Yamaha International Corp. v. Parks , 72 N.C. App. 625 ( 1985 )

325 S.E.2d 55 (1985)

YAMAHA INTERNATIONAL CORPORATION
v.
Michael T. PARKS, Ellen W. Parks and Cliff Robinson.

No. 8410DC401.

Court of Appeals of North Carolina.

February 5, 1985.

Smith, Debnam, Hibbert & Pahl by Carl W. Hibbert, Raleigh, for plaintiff-appellee.

W.C. Stuart, III, Raleigh, for defendants-appellants.

WHICHARD, Judge.

Defendants contend that by virtue of an oral modification they have been released from their written guaranty agreement with plaintiff. Notwithstanding contract provisions to the contrary, such as those here, supra, a written contract may be modified by a subsequent parol agreement, which may be either express or implied by the conduct of the parties. Son-Shine Grading v. ADC Construction Co., 68 N.C.App. 417, 422, 315 S.E.2d 346, 349 (1984); Electro Lift v. Equipment Co., 4 N.C.App. 203, 207, 166 S.E.2d 454, 456 (1969).

The burden is on defendants, however, to show the modification contended for. Russell v. Hardwood Co., 200 N.C. 210, 211, 156 S.E. 492, 493 (1931); Insurance Agency v. Leasing Corp., 31 N.C.App. 490, 492, 229 S.E.2d 697, 699 (1976). They have not met that burden here. The only forecast of evidence, supra, is the following: plaintiff was notified that defendant Michael T. Parks had withdrawn from the corporation; plaintiff was asked whether the corporation needed to sign a new dealer agreement due to defendant Michael T. Parks' withdrawal; corporation dealt with plaintiff's traveling representatives but not with plaintiff's corporate credit manager, who filed an affidavit on plaintiff's behalf; based upon defendant Michael T. Parks' prior dealings with plaintiff, defendants relied upon the oral representatives of plaintiff's traveling representatives and thought they were released from liability on the guaranty.

Defendants argue that considered in the light most favorable to them, the foregoing forecast of evidence raises an issue of material fact as to whether plaintiff's traveling representative by act or word modified the guaranty agreement. We disagree.

A guarantor of a principal obligation may be discharged from liability under the guaranty contract by a valid release by the creditor. 38 Am.Jur.2d Guaranty Sec. 79, at 1086 (1968). The release, or agreement discharging the guarantor, is binding upon the creditor if the agreement possesses the elements of a contract. Id., Sec. 80, at 1087. Thus, modification of a contract is as much a matter of contract as the original agreement. Electro Lift, 4 N.C.App. at 207, 166 S.E.2d at 456-57. The effect of a modification is the production of a new agreement, which must contain all the essential elements of a contract. Id. See also 38 Am.Jur.2d Guaranty Sec. 80, at 1087 (1968). Mutual consent is as much a requisite in effecting a contractual modification as it is in the initial creation of a contract. Electro Lift, 4 N.C.App. at 207, 166 S.E.2d at 457.

Defendants here have not forecast evidence establishing an issue of material fact as to whether plaintiff and defendants made a new agreement containing all the essential elements of a contract. The evidence forecast makes no reference either directly or indirectly to the original agreement between the parties, or to a new agreement. Defendants cannot reasonably contend that that which was neither directly nor indirectly spoken of was modified by a new agreement.

Summary judgment is proper if the pleadings and forecast of evidence establish that there is no genuine issue as to any material fact and a party is entitled to judgment as a matter of law. G.S. 1A-1, Rule 56(c); Frye v. Arrington, 58 N.C.App. 180, 182, 292 S.E.2d 772, 773 (1982). The pleadings and forecast of evidence here established that defendants owed plaintiff the sums claimed under the guaranty agreement. The only alleged defense was that plaintiffs had released defendants from their obligation by a subsequent oral modification of the agreement. Because defendants failed to forecast evidence that would sustain their burden of proof on this issue, the court properly granted plaintiff's motion for summary judgment.

Defendants contend that the affidavit of plaintiff's corporate credit manager is not made on personal knowledge as required by G.S. 1A-1, Rule 56(e) and is therefore inadmissible. Assuming without deciding that defendants' contention has merit, defendants waived any objection they may have had by not raising it at the hearing on plaintiff's motion. On a motion for summary judgment, uncertified or otherwise inadmissible documents may be considered if not challenged by timely objection. Insurance Co. v. Bank, 36 N.C.App. 18, 26, 244 S.E.2d 264, 269 (1978). This objection, first raised on appeal, is not timely. See Bank v. Harwell, 38 N.C.App. 190, 192, 247 S.E.2d 720, 722 (1978), cert. denied, 296 N.C. 410, 267 S.E.2d 656 (1979). We note additionally that even absent a consideration of plaintiff's affidavit, defendants raised no issue of material fact.

Defendants contend the court erred in continuing the case to allow plaintiff an opportunity to cure notice defects in its motion for summary judgment. Granting a continuance is within the sound discretion of the trial court and we find no abuse of that discretion.

Affirmed.

HEDRICK, C.J., and EAGLES, J., concur.