purported to waive her right to the $500.00 personal property exemption granted by Art. X, 1 of the N.C. Constitution and G.S. <cross_reference>1-369</cross_reference> was inoperable since the debtor could not waive her exemption in case of levy upon her property. However, the personal property exemption did not prevent the lender from enforcing its right to possession of the debtor's household goods in which it had a security interest, although all of the debtor's assets consisted of household goods worth less than $500.00. G.S. <cross_reference>25-9-503</cross_reference>.

1. Uniform Commercial Code 79 — sale of collateral — commercial reasonableness assumed — due process requirements met The provision of G.S. <cross_reference>25-9-601</cross_reference> which provides "any disposition of the collateral by public sale wherein the secured party has substantially complied with the procedures provided in this part [Part 6] shall conclusively be deemed to be commercially reasonable in all respects" does not offend the due process clause of the Fourteenth Amendment to the Constitution of the U.S. or the due process requirements of Article I, Section 19 of the Constitution of N.C., since the debtor is protected by other provisions of Part 6 which give the debtor ample opportunity to protect his interest by paying the debt, finding a buyer, or being present at the sale to bid, so that the collateral is not sacrificed by a sale at less than its true value, and by provisions which state that if the secured party fails to substantially comply with the procedures provided in Part 6, the debtor, in a suit by the secured party for a deficiency judgment, may contest the matter by appropriate responsive pleadings alleging such failure to substantially comply. 2. Uniform Commercial Code 79 — price of collateral at public sale — no hearing afforded debtor The allegations of a debtor of an inadequate and unreasonably low price obtained for the collateral at a public sale do not justify a hearing upon the question of commercial reasonableness if there was in fact a public sale following substantial compliance with the procedures provided in Part 6. 3. Uniform Commercial Code 79 — public sale of collateral — sufficiency of notice to husband and wife Though the better practice would be for the secured party to make separate mailings of notice of sale of the collateral to each debtor, the mailing of a joint notice to husband and wife at the residence address where they both lived was substantial compliance within the meaning of G.S. <cross_reference>25-9-601</cross_reference>.<page_number>Page 761</page_number>