Royal Service Co. v. Whitehead Const. Co., Inc.

• Decision Date: 09 April 1973
• Docket Number: No. 5--6236,5--6236
• Citation: 254 Ark. 234,492 S.W.2d 423
• Parties: ROYAL SERVICE CO., Appellant, v. WHITEHEAD CONSTRUCTION CO., INC., and Fidelity and Deposit Co. of Maryland, Appellees.
• Court: Arkansas Supreme Court

Page 423

492 S.W.2d 423

254 Ark. 234

ROYAL SERVICE CO., Appellant, v. WHITEHEAD CONSTRUCTION CO., INC., and Fidelity and Deposit

Co. of Maryland, Appellees.

No. 5--6236.

Supreme Court of Arkansas.

April 9, 1973.

Jones, Matthews & Tolson, Pine Bluff, for appellant.

Anderson & Crumpler, Magnolia, for appellees.

JONES, Justice.

This is an appeal by Royal Service Co. from an adverse circuit court judgment on a jury verdict in a suit by Royal against Whitehead Construction Company and its bondsman, and a counterclaim by Whitehead against Royal.

The facts appear to be as follows: Whitehead was the general contractor for the construction of a building at Southern State College. By written contract dated February 18, 1971, Whitehead sublet the mechanical work on the building to Royal as a subcontractor for the price of $94,006. Whitehead required the subcontractor Royal to carry its own liability and workmen's compensation insurance and among other provisions of the contract Article 9 provided in part as follows:

'Prior to starting work the required insurance shall be obtained from a responsible insurer, and satisfactory evidence shall be furnished to the Contractor that the Subcontractor has complied with the requirements of this Article 9.'

The subcontract further provided that the evidence of insurance should consist of 'Insurance Certificates,' and that the time of commencement and completion of the work was to be the essence of the contract unless extended by the contractor's written consent. The commencement date was designated as February 18, 1971, and the completion date as December 24, 1971.

Royal moved a tool house onto the construction site, ordered some materials and obtained shop drawings necessary to the performance of its subcontract, but it failed to furnish certificates of insurance. On June 3, 1971, Whitehead discharged Royal and directed him to remove his tool house and materials from the job.

Royal filed suit against Whitehead alleging that he had proceeded with his work as provided in his subcontract and had completed so much of the work as could be done in the state of progress of the general contract when it was wrongfully discharged by Whitehead. Royal alleged damages and prayed judgment in the amount of $9,542 for loss of profit and $1,677.98 for labor performed and materials furnished. Whitehead answered by general denial and in counterclaim alleged that Royal failed and refused to comply with the terms of the subcontract by furnishing certificates of insurance as required therein and performing the services required thereunder. Whitehead alleged that because of Royal's failure and refusal to comply with its contract, Whitehead was forced to purchase and install ducts at a cost of $1,250, and was forced to discharge Royal and secure the services of another subcontractor at an additional cost of $5,576, exclusive of the duct work, and Whitehead prayed judgment for $6,826. A jury trial resulted in a judgment for Whitehead on Royal's complaint and for Whitehead on its counterclaim but with no damages to Whitehead.

On appeal to this court Royal first contends that the trial court erred in permitting Whitehead to introduce testimony of nonperformance by Royal on matters which Whitehead had not pleaded as breaches of contract. We find no merit in this contention. Royal alleged in its complaint that it had proceeded with the work as provided for in the contract and had completed so much of the work as could have been done in the state of progress of the work on the general contract. Whitehead denied these allegations and affirmatively alleged breach of contract by failure to furnish certificates of insurance and to perform the services required under the contract.

Ark.Stat.Ann. § 27--1155 (Repl.1962) provides as follows:

'No variance between the allegation in a pleading and the proof is to be deemed material, unless it has actually misled the adverse party to his prejudice in maintaining his action or defense upon the merits. Whenever it is alleged that a party has been so misled, that fact must be shown to the satisfaction of the court, and it must also be shown in what respect he has been misled; and thereupon the court may order the pleading to be amended upon such terms as may be just.'

In Ark.Stat.Ann. § 27--1160 (Repl.1962) is found the following language:

'. . . when the allegations of a pleading are so indefinite or uncertain that the precise nature of the claim or defense is not apparent, the court may require the pleading to be made definite and certain by amendment. The court must, in every stage of an action, disregard any error or defect in the proceedings which does not affect the substantial rights of the adverse party; and no judgment shall be reversed or affected by reason of such error or defect.'

In Wood v. Smith, 224 Ark. 589, 275 S.W.2d 1, this court said:

'While the cross-complaint is wanting in language completely expressing Smith's cause of action, this vice could have been reached by motion to make more definite and certain. In the absence of such a motion it must be presumed that the cross-defendant was not without information as to the nature of the claim. The language is sufficient to suggest a legal duty upon Wood's part to fulfill a contractual obligation, and his failure to do so.'

See also Bonds v. Littrell, 247 Ark. 577, 446 S.W.2d 672, and Young v. Moore, 251 Ark. 296, 472 S.W.2d 100.

We are of the opinion that the allegations of the counterclaim were sufficient to permit the introduction of the testimony relating to the breach of contract, even if it were not, there was no prejudicial error. The trial court, in its discretion, may permit a new issue to be introduced during the progress of the trial. Gardner v. Farmers Electric Co-op Corp., 232 Ark. 435, 338 S.W.2d 206. The court may admit evidence in support of such an issue and, if necessary, give the adverse party an opportunity to prepare to meet it. Jonesboro Coca-Cola Bottling Co. v. Holt, 194 Ark. 992, 110 S.W.2d 535. Here, there was no plea of surprise or suggestion that appellant needed additional time. Furthermore, the evidence was offered to show that appellant's contentions about his wrongful discharge were untrue and it tended to disprove facts essential to appellant's cause of action. The evidence was also admissible on this ground. Andrews v. Victor Metal Products Corp., 241 Ark. 889, 411 S.W.2d 515.

Royal next contends that the trial court erred in permitting introduction of written reports to corroborate Whitehead's witness. The reports referred to were progress inspection reports made by Mr. M. W. Calhoun, inspector for the architect, and they were objected to on the ground they were hearsay and irrelevant to the issue. Apparently the trial court felt that these progress reports were offered and admissible as memoranda or records made in the regular course of business under Ark.Stat.Ann. § 28--928 (Repl.1962) and we are unable to say that the trial court erred in this regard. While § 28--928 makes certain business records admissible in evidence, it does not make such evidence either material or relevant. The evidence was material and relevant in this case because Whitehead testified that copies of some of the reports were handed to Mr. Ted Queen (the president, manager and principal owner of Royal), and their content tended to controvert Queen's testimony that his services had not been needed prior to his discharge, or that he had not been called upon to render any.

Royal next contends that the trial court erred in refusing to give its requested instructions Nos. 12 and 13. These requested instructions would have told the jury that if they should find that Royal had rendered substantial performance of the contract up to the time of the cancellation, Whitehead would not be justified in canceling the contract. Requested instruction No. 12 would also have told the jury that substantial performance permits enumerated omissions or deviations from the contract and may, without injustice, be compensated for by deductions from the contract price. Requested instruction No. 13...