Harris & Harris Const. Co. v. Crain & Denbo, Inc.

• Decision Date: 12 January 1962
• Docket Number: No. 313,313
• Citation: 123 S.E.2d 590,256 N.C. 110
• Parties: HARRIS AND HARRIS CONSTRUCTION COMPANY, Inc., Plaintiff, v. CRAIN AND DENBO, INC., and The Town of Mount Ollve; and Aetna Insurance Company, Additional Defendant.
• Court: North Carolina Supreme Court

Page 590

123 S.E.2d 590

256 N.C. 110

HARRIS AND HARRIS CONSTRUCTION COMPANY, Inc., Plaintiff, v. CRAIN AND DENBO, INC., and The Town of Mount Ollve; and Aetna Insurance Company, Additional Defendant.

No. 313

Supreme Court of North Carolina.

Jan. 12, 1962

J. L. Zimmerman and Williams & Zimmerman, Durham, for plaintiff, appellant.

Fletcher, Lake & Boyce, Raleigh, for Aetna Ins. Co., appellant.

Brooks & Brooks, Jones & Vann, Durham, and Taylor, Allen & Warren, Goldsboro, for defendant Crain and Denbo, Inc., appellee.

MOORE, Justice.

Appeals, involving procedural questions, in cases relating to the subject matter of this action have been heard by this Court on two previous occasions. Crain and Denbo, Inc. v. Harris & Harris Construction Co., 250 N.C. 106, 108 S.E.2d 122 (1959); Crain and Denbo, Inc. v. Construction Co., 252 N.C. 836, 114 S.E.2d 809 (1960). The instant case was instituted in Durham County. On motion the court in its discretion, for convenience of witnesses, removed it to Wayne County for trial.

At the close of plaintiff's evidence the court allowed the motion of the Town of Mount Olive for nonsuit. Plaintiff noted an exception, but makes no assignment of error based thereon. The exception is deemed abandoned. Rose v. Bank, 217 N.C. 600, 9 S.E.2d 2. The Town is not involved on this appeal.

Plaintiff's assignments of error 1 to 5 bring forward numerous exceptions to the admission and exclusion of evidence. Each has been carefully considered. We find in them nothing sufficiently prejudicial to warrant a new trial. True, some of the evidence admitted is of questionable relevancy, and some is of the hearsay variety. But 'in a hearing by the court under agreement of the parties, the rules of evidence are not so strictly enforced as in a trial by jury, since it will be presumed that incompetent evidence was disregarded by the court in making its decision.' 4 Strong: N.C. Index, Trial, S. 56, p. 363. The evidence excluded is either immaterial or is irrelevant to plaintiff's theory of the case.

Plaintiff's assignments of error 6 to 30 are addressed to findings of fact. It is contended in some instances that the findings are not supported by the pleadings, and in others not supported by competent evidence. The arguments in plaintiff's brief in support of these assignments are summary, general and indefinite. It is doubtful that they are in compliance with the rules of this Court. Rule 28, Rules of Practice in the Supreme Court. To consider and discuss these assignments severally the Court would be required to make repeated voyages of discovery through the record and list and catalog the evidence bearing upon each questioned finding of fact. The printed record contains 764 pages. In addition, there are voluminous exhibits which are not included in the bound record. The entire record has been carefully read and considered. In our opinion the findings of fact deal with the material issues raised by the pleadings. Where a jury trial has been waived, the findings of fact of the trial judge are as effective as the verdict of a jury, and are conclusive on appeal, if there is competent evidence to support such findings. Reid v. Johnston, 241 N.C. 201, 85 S.E.2d 114. It is our opinion that the findings of fact questioned by plaintiff are supported by competent evidence, except as hereinafter stated.

Plaintiff's action was laid upon the theory that the subcontract was breached by Crain, the work was wrongfully taken over by Crain, plaintiff was dismissed and prevented from performing his obligations under the subcontract by Crain's injurious conduct, and plaintiff was damaged by reason of the breach on Crain's part. Plaintiff insisted at all times that it was entitled to perform the work. Yet, at the close of plaintiff's evidence, the court allowed its motion to be permitted to amend the complaint so as to allege a cause for relief upon quantum meruit--$32,769.55 for labor performed and materials furnished.

Pursuing the quantum meruit theory, plaintiff contends that the provision of the subcontract requiring it to deposit $30,000 in a joint account was a condition precedent to the taking effect of the subcontract, that the deposit was never made and therefore the subcontract never became a binding agreement, and that plaintiff is entitled to recover the value of labor performed and materials furnished by it in prosecution of the work.

The subcontract stipulates the respective rights, duties and obligations of Harris and Crain with respect to the work, fixes their compensation, and in clause 14 provides:

'(a) Before the Sub-Contractor shall begin his work, a Special Account shall be opened in the Durham Industrial Bank in the name of HARRIS AND HARRIS, MOUNT OLIVE ACCOUNT. The Sub-Contractor agrees to deposit in this account the sum of THIRTY THOUSAND ($30,000.00) Dollars with which to finance his operations, and no part of this said $30,000.00 is to be withdrawn from the account until this account is disbursed as outlined hereinafter and after final payment is received from the Town of Mount Olive, N. C., by the Contractor at the completion and acceptance of the work.

'(b) Disbursements from this Special Account shall be made only by checks drawn against it for the sole purpose of paying for the items listed in Clause 2 as direct costs of the work. Checks shall be signed by Mr. W. A. Harris for the Sub-Contractor and counter-signed by H. S. Crain or E. M. Denbo for the Contractor. * * * '(c) Applicable funds derived from the performance of the work will be deposited in the Special Account by the Contractor as set forth in Clause 15(c) hereinafter.

'(d) If, at any time, the funds in the said Special Account shall be insufficient to pay the sum total of any payrolls or other bills then owing for items of expense referred to in Clause 2, then it shall be the obligation of the Sub-Contractor to promptly deposit such additional funds as may be required to pay all such bills, payroll or other expenses then owing. * * *'

The question then is whether making the deposit was a condition precedent, a condition to be performed before the agreement of the parties could become a binding contract.

The trial court concluded as a matter of law that 'the making of a deposit of $30,000.00 by Harris and Harris Construction Company, Inc., as required by clause 14(a) of the subcontract * * * was not a condition precedent to the taking effect of a valid and binding subcontract between the parties.'

'* * * (A) contract is not made so long as in the contemplation of both parties thereto something remains to be done to establish contract relations * * *. In negotiating a contract the parties may impose any condition precedent, a performance of which condition is essential before the parties become bound by the agreement. ' Federal Reserve Bank of Richmond v. Neuse Manufacturing Co., 213 N.C. 489, 493, 196 S.E. 848, 850. 'Breach or non-occurrence of a condition prevents the promisee from acquiring a right, or deprives him of one, but subjects him to no liability * * *. ' 3 Williston on Contracts (Rev.Ed.), s. 665, p. 1909. 'Whether covenants are dependent or independent, and whether they are concurrent on the one hand or precedent and subsequent on the other, depends entirely upon the intention of the parties shown by the entire contract as construed in the light of the circumstances of the case, the nature of the contract, the relation of the parties thereto, and other evidence which is admissible to aid the court in determining the intention of the parties. ' Wade v. Lutterloh, 196 N.C. 116, 120, 144 S.E. 694, 696 (citing Page on the Law of Contracts, Vol. 5, 2nd Ed., s. 2948).

The parties by their acts and conduct showed that they considered the subcontract effective and binding long before Harris defaulted in making the deposit. The time set by the town engineers for beginning construction was August 1st. Harris, with approval of Crain, ordered materials for the project immediately after the letting on June 26th. It continued to order materials after the subcontract was executed on July 6th. It unloaded the materials and placed them on the job, procured a storage lot, rented an office, and made other preparations to begin construction. On July 20th Harris furnished a performance and payment bond with surety, as required by the subcontract. There was no definite refusal to make the deposit until about the middle of August. In its pleadings Harris alleged with particularity the existence of the subcontract and the breach thereof by Crain. It at no time before trial contended that the subcontract was not binding. Crain has consistently maintained that the subcontract is effective. Aetna regarded the subcontract as binding, and when Crain declared Harris to be in default and took over the work Aetna proposed substitute subcontractors. '* * * (T)he ante litem motam practical interpretation of the parties is a safe guide in the interpretation of contracts. ' Jones v. Palace Realty Co., 226 N.C. 303, 37 S.E.2d 906. 'Where it is doubtful whether words create a promise or an express condition, they are interpreted as creating a promise * * *. ' Restatement of the Law, Contracts, s. 261.

Crain submitted the bid and executed the prime contract at the solicitation of Harris. When Harris and Crain thereafter signed the subcontract, the positive duty was immediately cast upon Harris or Crain, one or the other, to construct or cause to be constructed the water and sewer improvements in any event. The performance of the duty, and the right to receive compensation therefor from the Town, on the part of Harris or Crain, one or the other, did not depend on a deposit being made by Harris. By the terms of the subcontract Crain was authorized to take the prosecution of the work out of the hands of Harris if Harris defaulted in certain specified respects or was 'guilty of a substantial violation of any provision (of the) * * *...