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Redd v. Woodford County Swine Breeders

OPINION FILED NOVEMBER 23, 1977.

FRANCIS REDD, PLAINTIFF-APPELLEE,

v.

WOODFORD COUNTY SWINE BREEDERS, INCORPORATED, DEFENDANT-APPELLANT.



APPEAL from the Circuit Court of Woodford County; the Hon. WILLIAM ROBERTS, Judge, presiding.

MR. JUSTICE KUNCE DELIVERED THE OPINION OF THE COURT:

Woodford County Swine Breeders appeal from a trial court judgment in favor of plaintiff Francis Redd. For the reasons given, we affirm.

Woodford County Swine Breeders, Inc., contracted with Environ System, Inc., a Nebraska corporation, for Environ to be the general contractor in constructing a special facility near El Paso, Illinois, for the care and breeding of swine. The contract obligated Environ Systems to furnish all materials and labor for the work. The contract provided for payment to Environ on a percentage of completion basis. At the option of the owner, payment to subcontractors could be by joint check of the owner and general contractor.

In May 1973, Alfred Peterson, president of Environ, asked plaintiff Redd for a price on the carpentry work of the building, and an oral contract on a time and material basis with a labor rate of $10.50 per hour per man was thereafter made. Redd and Peterson orally agreed that Redd was to be paid by Peterson. According to Redd, no upset or total contract price was ever made. Kenton Zellmer, president of Woodford County Swine Breeders, was not aware of the arrangements between Peterson and Redd. The work was scheduled to start in July 1973, but because of a materials delay, Redd didn't begin work until August. Thereafter trouble arose.

It is undisputed that Peterson furnished only nominal materials and provided no supervision or payments between July and December of 1973. Redd considered the blueprints inadequate and sought consultation and help from Kenton Zellmer and Clifford Krug, two of the shareholders in the corporation. Redd was unsure about the construction of the swine building, but Zellmer had seen one elsewhere and knew how the building was supposed to look. Several alterations were made on the project. Both Zellmer and Redd tried several times from July to December to talk with Peterson, but he was unavailable. It appeared that Peterson and Environ Systems had abandoned the job and failed to honor the contract.

At the end of August, Redd requested payment from Zellmer because Peterson hadn't been seen. Redd was paid by Zellmer on August 31, 1973, by a money order. Redd executed a partial waiver of lien to Environ on August 31. Thereafter, Redd was paid by Kenton Zellmer out of the Swine Breeders' corporate checking account on 11 dates between September 13, 1973 and February 23, 1974. Ten of the 11 checks have a notation at the bottom reciting, "Environ Systems General Contract."

Redd issued lien waivers to Zellmer on the following dates: September 26, 1973; October 10, 1973; October 24, 1973; and November 8, 1973. Waivers also were issued for August 31 and September 12, but they stated that Redd was employed by Environ Systems. Beginning with the September 26 payment, the waivers state that Redd has been employed by Kenton Zellmer for $10.50 per hour. At one point during these payments, Zellmer told Redd that he was to be paid by the Swine Breeders as had been the case previously. Zellmer admitted that Redd was being directly employed and paid by the Swine Breeders to continue working on the building. At no time were joint checks ever issued between the Swine Breeders and Environ Systems to pay Redd. All but the first payments to Redd were made out of the account of the Woodford County Swine Breeders, Inc. Zellmer was well aware that the waivers recited that Redd was being employed by Kenton Zellmer and not Environ Systems.

In late November, Redd left the job because he had not been paid for three weeks of his November work. The work for his labor in November exceeded $16,000. Redd requested payments from Zellmer. Zellmer hesitated and talked with two attorneys who were shareholders in the close corporation. According to Zellmer, the reason Redd was not paid was because Peterson of Environ told Zellmer that the amount paid to Redd had already exceeded the amount allotted for labor that Peterson had agreed to pay Redd.

After Redd had left the job, Peterson, Redd and Zellmer had a conference about completing the work on the building. Redd submitted all the manhours to them that he had spent on the job. Thereafter, Redd entered into a written contract with the Swine Breeders to complete the work. Redd testified that Zellmer told him orally that if he would finish the job he would be paid. Apparently, Redd took this to mean that he would be paid for the November work. Zellmer denied that he promised Redd that the Swine Breeders would pay him for November if he went back on the job. Redd did finish the building, and he was paid the price in the written contract, but he was not paid for the November work. Zellmer testified that before Redd went back to work, he told Redd that he would use his best efforts to see that Redd would get paid. Redd also tried to contact Peterson for the full payment for the November work.

The trial court entered an order finding that from September 26 (the date the waivers were issued to Zellmer) forward, the Swine Breeders came upon the job site and established a quasi-contractual relationship with Redd. This finding was based on the fact that the Swine Breeders paid Redd directly, accepted lien waivers from him, and paid the bills submitted by him. Judgment was entered for $16,301.25.

Defendant argues on appeal that Redd is precluded from recovery because a subcontractor cannot recover against an owner under a quasi-contract theory. (Sloan v. Cleveland, Cincinnati, Chicago & St. Louis Ry. Co. (1908), 140 Ill. App. 31; Walker v. Brown (1862), 28 Ill. 378, 81 A.D. 287.) In Vanderlaan v. Berry Construction Co. (1970), 119 Ill. App.2d 142, 255 N.E.2d 615, this court stated that in the absence of an express contract, a subcontractor cannot recover against the owner for there is no employment between them. That proposition has been supported elsewhere. Baker v. Mayer (1911), 163 Ill. App. 391; Knickerbocker Ice Co. v. Murphy (1895), 59 Ill. App. 39.

• 1, 2 It is apparent that the trial court erred in basing recovery on quasi-contract. However, the reasons given for a judgment order or the findings upon which it is based, are not material and any basis appearing in the record or in law which would sustain the ruling will be sufficient (Keck v. Keck (1974), 56 Ill.2d 508, 309 N.E.2d 217; People ex rel. Scott v. United States Steel Corp. (1976), 40 Ill. App.3d 607, 352 N.E.2d 225). Although the issue of an express unilateral contract was not raised in the pleadings or argued in the appellate briefs, the rule states it is competent for an appellate court to affirm a trial court judgment on the basis of unargued legal grounds having factual support in the record. Collins v. Towle (1972), 3 Ill. App.3d 753, 279 N.E.2d 172, overruled on other grounds sub. nom. Romanik v. Board of Fire & Police Com. (1975), 61 Ill.2d 422, 338 N.E.2d 397; Ill. Rev. Stat. 1975, ch. 110A, par. 366(a)(5).

This is not the first time that an owner directly contracted with a subcontractor after the general contractor had abandoned his contract with the owner. In Berkowsky v. Viall (1896), 66 Ill. App. 349, the plaintiff contracted with the general contractor to supply materials for the building. During construction, the plaintiff apprehended some trouble in getting his money from the contractor. The owner told the plaintiff that he would see that the plaintiff would get paid his money for what he put in the building. Relying on that statement, the plaintiff continued to furnish material. At trial, the owner denied making the statement, but the court found that a contract existed. The court did not elaborate on what kind of contract was formed between the subcontractor and owner, but apparently it rested on an express contract. A similar factual situation has occurred elsewhere. Kramer Bros. Co. v. Powers (1953), 195 Va. 131, 77 S.E.2d 468.

In the instant case, Zellmer testified that he "assured" Redd that the Swine Breeders would pay him for his work. Moreover, Zellmer admitted that Redd was employed by the Swine Breeders. His statement indicates that both Redd and Zellmer felt that there was a direct employment relationship between them. Zellmer visited the site and gave Redd instructions. Redd purchased many of the materials for the project and he hired one subcontractor to do the insulation work. Krug, a shareholder, went with Redd to get a loan for Redd to buy up to $5,000 worth of materials. Redd was obviously relying on these acts as well as the statements by ...


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