Son-Shine Grading Inc. v. Adc Construction Co.

315 S.E.2d 346 (1984) | Cited 7 times | Court of Appeals of North Carolina | May 15, 1984

The dominant question for our determination is whether ADC's Field Supervisor, Jack Mabe, had authority to modify the contract with plaintiff by dispensing with the requirement that ADC's engineers measure the rock that plaintiff removed from the construction site. The several other questions posed by the appellants in their brief are subordinate to and controlled by this one. If Mabe had authority to, and did, modify the contract, whether ADC ratified the change, as the court also found and defendants dispute, is not crucial to plaintiff's case; if the contract was modified to permit removed rock to be measured in the ways specified in plaintiff's letter summarizing the modifications agreed to, defendants' contention that measurements made in accord therewith were too inexact and unreliable to support the damages awarded, merits little or no discussion; and, finally, if the contract was modified and ADC's refusal to pay thereunder was a breach, as the court also found, it necessarily follows that ADC's counterclaim, based on the theory that it had performed the contract and plaintiff had breached it, had no basis and the court could not have erred in dismissing it, as defendants contend. On the other hand, if the contract was not modified by Mabe, plaintiff's judgment must be set aside and ADC's counterclaim reinstated. The nature of the deviation from the written contract is such that it almost answers the question for us without further resort to the evidence. The modification imposed no new obligation of any kind on ADC and relieved plaintiff of no obligation to it; instead it relieved ADC of the necessity of having its engineers on the site every time rock had to be measured, named the experienced

construction employees of plaintiff and ADC that would do the measuring instead of the engineers, and specified the methods that they would use while so doing.

Pertinent to the dominant issue presented, the trial court made the following findings of fact:

11. That ADC's Jack Mabe as Field Superintendent was on the job site constantly (until June, 1981, and succeeded in that capacity by Frank Costin), supervising construction and dealing with subcontractors such as Son-Shine.

14. That on the Raleigh Garden Project, ADC's Jack Mabe had a wide range of responsibility and authority which was manifested by his conduct, and increased to some extent due to his representing an out-of-state general contractor (ADC).

15. That on this particular project, Jack Mabe, in his dealings with Son-Shine, exhibited his apparent authority in representing ADC by authorizing and requesting Son-Shine to do certain tasks outside the scope of the written agreement, including but not limited to:

a. drain and undercut (silt removal) a large pond on the site;

b. relocate a sewer line and manhole;

c. diesel fuel and gasoline to ADC;

d. rent equipment to ADC for its use.

19. That Son-Shine was paid by ADC for most of the above items requested (and more specifically for the pond and sewer line work) in the earlier stages of the project.

21. That Son-Shine first encountered subsurface rock on the job site in April, 1981, and thereafter a meeting was held on April 7, 1981, between Son-Shine's Wayne Britt and ADC's Jack Mabe concerning procedures to be followed in measuring

rock quantities. That the letter written by Wayne Britt on April 8, 1981 (see plaintiff's Exhibit 18) was a memorandum of the oral agreement and was delivered to Jack Mabe on or about April 8, 1981.

22. That certain procedures for measuring quantities of rock were agreed upon by ADC and Son-Shine at the April 7, 1981 meeting, and that thereafter these procedures were substantially complied with by Son-Shine.

It is well established under our law that: The provisions of a written contract may be modified or waived by a subsequent parol agreement, or by conduct which naturally and justly leads the other party to believe the provisions of the contract have been modified or waived, even though the instrument involved provides that only written modifications shall be binding. W.E. Garrison Grading Co. v. Piracci Construction Co., Inc., 27 N.C. App. 725, 221 S.E.2d 512 (1975), rev. denied, 289 N.C. 296, 222 S.E.2d 695 (1976). The foregoing and other findings of fact, abundantly supported by evidence, are clearly sufficient, in our opinion, to support the trial judge's conclusion that the contract terms governing the measurement of the amount of rock removed was modified by a mutual oral agreement. The defendants' contention that written authority from a company officer had to be shown is rejected. ADC chose to conduct this large, ongoing project through Mabe, who could not possibly carry out the project efficiently without authority to make such minor changes in the project and the methods of accomplishing it as the exigencies of the situation required. That that was the understanding of ADC, as well as the plaintiff, is clearly inferable from the various events recited, and by the additional fact, as the evidence plainly shows, that the job was already behind and more delays were inevitable unless ADC kept its engineers at plaintiff's beck and call for an extended period at considerable expense or measured the rock with on-site personnel. That Mabe had authority from ADC to purchase work and materials not even referred to in the written contract at a cost of several thousand dollars is certainly some evidence that he likewise had authority to expedite his employer's business by having rock that was covered by the written contract measured by other construction personnel that were already there.

Furthermore, even if Mabe's modification of the written contract had not been authorized by ADC, that deficiency was rendered irrelevant by ADC's own actions thereafter. ADC did not exist just in Atlanta, where its officers and home offices were, as defendants in effect contend; it was also at the site of the project in great force, constructing much of it and supervising the rest. Like any other legal entity, ADC was bound to know the status of its own business and the movement and activities of its own members, the employees of a corporation being, in effect, what arms, legs, ears and eyes are to an individual. Thus, ADC knew from observation, bills received, and the whereabouts and work of its own employees that great quantities of rock were being excavated on this project without its engineers being sent to the scene or doing the measuring; and it also knew that the measuring was being done by site personnel without the project being delayed by the absence of its own engineers. Knowing these things and that it was its obligation, not plaintiff's, to have its engineers there when needed, ADC nevertheless permitted its engineers to work elsewhere, continued to accept plaintiff's excavation work without the measurement of its engineers, and even paid on various of plaintiff's invoices. In doing so, ADC ratified the modification made and the appellants are estopped to deny Mabe's authority to make it. Boddie v. Bond, 154 N.C. 359, 70 S.E. 824 (1911). To hold otherwise would be to penalize plaintiff for ADC's own derelictions, which the law does not permit.

Though a discussion of the other questions presented by defendants is not required for the reasons earlier stated, we nevertheless note that their claim that the amounts awarded plaintiff for removing rock is supported only by measurements made by methods that are unreliable and uncertain is without merit. Apart from the fact, which is answer enough, that the methods used to measure the rock involved were those that ADC itself agreed to and regularly used, measurement being the joint task of Mabe and certain of plaintiff's employees under the modification, the record contains plenary evidence that those methods are inherently reliable, reasonably accurate, and generally approved by construction personnel in this area.




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