{
  "id": 8547854,
  "name": "GARDNER HOMES, INC. v. W. G. GAITHER, JR., R. L. HOLLOWELL, JOHN F. RIXEY, and JOHN L. GIBSON II, Partners Trading Under the Partnership Name, VIRGINIA DARE ASSOCIATES",
  "name_abbreviation": "Gardner Homes, Inc. v. Gaither",
  "decision_date": "1976-10-06",
  "docket_number": "No. 761SC284",
  "first_page": "118",
  "last_page": "121",
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    {
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      "cite": "31 N.C. App. 118"
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  "court": {
    "name_abbreviation": "N.C. Ct. App.",
    "id": 14983,
    "name": "North Carolina Court of Appeals"
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    "name_long": "North Carolina",
    "name": "N.C."
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      "cite": "153 S.E. 2d 800",
      "category": "reporters:state_regional",
      "reporter": "S.E.2d",
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      "year": 1967,
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    {
      "cite": "270 N.C. 69",
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      "reporter": "N.C.",
      "case_ids": [
        8565294
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      "year": 1967,
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          "page": "73"
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  "last_updated": "2023-07-14T16:36:26.493722+00:00",
  "provenance": {
    "date_added": "2019-08-29",
    "source": "Harvard",
    "batch": "2018"
  },
  "casebody": {
    "judges": [
      "Judges Britt and Martin concur."
    ],
    "parties": [
      "GARDNER HOMES, INC. v. W. G. GAITHER, JR., R. L. HOLLOWELL, JOHN F. RIXEY, and JOHN L. GIBSON II, Partners Trading Under the Partnership Name, VIRGINIA DARE ASSOCIATES"
    ],
    "opinions": [
      {
        "text": "HEDRICK, Judge.\nDefendants contend that the court erred in entering summary judgment for plaintiff and in denying their motion for summary judgment. They argue that the evidence considered on the motions for summary judgment discloses that the contract was not made under a mutual mistake of material fact.\nIn MacKay v. McIntosh, 270 N.C. 69, 73, 153 S.E. 2d 800, 804 (1967), we find the following:\n\u201c \u2018The formation of a binding contract may be affected by a mistake. Thus, a contract may be avoided on the ground of mutual mistake of fact where the mistake is common to both parties and by reason of it each has done what neither intended. Furthermore, a defense may be asserted when there is a mutual mistake of the parties as to the subject matter, the price, or the terms, going to show the want of a consensus ad idem. Generally speaking, however, in order to affect the binding force of a contract, the mistake must be of an existing or past fact,which is material; it must be as to' a fact which enters into and forms the basis of the contract, or, in other words it must be of the essence of the \u00bfgreemeht, the sine qua non, or, as is sometimes said, the efficient cause of the' agreement, and must be such that it animates and controls, the conduct of the parties.\u2019 17 Am. Jur. 2d, Contracts \u00a7 143.\u201d\nThe, uses of real property permissible under a zoning ordinance is a fact, and a mutual mistake with respect thereto entitles either party to an avoidance of a contract when such fact goes to the essence of the agreement. MacKay v. McIntosh, Id.\nIn the present case all the eleinents necessary to rescind the contract for mutual mistake of fact as set forth in MacKay are established by the uncontradicted evidence submitted by both parties on their motions for summary judgment.\nThere is no doubt that the mistake was as to a material fact. The purpose for which plaintiff desired to purchase the hotel, as set forth in the agreement itself, was so that it could convert it into an apartment complex. The zoning ordinance prevented the accomplishment of that very purpose.\nThere is also no doubt that the parties at the time the contract was entered into were mutually mistaken as to the permissibility under the zoning ordinance of a conversion and use of the hotel into an apartment complex. The evidence of both parties is not in conflict on this point. W. D. Gardner, plaintiff\u2019s president, testified, \u201cIt didn\u2019t occur to us \u2014 well we just didn\u2019t even consider that it may not be zoned for the use we planned for it. . . .\u201d Defendant W. G. Gaither, Jr., who handled the negotiations for the defendants, testified, \u201cIt was just a basic assumption of mine at the time of these dealings with Gardner that it [conversion of the hotel into an apartment complex] would be permitted under existing zoning.\u201d\nSuffice it to say, therefore, the record is replete with evidence clearly establishing that the parties were mutually mistaken with respect to the fact that plaintiff would be permitted under the zoning ordinance to convert the hotel into an apartment complex. There is no evidence to the contrary.\nDefendants contend in the alternative that the evidence on the motions for summary judgment raised a genuine issue as to whether the conversion of the hotel into an apartment complex could have been completed within six months. The Elizabeth City Zoning Ordinance provides that an existing nonconforming use may be continued unless the nonconforming use is discontinued for a period of six months. Defendants argue that if the conversion could have been completed within six months, it would have been permissible under the zoning ordinance as a continuation of an existing nonconforming use since the hotel had already contained seven apartments.\nThere is a genuine issue as to whether the conversion could be completed in six months, but the issue is as to an immaterial fact. Section 4.1 of the Elizabeth City Zoning Ordinance provides: \u201cNonconforming buildings and nonconforming use of buildings shall not hereafter be enlarged.\u201d (Emphasis added.) An increase in the number of apartments in the building from seven to forty-two, as had been planned by plaintiff, would certainly have constituted an enlargement of a nonconforming use.\nWe hold the evidence in the record discloses the nonexistence of a genuine issue of material fact, and the plaintiff is entitled to a rescission of the contract as a matter of law. G.S. 1A-1, Rule 56. The court correctly denied the defendants\u2019 motion for summary judgment and correctly entered summary judgment for plaintiff.\nThe judgment appealed from is\nAffirmed.\nJudges Britt and Martin concur.",
        "type": "majority",
        "author": "HEDRICK, Judge."
      }
    ],
    "attorneys": [
      "White, Hall, Mullen & Brumsey, by Gerald F. White and John H. Hall, Jr., for plaintiff appellee.",
      "Leroy, Wells, Shaw, Hornthal, Riley & Shearin, by Dewey W. Wells and Roy A. Archbell, Jr., for defendant appellants."
    ],
    "corrections": "",
    "head_matter": "GARDNER HOMES, INC. v. W. G. GAITHER, JR., R. L. HOLLOWELL, JOHN F. RIXEY, and JOHN L. GIBSON II, Partners Trading Under the Partnership Name, VIRGINIA DARE ASSOCIATES\nNo. 761SC284\n(Filed 6 October 1976)\n1. Cancellation and Rescission of Instruments \u00a7 4\u2014 permissible use under zoning ordinance \u2014 mutual mistake \u2014 grounds for avoidance of contract\nThe use of real property permissible under a zoning ordinance is a fact, and a mutual mistake with respect thereto entitles either party to an avoidance of a contract when such fact goes to the essence of the agreement.\n2. Cancellation and Rescission of Instruments \u00a7 4\u2014 purchase of hotel to convert into apartments \u2014 impermissible use under zoning ordinance \u2014 mutual mistake as grounds for rescission of contract\nIn this action to rescind a contract to purchase a hotel, evidence was sufficient to support findings that the purpose for which plaintiff desired to purchase the hotel was to convert it into an apartment complex and that the parties at the time the contract was entered into were mutually mistaken as to the permissibility under the city\u2019s zoning ordinance of a conversion and use of the hotel into an apartment complex; therefore, plaintiff was entitled to rescission of the contract.\nAppeal by defendants from Peel, Judge. Judgment entered 6 January 1976 in Superior Court, Pasquotank County. Heard in Court of Appeals 24 August 1976.\nThis is a civil action wherein the plaintiff, Gardner Homes, Inc., seeks to rescind its contract with the defendants, W. G. Gaither, Jr., R. L. Hollowell, John F. Rixey, and John S. Gibson II, partners trading under the name Virginia Dare Associates, to purchase the Virginia Dare Hotel in Elizabeth City, North Carolina, and to recover a fifteen thousand ($15,000) dollar \u201cearnest money\u201d deposit.\nPlaintiff alleged in its complaint that the contract was made under a mutual mistake of material fact, and it is therefore entitled to rescind the contract and recover the deposit. Defendants in their answer admitted the receipt of the deposit pursuant to the contract, but denied that the contract was made under a mutual mistake of material fact.\nBoth parties moved for summary judgment and submitted affidavits and depositions in support of their motions. The un-contradicted evidence submitted by the parties tends to show the following:\nPlaintiff contracted with the defendants for the purchase of the Virginia Dare Hotel in Elizabeth City, North Carolina, and pursuant to said contract gave defendants a fifteen thousand ($15,000) dollar \u201cearnest money\u201d deposit. Plaintiff\u2019s purpose for contracting to purchase the hotel was so that it could convert it into a 42-unit apartment complex. This purpose was incorporated into the agreement between the parties and defendants agreed to obtain financing for plaintiff so the purpose could be carried out. Plaintiff discovered a few days before the sale was to be closed that under the Elizabeth City Zoning Ordinance an apartment complex was not a permitted use in the zone in which the property was located. Up until that time, it had also been defendants\u2019 view and thinking that the zoning ordinance would permit an apartment complex in the zone in which the property was located.\nThe court allowed the plaintiff\u2019s motion and denied the defendants\u2019 motion for summary judgment. From summary judgment for plaintiff rescinding the contract, defendants appealed.\nWhite, Hall, Mullen & Brumsey, by Gerald F. White and John H. Hall, Jr., for plaintiff appellee.\nLeroy, Wells, Shaw, Hornthal, Riley & Shearin, by Dewey W. Wells and Roy A. Archbell, Jr., for defendant appellants."
  },
  "file_name": "0118-01",
  "first_page_order": 146,
  "last_page_order": 149
}