Morgan v. Singley, 8504

• Decision Date: 13 December 1977
• Docket Number: No. 8504,8504
• Citation: Morgan v. Singley, 560 S.W.2d 746 (Tex. Ct. App. 1977)
• Parties: Jim MORGAN, Appellant, v. Grady SINGLEY, Appellee.
• Court: Texas Civil Court of Appeals

Page 746

560 S.W.2d 746

Jim MORGAN, Appellant,

v.Grady SINGLEY, Appellee.

No. 8504.

Court of Civil Appeals of Texas, Texarkana.

Dec. 13, 1977.

Rehearing Denied Jan. 31, 1978.

Thomas R. Grett, Longview, for appellant.

Guy N. Harrison, Longview, for appellee.

CORNELIUS, Chief Justice.

Grady Singley, who was the plumbing, heating and air conditioning subcontractor for the general contractor M. Clint Brown Company, entered into subcontracts with Jim Morgan by the terms of which Morgan was to perform the plumbing portion of Singley's contracts on the Citizens Resource Center and the Student Center at LeTourneau College in Longview.The contracts required Singley to pay Morgan $31,000.00 for the Resource Center and $48,845.00 for the Student Center.They also required Morgan to perform his work in accordance with certain plans and specifications, and obligated Singley to pay Morgan monthly progress payments based on the work completed to that time.The work began and Morgan was paid his monthly progress payments through June of 1974.The last payment was made to Morgan on June 26, 1974, for work and materials for the month of May.Morgan received no payment after June 26th but he continued his work until September 1, 1974.At that time Morgan was told that payments for his work in July and August had been made by the general contractor to Singley but that Singley had not passed them on.Upon that discovery, Morgan promptly removed his workmen from the job sites and performed no more services under his contracts.In response, Singley used some of his own workmen and also employed another plumbing contractor, on a cost-plus basis, to complete the work.He then sued Morgan to recover the expenditures in excess of the contract prices.Morgan counterclaimed seeking payment for work done but not paid for and for the value of certain materials allegedly left at the job sites.

The testimony relating to the reasons for Singley's withholding of Morgan's progress payments was conflicting.Both Singley and the general contractor's superintendent agreed that payment was made to Singley for Morgan's work as it progressed but that the superintendent instructed Singley to withhold Morgan's share until certain defects and deficiencies in Morgan's work had been remedied.Singley contended the defects were never remedied.Morgan denied these assertions.He testified that Singley told him that the general contractor made no payments in July and August.Morgan also contended that any defects in his work had been remedied prior to his leaving the job sites.No witness was able to recall the exact dates when defects or deficiencies in the work were discovered or when Morgan was asked to remedy them.Morgan testified that much of the non-complying work was approved by an inspector who was later overruled by another inspector.All of the inspectors who testified denied ever approving any of the defective work.

Trial was to a jury which found, in effect, that Morgan abandoned his work without justification; Morgan failed to perform his work according to the plans and specifications; Morgan's abandonment proximately caused Singley to expend $38,087.82 to complete the work; and that Morgan had substantially completed the work on the Resource Center, for which he was due an additional $2,691.93 by way of offset against Singley's recovery.Certain other jury findings were disregarded, of which action neither party has complained.Based upon the jury findings and undisputed evidence showing that Singley had paid $90,903.09 for the two jobs which Morgan had contracted to perform for a total of $82,795.00, the court awarded Singley a recovery of $8,108.09 less the $2,691.93 offset for Morgan's unpaid work on the Resource Center, for a net of $5,416.16.

Four points of error have been assigned.The first two contend that the jury finding that Morgan breached the contracts by abandoning the work without justification, and the trial judge's implied finding (Tex.R.Civ.P. 279) that Singley's withholding of the progress payments did not amount to a breach, are both against the great weight and preponderance of the evidence.It is argued that, as it was undisputed that Singley failed to pay the July and August payments, that fact alone establishes that Singley breached the contract and that Morgan's subsequent abandonment of the work was justified and could not have constituted a breach, citing Taylor-Fichter Steel Const. Co. v. Curtis, 144 S.W.2d 285(Tex.Civ.App.Beaumont 1940, writ dism'd judgmt cor.), and Kidd-Scruggs v. Tyler Hotel Co., 270 S.W. 566(Tex.Civ.App.Texarkana1925, writ ref'd).It is, of course, the general rule that the unjustified refusal or failure to pay the agreed installments would constitute a breach of the contract.But it is now recognized to be the rule that reciprocal promises in a contract are presumed, in the absence of an intention to the contrary, to be mutually dependent rather than independent, and that the breach of one will excuse performance of the other.SeeK & G Construction Company v. Harris, 223 Md. 305, 164 A.2d 451(1960).In speaking of the refusal of an owner or general contractor to pay a contractor or subcontractor because his work has been defective, Professor Corbin states:

"If the refusal to pay an installment is justified on the owner's part (Singley in our case), the contractor (Morgan in our case) is not justified in abandoning work by reason of that refusal.His abandonment of the work itself will be a wrongful repudiation that goes to the essence, even if the defects in performance did not."(Parenthesis supplied.)3A A.Corbin, Contracts, Sec. 708, at 333(1972).

Thus, if Morgan's performance had not been in compliance with the plans and specifications as agreed, Singley's refusal to pay the progress payments would have been justified and Morgan's abandonment of the work, rather than Singley's refusal to pay, would have constituted the breach of the contracts.As to whether Morgan's performance was in compliance with the contracts or was defective at the time Singley discontinued payment, the evidence was highly contradictory with considerable evidence pro and con.From a review of the entire record we cannot say that either the jury's finding or the trial judge's implied finding concerning the party responsible for the breach of the contracts is against the great weight and preponderance of the evidence.

Morgan urges that the general contractor's payment to Singley for Morgan's work constituted an acceptance of the work and Singley had a duty to pass the payment on to Morgan.There was testimony, however, that the payments to Singley were with the reservation that they should not be passed on to Morgan until the work defects were remedied.In those circumstances, the payment to Singley would only constitute a conditional acceptance of Morgan's performance, and would not preclude a finding that Singley was justified in withholding payments until the defects were remedied.

PointNo. 3 asserts that the jury's answer to Special IssueNo. 6 is ambiguous and that the court was in error in basing a judgment thereon.IssueNo. 6 inquired what amount of money Singley "was required to expend to complete the work JIM MORGAN had contracted to perform?"The jury answered: "$38,087.82."Morgan contends that the issue is defective because it is not clear whether the answer of the jury represents the amount expended above that paid to Morgan or the amount expended above the contract price.

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