Askew v. Joachim Memorial Home, 9113
| Decision Date | 06 October 1975 |
| Docket Number | No. 9113,9113 |
| Parties | Jack G. ASKEW, d/b/a Leonhard & Askew, Architects, Plaintiff-Appellee, v. JOACHIM MEMORIAL HOME, Defendant-Appellant. Civ. |
| Court | North Dakota Supreme Court |
Syllabus by the Court
1. The general rule is that a third person, having dealt with one purporting to act as the agent of another, is estopped, as against the supposed principal, to deny the agency.
2. At common law, in the absence of an enabling statute, a voluntary unincorporated association cannot sue or be sued in its common name.
3. A voluntary unincorporated association doing or transacting business under a common name may be estopped to deny its own existence as a legal entity and be subject to suit under such common name.
4. A voluntary unincorporated association which has a large and fluctuating membership, holds itself out in its bylaws as a legal entity in the operation of a retirement home, charges fees for its services, hires and pays employees, accumulates funds, makes loans, and is licensed as an entity by the State is estopped to deny its existence as a legal entity for purposes of suit in its common name on its contractual obligations.
5. The unauthorized act of an agent purportedly done for the benefit of a principal can be subsequently ratified by the purported principal.
6. When issues not raised by the pleadings are tried by the express or implied consent of the parties, they shall be treated as if they had been raised by the pleadings. Such amendment of the pleadings as may be necessary to make them conform to the evidence may be made upon motion of any party at any time, and failure so to amend does not affect the result of the trial. Rule 15(b), N.D.R.Civ.P.
7. Ratification is the affirmance by a person of a prior act which did not bind him but which was done or professedly done on his account, whereby the act, as to some or all persons, is given effect as if originally authorized by him.
8. Ratification by the principal of an unauthorized act may be either express or by implication from conduct of the principal inconsistent with a repudiation of the agent's action.
9. Where the principal acts in such a manner as to voluntarily assume the risk of acting without first ascertaining all of the facts, when the means to ascertain those facts is readily available, the principal will be estopped to deny that the ratification occurred with the principal's knowledge of all of the material facts.
10. A motion for a directed verdict is to be denied unless the evidence is such that reasonable men, without weighing the credibility of witnesses or otherwise considering the weight of the evidence, could not disagree upon the conclusion to be reached.
11. A mere scintilla of evidence in favor of the party against whom the motion for a directed verdict is made does not preclude the granting of the motion.
12. A motion for a directed verdict should not be granted unless the moving party is entitled to a judgment on the merits as a matter of law. In determining whether or not the moving party is entitled to a judgment on the merits as a matter of law, the evidence should be evaluated in the light most favorable to the party against whom the motion is made.
13. Granting plaintiff's motion for a directed verdict made at the close of all the evidence, after once denying that motion and then recessing court for the day, was, at most, harmless error by the trial court and resulted in no prejudice to the defendant, and did not affect the substantial rights of the parties.
14. For reasons stated in the opinion, the judgment of the district court is affirmed.
Sperry & Schultz, Bismarck, and Joseph A. Vogel, Jr., Mandan, for defendant and appellant; argued by Alfred C. Schultz, Bismarck.
Bair, Brown & Kautzmann, Mandan, for plaintiff and appellee; argued by Malcolm H. Brown, Mandan.
This is an appeal from an order and judgment of the Mercer County District Court dismissing the counterclaim of the defendant and appellant, Joachim Memorial Home, and granting the motion for a directed verdict of the plaintiff and appellee, Jack G. Askew, doing business as Leonhard & Askew, Architects. Judgment was entered against the defendant for the sum of $17,850.27, which sum includes the plaintiff's claim, plus interest and costs.
This suit results from a claim by Askew that the Joachim Memorial Home is liable to him for $15,915.20, plus interest and costs, as the final payment of an architect's fee of $27,915.20. The fee was calculated pursuant to the terms of a written agreement signed on June 23, 1968, by Edward Schulz and H. M. Leonhard, under which the architectural firm of Leonhard & Askew, Architects, was to provide certain architectural services to the Joachim Memorial Home in connection with a planned building project.
Schulz is purported to have acted as the agent for the Rev. Joachim Memorial Association (hereinafter 'Association'), which operates the Joachim Memorial Home in Beulah as a retirement home for elderly persons. Schulz, in 1968, was president of the Association's board of directors (hereinafter 'Board').
Leonhard, in signing the agreement with Schulz on June 23, 1968, is purported to have acted as an agent for Askew, who was at that time operating his professional firm under the assumed name of Leonhard & Askew, Architects. Leonhard and Askew had been partners in the firm of Leonhard & Askew, Architects, from 1955 until January 1, 1968, when the partnership was dissolved. After January 1, 1968, Leonhard continued until his death on January 23, 1974, to be associated with the firm, Leonhard & Askew, Architects, as an employee of Askew.
Beginning in June 1968, Askew, through Leonhard and other employees, began providing architectural services to the Association. On July 18, 1968, the Board discussed the preliminary plans for the building and was told that an architect had been hired. It was during this initial planning phase that the plaintiff first estimated that the cost of construction would be approximately $394,000.
The Association's minutes show that planning for the construction of a new building continued during the next two years. The minutes of the January 21, 1969, annual meeting of the Association state, in pertinent part:
One year later, the minutes of the Association again reflect the continued involvement of the Association in planning for the construction of a new building. The minutes of the January 20, 1970, annual meeting of the Association state, in pertinent part:
'President Schulz reported that the building project is still under way at this time.'
The next action reflected in the Board's minutes is a report at the March 2, 1970, Board meeting. At such meeting the Board was told that the architect was drawing up a new set of plans based on earlier discussions to reflect proposed changes.
By September 1970, more complete plans for the structure had been completed and Askew had met with representatives of the Board, as well as with other interested persons in Beulah. At the September 27, 1970, meeting of the Board, details of the building were explained and Askew gave as a verbal cost estimate the figure of $440,000.
In April 1971, Board President Edward Schulz, Board Secretary Helmuth Hilz, and H. M. Leonhard of the architectural firm, met with officials of the Bank of North Dakota to discuss financing the project. The Bank of North Dakota was not willing to commit itself to the project at that time, but suggested that the Board obtain firm bids on the proposal and return to discuss the project after bids had been received.
Bids for the project were let on July 15, 1971. The low construction bid was $471,550.
After receiving bids, the Association continued its efforts to secure financing for the project but was unable to do so. As late as April 20, 1972, the minutes of the Board show that the Association was continuing its search for financial backing to construct the building and that the contractors had agreed to hold open their bids for an unspecified period of time. Finally, however, the Board was forced to conclude, during the summer of 1972, that financing would not be available. The project was then abandoned.
At a meeting of the Board held on October 11, 1971, the Board had authorized payment to Askew of the sum of $12,000, which was a partial payment of his architectural fee. Such sum had been paid after its approval by the Board; at such meeting the Board was advised that Schulz had a copy of the agreement with Askew, but the Board voted to pay such fee without knowing of all of its terms and conditions. However, once the Board discovered that Askew's total fee was $27,915.20, they refused to pay the balance of such fee. The amount of the fee was calculated according to the terms of the agreement signed on June 23, 1968, by Edward Schulz and H. M. Leonhard. That agreement provided for a fee of 7.4 percent of the low bid if the building was actually constructed. If not built, the fee would be a percentage of the total fee, based upon the following schedule:
Schematic Design Phase ..... 15%
Design Development Phase ..... 35%
Construction Documents Phase ..... 75%
Bidding or Negotiation Phase ..... 80%
Construction Phase ..... 100%
This project proceeded through the 'Bidding or Negotiation Phase' before the project was terminated by the Association.
After a series of meetings between Askew and the Board had failed to resolve the dispute, Askew brought this action on October 6, 1972, to recover that portion of his fee which remained unpaid. The Association answered and counterclaimed for the $12,000 it had already paid to Askew. The Association claimed that the...
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