Oldham & Worth, Inc. v. Bratton , 263 N.C. 307 ( 1965 )

139 S.E.2d 653 (1965) 263 N.C. 307

OLDHAM & WORTH, INC.
v.
John BRATTON, Jr. and wife, Michelle T. Bratton, and John M. Cannon.

No. 478.

Supreme Court of North Carolina.

January 15, 1965.

Vaughan S. Winborne, Raleigh, for plaintiff appellant.

Joyner & Howison, Raleigh, for defendant appellees Bratton.

BOBBITT, Justice.

Where, upon waiver of jury trial in accordance with G.S. § 1-184, the court makes no specific findings of fact but enters a judgment of involuntary nonsuit, the only question presented is whether the evidence, taken in the light most favorable to plaintiff, would support findings of fact upon which plaintiff could recover. Shearin v. Lloyd, 246 N.C. 363, 98 S.E.2d 508, and cases cited; DeBruhl v. Harvey & Son Co., 250 N.C. 161, 167, 108 S.E.2d 469.

Since the evidence was fully developed, whether there was error in the order relating to an election is immaterial if the evidence, when considered in the light most favorable to plaintiff, is insufficient to support a recovery on any theory.

The total of $1,774.90 plaintiff seeks to recover consists of (1) $1,702.74 for materials sold prior to January 1, 1962, and (2) the $72.16 for materials sold during January 1962 for which defendants Bratton tendered judgment. There was evidence plaintiff has not received payment of any part of said $1,774.90 from any source.

Plaintiff's invoices for materials sold and delivered prior to January 1, 1962, were made out to J. M. Cannon, "(f)or use on the Bratton Job," and plaintiff's ledger sheet (Exhibit #1) shows the items covered by said invoices (a total of $1,702.74) were charged to J. M. Cannon in connection with the "Bratton Job—Lakeview Dr."

Plaintiff contends Cannon purchased the materials ($1,702.74) as agent for defendants Bratton. All the evidence is to the effect that these materials were sold and charged by plaintiff to Cannon on the basis of credit extended by plaintiff to Cannon.

Plaintiff's (then) Vice President, George W. Worth, who acted for plaintiff in its dealings with Cannon with reference to materials furnished for Cannon's use on the Bratton job, testified: "Mr. Cannon had purchased over a great many years a great quantity of materials from Oldham & Worth and during those years Oldham & Worth had constantly extended credit to him." Referring specifically to the Bratton residence, Worth testified: "My firm sold him (Cannon) materials for the construction of that house * * *" Referring to the items (a total of $1,702.74) shown on Exhibit #1, Worth testified: "Oldham & Worth intended to make each one of the sales to Mr. Cannon. I had no dealings with anybody else in connection with those sales. I sent statements for the amount of those sales to J. M. Cannon. * * * At no time between August 3, 1961 (the date of the first entry on Exhibit #1), through December 31, 1961, did I make any claim whatsoever upon Mr. John Bratton, Jr., or his wife Michelle T. Bratton for any of" said items.

Worth testified: "It was only after Mr. Cannon got in financial difficulties and called a meeting of his creditors early in 1962 that I made any effort to bill materials to Mr. and Mrs. Bratton." Again: "At the time of the creditors' meeting I did not know the terms of the contract between Mr. Cannon and the Brattons." (Note: Bratton testified said (first) meeting of Cannon's creditors was held January 11, 1962.)

During the period from August 3, 1961, through December 31, 1961, plaintiff was selling Cannon materials for use on other jobs. Worth testified: "I was looking to him for payment of those materials, just as I was for payment for the materials on this job." Payments were made by Cannon to plaintiff during said period. Cannon did not direct the application thereof. Plaintiff credited them "to the oldest account."

Bratton wanted the construction on his residence to go forward. According to Worth, Bratton agreed to pay for three items, a total of $72.16, for materials delivered in January, 1962. These three items were invoiced and charged to defendants Bratton and appear on Exhibit #2 (ledger sheet). According to Worth, one item ($12.36) was for material delivered January 3, 1962, and two items (a total of $59.80) were for material delivered January 17, 1962.

At said first meeting of Cannon's creditors, one of the terms of a proposed agreement was "that the owners of the two projects would pay Mr. Cannon's payroll and would also pay the brick mason's payroll." (Note: The certificate of payment dated January 19, 1962, is for January labor.) Later in January, after a second meeting of Cannon's creditors, "everything came to a dead halt."

The extensive provisions of the contract of July 24, 1961, which define the status of the Contractor, the Owner and the Architect, did not make Cannon the agent of defendants Bratton for the construction of the Bratton residence. On the contrary, these provisions clearly identify and establish Cannon's status as that of independent contractor. Legal principles distinguishing an independent contractor from an agent are set forth in many of our decisions. Hayes v. Board of Trustees of Elon College, 224 N.C. 11, 29 S.E.2d 137, and cases cited; Cooper v. Asheville Citizens-Times Publishing Co., 258 N.C. 578, 129 S.E.2d 107, and cases cited; Richards v. Nationwide Homes, N.C., 139 S.E.2d 645, and cases cited. Reference is made to Economy Pumps, Inc. v. Woolworth Co., 220 N.C. 499, 17 S.E.2d 639, for application of these legal principles in a similar factual situation. Restatement of these well-settled legal principles is unnecessary.

Cannon was engaged in an independent business or occupation. He was a general contractor of long experience. His contractual obligation was to construct the Bratton residence in accordance with the Drawings and Specifications. Where he would purchase materials, whom he would employ as workmen, and to what extent, if any, he would subcontract the job, were for decision by Cannon. Bratton was concerned only with the final result, namely, the construction and completion of the residence in accordance with the Drawings and Specifications. It is noted that this was Bratton's first experience in connection with the construction of a residence.

It seems appropriate to consider plaintiff's alternative contention, namely, that defendants Bratton are liable to him on account of payments made by Bratton to Cannon as authorized by the Architect's said certificates without first determining Cannon had made actual payment of the items he listed on the statements he submitted to the Architect.

Under G.S. § 44-8, it was Cannon's duty before he received payment from Bratton to show the amount, if any, he then owed plaintiff for materials used on the Bratton job. He did not do so.

As a basis for progress payments, Cannon, under Article 12 of the Contract, was required to submit statements to the Architect covering "all moneys paid out by him on account of the cost of the work during the previous month for which he (was) to be reimbursed under Article 5." (Our italics.) The Architect accepted Cannon's statements as correct in respect of the work he had done. As indicated, each certificate of the Architect authorized payment "(p)rovided that neither the Owner nor any agent of the Owner has received any notice of any sort from any source indicating that the Contractor has failed to pay any sub-contractor, laborer, or materialman." Bratton had no knowledge or notice that plaintiff had not been paid for materials Cannon had purchased from plaintiff and covered by numbered invoices listed on the statements submitted by Cannon to the Architect.

Until said meeting of Cannon's creditors on January 11, 1962, Bratton had no notice that Cannon was indebted to plaintiff for materials it had sold and delivered to him for use on the Bratton job. Worth testified: "As to my not making any effort to collect any monies from Mr. Bratton until after the first of 1962, I expect that if I had said to Mr. Cannon anything about whether he was getting payments on Mr. Bratton's bill he would have cut me off immediately as a customer. As to why I didn't do it, nobody does it."

No notice was given by plaintiff to Bratton. See G.S. § 44-9. Plaintiff relies on G.S. § 44-8. The question is whether Bratton became liable for amounts due by Cannon to plaintiff because he made payments to Cannon without first ascertaining that the items listed on Cannon's statements to the Architect as a basis for progress payments had not in fact been paid. The answer is, "No."

G.S. § 44-8, in substance, is a codification of Section 1, Chapter 67, Laws of 1887. Its legal significance, in a factual situation similar to that now under consideration, was settled in Pinkston v. Young, 104 N.C. 102, 10 S.E. 133 (1889).

In Pinkston v. Young, supra, the action was to enforce a lien against the property of defendant for the amount owing on account of materials sold and delivered by plaintiffs to a contractor (Linthicum) for use and used in constructing a house for defendant. Defendant had paid the contractor. The contractor had failed to notify defendant in the manner provided in the 1887 Act that he was indebted to plaintiffs for such materials.

Referring to provisions of the 1887 Act now codified as G.S. § 44-8 and G.S. § 44-12, this Court, in opinion by Merrimon, J. (later C. J.), said: "It is further provided that, if any such contractor or architect shall fail to furnish such itemized statement, he shall be guilty of a misdemeanor, and, upon conviction, fined or imprisoned, or both, in the discretion of the court. This stringent provision is directed against, not the owner of the property, but the contractor. The purpose is to compel the latter to supply the itemized statement, so that the laborer may be benefited,—have his right facilitated,—and the owner of the property may be reasonably protected. There is no liability created on the part of the latter if the itemized statement is not supplied to him. He cannot compel the contractor to furnish him with it, nor is he presumed to know that he has not paid the laborer or mechanic, or that he owes him any particular sum. It may be that the contractor has paid him or secured the sum due him to his satisfaction. It would be alike unreasonable and unjust to create such liability on the part of the owner of the property in the absence of the statement required. It would tend strongly to prevent such owners from improving their property, and such a purpose cannot be attributed to the legislature, in the absence of some language or provision making it manifest."

In Economy Pumps, Inc. v. Woolworth Co., supra, the contractor had furnished the defendant-owner a false affidavit to the effect all bills for labor and material had been paid. It was held that plaintiff, which furnished a pump to the contractor, was not entitled to recover from the defendantowner. The following excerpt from the opinion of Barnhill, J. (later C. J.), is pertinent:

"While it is true that when a contractor furnishes a list of laborers and materialmen to whom he is indebted, the owner must retain a sufficient part of the contract price to satisfy such claims, (citations) the burden is on plaintiff to show that such notice was so given by the contractor or that the owner was notified directly by him. There is no lien until and unless the statutory notice either under C.S. 2439 [(G.S. § 44-8),] or under C.S. 2440 [(G.S. § 44-9),] has been given. Pinkston v. Young, supra.

"Such notice or itemized statement must be filed in detail specifying the material furnished or labor performed and the time thereof. It must further show the amount due and unpaid so as to put the owner on notice that such amount is demanded. (Citations) Neither invoices furnished under the contract nor statements made by the contractor to enable him to procure what is due, nor mere knowledge of the owner of the existence of the debt is sufficient to charge him with liability. (Citations)" (Our italics.)

True, Cannon did not attach to the statements he submitted to the Architect as a basis for progress payments an affidavit that he had paid the items shown thereon. Nor did he expressly declare that he had made such payments. On the other hand, nothing appears thereon to indicate Cannon had not paid the items listed thereon. Article 12 of the Contract expressly provides such statements shall consist solely of items the contractor has paid. Hence, the Architect and Bratton had reasonable grounds to assume Cannon had made such payments. Be that as it may, Cannon gave no notice of unpaid amounts due plaintiff within the purview of G.S. § 44-8.

The Contract was terminated solely on account of Cannon's inability, for lack of finances, to perform it. He advised Bratton by letter to this effect. Consequently, the provisions of Article 22 of said General Conditions and of Article 15 of the Contract do not apply. They refer to the "Owner's Right to Terminate Contract" and rights and obligations of the owner as a result of such termination.

We perceive no prejudicial error in respect of the orders (1) permitting defendants Bratton to file a further answer and defense and (2) overruling plaintiff's demurrer to such further answer and defense. Too, these orders have no bearing on whether the evidence offered by plaintiff was sufficient to withstand nonsuit.

Nor do we perceive prejudicial error in respect to the court's rulings on evidence. Decision as to nonsuit is not based in whole or in part on evidence admitted over plaintiff's objections. Too, the rules of evidence are not so strictly enforced where jury trial is waived. Bizzell v. Bizzell, 247 N.C. 590, 604, 101 S.E.2d 668; Everette v. D. O. Briggs Lumber Co., 250 N.C. 688, 694, 110 S.E.2d 288.

With reference to the tender of judgment referred to in our preliminary statement: G.S. § 1-541, in pertinent part, provides: "The defendant, at any time before the trial or verdict, may serve upon the plaintiff an offer in writing to allow judgment to be taken against him for the sum or property, or to the effect therein specified, with costs." Here, the judgment of nonsuit had been entered, plaintiff had appealed therefrom and the session of court had expired by limitation before the tender was made. Suffice to say, such tender was not authorized and is not in compliance with G.S. § 1-541. On appeal, we consider the status of the case when presented to and passed upon in the superior court.

Defendant Michelle T. Bratton did not sign the Contract. There is no evidence she had any dealings with plaintiff or participated in negotiations with Cannon. Nor is there evidence or presumption that her husband was her agent. Pitt v. Speight, 222 N.C. 585, 24 S.E.2d 350; General Air Conditioning Co. v. Douglass, 241 N.C. 170, 84 S.E.2d 828.

As to defendant Michelle T. Bratton, the judgment of nonsuit is affirmed in its entirety.

As to defendant John Bratton, Jr., the judgment of nonsuit is affirmed as to the items for materials sold and delivered by plaintiff to Cannon prior to January 1, 1962, to wit, a total of $1,702.74; but as to the three items, a total of $72.16, the judgment of nonsuit is reversed. There was evidence sufficient to support a recovery by plaintiff for these items, to wit, testimony that defendant John Bratton, Jr., in January, 1962, by agreement with plaintiff, became obligated to pay therefor.

It is ordered that the costs on this appeal be taxed as follows: One-half to plaintiff and one-half to defendant John Bratton, Jr.

As to defendant Michelle T. Bratton: Affirmed.

As to defendant John Bratton, Jr.: Affirmed in part and reversed in part.