Salem Realty Co. v. Batson, 391

• Decision Date: 02 February 1962
• Docket Number: No. 391,391
• Citation: 256 N.C. 298,123 S.E.2d 744
• Parties: SALEM REALTY COMPANY, Inc. v. W. K. BATSON, Trading as W. K. Batson Company, and Equltable Fire and Marine Insurance Company.
• Court: North Carolina Supreme Court

Page 744

123 S.E.2d 744

256 N.C. 298

SALEM REALTY COMPANY, Inc. v. W. K. BATSON, Trading as W. K. Batson Company, and Equltable Fire and Marine Insurance Company.

No. 391

Supreme Court of North Carolina.

Feb. 2, 1962

Wood & Stone, Winston-Salem, for plaintiff, appellee.

Fletcher, Lake & Boyce, Raleigh, for defendant Equitable Fire & Marine Ins. Co., appellant.

BOBBITT, Justice.

Equitable contends the court erred (1) in overruling its motion for judgment of nonsuit, and (2) in rulings relating to certain evidence.

The original contours of the land had been leveled by 'cuts' and 'filling in,' and the streets had been rough-graded but not paved, when Batson's work began.

R. W. Clayton, plaintiff's secretary and general manager, executed said contract in plaintiff's behalf and acted for plaintiff in its dealings with Batson. Clayton testified Batson began work 'the latter part of April or in May, 1957, and * * * stopped the actual machine work, the covering up and all in the latter part of June or July, 1957.' Batson testified he began work on April 7, 1957, or on April 9, 1957, and 'finished up' on June 19, 1957, and moved his equipment away; that, after the curbs and gutters had been put in, he went back 'for a couple of days' to adjust the water meters on the service lines and sewer stacks; that these adjustments were made 'in July, or the first of August, of 1957'; and that, immediately after these adjustments were made, he received from plaintiff (August 6, 1957) a payment of $6,000.00.

At first Burns, the engineer who had prepared plaintiff's overall plans, and later Jones, did the surveying, laid out the lines and furnished the grades from the drawings covering this job.

Batson testified he submitted two estimates. The first, payable May 10, 1957, was for $10,215.00 The second (final), submitted June 22, 1957, was for $19,166.48, which included the $10,215.00. (Note: It was stipulated that $19,116.48 was the correct total amount due Batson.)

Clayton testified plaintiff paid Batson as follows: $8,000.00 on May 14, 1957; $2,500.00 on July 1, 1957; $6,000.00 on August 6, 1957; $1,000.00 on September 17, 1957; $666.48 on December 10, 1957; and $500.00 on April 7, 1958. (Note: Plaintiff admitted it owed Batson a balance of $500.00. The record contains no explanation as to why this amount was not paid to Batson.)

Equitable offered in evidence a paperr writing entitled 'CONTRACT STATUS INQUIRY,' bearing date of September 6, 1957. This inquiry, addressed by Equitable to plaintiff, requested information relevant to the bond executed by Equitable as Batson's surety. Questions thereon and the answers thereto (executed in plaintiff's behalf by Clayton) are as follows: 'Has work been completed and accepted (yes or no) Yes. If not completed approximate percentage done * * *. Approximate amount paid contractor to date * * *. Amount of retained percentage $2,666.48. Has work progressed satisfactorily to date: Yes. So far as you know are labor and material bills paid to date: Materials furnished by owner.'

With reference to said paper writing, Clayton testified: 'On September 6, 1957, I signed and returned to Mr. Batson a paper stating that the job had been completed and I accepted it. When Mr. Batson brought me this paper here, stating that the work had been finished, and so far as he knew in good shape, and I didn't know at that time that it wasn't in good shape, I agreed with him; I was satisfied that it was in good shape. It seems that at that time my company held $2,666.48 due to Mr. Batson by the terms of the contract; I so stated in that paper.'

No defects in Batson's work were reported to Clayton by Burns or by Jones. There is no evidence that either Burns or Jones had knowledge of any faulty construction or workmanship. Plaintiff testified that Jones, plaintiff's engineer, reported to him 'that the work had been done'; and that he made said payments to Batson '(i)n reliance upon what Mr. Jones had told (him).' Clayton was not advised of any defects until the City refused to approve the paving of the streets, approximately a year after Batson had finished his work.

In June or July of 1958, to determine whether plaintiff would be permitted to proceed with the paving of the streets, an inspection was made by Berrier, Street Superintendent of Winston-Salem, and by Pettit, an Inspector for Berrier. By this inspection, according to their testimony, they discovered defects in the underground work installed by Batson (storm sewer lines, manholes and catch basins); and that Batson's work, in enumerated particulars, was not 'in accordance with the standards and workmanship required by the City of Winston-Salem, N. C.'

Batson, at Berrier's request, met Berrier at the work site. Berrier pointed out the conditions he considered defective. According to Berrier, Batson (whose place of business was in Charlotte) stated he had brought only one man with him; that he did not anticipate the work to be done was so extensive; and that he would come back the next week and make adequate corrections. Berrier testified further that Batson later telephoned him and then stated he had decided not to come back and do the work; and that Batson gave as a reason for this decision his inability to collect from plaintiff the $500.00 balance due him under the contract. Berrier and Pettit testified in detail as to the defective conditions plaintiff was required to have corrected before it could go forward with the paving of the streets. Plaintiff's evidence tends to show it expended $6,925.09 to have made the corrections pointed out by Berrier and Pettit.

Batson contended and offered evidence tending to show: (1) that all work was done in strict accordance with instructions received from Burns and Jones, plaintiff's engineers; (2) that certain of the changes required by the City officials related to the elimination of curves in pipelines laid in accordance with instructions of plaintiff's engineers and to the re-laying of pipelines at depths different from those designated by plaintiff's engineers; and (3) that certain of the work required by the City officials related to matters not covered by the plans furnished by plaintiff to Batson. Even so, there was ample evidence to support findings that, in certain respects, Batson's construction and workmanship were faulty. While Batson's said contentions are noted, the questions presented by Equitable on this appeal do not relate to whether Batson breached his contract in respect of designated particulars. Rather, the question now presented is whether Equitable's motion for judgment of involuntary nonsuit should have been allowed.

Batson's breach of said contract and plaintiff's damages are established by the verdict. Equitable, to support its motion for judgment of nonsuit, must rely upon matters alleged in its further defenses. In this connection, it is noted that the burden of proof rests upon Equitable to establish one or more of its alleged affirmative defenses. Aldridge Motors, Inc., v. Alexander, 217 N.C. 750, 756, 9 S.E.2d 469. Since no issue was submitted or tendered with reference thereto, the question, in respect of nonsuit, is whether plaintiff's evidence establishes any of Equitable's affirmative defenses.

In its answer, Equitable alleged that Batson had fully performed said contract and that plaintiff had advised Equitable in writing on September 6, 1957, 'that the work had been completed and accepted and had progressed satisfactorily.' As a further defense, Equitable alleged: Batson laid the pipe in accordance with the lines and grades designated by plaintiff's engineers and plaintiff is estopped to assert any claim on account thereof.

Equitable, apparently after verdict, moved for leave to amend its complaint by alleging: (1) As a second further defense: Plaintiff, by its reply on September 6, 1957, to Equitable's 'CONTRACT STATUS INQUIRY,' is estopped to assert a claim against Equitable on account of Batson's alleged failure to perform said contract. (2) As a third further defense: Plaintiff accepted Batson's work as complete and satisfactory and paid Batson, with the exception of $500.00, the balance due according to the final estimate; and, by reason of plaintiff's said payments to Batson in disregard of its duty to retain these amounts until Batson had satisfactorily completed the work, Equitable is entitled to a credit of $9,922.98 against any claim plaintiff might have against Batson. (Note: Equitable's alleged credit of $9,922.98 consists of $1,021.50, 10% of the first estimate,...