Security Development & Inv. Co. v. Ben O'Callaghan Co., 46404

• Decision Date: 24 January 1972
• Docket Number: No. 46404,No. 3,46404,3
• Citation: 125 Ga.App. 526,188 S.E.2d 238
• Court: Georgia Court of Appeals
• Parties: SECURITY DEVELOPMENT & INVESTMENT COMPANY v. BEN O'CALLAGHAN COMPANY

Page 238

188 S.E.2d 238

125 Ga.App. 526

SECURITY DEVELOPMENT & INVESTMENT COMPANY v. BEN O'CALLAGHAN COMPANY.

No. 46404.

Court of Appeals of Georgia, Division No. 3.

Jan. 24, 1972.

Rehearing Denied Feb. 22, 1972.

Rose, Hunt, Stern & Dailey, George S. Stern, J. Michael Kaplan, Atlanta, for appellant.

Lipshutz, Macey, Zusmann & Sikes, John M. Sikes, Jr., Atlanta, for appellee.

Syllabus Opinion by the Court

CLARK, Judge.

Ben O'Callaghan sued Security Development and Investment Company on a past due promissory note for principal, interest, and attorney's fees. The facts in connection with the execution and delivery of this note are detailed hereinafter.

Defendant denied the material allegations. Answering further, it denied any indebtedness to plaintiff; that there was no consideration given for the note; that the consideration given by plaintiff for the note had failed; that the note was signed under duress and through a false representation by plaintiff that plaintiff had finished its work under a construction contract between the two parties; and that plaintiff had in this contract agreed with defendant to install in a multi-apartment project a complete ventilation, heating and air-conditioning system for $283,009.00, for which $245,000.00 had been paid, although plaintiff has never completed the same and the cost to do so is in excess of the amount sued for.

Defendant also made four counterclaims, each for $50,000.00. The first counterclaim alleged a breach of contract in that the system contemplated by their contract was never completed by plaintiff.

The second counterclaim alleged plaintiff was to construct and install the complete system and would guarantee all material The third counterclaim alleges plaintiff falsely represented it had completed the system, then in fact it was never completed and has never worked properly; that plaintiff has violated an implied warranty of fitness for a particular purpose under UCC 109A-2-315 and has refused despite demand to complete the system properly.

and workmanship for a period of one year from date of completion, but that after work began defendant had encountered many defects in workmanship and materials, and since June of 1969 has informed plaintiff of same but plaintiff has refused to put the system in proper condition.

Counterclaim four alleges plaintiff on October 14, 1969 misinformed defendant that the system was completed and properly installed in order to induce defendant to execute the note sued on; that the defendant relied on the representations and lacked the expertise to determine otherwise.

A trial was had resulting in a verdict for the plaintiff in the amount sued for, less an allowance to defendant for a water treatment system.

Defendant's appeal is from the denial of its motion for new trial as amended which enumerates such denial as error together with several evidentiary rulings and objections to portions of charge of the court.

It appears from the evidence plaintiff designated as sub-contractor entered into a contract with defendant under which plaintiff was to install the air-conditioning and ventilation system plus several other items in a multi- apartment project being built by defendant.

In their contract (styled 'sub-contract') reference is made to a 240 unit apartment project to be built in strict accordance with plans and specifications prepared by a certain architect. The contract in part recites:

'Sub-contractor will furnish all labor and materials equipment and supervision to install a complete heating, air conditioning and ventilation system in strict accordance with all requirements of the plans and specifications. Particular mention of this work is made in section 15-B of the specifications and this sub-contract includes all work contained therein and as described below. . . .'

The contract further stipulates:

'All material and workmanship shall be guaranteed for one year from date of completion. Also 24 hours service and maintenance of gas engine units, for one year after completion, is included in this sub-contract.

'All work shall be performed in complete harmony with other trades to the best interest of the job. In the event of change orders involving more or less work, it is hereby understood that the sub-contract will be increased or decreased at the same unit prices used on the original quotation. . . .

'Weekly payments will be made on Friday for requisitions approved Monday of the same week and 10% will be withheld until all work is completed to the satisfaction of the project manager. . . .' (Emphasis supplied.)

The above contract was executed on February 22, 1968 and construction began in April. The 240 units were incorporated in some 40 buildings and were intentionally built in staggered groups so that some would be ready for occupancy and income production while others would be in various stages of construction and completion.

Mr. O'Callaghan testified his company had finished its contract work on the project by June or July, 1968 and that its final payment plus the 10% retainage plus payment for certain extras was then due. A bona fide dispute arose as to the amount owed, O'Callaghan claiming $41,636, but an understanding was reached, concerning which he testified:

'And we shook hands on it at 36.5 (meaning $36,500) with the understanding There was evidence defendant's attorney drafted the note and that two or three days later the president of the defendant company executed and delivered it to the plaintiff.

a note, interest-bearing note, was to be given. The date on the note and the terms on which it was paid was based upon what they saw as their closing date for that project when they would obtain additional funds, which they felt like would be around November 15th or November 20th but might go as long as January 20, 1970, when their commitment ran out on this job. And so that was the basis on which the terms of the note came into being, that's when they would be able to meet my note, to redeem it.'

The note is a promise to pay a certain sum ($36,500) on a certain day (November 19, 1969) except with regard to the due date it provides: 'In the event the permanent loan closing in the construction of the . . . apartments has not been closed by November 19, 1969, the undersigned may extend the maturity day of the within note until one (1) day following said closing, but in no event shall said maturity date be extended beyond January 19, 1970.'

1. The note sued on was by its terms an unconditional promise to pay a certain sum on a certain day as defined in the note. The case was tried for 5 days and the contentions of both sides were fully presented to the jury. The jury was authorized from the evidence to find, in answer to the defenses raised, that the defendant maker had given it to the plaintiff in discharge of the final payment (the amount of which had been disputed but was negotiated and agreed upon) owed to plaintiff under an installation contract between the parties under which the plaintiff and the defendant had agreed and acted upon as completed. As regards the general grounds of the motion for new trial, '(T) he only query is whether the evidence supported the verdict. Southern Ry. Co. v. Adams, 14 Ga.App. 366, 80 S.E. 912; Brown v. Bank of Cumming, 144 Ga. 655, 87 S.E. 887.' Daniels v. Hartley, 120 Ga.App. 294, 170 S.E.2d 315. A new trial was not authorized on the general grounds.

2. Error is enumerated with regard to the portions of the court's charge to the jury which quoted Ann.Code §§ 20-201, 20-106, 20-703, and 3-107.

Appellant urges these charges authorized the jury to disregard completely the written contract of the parties, that there was no basis for indicating to the jury that any oral agreements were involved; that the written contract was not ambiguous and was therefore the measure of all the duties and obligations between the parties.

In connection with the suit on the note, the defenses thereto and the counterclaims, the jury had before it the written installation contract which called for a precise amount of work and material for a stated price. However, the contract also expressly recognized that more or less work and material than that specified might be required and that the price would be changed thereby. As to these items the contract obviously contemplated further bargaining. There was evidence extra work items were performed which were the subject of negotiation between the parties.

The trial judge did not err in charging the jury on the general legal principles of contracts complained of. It is the duty of the court to charge the law applicable to the evidence and the contentions of the parties. Rutland v. Jordan, 111 Ga.App. 106, 107(3), 140 S.E.2d 498; American Fire, etc., Co. v. Grizzle, 108 Ga.App. 496, 497, 133 S.E.2d 400.

3. The appellant also contends the court erred by permitting over objection oral testimony to vary and contradict the warranty provision within the written contract, the alleged breach of which constituted the basis of some of the counterclaims.

The warranty was: 'All material and workmanship shall be guaranteed for one year from date of completion.'

There was evidence the 240 apartment units were...