Hurst v. West

272 S.E.2d 378 (1980)

William Fulton HURST and wife, Doris Clark Hurst
v.
Ted G. WEST and H. Houston Groome, Jr., d/b/a West & Groome, Attorneys at Law; Ted G. West and wife, Claudine G. West, Individually; H. Houston Groome, Jr. and wife, Marsha D. Groome, Individually.

No. 8019SC367.

Court of Appeals of North Carolina.

December 2, 1980.

James L. Roberts, Charlotte, for plaintiffs-appellants.

West, Groome & Correll by Ted G. West, H. Houston Groome, Jr. and Edward H. Blair, Jr., Lenoir, for defendants-appellees.

HARRY C. MARTIN, Judge.

Plaintiffs' primary assignments of error relate to the trial court's refusal to submit to the jury the issues tendered by the plaintiffs and granting defendants' motion for directed verdict. After careful review of the record on appeal, we conclude that the motion for directed verdict was properly granted.

At the close of plaintiffs' evidence, after the jury was out, the following dialogue took place between counsel for the parties and Judge Mills:

MR. ROBERTS: In regards to the Counterclaim, if you will look at that Exhibit, I believe it's Seven, wherein they made agreement with J. D. Hurst and said they conveyed all their rights, title and interest for the Seventy-Five Hundred Dollars.

THE COURT: Okay, I understand what your motion is.

MR. ROBERTS: As a result of that they would not be the proper party to being [sic] the motion. J. D. Hurst would be the proper party and he's not here and not in the lawsuit and for that reason, it could not be submitted.

MR. GROOME: Your Honor, under Rule 41(b) we move for a dismissal of Plaintiff's case in its entirety and would like to direct your attention for the Complaint in the prayer for relief, paragraph Ten of Plaintiff's Complaint. [That the Defendant, J. D. Hurst, caused the property described in Exhibit B to be fraudulently conveyed in the name of HURST DISTRIBUTING COMPANY, INC. ....] (Argues Motion).

(Attorneys for both sides argue their contentions of law to the Court.)

THE COURT: The Court will grant you motion to dismiss at the close of the plaintiff's evidence and the Court will also find on Mr. Roberts' motion that the Court was improvidently reinstated your claim that for the same reasons found by Judge Collier on the Dismissal of those Counterclaims for attorneys fees. The Court will reaffirm that and adopt that position and find that I improvidently should not have allowed you to reassert that claim based on that finding by Judge Collier. Your Counterclaim is dismissed on those bases and your claim is dismissed on that basis.

Although it is not contained in the record, it is apparent that Judge Mills had reinstated defendants' counterclaim for attorney fees and later reconsidered that reinstatement because their claim had been effectively assigned to J. D. Hurst and Hurst Distributors, Inc. under the contract of 8 January 1976. For the same reason, plaintiffs' claim against defendants was dismissed.

Plaintiffs contend that defendants breached the contract by disposing of the property without adequate consideration and by failing to collect the rents and apply the same to the indebtedness on the property and to account for collections and expenditures. We note that the contract set out above did not impose a duty of accounting upon defendants. Plaintiffs' evidence includes testimony by Donald Weinhold, an attorney who formerly represented William Hurst regarding the property in question. Weinhold's testimony was that he requested and received an accounting of the rents during the time defendants had possession. We are unable to find any evidence in the record that defendants did not properly apply any rents received on the property. The issue remaining, then, is whether defendants breached their agreement to sell the property at its reasonable market value and remit any amount in excess of $20,000 plus costs to plaintiff William Hurst by conveying the property, subject to the contract, to Hurst Distributors, Inc. We hold that the contract was assignable and therefore defendants committed no breach.

The general rule is that contracts may be assigned. "The principle is firmly established in this jurisdiction that, unless expressly prohibited by statute or in contravention of some principle of public policy, all ordinary business contracts are assignable, and that a contract for money to become due in the future may be assigned." Bank v. Jackson, 214 N.C. 582, 585-86, 200 S.E. 444, 446 (1939). Accord, Lipe v. Bank, 236 N.C. 328, 72 S.E.2d 759 (1952); Horne-Wilson, Inc. v. Wiggins Bros., Inc., 203 N.C. 85, 164 S.E. 365 (1932).

In Lipe, supra, 236 N.C. at 331, 72 S.E.2d at 761, the Supreme Court stated:

A valid assignment may be made by any contract between the assignor and the assignee which manifests an intention to make the assignee the present owner of the debt. [Citations omitted.] The assignment operates as a binding transfer of the title to the debt as between the assignor and the assignee regardless of whether notice of the transfer is given to the debtor.

Exceptions to the rule that contracts are freely assignable are when the contract expressly provides that it is not assignable, Edgewood Knoll Apartments v. Braswell, 239 N.C. 560, 80 S.E.2d 653 (1954), or when performance of some term of the contract involves an element of personal skill or credit. Boney, Insurance Comr. v. Insurance Co., 213 N.C. 563, 197 S.E. 122 (1938). See also Oil Co. v. Furlonge, 257 N.C. 388, 126 S.E.2d 167 (1962). "Whether or not a contractual duty requires personal performance by a specific individual can be determined only by interpreting the words used in the light of experience." 4 A. Corbin, Contracts § 866, 455 (1951).

The contract between William F. Hurst and West & Groome contained no express prohibition against assignment. Although the duty of defendant attorneys to defend plaintiff William Hurst on the charges then pending against him involved an element of personal skill and would not have been assignable to a third party, those obligations were fulfilled and discharged when the criminal charges against Hurst were dismissed. The remaining obligation of defendants under the contract, that they sell the property at a reasonable market value if the option to purchase were not exercised, was not personal in nature, as such a performance can be rendered with equal effectiveness by an assignee of the contract. Thus it is clear that no breach occurred merely by West & Groome's assignment of the contract to J. D. Hurst and Hurst Distributors, Inc.

Traditionally the assignment of a contract did not operate to cast upon the assignee the duties and obligations or the liabilities of the contract if the assignee did not assume such liabilities. Koppers Co., Inc. v. Chemical Corp., 9 N.C.App. 118, 175 S.E.2d 761 (1970). But in Rose v. Materials Co., 282 N.C. 643, 194 S.E.2d 521, 67 A.L. R.3d 1 (1973), our Supreme Court held that unless a contrary intention is apparent, an assignee under a general assignment of an executory bilateral contract becomes the delegatee of the assignor's duties and impliedly promises to perform them. The Court adopted and reaffirmed as the more reasonable rule:

"The assignment on its face indicates an intent to do more than simply to transfer the benefits assured by the contract. It purports to transfer the contract as a whole, and since the contract is made up of both benefits and burdens both must be intended to be included. It is true the assignor has power only to delegate and not to transfer the performance of duties as against the other party to the contract assigned, but this does not prevent the assignor and the assignee from shifting the burden of performance as between themselves. Moreover, common sense tells us that the assignor, after making such an assignment, usually regards himself as no longer a party to the contract. He does not and, from the nature of things, cannot easily keep in touch with what is being done in order properly to protect his interests if he alone is to be liable for non-performance. Not infrequently the assignor makes an assignment because he is unable to perform further or because he intends to disable himself for further performance. The assignee on the other hand understands that he is to carry out the terms of the contract, as is shown by the fact that he usually does ...."

Id. at 662, 194 S.E.2d at 534.

In the present case, J. D. Hurst and Hurst Distributors, Inc. expressly agreed to assume all liabilities and responsibilities under the original contract and to hold defendants harmless "from any liability or responsibility under said contract and particularly from any liability or claim of any kind or description William Hurst may now or hereafter make against the Seller [defendants] for accounting or sale of property." J. D. Hurst and Hurst Distributors, Inc., as assignees of the contract, could take by transfer only what rights and interests the assignor had at the time of the assignment, Holloway v. Bank, 211 N.C. 227, 189 S.E. 789 (1937), and took subject to any setoffs and defenses available to plaintiffs against the assignor. Amusement Co. v. Tarkington, 247 N.C. 444, 101 S.E.2d 398 (1958). The assumption of the duties under the contract gives the other party new and additional security. Brown v. Construction Co., 236 N.C. 462, 73 S.E.2d 147 (1952). The assignor is then in substantially the position of a surety. 4 A. Corbin, supra § 866. If a breach of the contract in question was committed, it was committed by J. D. Hurst and Hurst Distributors, Inc. As assignees, they were the real parties in interest. Morton v. Thornton, 259 N.C. 697, 131 S.E.2d 378 (1963); Trust Co. v. Williams, 201 N.C. 464, 160 S.E. 484 (1931). Plaintiffs had the right to bring suit against the assignees of the contract. This they did; and summary judgment was entered against them. No appeal from that order is now before us. We note that the subsequent foreclosure precluded a private sale at a reasonable market value.

Because plaintiffs' evidence did not establish the necessary elements of breach of contract, we hold that the directed verdict in favor of defendants was proper. The assignment of error is overruled.

Plaintiffs' other assignment of error deals with the exclusion of testimony offered by plaintiffs' witnesses. Most of that testimony dealt with opinions as to the value of the property in question at the time it was transferred by defendants to J. D. Hurst and Hurst Distributors, Inc. As we have found on other grounds that there was no breach of the contract, the exclusion of such testimony was not erroneous.

The other testimony that plaintiffs contend was improperly excluded dealt with customary or average attorney fees in capital cases. It appears, although the record and briefs are far from illuminating on this issue, that plaintiffs are no longer pursuing their claim as to excessive attorney fees because of the dismissal of the counterclaim for recovery of such, and because of defendants' failure to perfect their appeal on this issue. In any case, there is no evidence that such fees were unreasonable. The record does not show what answers the witness would have given to the questions regarding this issue; therefore exclusion of the testimony cannot be held to be prejudicial. Service Co. v. Sales Co., 259 N.C. 400, 131 S.E.2d 9 (1963); Abbitt v. Bartlett, 252 N.C. 40, 112 S.E.2d 751 (1960); Board of Education v. Mann, 250 N.C. 493, 109 S.E.2d 175 (1959).

We find no merit in plaintiffs' assignments of error.

No error.

ARNOLD and HILL, JJ., concur.