Meares v. Nixon Const. Co., 7026SC27

• Decision Date: 06 May 1970
• Docket Number: No. 7026SC27,7026SC27
• Court: North Carolina Court of Appeals
• Parties: Houston D. MEARES, d/b/a Dixie Fire & Sprinkler Company v. NIXON CONSTRUCTION COMPANY.

Page 593

173 S.E.2d 593

7 N.C.App. 614

Houston D. MEARES, d/b/a Dixie Fire & Sprinkler Company v. NIXON CONSTRUCTION COMPANY.

No. 7026SC27.

Court of Appeals of North Carolina.

May 6, 1970.

Fairley, Hamrick, Monteith & Cobb, by Laurence A. Cobb, Charlotte, for plaintiff-appellee.

Ernest S. DeLaney, Jr., Bradley, Gebhardt, DeLaney & Millette, Charlotte, for defendant-appellant.

BRITT, Judges.

In its brief defendant states its contention regarding the first assignment of error as follows: 'The Court below committed error when it instructed the jury it should find that the defendant breached the contracts by failing to pay the estimates within thirty days without the jury first finding that said estimates had been approved.' A portion of the charge included in this assignment of error is as follows:

'By way of summary, ladies and gentlemen, with regard to the second issue, 'did the defendant breach the Birmingham contract, as alleged in the complaint?' the court instructs you that if you find from the evidence and by its greater weight, the burden being upon the plaintiff on this issue to so satisfy you, that the defendant, Nixon, failed to pay the invoices submitted to them in accordance with the paragraphs of the contract that I have previously read to you, and that the defendant's delays or refusals to make these payments were not reasonable delays, and that there was no bona fide dispute in existence as to the amounts due at that time or as to the percentage of the work completed, and if you further find from the evidence and by its greater weight that the plaintiff had not at that time previously breached the contract, then and in that event the court instructs you it would be your duty to answer the first issue 'yes.' On the other hand, if you fail to so find, or if after considering all of the evidence, you are unable to say where the truth lies or if you find the evidence evenly balanced, then and in any of these events it would be your duty to answer the second issue 'no.' If, however, the work had not progressed to the point required to permit the submission of the invoices and to require payment thereof, or if you find that under the circumstances the delays in payment, if any, were reasonable, that is, that the defendant had reason to believe that the work had not progressed and was not progressing according to the contract and that the plaintiff was not under the terms of the contract entitled to submit or to have the submitted invoices paid, at the time of their submission in accordance with the provisions of the contract, then it would be your duty to answer the second issue 'no."

Later in the charge the trial judge gave a similar instruction regarding the Cleveland contracts. Previous to the instruction above set forth the court quoted paragraphs (A), (B) and (C) of section 6 of the contracts but did not quote the proviso of section 6 preceding paragraph (A). Sections 3, 5 and 6 of the contracts provided as follows:

'3. The General Contractor agrees to pay to the Subcontractor for the performance of the above described work the sum of (amount specified in each contract) in current funds, subject to additions and deductions for changes as may be agreed upon, and to make payments on account thereof in accordance with Section 6 hereof.

5. The Subcontractor shall present to the General Contractor a monthly estimate of work completed for the full month; said estimate to be submitted not later than Saturday of the month of the completion of said work.

6. Provided this agreement has been approved by the Owner, the Owner shall upon approval of said estimate, make payments on account to Subcontractor on behalf of the General Contractor as follows:

(A) The estimates shall show percentages of work completed and, where applicable, amounts requested for payment. Unless otherwise agreed, such requests for payment shall be made only once monthly and submitted for the full month not later than the 5th day of the following month. Such requested amounts, less the retained percentages as specified below, shall be paid within 30 days after the date submitted in New York office.

(B) Prior to receipt of each payment, the Subcontractor shall, upon request of General Contractor or Owner, furnish lien waivers for all work, labor and material performed and furnished through date for which each payment becomes due.

(C) The General Contractor and the Owner shall retain 10% Of the amount due on each payment until final payment becomes due.'

The gist of defendant's argument is that before plaintiff could justify a termination of his work on the Birmingham and Cleveland contracts for failure of defendant to pay monthly estimates when due, plaintiff had the burden of showing that the owner (Overmyer) approved the estimates. We do not accept this argument. In 2 Strong, N.C. Index 2d, Contracts, § 12, p. 315, is found a concise resume of certain well-settled principles of law with respect to construction of contracts; these include the following: 'The heart of a contract is the intention of the parties, which is to be ascertained from the language used, the subject matter, the end in view, the purpose sought, and the situation of the parties at the time. * * * A contract is to be construed as a whole * * *.'

Needless to say, the contract does not clearly state who had the responsibility of relaying the monthly estimates from defendant to the owner and seeking their approval, but considering 'the subject matter, the end in view, the purpose sought, and the situation of the parties,' we think the contract contemplated that defendant had this responsibility. The invoices of monthly estimates submitted by plaintiff complied with defendant's requirements as to form; they also complied with 'Instructions To Sub-Contractors' provided by defendant's parent corporation (plaintiff's exhibit 14). Evidently, defendant did not expect plaintiff to exercise such responsibility regarding invoice No. 103 for the Cleveland job as the evidence discloses that this invoice, dated 26 May 1966, was paid on 13 July 1966. Plaintiff's evidence discloses that in connection with the Birmingham job he timely submitted to defendant estimate invoices dated 30 April 1966 for $7,614.00 and 30 May 1966 for.$6,963.75 and that neither was paid. Plaintiff testified: 'I was in contact with the Accounts...