Court Opinion

ID: 8904122
Source: CourtListenerOpinion
Date Created: 2022-11-27 01:37:00.039118+00
Date Added: 2024-06-11T17:08:03.230514
License: Public Domain

Judge BECTON
dissenting.
The majority correctly states that Neighborhood Housing Services, Inc.’s motion to dismiss “raises the question of whether any findings could be made from the evidence to support a recovery.” The majority then concludes (1) that Neighborhood Housing Services, Inc. made a direct promise to pay for goods delivered to Autry, taking the transaction outside the Statute of Frauds, G.S. 22-1; and (2) that the Uniform Commercial Code’s (U.C.C.) Statute of Frauds, G.S. 25-2-201, does not apply because the contract was executed in that there was a delivery and acceptance of the goods'. I disagree; but before setting forth my reasons, I note that the trial court’s Finding of Fact Number 10 that the promise was a “direct and unconditional promise to pay for [the] goods furnished” is a conclusion of law even though it is denominated a finding of fact, and it is reviewable by this Court. Walston v. Burlington Industries, 49 N.C. App. 301, 307, 271 S.E. 2d 516, 520 (1980); Moore v. Electric Co., 259 N.C. 735, 131 S.E. 2d 356 (1963).
While I agree with the Court’s holding that the oral communications between Ron Conrady, acting as agent for Neighborhood Housing Services, Inc., and Harry Rimel, president and general manager of Dealers Specialties, Inc., constituted an original, not a collateral, obligation, I disagree with the Court’s holding that that oral agreement is enforceable against Neighborhood Housing Services, Inc. The promise between Neighborhood Housing Services, Inc. and Dealers Specialties, Inc. was a conditional promise, requiring performance by Neighborhood Housing Services, Inc. only upon the occurrence of certain events. Moreover, while I agree that G.S. 25-2-201(3)(c) exempts executed contracts from the Statute of Frauds provision of the U.C.C., I must respectfully disagree with its application to the facts of this case. The contract was executed only as to Lonnie Autry and that provision may be applicable to him. It is not, however, applicable to Neighborhood Housing Services, Inc. Neighborhood Housing Services, Inc. has neither received nor accepted any goods from Dealers Specialties. Lonnie Autry, whom Dealers Specialties does not allege to be an agent of Neighborhood Housing Services, Inc., was the party receiving and accepting the goods.
The agreement between Dealers Specialties and Neighborhood Housing Services, Inc. was that Dealers Specialties would *56issue credit to Lonnie Autry in exchange for Neighborhood Housing Services, Inc.’s promise to issue the check for the “final draw on the job, Sixth Street,” jointly to Dealers Specialties and Lonnie Autry, such draw only being available to Autry upon completion of the job to the satisfaction of Neighborhood Housing Services, Inc. and the homeowner and upon a presentation of lien waivers by Autry. Neighborhood Housing Services, Inc.’s promise was a conditional promise and its duty to perform did not arise until the conditions were met. See Ross v. Perry, 281 N.C. 570, 189 S.E. 2d 226 (1972); and Jones v. Realty Co., 226 N.C. 303, 37 S.E. 2d 906 (1946). Ross and Jones both involved instances in which performance by the defendant was conditioned upon the actions of third parties. In Ross the broker could not receive commissions despite the fact that he had secured a tenant because the defendant’s owner’s duty to pay was conditioned upon the payment of rents and the continuation of the lease in full force. The taking of the property through condemnation proceedings relieved the defendant owner of the duty to pay because the conditions for performance had not occurred. Likewise, in Jones, the broker’s receipt of commission for finding a ready, willing and able buyer was dependent upon a sale being closed. Because the potential purchaser was unable to come up with the money, the deal was not closed. Consequently, the defendant owners had no duty to pay the commission since the conditions were not met.
Similarly, in the case sub judice, Neighborhood Housing Services, Inc.’s performance was conditioned upon the happening of specified events. Since the specified events did not occur, Neighborhood Housing Services, Inc. is excused from performance. Neighborhood Housing Services, Inc. did not promise payment for the goods upon delivery to Autry. Mr. Rimel’s testimony regarding his understanding of the agreement shows that he “did not understand that Neighborhood Housing Services, Inc. would pay [him] if Autry didn’t.” Further, Mr. Rimel, a merchant accustomed to building practices, testified that he understood that he was selling the goods to Lonnie Autry. Moreover, Rimel testified that he was told “by Conrady that Neighborhood Housing Services, Inc. had a policy of inspecting the jobs, that there has to be a certain percentage of work done in order for the contractor, to draw a percentage of the funds.” Consequently, when Mr. Rimel entered into the agreement to deliver the goods, he took the risk *57of not receiving his money until the job on Sixth Street had been completed to the satisfaction of Neighborhood Housing Services, Inc. and the homeowner, and until all lien waivers were presented. He also took the risk that the contractor (Autry) might not complete the job.
Neighborhood Housing Services, Inc. is an organization whose purpose is to assist homeowners in the improvement of their homes by financing and supervising renovations. Loans are made directly to the homeowners. Contractors are paid only upon the approval of the homeowner; the contractors submit bills to the homeowner and the homeowner in turn submits the bills to Neighborhood Housing Services, Inc.
As in this case, a loan could be used to hire more than one contractor. When Autry failed to complete the contract, the money remaining from the loan allocated to the project was used, along with other funds, to complete the project. It is true that Autry was paid for all of the work which he performed on the project through his termination point in November. The last check issued to him, however, did not constitute the final draw on the project, as the project was not completed and funds were left to be expended on it. Dealers Specialties took the risk, by the terms of the agreement, that the final draw would be made by someone other than Autry; it should not be heard to complain now.
Consequently, I believe the judgment appealed from should be
Reversed.