Corinthian Lodge v. Smith, 147 N.C. 244 (1908)

April 1, 1908 · Supreme Court of North Carolina

147 N.C. 244

CORINTHIAN LODGE v. SMITH & BAKER.

(Filed 1 April, 1908).

1. Contracts — Breach — Condition Precedent — Legal Excuse — Liability.

A party to a contract cannot maintain an action for its breach without averring and proving a performance of his own antecedent obligations arising on the contract or some legal excuse for a nonperformance, when the stipulations are not concurrent.

2. Contracts, Executory — Conditions Precedent — Strict Compliance— Liability.

When the conditions imposed upon the plaintiff, in an action to recover of defendant damages for Ms nonperformance of an execu-tory contract, are in the nature of conditions precedent, a strict compliance therewith may be insisted on by defendant in bar of a recovery.

3. Same — Waiver.

Plaintiff and defendants entered into an executory contract that defendants would rent a store in a building of plaintiff’s, then under construction, to be completed, heated with steam heat and ready for occupation by 1 January following. The building was not completed when contracted to be, and for some time after 1 January was heated by two stoves. Plaintiff informed defendants in December that the store would not be ready by 1 January. Defendants were merchants, doing a retail business, for which the store was to have been used: Held, (1) that plaintiff could not recover damages on account of defendants’ refusal to take the store when not completed as and at the time agreed upon; (2) that the information given beforehand that the store would not be completed 1 January does not affect the question, in the absence of some act or thing done by the defendants amounting to a waiver of their right of demand for a strict performance of the contract.

(The difference between this and a “builder’s contract,” in its accepted meaning, and the liability under the latter, discussed and distinguished by I-Ioke, J.).

AotioN tried before Neal, J., and a jury, at October Term, 1907, of Edgecombe.

There was evidence tending to show that plaintiff lodge, in 1904, was erecting a Masonic temple for the use of the order in the town of Rocky Mount, N. 0., and intended to prepare tbe first floor, 25 x 130 feet, to rent as a storeroom for mercantile purpose, and, pending tbe construction of tbe building, plaintiff entered into a contract witb defendants to rent tbem tbe store for one year, witb privilege of renewal, at tbe contract price of $700 per year, to commence 1 January, 1905; tbat defendants failed and refused to take tbe store as agreed upon, to plaintiff’s damage $375. Defendants admitted tbat they bad entered into an executory contract to lease tbe store; tbat tbey bad refused to take tbe same, and justified tbeir action on tbe alleged ground tbat tbe contract stipulated tbat plaintiff was to fit up and furnisb tbe storeroom and bave same provided witb steam beat; witb awnings at eitbe-r end of store, same having two fronts; witb oak counters, grained; bave sidewalks in front of each end of store paved; and all to be completed and ready for occupation by 1 January, 1905; and tbat plaintiff bad totally failed to comply witb these requirements of the contract. On tbe trial there was conflict of testimony as to other terms of tbe contract and compliance witb tbe same, but tbe evidence of both parties was to the effect tbat tbe storeroom was to be steam-heated and ready for occupation by 1 January, 1905; tbat tbe steam beat was not ready at tbat time, but tbe beat was turned on some time between tbe 5th and tbe 10th of January; that two stoves bad been put in tbe building to supply beat for tbe workmen and then for use by defendants. H. E. Brewer, a witness for plaintiff, and one of tbe trustees, said tbat be told defendant Smith as early as 1 December tbat tbey could not get tbe beat in by 1 January, and be made no reply. At tbe close of tbe testimony bis Honor stated to tbe counsel for plaintiff tbat be would instruct tbe jury “tbat, if tbey should find from tbe evidence tbat tbe contract between tbe plaintiff and tbe defendants was tbat plaintiff was to bave tbe store steam-heated, completed and ready for occupancy by 1 January, 1905, and did not bave said store steam-heated on tbat day according to contract,’ but had it heated by two stoves, to answer tbe first issue ‘No/ and this would be so notwithstanding the plaintiff had stated to the defendant Smith, some time in December, 1904, that the plaintiff could not have the store steam-heated by 1 January, to which statement the said Smith made no reply; and if you so find the facts, then this would be the law, notwithstanding all else that appears in the evidence.” In deference to this intimation the plaintiff submitted to a non-suit and appealed.

Gilliam & Bassett for plaintiff.

Q. M. T. Fountain for defendants.

Hoke, J.,

after stating the case: In Ducker v. Cochrane, 92 N. C., 597, the Court held “that one party to a contract cannot maintain an action for its breach without averring and proving a performance of his own antecedent obligations arising on the contract or some legal excuse for a nonperformance thereof or, if the stipulations are concurrent, his readiness and ability to perform-them.” This principle has been recognized and applied by us in many well-considered cases. Tussey v. Owen, 139 N. C., 457; Jones v. Mial, 79 N. C., 164, modified, but not on this point, in 82 N. C., 252; Niblett v. Herring, 49 N. C., 262; Grandy v. McCleese, 47 N. C., 142. And it is also well established that when the stipulations imposed by such a contract on the complaining party are in the nature of conditions precedent a strict compliance may be insisted on. Mizell v. Burnett, 49 N. C., 249; Norrington v. Wright, 115 U. S., 188; Oakley v. Morton, 11 N. Y., 25; Pickering v. Greenwood, 114 Mass., 479.

A correct application of the principles upheld in these cases fully sustains the charge as proposed by his Honor, and in our opinion there is nothing presented here which would justify the Court in holding that substantial compliance had been shown or that time was not of the essence. The testimony is to the effect that defendants were merchants having an established business in the town of Rocky Mount, and they agreed to take a lease of plaintiff’s storeroom if it was furnished with steam heat and ready for occupation in this and other specified particulars by 1 January, 1905. They were not called on to accept two stoves as a substitute for the steam heat for which they had contracted, and they were not required to enter in the occupation of an unfinished storeroom without knowing how long such a condition would continue— a condition that might subject themselves and customers to much annoyance and possibly result in a substantial falling off of their trade. They had made a careful contract, provident against any serious interruption of their business by reason of the contemplated move, and they had a right to insist that its terms be complied Avith in the specified particulars and within the specified time. Nor are defendants estopped from maintaining this defense by the fact that one of plaintiff’s trustees told one of defendants, on or about 1 December, 1904, that plaintiff would not be able to complete the store within the time allowed. There is no testimony offered that at that time or afterwards defendants gave any directions about the work or assumed any authority over it or gave indication in any ivay that they waived their right to demand a strict performance of the contract; and there is nothing in this occurrence, therefore, which prevents them from setting up the defense on which they insist.

The doctrine which we hold to be controlling on the facts of this appeal is modified to some extent by a line of cases which establishes the principle that, when “one party has performed the contract in a substantial part and the other party has accepted and had the benefit of the part performance, the latter may under certain circumstances be precluded from relying' on the performance of the residue as a condition precedent to his liability.” Beach Law Modern Contracts (Vol. I), sec. 107; 9 Cyc., p. 645. This principle more usually obtains in the case of building contracts, when the owner or proprietor of a house that has been built or substantially completed by another has entered into the possession and use of his building. In such case, owing to the great hardship and injustice that would frequently arise by a strict application of the general rule, the courts are disposed to lay hold of slight circumstance as justifying the modification suggested and apply the principle stated in Beach Modern Law of Contracts, as follows: Section 108 — “Where a building is erected upon and becomes a part of the realty of .the owner, and, although defective in some respects, is of real and substantial value to the owner, the contractor can recover the value of his work, less the damages to the other party, for a failure to comply with the terms of the agreement.” But the facts of this case do not call for or permit the application of the principle referred to. The defendants have never entered in possession of this storeroom, nor have they received or enjoyed the benefit of any labor or expenditure on the part of plaintiff. On the contrary, they insist that, by reason of plaintiff’s failure to comply with antecedent conditions, they are not called on to take the plaintiff’s' store and they are not responsible in damages for refusing to do so. While the contract is about a building, it is in no sense a building contract within the meaning of the principle which plaintiff seeks to invoke, but as between these parties it is an ordinary business contract, governed by the general principles stated at the outset and decisive of the question presented in defendants’ favor.

There is no error and the judgment below is affirmed.

No Error.