Yeargin Construction Co. v. Futren Development Corp.

225 S.E.2d 623 (1976) 29 N.C. App. 731

YEARGIN CONSTRUCTION COMPANY, INC.
v.
FUTREN DEVELOPMENT CORPORATION.

Nos. 7526SC798, 7526SC953.

Court of Appeals of North Carolina.

June 16, 1976.

Grier, Parker, Poe, Thompson, Bernstein, Gage & Preston, by Gaston H. Gage and William P. Farthing, Jr., Charlotte, and Haynsworth, Perry, Bryant, Marion & Johnstone, by Charles T. Roy, Jr., Greenville, S. C., for plaintiff appellant-appellee.

William H. Ashendorf and Perry, Patrick, Farmer & Michaux, by Roy H. Michaux, Jr., Charlotte, for defendant appellant-appellee.

BRITT, Judge.

PLAINTIFF'S APPEAL

The sole question presented by plaintiff's appeal is whether the trial court erred in denying plaintiff's motion for attorneys' fees in amount of $31,900, representing ten percent of the principal amount of the verdict. We hold that the court did not err in denying the motion.

The contract between the parties contains the following provision:

"In the event any Progress Payment or any final payment, or any part of either of same, shall not be paid when and as the same shall become due and payable as provided herein, such Progress Payment or final payment, or part thereof as shall be past due shall bear interest at the rate of ten percent (10%) per annum, and in the event of any such nonpayment, if same be placed in the hands of an attorney for collection or if collected through any bankruptcy proceedings or any other court action. Owner agrees to pay, in addition to all other sums due or to become due hereunder, an additional ten percent of any monies so unpaid as attorneys' fees."

Plaintiff argues that under the common law of our State, parties may contract for the payment of attorneys' fees in the event of litigation based on the contract. We do not find this argument persuasive.

The first expression of our Supreme Court on this question was in Tinsley v. Hoskins, 111 N.C. 340, 16 S.E. 325 (1892). There the court held that a stipulation in a promissory note "that in case this note is collected by legal process the ususal collection fee shall be due and payable" is not consistent with public policy, therefore, the same is not enforceable.

In Parker v. Realty Company, 195 N.C. 644, 646, 143 S.E. 254, 256 (1928), the court stated with approval the general rule that "``[a]ttorneys' fees are not recoverable by successful litigants in this state, as such are not regarded as a part of the court costs'". The court further declared that "[t]his rule has been applied to suits on promissory notes, breach of contract, personal injury and injunctions".

It appears to be well established that ordinarily attorneys' fees are recoverable only when expressly authorized by statute. Horner v. Chamber of Commerce, 236 N.C. 96, 72 S.E.2d 21 (1952). See also Hoskins v. Hoskins, 259 N.C. 704, 131 S.E.2d 326 (1963); Wachovia Bank & Trust Company v. Schneider, 235 N.C. 446, 70 S.E.2d 578 (1952); Credit Corporation v. Wilson, 12 N.C.App. 481, 183 S.E.2d 859 (1971), aff'd, 281 N.C. 140, 187 S.E.2d 752 (1972).

Plaintiff next argues that assuming the common law does not allow recovery of attorneys' fees in this case, their recovery is authorized by G.S. 6-21.2 (enacted in 1967) which provides in pertinent part: "Obligations to pay attorneys' fees upon any note, conditional sale contract or other evidence of indebtedness . shall be valid and enforceable . ." (Emphasis added.) Plaintiff contends that the provision of the contract quoted above is an "evidence of indebtedness" in the contemplation of the statute. We reject this argument.

In Brown v. Brown, 213 N.C. 347, 196 S.E. 333 (1938), the Supreme Court held that while all questions of public policy are for the determination of the Legislature, a statute will not be construed to alter established principles of public policy founded on good morals unless that intent is clearly and unequivocally expressed in the statute. We think the rule of strict construction must be applied to G.S. 6-21.2 and that when the statute is strictly construed, the interpretation urged by plaintiff cannot be given.

For the reasons stated, the order from which plaintiff appeals is affirmed.

DEFENDANT'S APPEAL

Defendant's sole assignment of error relates to exceptions to three portions of the trial court's charge to the jury. Suffice it to say, we have carefully reviewed the entire charge, with particular reference to defendant's exceptions, and conclude that defendant has failed to show prejudicial error.

On plaintiff's appeal—affirmed.

On defendant's appeal—no error.

VAUGHN and ARNOLD, JJ., concur.