Arnold v. Ray Charles Enterprises, Inc.

141 S.E.2d 14 (1965) 264 N.C. 92

Oliver W. ARNOLD
v.
RAY CHARLES ENTERPRISES, INC., and Ray Charles (As Leader of "The Sixteen Plus the Raelets, Musicians").

No. 687.

Supreme Court of North Carolina.

March 24, 1965.

Major S. High, Greensboro, Samuel S. Mitchell, Raleigh, Lee & Lee, Greensboro, for plaintiff.

Smith, Moore, Smith, Schell & Hunter, by Richmond G. Bernhardt, Jr. and James R. Turner, Greensboro, for defendants.

SHARP, Justice.

The contract involved in this case was made in New York, it was to be performed in Virginia, and the action for its breach is brought in North Carolina. Unquestionably the law of the forum, North Carolina, governs all matters of procedure. Howard v. Howard, 200 N.C. 574, 158 S.E. 101. No question of interpretation arises; the language is clear and unambiguous, leaving no room for construction. The only question of substantive law raised by the assignments of error involves the proper measure of damages. Johnson v. Lamar, 250 N.C. 731, 110 S.E.2d 323; 25 C.J.S. Damages § 4 (1941). Throughout, neither party has made any reference to the law of New York or that of Virginia, yet we are required to take judicial notice of foreign law. G.S. § 8-4. It appears that the law of New York, lex loci celebrationis, and that of Virginia, lex loci solutionis, are no different with reference to the substantive question here involved. There would be no profit, then, for us to exercise ourselves here to determine which law is to be applied, for to do so would take us into a "highly complex and confused part of conflict of laws." 16 Am.Jur. 2d, Conflict of Laws § 38 (1964). See Id. at §§ 38-42; 17 C.J.S. Contracts § 12(1)-12(5) (1963); 15 C.J.S. Conflict of Laws §§ 11, 20-22 (1939).

"The general rule is that, where a person by his contract charges himself with an obligation possible and lawful to be performed, he must perform it * * *. (I)f a party desires to be excused from performance in the event of contingencies arising, it is his duty to provide therefor in his contract, at least where he could reasonably have anticipated the event." 17A C.J.S. Contracts § 459 (1963).

"In order that a party shall be excused from performing his contract obligation by an absolving clause contained in the contract, the excuse must not only come within the terms of such clause, but also must be reasonably beyond the power of the party to prevent; that is, such a clause will not give a party the power arbitrarily to refuse performance, but he is under a duty to exercise a reasonable amount of care to prevent the happening of the contingency named." 17 Am.Jur. 2d, Contracts § 409 (1964).

Defendants take no exception to the first eleven findings of fact contained in the judgment. They do except to the findings of fact with reference to the amount of damages contained in Conclusion of Law No. 4, but which should have been included in the Findings of Fact as paragraph No. 12. G.S. § 1-184.

The question raised by defendants' first three assignments of error is whether the findings of fact made by the trial judge support his conclusions of law that defendants were not relieved of their obligation to perform the contract in suit by "proven detention by * * * accident or accidents to means of transportation * * * or any other legitimate conditions beyond the control of the employees (defendants)."

Although the judge made no finding based upon it, plaintiff's testimony was that he knew defendants would travel to Roanoke by plane and he made no objection to this means of transportation. Had the parties so agreed, the contract could, of course, have specified another mode of travel as well as have required defendants to arrive in Roanoke on, say, the preceding day.

The findings of fact eliminated one of the questions debated in the brief, i. e., whether, considering the ever-present weather hazards to avigation, defendants allowed themselves too little time to travel from Baltimore to Roanoke. When they left Charlottesville for Roanoke at 6:40 p. m. on the day of the scheduled concert, the Roanoke Airport was open for "in flights." It was not, therefore, the weather which prevented defendants' arrival in time for the concert; it was an accident to "means of transportation," viz., a severe oil leakage in one of the plane's engines. If this leakage was beyond the control of defendants, they are exculpated from liability under the express provisions of the absolving clause of the contract; if not, they are liable. See Annot., Express provisions in contract of sale, or for supply of a commodity, for relief from the obligation in certain event, 51 A.L.R. 990, 996.

Ordinarily the law of the forum controls as to the burden of proof, Howard v. Howard, supra; 3 Beale, Conflict of Laws § 595.3 (1935 Ed.); 15 C.J.S. Conflict of Laws § 22i (1939); and the burden is on defendants to exculpate themselves from liability for their nonperformance. Potter v. Carolina Water Co., 253 N.C. 112, 116 S.E.2d 374; Crouse v. Vernon, 232 N.C. 24, 59 S.E.2d 185; Annot., 51 A.L.R., supra at 906.

Defendants, as operators of the airplane upon which they depended for their arrival in Roanoke in time to perform their contract, were under the duty to exercise reasonable care in the inspection of its engines in order to discover any defects which might prevent its proper operation, and they are chargeable with knowledge of any defects which such inspection would disclose. Annot., Duty and liability as to pre-flight inspection and maintenance of aircraft, 30 A.L.R. 2d 1172. The testimony of defendants' booking agent, a witness for defendants, discloses that, after defendants were unable to land in Roanoke, on the flight from there to Charlottesville, the nearest open airport, they "had some oil line trouble with the plane." The agent received this information from the individual defendant's personal manager between 5:00 and 6:00 p. m. on the day in question. Was this trouble investigated, remedied or attempted to be remedied during the hour and twenty-five minutes defendants were on the ground at Charlottesville? Defendants offered no evidence on this crucial point, and the burden was on them to do so.

We may concede that the facts found by the judge do not support his conclusions of law. (1) His findings are that, had defendants taken the bus provided for them at Charlottesville, they would have arrived one hour late for the scheduled concert. Their only chance to arrive on time was to undertake to land their plane in Roanoke. Had not engine trouble developed, their judgment would have been vindicated, for the weather had cleared and the airport was opened. Insofar as the findings disclose, at the time the decision to fly was made the only risk which was considered was the weather—not engine trouble. The judge's conclusion, however, was that because weather had once that day prevented their landing at Roanoke, defendants should have chosen an alternate method of travel even though it would have made them one hour late for their engagement. We think this is a non sequitur. (2) He made no finding as to whether the engine trouble was beyond defendants' control. The judgment contains no finding with reference to inspection and repairs to the engine, the pivotal point here, in our view of the case. It does not follow, however, that this judgment must be reversed or remanded.

Ordinarily, when the parties waive a jury trial and the judge omits to find a material fact, we must remand the cause for a finding sufficient to support a judgment. McMillan v. Robeson, 225 N.C. 754, 36 S.E.2d 235; Shore v. Norfolk Nat. Bank, 207 N.C. 798, 178 S.E. 572; Raleigh Banking & Trust Company v. Safety Transit Lines, 198 N.C. 675, 153 S.E. 158. To remand this case for further findings, however, when defendants, the parties upon whom rests the burden of proof here, have failed to offer any evidence bearing upon the point, would be futile. By stipulation the evidence before the Superior Court consisted entirely of the exhibits and the transcript of proceedings in a former trial of this same case in the Corporation Court of the City of Lynchburg, Virginia, in June 1963. (At the conclusion of the evidence there plaintiff elected to take a voluntary nonsuit.) "The Court may always direct a verdict against the party who has the burden of proof, if there is no evidence in his favor, as where he fails to introduce any evidence, or if the evidence offered and taken to be true fails to make out a case." (Italics ours.) First Nat. Bank & Trust Co. v. Levy, 209 N.C. 834, 184 S.E. 822; accord, Strigas v. Durham Life Insurance Co., 236 N.C. 734, 73 S.E.2d 788; Sanders v. Hamilton, 233 N.C. 175, 63 S.E.2d 187; McCullen v. Durham, 229 N.C. 418, 50 S.E.2d 511. Defendants here, having chosen to rest their defense upon the transcript of a former trial in which they failed to offer evidence essential to the defense, have no cause to complain of an adverse judgment when the transcript affirmatively discloses their failure to carry the burden of proof which the law puts upon them.

Although we do not adopt his reasons, the conclusion of the trial court that defendants are liable for their failure to perform the contract is sustained.

We come now to the question of damages.

"For a breach of contract the injured party is entitled as compensation therefor to be placed, insofar as this can be done by money, in the same position he would have occupied if the contract had been performed. The amount that would have been received if the contract had been kept and which will completely indemnify the injured party is the true measure of damages for the breach." Perfecting Service Co. v. Product Development Sales Co., 259 N.C. 400, 415, 131 S.E.2d 9, 21.

Accord, New York Water Corp. v. City of New York, 4 A.D.2d 209 (1st Dept.), 163 N.Y.S.2d 538; Orebaugh v. Antonious, 190 Va. 829, 58 S.E.2d 873.

The amount of the gross receipts from ticket sales for the scheduled concert is not a subject for speculation. The tickets had been sold and the money was in hand when defendants failed to perform. The trial judge found the gross receipts, less admission taxes, to have been $12,600.90. The evidence sustains the finding. It is, therefore, conclusive on appeal. Harris & Harris Construction Co. v. Crain and Denbo, Inc., 256 N.C. 110, 123 S.E.2d 590. Having gross receipts in excess of $7,000.00, by the terms of the contract plaintiff was entitled to 50% of the proceeds and defendants to 50%. The amount of damages which the judge awarded plaintiff, $6,300.45, was 50% of the gross receipts.

Defendant contends that plaintiff's one-half should be reduced by $1,000.00, the amount which plaintiff agreed to pay the Y.M.C.A. for promoting the concert, but did not pay, and by deducting plaintiff's expected expenses, also. This contention is without merit.

Under the terms of this contract, the amounts which plaintiff expended or agreed to expend, in promoting, advertising, and preparing for the concert are of no concern to defendants. All such expenses came out of plaintiff's one-half of the gross receipts. Had defendants performed the contract, plaintiff would have received $6,300.45, one-half of the admission receipts, regardless of the expenses he might have incurred. That sum, and not his net profit, is therefore, the measure of plaintiff's damages in this case. New York Water Corp. v. City of New York, supra; Orebaugh v. Antonious, supra. Plaintiff's net profit, of course, will ultimately depend upon the amount of his expenditures in promoting the concert; the less expended, the more his profit. Judge Shaw correctly measured and assessed plaintiff's damages.

The judgment of the court below is

Affirmed.

HIGGINS, Justice (dissenting).

I am unable to agree with the trial court's conclusion of law "that the defendants were not prevented from performing the scheduled agreement within the meaning and intent of the (escape) clause in the contract as set out in paragraph 3 of the foregoing Findings of Fact." The contract provided: "The agreement of the employees to perform is subject to proven detention by sickness, accidents, or accidents to means of transportation, riots, strikes, epidemics, acts of God, or any other legitimate conditions beyond the control of the employees (defendants)."

The trial court found these facts: The performance was to begin at 8:00 p. m. The plaintiff not only knew the troupe would travel by air from Baltimore to Roanoke, arriving at about 4:30 p. m., but actually had busses at the airport to meet them. When the plane arrived at Roanoke, federal authorities refused permission to land due to local weather conditions. The defendant's pilot, in this emergency, ascertained the nearest open airport was Charlottesville, approximately 100 highway miles from Roanoke. A bus trip to Roanoke would delay the performance at least an hour. In the meantime, the pilot ascertained weather conditions had improved at Roanoke sufficient to permit a landing there in time for the performance to begin on schedule. The defendants, in this emergency, (not of their making) chose to take to the air again in order to meet their obligation. The decision to fly would appear to be the wiser choice. After take-off an oil leak developed in one of the engines. Report of this trouble resulted in a federal order for the plane to return to Charlottesville.

These accidents were to the means of transportation. These findings made by the trial judge not only do not support the conclusion of law No. 1, but compel a contrary conclusion. The decision must rest squarely on the facts found. Additional facts may not be assumed. When the facts are not in dispute, decision becomes a matter of law, and a judgment not supported by the facts will be reversed. Strong's North Carolina Index, Vol. 1, Appeal and Error, § 21, pp. 93-94, n. 225. I vote to reverse.

PARKER, J., joins in this dissenting opinion.