Christian v. Bremer

1. Where the issues in an equitable proceeding, which sets for the several grounds for equitable jurisdiction, and which asks for an injunction and the appointment of a receiver and other relief, were referred to an auditor after the granting of a temporary restraining order, and where the petition was not amended so as thereby to strike therefrom the grounds setting forth equitable jurisdiction or the prayers for equitable relief, but where the temporary restraining order previously granted remained operative, the mere fact that in the hearing before the auditor no additional equitable relief was sought, did not convert the action into one at law, so as to require the judge of the superior court to approve and submit to a jury exceptions of fact filed to the auditor's report. It has been held that this rule would still obtain, even though, upon the submission of the issues to the auditor, there had been an agreement whereby all questions were eliminated save issues of fact, and evidence upon those questions alone was submitted to the auditor. Stone v. Risner, 111 Ga. 809 (35 S.E. 648). Accordingly, the judge did not err in refusing to approve and submit to a jury the exceptions of fact to the auditor's report.

2. "When error is assigned upon the refusal of the judge to approve an exception of fact to an auditor's report in an equity case, the burden is upon the plaintiff in error to show to the satisfaction of the Supreme Court that the finding of the auditor is unsupported by evidence, the presumption being that the finding is correct; and where it does not distinctly appear that the finding is unsupported, the judgment refusing to approve the exceptions of fact will be affirmed. The rule is well settled that in equity cases this court will not interfere with the discretion of a trial judge in overruling exceptions of fact to an auditor's report, unless it appears there has been a manifest abuse of such discretion." Crim v. Alston, 169 Ga. 852 (3) (151 S.E. 807), and cit.

3. Novation of the terms of an oral contract may be inferred by the actions and course of dealings of the parties evidencing consent to the altered requirements as to performance, when a consideration is afforded by such performance. See Epps v. Story, 109 Ga. 302 (2), 305 (34 S.E. 662); Code, § 20-116. Accordingly, where a landowner and a builder, shortly after the commencement of construction under an oral building contract between them, and at all times thereafter, disregarded those terms of the contract which made the builder an independent contractor, and where, upon default by the owner in providing for the financing of labor as agreed, the builder abandoned construction and the owner took over the management of the work, giving direction to the workmen and ordering and paying for additional or other material, and the builder instructed the workmen to do whatever the owner requested, a finding that the parties, by their mutual course of dealings, changed the terms of the original contract, and that the relationship of master and servant was substituted, was authorized. In Robinson v. Reese, 175 Ga. 574 (4), 578 (165 S.E. 744), under similar circumstances, an agency was held to have been created. A more elaborate statement of the facts on which this division of the syllabus is based will be found in the statement of facts following the syllabus.

4. The relationship of master and servant existing between the owner and the builder, it follows that the master became liable for the acts of the servant as his agent within the scope of his employment, and therefore was subject to a personal judgment, and his property was subject to liens for the labor and materials which had been furnished to him through such servant, and of which he had received the benefit. The owner was also liable for that portion of the material which had been furnished on the owner's own personal order. The judge did not err in sustaining the auditor in so finding, or in sustaining his judgment setting up a lien on the property for the construction of which the material was furnished. See Robinson v. Reese, 175 Ga. 574, 580 (5) (supra); Coweta Falls Mfg. Co. v. Rogers, 19 Ga. 416 (3) (65 Am. D. 602); Savannah Western R. Co. v. Phillips, 90 Ga. 829 (3) (17 S.E. 82); 40 C. J. 138, § 152; 2 Jones on Liens (3d ed.), § 1513a; Rockel on Mechanics Liens, § 66.

5. To entitle a materialman to a single lien on several houses, being simultaneously built under one operation, for material furnished generally for them all, and to be used indiscriminately among them as needed, it is not necessary for such materialman to prove just what material went into any particular house, provided it be shown that the material was delivered under such order. See Maryland Brick Co. v. Spilman, 76 Md. 337 (25 A. 297, 17 L.R.A. 599, 35 Am. St. R. 431).

6. Exception is taken to the judgment approving the auditor's finding of equitable liens in favor of various laborers and materialmen. Even though it be conceded that the petitioners were not entitled to equitable liens (see Williams v. Jay, 173 Ga. 372, 160 S.E. 426), nevertheless, the mere fact that the auditor called them "equitable liens," when in fact they were statutory liens asserted in an equitable action, would not vitiate them when they were authorized to be, and were actually, set up as statutory liens. The auditor so found, and the liens not being incorporated in the record, we can not say that the trial judge erred in approving this finding of the auditor, and in overruling the exception.

7. This court can not pass upon an exception to a finding that certain liens were not filed within the statutory period, when the record here contains no evidence, by invoices, delivery receipts, or otherwise, showing when materials were delivered, nor any evidence showing when the liens were filed.

8. Exception is taken to the allowance of $1000 as fees for reporting the evidence and for the auditor's services. The record does not show what part of this amount was for reporting the evidence, which was done by the auditor himself, and what part was for the auditor's fee. The record was voluminous. The Code, § 10-501, limits the fees for reporting the evidence to $500. The record does not disclose any proof as to the number of words reported, and this court can not, therefore, undertake to pass upon any amount less than the maximum permitted. This would leave the auditor's fee at $500. The above Code section provides a scale of fees to the auditor based upon the amount involved. From the record here it can not be determined what was the actual amount involved. In Loveless v. McCollum, 185 Ga. 751 (2) (196 S.E. 428), the court said: "He who alleges error must demonstrate it. In determining the amount involved, within the meaning of the Code, § 10-501, with reference to the fixing of the auditor's fee, the court must look not alone to the final conclusion of the auditor as to the amount found, where an accounting is prayed for." Accordingly, it can not be said that the court erred in awarding the fees for reporting the evidence and for the auditor's services in making his findings, rulings, proceedings, and conclusions.

9. It being conceded that the judgment in favor of Southern States Iron Roofing Company was entered in error, as this claim had been paid pending the litigation, direction is given that the judgment be modified accordingly.

Judgment affirmed, with direction. All the Justicesconcur.

No. 15068. APRIL 3, 1945. REHEARING DENIED MAY 12, 1945. W. J. Bremer and other materialmen and laborers filed a bill in equity against Walter A. Christian, the owner of ten lots in Savannah, not all contiguous, and against John F. Lee, a contractor, in which other laborers and materialmen intervened. The petition as amended alleged in substance: that Christian entered into an oral contract with Lee to construct on said lots seven single and three duplex bungalows at a fixed cost per unit for each type, without any plans or specifications, but to be built like certain other improvements recently completed by Lee for Christian; that, by virtue of Christian's insistence upon material and labor beyond that contracted for, the cost of each building was increased by approximately $750 for the single units and $1250 for the duplex units; that Christian financed $1000 of the pay roll, but declined to make any further advancements on account of pay rolls according to their original understanding; that, immediately after the agreement was entered into and at all times thereafter, both Christian and Lee disregarded those details of the contract which made Lee an independent contractor, and from time to time Christian took over the management of the work, directed the hiring and firing of workers, gave directions to Lee and to workmen when and where to obtain materials, and purchased some materials himself, and Lee had no liberty of action; that the type of work done and the changes were ordered, directed, and supervised by Christian; and, when Lee became sick and was confined to his home for six weeks, Christian took complete charge of all aspects of the work, assumed its entire management, and handled the purchases and receipt of materials on the jobs; that this continued throughout the period of construction, and Lee was nothing more than a foreman, and the relationship of master and servant existed between them, and thereby Christian is liable for the full costs of all material and labor furnished upon said buildings; that, as a result of Christian's failure to further finance the pay rolls, work was stopped upon the buildings, and Christian led the petitioners to believe that, if they would furnished the additional material to complete four of the buildings, he would pay them $10,000, and that they would be protected from loss for the other labor and material entering into the incompleted houses; that they furnished the labor and material to complete the four buildings on the strength of Christian's promise, whereupon he took possession and has been collecting the rents, but refuses after demand to pay any sum whatever, and refuses to make any arrangements to complete the unfinished houses; that Christian, by virtue of his agreement with the petitioners, has obligated himself to them in the sum of $10,000, and by his actions has ratified the contract entered into for him by his agent and contractor Lee, and is liable to the petitioners in the additional sum of $3943.08 for the additional materials furnished and labor performed upon said various bungalows, which entered into all ten of said buildings; but the petitioners can not exactly apportion the amount chargeable to each of said jobs, because the materials were delivered to the jobs as a whole. They set up the amounts of their respective claims, and alleged that they had filed their respective liens and brought this action within the times provided by the statute. They prayed for an injunction and for a personal judgment against Lee and Christian with liens against the property. The case was referred to an auditor, whose findings in the main were in favor of the petitioners, although their testimony was sharply disputed by Christian. He filed exceptions of law and of fact to the auditor's report. The court affirmed all the findings of the auditor, overruled all exceptions of law, and disallowed all exceptions of fact; entered judgments in favor of the various laborers and materialmen for designated amounts, with general and special judgments against both defendants, Christian and Lee, and with an equitable lien against the four completed and the six uncompleted bungalows; taxed the costs, including stenographic charges and compensation for the auditor, against the defendants; and allowed the auditor, as a fee for reporting services and auditor's services, the aggregate sum of $1000; to which judgment Christian excepted. The exceptions, so far as their consideration may be necessary, are dealt with in the syllabus opinion.

Some elaboration of the facts as disclosed by the evidence, upon which the third division of the syllabus is based, seems appropriate. The auditor's findings of fact, approved by the trial judge, that the parties in their course of dealings changed the terms of the original building contract, whereby, under the changed agreement, the owner bound himself for all materials delivered and labor performed, and to finance the jobs as they continued, creating the relationship of master and servant instead of that of owner and independent contractor, are supported by testimony. The builder testified to the effect that the land owner originally contracted with the builder for the erection of seven single bungalows and three duplex bungalows at named prices for the two types per unit, without written plans or specifications, but to be as nearly as possible like other improvements which had been recently completed by the builder for the owner, each unit to be paid for as completed, and under arrangements similar to those under which the former construction had been done, where the owner had financed pay rolls and paid for construction upon completion of each house. Although the owner testified that under the oral contract he was to make no payments until the contract should be entirely completed, the builder, in support of his testimony to the contrary and as showing the breach of the contract by the owner, testified that, when he asked the owner for pay rolls, the owner endorsed the note of the builder so the builder could borrow the money to meet the pay rolls, and later substituted his own note therefor which he subsequently paid, and that the owner thereafter refused to make any additional payments until the entire job should be completed.

There was also evidence to the effect that the owner made changes in the construction; that the builder added sun parlors to the original plan; and that the owner increased the size of sun parlors two feet, contrary to the original understanding. In response to a question as to changes in the size of rooms, the owner testified that none were changed except the "size of sun parlors;" and again, without fixing the time referred to, testified: "The dining room was too large. I made the dining room smaller and added it to the sun parlor." The builder, at the instruction of the owner, changed two windows as originally planned to a triple window and two double windows, thus adding five windows to each sun parlor. The builder testified that the owner asked him to make changes beyond the contract, and required changes in the color of mortar and paint, after construction according to the original agreement. There was testimony that the builder told laborers and subcontractors, who had been engaged under the original contract, to do whatever the owner wanted done. While Lee, the builder, was sick for about two months, the owner told Lee that he was having various things done; that during this time the owner was supervising the job; that he "took charge one hundred per cent;" that he was "boss" and gave orders; that he was there at 7:30 in the morning when workers came, and was there at 4:30 to 5 in the afternoon when they left; that he had the keys, and let them in; that he changed colors at least three times from what the builder had made them, to suit the owner's sister; that the owner entered into an independent contract with a plumber, and gave instructions as to the location of toilets and basins, which were changed from the location designated by the builder; that electric cable installed under directions of the builder was torn out and more expensive cable substituted on order of the owner, causing the loss of the original cable; that the owner pointed out the location for wiring and made material alterations in the wiring, directing all the work of the electrical contractor from the time he started until its completion, and furnished the fixtures; that the owner directed changes in doors which had been furnished by the builder, and which had to be ordered from out of town; that, when the builder was taken sick, work was being done on the second house, and the owner said, if any materials were needed, to let him know, and he ordered the material for the men; that the owner was there all the time during this period, inspected and checked incoming material, and gave directions as to what he wanted done; that, two months before the four bungalows were finished, the owner knew that the materialmen would not furnish any more material, and they refused to furnish the material necessary to finish those four jobs until the owner promised to pay $10,000 to be settled among the creditors, which was furnished on this promise; and that the owner knew the materialmen had taken over the job. There was evidence that the owner ordered out and paid for some of the materials without the builder's consent. A letter written by the owner's attorney shows the payment by the owner of $2000.88 on account of material and labor, although insisting that he had not taken over the contract. The owner admitted having paid for the lighting fixtures, metal shingles, medicine cabinets, and hardware, which he said was under the builder's authority and for which he claimed a deduction. The owner further testified that the builder had plans for the duplex units, but they were enlarged; that he let the builder have money as the work was going on; that he was on the job every day; and that he paid for the materials which were paid for because the builder could not get the materials delivered. Various materialmen and laborers testified that their labor or material had gone into the different buildings; that it could not all be separated; and that the material was delivered under the designation of the "Christian job" for use in all the buildings. Upon completion of the four bungalows, the owner refused to make any payments until the entire ten bungalows should be completed, three of which were only about half complete, and three had progressed only to the stage of foundations and flooring. He refused to pay the petitioning materialmen the $10,000 which they said he had promised, stating that it was too much, and in fact paid them nothing, but took charge of, and rented out, the four completed bungalows.

The petitioners substantiated by their evidence their claims as to the furnishing of labor and materials in the amounts adjudged in their favor by the auditor;leaving for determination by this court with respect thereto only the question of the defendant's liability and the petitioner's rights to liens therefore.