Opinion
No. 4146.
Decided February 3, 1953.
An exception to the denial of a motion for a directed verdict raises the question of whether the evidence was sufficient to justify the verdict rendered. Where the defendant contractor to insure the furnishing of labor and material to complete construction of a plant entered into an original undertaking with the plaintiff, who was under contract with defendant's insolvent subcontractor, to make payment therefor direct to the plaintiff such undertaking was not within the statute of frauds. The plaintiff was not precluded from enforcing such undertaking by the fact that there was no novation discharging his immediate subcontractor from its obligation since the defendant's promise was made to assure plaintiff's performance. In such case, the defendant waived any right he may have had to require this labor and materials to be furnished by the plaintiff by virtue of the plaintiff's contract with the defendant's insolvent subcontractor at the latter's expense, and the furnishing of such labor and material by the plaintiff in response to defendant's promise to pay, constituted sufficient consideration for defendant's undertaking to pay the plaintiff directly.
ASSUMPSIT, to recover a balance alleged to be owing the plaintiff for work, labor, and materials furnished in the construction of a boiler plant with piping accessories at Concord. The defendant was the contractor with the owner, under a contract dated April 12, 1948. In the following month the defendant entered into a subcontract for a portion of the work with the P. A. Dolan Company, and this company in turn thereafter entered into a subcontract with the plaintiff for pipe covering required by the original contract, at a price of $13,500. The plaintiff seeks to recover an unpaid balance of $3,444.33 and a charge for extras amounting to $1,273. Trial by the Court (Leahy, J.). Verdict for the plaintiff for $4,717.33 with interest from July 8, 1949.
The defendant excepted to the denial of its motion for a directed verdict and of its motion to set aside the verdict because against the law and the evidence, and "the weight of the law and the weight of the evidence." The questions presented by the defendant's exceptions were transferred by the Presiding Justice upon its bill of exceptions.
The findings and rulings of the Trial Court, to which no exceptions were taken, establish facts which may be briefly summarized. The subcontractor Dolan Company commenced work in late April or early May, 1948. In mid June the defendant's president learned that Dolan Company was in financial difficulties and unable to meet its payroll. On July 23, 1948, the subcontract between the defendant and Dolan Company was modified to provide that the contract price should be reduced by charges for specified items, including materials and supplies paid direct to the supplier for the Dolan Company account by the defendant. In November, 1948, the plaintiff commenced deliveries of materials under its contract with Dolan Company, and received a payment from the defendant in response to its first request for payment forwarded to Dolan Company in care of the defendant. Late in 1948, the defendant's president notified the plaintiff's representative on the job that Dolan Company was in difficulty, and that he would "foot" the plaintiff's bills. "Later on [he] informed the bookkeeper for Curtis he would foot the bills on the Dolan account and when he received his money from [the owner] he would pay Curtis." With these assurances, the plaintiff completed the work called for by its contract with Dolan Company and supplied certain extras. The defendant paid the plaintiff's bills with the exception of two dated April 8, and 27, 1949, respectively, which totalled $4,717.33.
The Court found that "the continuance of the work and supplying of material by the plaintiff . . . was based on the direct promise by the defendant, through its authorized agent, to pay for such work and materials including `the extras.'" The Court ruled that "an express oral contract was entered into between the defendant and plaintiff to the effect that if the plaintiff would carry out its work and supply materials, the defendant would pay." It was further found that there was no dispute as to the fairness of the plaintiff's charges or the quality of the work done. Interest was allowed from the date on which the defendant notified the plaintiff that it would make no further payments. Other facts appear in the opinion.
Hamblett, Moran Hamblett and Irvin M. Davis of Massachusetts (Mr. Moran orally), for the plaintiff.
Karl E. Dowd (by brief and orally), for the defendant.
The defendant's exception to the denial of its motion for a directed verdict raises the question of whether there was any evidence to sustain the verdict, and if so whether the verdict could properly be reached upon the evidence. Bennett v. Larose, 82 N.H. 443, 445. The statement submitted by the plaintiff to Dolan Company under date of December 20, 1948, indicated that it had then furnished labor and materials of a value of approximately $9,000. Shortly thereafter it learned from the defendant of the Dolan Company's insolvency, and received assurances that the defendant would "foot" the bills. Statements thereafter submitted were directed to the defendant rather than to Dolan Company. The payments received by the plaintiff were all made by the defendant, and aggregated more than $10,000. The plaintiff carried no account for Dolan Company upon its books, but upon completion of its work in April, 1949, charged the entire account upon its records to the defendant. The defendant's president testified that the claim which it proved in the Dolan bankruptcy proceedings included the amount which the plaintiff now seeks to recover. The finding that the work done by the plaintiff in 1949 in performance of its contract was in reliance upon the defendant's promise to pay was warranted by the evidence.
The defendant contends that it is nevertheless under no liability because the alleged undertaking was not in writing (R. L., c. 383, s. 2), was without consideration, and because no novation was established.
"From the evidence . . . it could be found that the plaintiff furnished the materials upon the credit of the defendant, and that the defendant's promise was an original and not a collateral undertaking, and therefore not within the statute of frauds." Janvrin v. Powers, 79 N.H. 44, 46.
The fact that no novation was entered into, releasing the Dolan Company of its contractual rights and obligations (see Staples v. Davis, 75 N.H. 383), does not affect the plaintiff's rights, since the defendant's promise was made to assure receipt of the benefits for which the promise was exchanged. Janvrin v. Powers, supra; Beede v. Foster, 88 N.H. 131. The indebtedness which arose prior to the defendant's promise was paid by it voluntarily. The balance which it declined to pay could be found to have arisen out of materials and labor furnished in reliance upon the promise.
The consideration for the defendant's offer or promise to pay was the furnishing of the labor and materials. If the defendant had a right by reason of the contract between the plaintiff and Dolan Company to have them furnished at the latter's expense, the defendant surrendered that right by promising to pay the plaintiff. See Watkins v. Carrig, 91 N.H. 459, 463. Similarly if the plaintiff's contract with Dolan Company required it to furnish the labor and materials, its waiver of any excuse for nonperformance arising out of the insolvency of the company (Restatement, Contracts, s. 287), and the furnishing of the labor and materials in response to the defendant's offer to pay, constituted consideration for the defendant's undertaking. The motion for a directed verdict was properly denied.
The exception to the denial of the motion to set aside the verdict presents no additional issue which discloses any error. See Condiles v. Waumbec Mills, 95 N.H. 127.
Judgment on the verdict.
All concurred.