Having carefully examined the materials before the trial court on the parties’ respective motions for summary judgment, we have determined that summary judgment was properly entered for defendants. Except as modified herein, we affirm the decision of the Court of Appeals.
The undisputed evidence establishes that in accordance with Chapter 131, Article 13B of the 1947 Session Laws of North Carolina, the Franklin County Board of Commissioners created by resolution the Franklin Memorial Hospital and the Board of Trustees of Franklin Memorial Hospital on 5 January 1948. This resolution vested the board of trustees “with full authority to employ an architect, select a site and for the planning, establishment, construction, maintenance, and to employ such other personnel as are necessary for the proper operation of said Hospital . . . .”
On 21 March 1983, the commissioners adopted a resolution inviting Carolinas Hospital and Health Services, Inc. (CHHS) and Hospital Corporation of America (HCA) to submit proposals for management of the hospital to the commissioners. This resolution provided that such proposals were to be submitted at a specially called meeting of the commissioners to which the trustees, medical staff of the hospital, and plaintiff were invited. On 23 May 1983 the commissioners, trustees, and plaintiff met with representatives of CHHS and HCA to receive the proposals submitted. Both proposals provided that the administrator of the hospital would be an employee of the management company selected.
On 6 June 1983 the commissioners unanimously voted to contract with HCA for the management of the hospital. In a letter agreement dated 10 June 1983, the commissioners and HCA agreed that HCA would supply an interim administrator, if requested, to assist in the provision of management services to the hospital pending negotiation and signing of a final, long-term contract between the commissioners and HCA. At a specially called meeting at 7:30 р.m. on 15 June 1983, after learning of the commissioners’ resolution and letter agreement with HCA, and in the presence of plaintiff, the trustees adopted a resolution stating their intent to contract with CHHS for management services for the hospital. At this 15 June 1983 meeting the trustees also purported to enter into a written three-year employment contract with plaintiff under which plaintiff was to act as hospital administrator. In a specially called meeting at 9:00 p.m. on 15 June 1983, the commissioners voted to revoke the purported contract that the trustees had entered into with CHHS. On 27 June 1983 the board of commissioners entered a resolution expressly repealing, inter alia, those sections of the 1948 resolution which had vested authority to operate and manage the hospital in the trustees, and stating that all authority to plan, establish, construct, maintain and operate the hospital would now be vested in the commissioners, who would also serve as the trustees of the hospital. On 1 July 1983 this new board of trustees of the hospital voted to fire plaintiff as administrator of the hospital; the trustees also requested HCA to provide immediately an interim administrator for the hospital. By letter dated 11 July 1983, plaintiff was notified in writing by the chairmаn of the board of trustees that his employment as administrator of the hospital was terminated.
Plaintiff contends that the hospital, through the trustees then in power, entered into an enforceable written contract of employment with him on 15 June 1983 and that the hospital, through the commissioners (and later, as nеw trustees), breached this contract by firing him before the end of the term specified in the contract. In affirming summary judgment for defendants the Court of Appeals reasoned that by their 6 June 1983 resolution to contract with HCA, the commissioners revoked by implication the power of the trustees to enter into a long-term contract with any party concerning the management of the hospital. The Court of Appeals stated that because the trustees therefore had no authority to enter into a long-term employment contract with plaintiff on 15 June 1983, the purported contract “is thus
The Court of Appeals correctly stated that under N.C.G.S. § 131426.21(a) the board of commissioners hаd authority to delegate its management authority over the hospital to the trustees and properly did so pursuant to the resolution entered in 1948.
See Simmons v. Elizabeth City,
Although thе 6 June resolution does not state expressly that it revokes authority granted to the trustees in 1948, the clear implication of its language demonstrates the commissioners’ intent to revoke the trustees’ authority to enter into long-term management contracts on behalf of the hospital. In determining whether an ordinance or resolution has been repealed by implication, we look to the intent of the commissioners, bearing in mind that a presumption against intent to repeal exists “where express terms
are not used, and where both statutes [or resolutions or ordinances] by any reasonable construction can be declared to be operative without obvious or necessary repugnancy.”
State v. Lance,
We agree with the Court of Appeals that the language of the 6 June resolution declaring that HCA will be the new manager of the hospital logically conflicts with thе 1948 resolution insofar as the latter conferred authority on the trustees to enter into long-term employment contracts with respect to the management of the hospital. Under the circumstances, the 6 June resolution choosing HCA over CHHS clearly showed the commissioners’ intent to exercise thеir authority to decide how the hospital would be managed in the future. By so resolving, the commissioners manifested their intent to divest the trustees of the delegated authority to make long-term management decisions on behalf of the hospital. Therefore, the resolution of 6 June 1983 impliedly repealed thаt part of the resolution of 1948 which had delegated authority to the trustees to enter into long-term contracts regarding management of Franklin Memorial Hospital. Thus, on 15 June 1983 the trustees had no authority to enter into a long-term contract of employment with plaintiff. Cf. N.C.G.S. § 131426.21(b) (1981) (body to which county commissioners delеgate authority to maintain and operate hospital “shall exercise only such powers and duties as are prescribed in the resolution of the board of county commissioners granting and vesting such authority and powers in said [body]”). However, the fact that the trustees had no authority to enter into an еnforceable long-term employment contract on behalf of the hospital does not mean that the contract was ultra vires.
An act by a private or municipal corporation is ultra vires if it is beyond the purposes or powers expressly or impliedly conferred upon the corрoration by its charter
Under the facts of the present case, because of the commissioners’ 6 June resolution, the trustees’ attempt to enter into an employment contract which would be binding upon the hospital was, under the law of agency, without actual authority.
See generally, e.g., Research Corp. v. Hardware Co.,
“If the facts and circumstances of the particular case reveal thаt an ordinarily prudent [person] would have been put on notice that one with whom he was dealing was not acting within the apparent scope of his authority, the principal is not bound under well-settled principles of agency law.”
Id. (quoting 2 W. Fletcher, Cyclopedia of the Law of Private Corporations § 434, at 307 (perm. ed. 1931)). Therefore we turn to the question whether there is any material issue of fact whether an ordinarily prudent person exercising reasonable care in plaintiffs position would have been justified in believing that on 15 June 1983 the trustees continued to have authority to enter into long-term employment contracts on behalf of the hospital. We conclude thаt such a belief by an ordinarily prudent person would not have been justified and therefore the contract is not enforceable under principles of apparent authority. 3
Although the trustees had hired plaintiff in 1981 under an oral contract of employment, plaintiff was undeniably aware of the frictiоn between the commissioners and trustees during 1983 concerning the future management of the hospital: he was present at the 23 May 1983 meeting of the commissioners and trustees when proposals were received from CHHS and HCA and was aware of the commissioners’ resolution of 6 June to contract with HCA shortly after it was entered. Eleven copies of the interim agreement of 10 June 1983 between the commissioners and HCA were hand delivered to plaintiff on 14 June 1983 by the County Manager of Franklin County. We hold that a reasonably prudent person in plaintiffs shoes would not have been justified in believing that on 15 June 1983 the trustees continued to have authority to enter into long-term employment contracts on behalf of the hospital. Therefore, there is no merit to the theory that any of the defendants were contractually bound to plaintiff under the doctrine of apparent authority.
Under the facts of this case plaintiff wаs merely an employee at will of the hospital when his employment was terminated.
See, e.g., Smith v. Ford Motor Co.,
The decision of the Court of Appeals is
Modified and affirmed.
Notes
. The harshness of the defense of ultra vires is predicated on the rule that those dealing with a municipal corporation are held to know the extent of the сorporation’s authority because the scope of such authority is a matter of public record.
See generally, e.g.,
18B Am. Jur. 2d
Corporations
§ 2002 (1985) (“Obligation of Member of Public to Take Notice of Extent of Corporation’s Powers”); 10 E. Mc-Quillin,
Municipal Corporations
§ 29.04 (1981 & Supp. 1985) (“Notice Imputed to One Contracting With Municipality”); Comment,
Chemical Bank v. Washington Public Power Supply System: An Aberration in Washington’s Application of the Ultra Vires Doctrine,
8 U. Puget Sound L. Rev. 59, 62-65 (1984). Although ultra vires is permitted only to a limited extent as a defense by private corporations to actions based on contract brought by third parties,
see
N.C.G.S. § 55-18 (1982);
Piedmont Aviation v. Motor Lines,
. Under our analysis of the appeal, we find it necessary to address this issue although it was not argued by the parties.
. In passing, we note that in an action to enforce a contract it may be appropriate to reply to a defense of lack of authority with an allegation of estoppel. See N.C.R. Civ. P. 8(c) (estoppel is an affirmative defense). Plaintiff did not do so in the instant case.