Dorrity v. Greater Durham Building & Loan Ass'n

169 S.E. 640, 204 N.C. 698, 1933 N.C. LEXIS 241

• Court: Supreme Court of North Carolina
• Decided: June 14, 1933
• Status: Published

Opinion

BROgden, J.

There was no evidence that the'plaintiff was illiterate or could not read and write, although he testified that he read poorly. The subscription agreement which the plaintiff signed, explained the transaction in detail and advised him positively that he was paying $250.00 for a membership in the defendant corporation, and that in addition to such membership fee he would be required to pay twenty-five cents per share for the stock in accordance with the by-laws of the company. Moreover C. S., 5176 authorizes in proper instances building and loan associations to prescribe an entrance fee to be paid by share holders.

The pertinent and governing principle of law was thus stated in Colt v. Kimball, 190 N. C., 169: “It is the defendant’s duty to read the contract or have it read to him, and his failure to do so, in the absence of fraud, is negligence, for which the law affords no redress. The defendant’s duty to read or have read to him the contract, is a positive duty of which he is not relieved, except in cases of fraud. . . . Having executed the contract, and no fraud appearing in the procurement of the execution, the court is without power to relieve the defendant on the ground that he thought it contained provisions which it does not.” The same principle relating to contracts generally is applicable to stock subscription agreements. Thus in Improvement Co. v. Andrews, 176 N. C., 280, 96 S. E., 1032, the Court said: “The fact that this is a subscription to stock does not take the case out of the usual rule. It seems to be generally agreed that where a subscription contract is reduced to writing and signed, all oral agreements, whether prior or cotemporaneous, are merged in it and parol evidence of them cannot be received to vary the legal purport of the writing.” See Hotel Corporation v. Overman, 201 N. C., 337.

The negligence rule referred to in many of the decisions does not apply: (1) where the person signing the agreement was illiterate or otherwise incapable of understanding the writing; (2) where there is positive misrepresentation of contents of the paper-writing of such type and character as to deceive a person of ordinary prudence and the person signing such agreement reasonably relied -upon such misrepresentation; (3) where the party procuring the signature resorted to some device, scheme, subterfuge, trick or other means of preventing or interfering with the reading of the paper or reasonably tending to throw a person of ordinary prudence off guard.

However, none of the foregoing elements appear in this ease. There is no evidence that the agent misrepresented the contents of the subscription agreement which the plaintiff signed, nor was there any trick, artifice, scheme or device, resorted to tending to prevent or interfere with the reading of the agreement. Therefore, the ruling of the trial judge is correct.

Affirmed.