Builders Center, Inc. v. Smith

• Decision Date: 17 November 1969
• Docket Number: No. 7790,7790
• Citation: 228 So.2d 245
• Parties: BUILDERS CENTER, INC., Plaintiff-Appellant, v. Joe SMITH, Defendant-Appellee.
• Court: Court of Appeal of Louisiana — District of US

Page 245

228 So.2d 245

BUILDERS CENTER, INC., Plaintiff-Appellant, v. Joe SMITH, Defendant-Appellee.

No. 7790.

Court of Appeal of Louisiana, First Circuit.

Nov. 17, 1969.

James R. Coxe, III, of Coxe, Coxe & Smith, Baton Rouge, for appellant.

William F. Kline, Jr., Clinton, for appellee.

Before LANDRY, SARTAIN and ELLIS, JJ.

SARTAIN, Judge.

This is a suit on an open account for the sum of $4,511.47, representing materials furnished by plaintiff during the construction of a residence for Joe Smith, defendant. The trial judge ruled that defendant was not personally liable to the plaintiff as the latter had failed to file and take advantage of a materialman's lien against the property of the defendant. Plaintiff appeals from this judgment.

The evidence shows that on or about September 30, 1966, defendant entered into a cost plus contract with S & S Contractors, a partnership composed of A. M. Stewart and H. E. Barron, for the construction of a brick veneer home in Jackson, Louisiana. The costs of materials and labor were not to exceed $14,600 and the fee to the contractor was not to exceed $1,400. The first installment of $5,000 was to be paid the contractor when the slab was finished. The second installment of $5,000 was to be paid upon completion of 'framing'. The balance due under the contract was to be paid after the completion of the residence. The contract was not recorded.

Shortly after the contract was executed, Mr. A. M. Stewart went to plaintiff's place of business and allegedly opened an account in defendant's name. The invoices filed in the record show that the materials were 'sold to Joe Smith', Jackson, Louisiana.

Between the dates of October 6, 1966 and December 8, 1966, the contractor obtained from plaintiff materials valued in the amount now sued for.

Defendant made the following payments under the contract to S & S Contractors: $5,000 on October 5, 1966; $4,375 on October 14, 1966; and $625.00 on October 17, 1966. None of these funds were paid on the account with plaintiff. The final payment was never made because there later arose a dispute between defendant and the contractors as to whether or not the contractors had completed the job satisfactorily.

Plaintiff filed a lien against defendant's property which was later ordered cancelled by the court because it was not timely filed .

In the meantime, A. M. Stewart, one of the partners of S & S Contractors petitioned for bankruptcy and listed plaintiff as an unsecured creditor of an open account in the amount of $4,456.00. Mr. Stewart's bankruptcy schedule also showed as a credit item the sum of $6,000, owed to him by defendant for the work done on the latter's home.

Plaintiff now proceeds on the grounds that S & S Contractors was either the agent in fact of the defendant or that the defendant by his own conduct and action has ratified the acts of S & S Contractors who appeared to act on his behalf. Plaintiff bases its case on what it argues are two well established rules of law. The first rule is that one who is notified that a contract has been made for him by a person who purports to have authority to do so is presumed to have ratified the contract unless he promptly repudiates any such authority when is he informed thereof. C.C. Art. 2985, Pitts v. Shubert, 11 La. 286 (La.Sup.Ct., 1837) and Da Ponte v. Ogden et al., 161 La. 378, 108 So. 777 (La.Sup.Ct., 1926). Secondly, when a defendant keeps goods purchased for his account by an unauthorized person, the vendor may, at its option, treat such action as a conversion of the goods or as a ratification of the purchase. Goldman v. Greater Louisiana Corporation, 126 So.2d 771 (4th La.App., 1961). In support of these two contentions plaintiff offered the testimony of Mr. William K. Coxe, its credit and sales manager. Mr. Coxe testified that Mr. A. M. Stewart came to plaintiff's place of business and opened an account in the name of Joe Smith, Jackson, Louisiana. He further stated that a copy of each invoice was mailed to the defendant as well as a monthly statement and that at no time did he receive any notice from defendant that defendant did not consider himself responsible for the account. Mr. Coxe admitted that when the account was opened in the name of defendant he did not know him, made no inquiry as to his financial status, credit rating, ability to pay, or the location of the property upon which the house was to be erected other than to note it was in Jackson, Louisiana. On the other hand, Mr. Coxe admitted that for a number of years, he had known both Mr. Stewart and Mr. Barron and had done business with them.

Mr. Coxe's testimony is in part substantiated by that of Mr. Stewart who stated that he did go to plaintiff's place of business and open the account in defendant's name for the purpose of obtaining materials to construct defendant's home.

Mr. Barron, the other partner of S & S Contractors, testified that the account was set up in the manner above described and this account was to be paid by defendant upon completion of the work.

Plaintiff also relies very heavily on a paragraph in the contract between S & S Contractors and Mr. Smith which reads as follows:

'The Contractor, As agent of the owner shall provide and pay all Materials, Labor specialty and Sub-Contract service, and Supervision, and so and provide all things necessary to accomplish the following:' (Emphasis ours.)

Defendant bases his defense on the fact that he engaged the services of S & S Contractors as an independent contractor for the purpose of...