Owens v. Harnett Transfer, Inc.

257 S.E.2d 136 (1979)

42 N.C. App. 532

William Woodrow OWENS v. HARNETT TRANSFER, INC.

No. 7811DC828.

Court of Appeals of North Carolina.

August 7, 1979.

*139 Bryan, Jones, Johnson & Greene by K. Edward Greene, Dunn, for plaintiff appellee.

Johnson & Johnson by Sandra L. Johnson, Lillington, for defendant appellant.

PARKER, Judge.

The defendant first assigns error to the trial court's denial of its motion for a directed verdict and judgment notwithstanding the verdict. Defendant contends that the evidence shows as a matter of law that plaintiff breached the contract by ceasing to drive the tractor after 18 October 1976 and by allowing the payments on the tractor to become two months in arrears, thus establishing defendant's right to repossess the vehicle on 6 February 1977 pursuant to the terms of the contract. We do not agree.

First we note that the transaction that is the subject of this action was a sale of goods within the purview of G.S. Chap. 25, Article 2. G.S. 25-2-102. In essence, the transaction was a sale of the tractor in consideration of payments of money and delivery of haulage services by the plaintiff.

From the evidence presented the jury could find that for approximately three and one half months the defendant acquiesced in the substitution of plaintiff's son for plaintiff as driver of the vehicle after plaintiff announced to defendant's president his intention to go out and get another job. This acquiescence by defendant, if found by the jury, constitutes waiver of the agreement in the contract which provided that the plaintiff would operate the tractor in conjunction with defendant's business. G.S. 25-2-208(3).

A waiver is sometimes defined to be an intentional relinquishment of a known right. The act must be voluntary and must indicate an intention or election to dispense with something of value or to forego some advantage which the party waiving it might at his option have insisted upon. The waiver of an agreement or of a stipulation or condition in a contract may be expressed or may arise from the acts and conduct of the party which would naturally and properly give rise to an inference that the party intended to waive the agreement. Where a person with full knowledge of all the essential facts dispenses with the performance of something which he has the right to exact, he therefore waives his rights to later insist upon a performance. A person may expressly dispense with the right by a declaration to that effect, or he may do so with the same result by conduct which naturally and justly leads the other party to believe that he has so dispensed with the right.

Guerry v. Trust Co., 234 N.C. 644, 648, 68 S.E.2d 272, 275 (1951).

Should the jury find that defendant accepted the substitution of plaintiff's son for plaintiff as driver, the defendant could not now successfully assert that the substitution constituted a breach of the contract. This is so even though this was a personal contract. "Parties can be substituted in a *140 personal contract when (1) the parties do not object, and (2) fully acquiesce in accepting the services performed by the substituted party." Rape v. Lyerly, 23 N.C.App. 241, 249, 208 S.E.2d 712, 716-17 (1974), aff'd, 287 N.C. 601, 215 S.E.2d 737 (1975).

Nor does the evidence establish conclusively that the plaintiff breached the contract by failing to make a $600.00 payment in either December 1976, or January 1977. The evidence shows that by mutual understanding of the parties from the contract's inception in July 1976 the defendant obtained each monthly $600.00 payment by taking out the payments from plaintiff's 70% share of the freight charges when settlement was made at month's end. This was done by defendant, the evidence shows, even though plaintiff's account always was in deficit. In December, 1976 and January, 1977 the defendant stopped withholding payments even though it continued in these months to make settlements with plaintiff. There is no evidence to show that defendant ever notified plaintiff that it was demanding a change in the method of payment.

It is true that the contract does not expressly require the defendant to obtain payment by withholding a portion of plaintiff's share. However, after the defendant had obtained payment in this way for five consecutive months, the plaintiff thereafter had a right to rely on the construction defendant had placed upon the contract and assume that the manner of payment had been established. G.S. 25-2-208(1) provides:

(1) Where the contract for sale involves repeated occasions for performance by either party with knowledge of the nature of the performance and opportunity for objection to it by the other, any course of performance accepted or acquiesced in without objection shall be relevant to determine the meaning of the agreement.

In summary, on the directed verdict issue there was evidence from which the jury could find that the contract was so modified by the parties' actions that plaintiff's performance did not constitute a breach of the contract. If plaintiff did not breach the contract, then defendant's repossession of the tractor on 6 February 1977 was a breach of the contract. Defendant's motion for a directed verdict was correctly denied.

The defendant next assigns error to the trial court's charge to the jury on issue number four. We find error and reverse.

The challenged instruction reads:

Issue No. 4 reads: Did the Plaintiff, William Woodrow Owens, breach the contract dated July 5, 1976 by violation or nonfulfillment of the obligations, agreements, or duties imposed by the contract? Again, the Court instructs you on the burden of proof, and on this Issue, the burden of Proof, on this Defendant, Harnett Transfer, Inc., to satisfy you, by the greater weight of the evidence, that the contract was breached by the Plaintiff, William W. Owens. A breach of contract, as previously instructed, is the unjustified failure to perform any promise, expressed or implied, that is a part of the contract. A breach occurs when a party, without legal excuse, fails to perform any promise which is all or part of the contract. As to this Issue, you are instructed to recall the summary of evidence by the Court on the previously instructed on Issues. As to this Issue, I finally instruct you that if you find, by the greater weight of the evidence, that the Plaintiff, William W. Owens, without legal excuse, failed to perform any promise, which is all or part of the contract, then you will answer this Issue "yes". On the other hand, if you fail to so find, by the greater weight of the evidence, then you will answer the Issue "no." I will instruct you as to the law concerning breach of contract by the Plaintiff and the Defendant as follows: When there is a breach of contract or some provision thereof, which does not go to the substance or the whole contract, and indicate any intention to repudiate it, the breach may be waived by the innocent party who may elect to treat the contract as still subsisting and continue performance *141 on his part. While a party to a contract may excuse or waive nonperformance of a condition by the other party, waiver is a question of intent and does not obtain unless intended by the one party and so understood by the other. Further, the provisions of a written contract may be modified, waived or abandoned by a subsequent parol agreement. Such modification or waiver may be by subsequent parol agreement or by conduct which naturally and justly leads the other party to believe that the provisions had been modified or waived. The burden of proving modification or waiver is on the party asserting it, and conduct which will operate as a modification or abandonment must be positive, unequivocal and inconsistent with the terms of the contract.

This instruction is inadequate. In no part of the charge did the court give the jury a clear mandate as to what facts, for which there was support in the evidence, it would have to find in order to answer the issue either in the affirmative or in the negative. As our Supreme Court has said, Justice Moore speaking for the Court:

G.S. § 1-180, as now incorporated in G.S. § 1A-1, Rule 51, required the judge to explain and apply the law to the specific facts pertinent to the issue involved. A mere declaration of the law in general terms was not sufficient to meet the requirements of the statute. Saunders v. Warren, 267 N.C. 735, 149 S.E.2d 19 (1966). It is the duty of the court, without a request for special instructions, to explain the law and to apply it to the evidence on all substantial features of the case. Melton v. Crotts, 257 N.C. 121, 125 S.E.2d 396 (1962). A failure to do so constitutes prejudicial error for which the aggrieved party is entitled to a new trial. Correll v. Gaskins, 263 N.C. 212, 139 S.E.2d 202 (1964).

Investment Properties v. Norburn, 281 N.C. 191, 197, 188 S.E.2d 342, 346 (1972).

The plaintiff-appellee contends that the court's error was in any event nonprejudicial because the answers given by the jury to issues number one and two provide the answer to issue number four also, making that issue and the instruction on it mere surplusage. We disagree. First, we note that an examination of the instructions on the first two issues reveals that they suffer from the same infirmity as the instruction on the fourth issue. Second, and more directly in answer to plaintiff-appellee's argument here, in the final analysis the first two issues do not provide a satisfactory frame for posing to the jury the questions which the finder of fact in this action is called upon to determine.

This points up a question upon which we will comment, looking ahead toward the new trial of this action. The five issues submitted by the trial court do not as a whole satisfactorily frame the issues in this action. The evidence is uncontroverted that plaintiff failed to comply with some terms of the 5 July 1976 agreement and that defendant repossessed the tractor on 6 February 1977. The only issue for determination by the finder of fact is whether the contract was so modified by the actions of the parties that plaintiff's action in substituting his son as driver and his inaction in failing to tender the $600.00 payment in December 1976 and January 1977 did constitute a breach of the contract. The jury's repeated requests for re-instruction on the issue of waiver and modification shows that the jury was confused by the manner in which the issues were framed. In the new trial of the action, the trial court should simplify the issues in order that the question to be answered may be posed more directly to the jury in a fashion that it will be able to understand.

New Trial.

MITCHELL and HARRY C. MARTIN, JJ., concur.