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ROBIE L. KIGHT, JR. & RHONDA C. KIGHT v. SHEPPARD BUILDING SUPPLY

JANUARY 25, 1989

ROBIE L. KIGHT, JR. & RHONDA C. KIGHT
v.
SHEPPARD BUILDING SUPPLY, INC.



BEFORE HAWKINS, P.J., SULLIVAN & ZUCCARO, JJ.

SULLIVAN, JUSTICE, FOR THE COURT:

Sheppard Building Supply, Inc., filed suit against Robie L. Kight for the collection of sums due on an open account. The sums due were for materials and supplies purchased and used by the prime contractor on an apartment

complex project owned by Kight. This appeal is from a final judgment entered in favor of Sheppard Building Supply on January 13, 1987, in the Circuit Court of the First Judicial District of Hinds County, Mississippi, by a trial judge sitting without a jury.

 Briefly, the facts reveal that on June 14, 1985, Robie Kight, as owner, and James Britt, d/b/a J. M. Construction Company, as prime contractor, entered into an agreement for the construction of an eight unit apartment complex at 11 Bellevue Drive in Jackson, Mississippi. As prime contractor, Britt contracted separately with various sub-contractors to furnish materials and labor for the project. Sheppard Building Supply, among others, furnished materials to Britt.

 It became apparent in September, 1985, that Britt was having trouble paying all of his sub-contractors, including Sheppard Building Supply. As a result, accounts on the apartment project became past due. One of those past due accounts was Sheppard Building Supply.

 Some time around the 10th of September, 1985, Britt approached Kight about his financial problems. About this same time, Sheppard Building Supply also contacted Kight about Britt's past due account. Kight assured Sheppard that the account would be brought current, and that he and Britt were negotiating to allow Britt to continue his work on the project. From this point forward, Sheppard Building Supply relied exclusively on Kight's assurances that the indebtedness would be worked out.

 As a result of their meeting, Britt and Kight mutually agreed that Kight would henceforth make payments directly to Sheppard Building Supply, among others, in order to bring current the past due account on Kight's apartment complex project (" Bellevue Project "). Britt and Kight employed an attorney of Kight's choosing to draft an appropriate agreement, and this agreement was executed on September 20, 1985.

 The agreement stated that it would amend the original contract. It listed various sub-contractors, including Sheppard Building Supply, to whom Britt was indebted on the Bellevue Project, and further stated that Kight would directly pay the listed bills and sub-contractors. The problem with the agreement is that it does not state either the amount Kight was to pay the listed subcontractors, or the duration of this obligation.

 Pursuant to the agreement, on September 24, 1985, Kight and Britt personally delivered a check to Sheppard Building Supply in the amount of $7,255.11. This brought the past due account of Britt current, but did not pay it in full. At some point following delivery of the check, but on or before September 25, 1985, Britt presented the agreement to Sheppard's in an effort to assure them that Kight would thereafter pay for any materials ordered for the Bellevue Project. Ultimately, in reliance on the agreement, Sheppard's extended credit to Britt for the purchase of additional materials for the Bellevue Project. From this point forward, Sheppard Building Supply looked solely to Kight for payment.

 As a consequence of this agreement, Kight no longer issued progress payments to Britt, who would in turn pay his suppliers, per the original contract. Instead, Kight paid monies directly to the listed suppliers, including the payment to Sheppard Building Supply on September 24, 1985, in the amount of $7,255.11. With the exception of Sheppard Building Supply, Kight continued to pay monies directly to the listed suppliers following execution of the agreement.

 On October 25, 1985, Kight closed the permanent loan on the Bellevue Project at which time Britt was paid in full. According to affidavits filed in connection with this closing, neither Kight nor his attorney had any record notice of any claims by materialmen or subcontractors. However, on November 7, 1985, Sheppard Building Supply filed a complaint in the Circuit Court of Hinds County, First Judicial District, alleging that Kight was responsible for the payment of $36,106.26, plus interest, for materials supplied to Britt on the Bellevue Project. A non-jury trial was conducted on January 7, 1987, after which the court entered final judgment holding that Kight was liable to Sheppard Building Supply per the September 20, 1985, agreement in the principal amount of $36,106.26, plus interest until thereafter paid.

 The lower court found in essence that a limited agency relationship existed between Kight and Britt per their September 20, 1985, agreement entitling Sheppard Building Supply to proceed directly against Kight for the unpaid balance on materials purchased and used by Britt on Kight's Bellevue Project. The trial judge went beyond the face of the agreement in question in an attempt to ascertain its true meaning. The trial judge considered the live testimony of Kight and Britt regarding their

 purpose in executing the agreement, and also heard testimony regarding the actions of the various parties in consequence of the agreement. Kight challenges this finding on appeal, arguing that the lower court erred in finding that an agency relationship existed when in fact the relationship remained that of owner - independent contractor.

 In interpreting the writing at issue, the cardinal rule of construction is to give effect to the mutual intentions of the parties. Hoerner v. First National Bank of Jackson, 254 So.2d 754, 759 (Miss. 1971). Where, as here, the writing is ambiguous, courts are obligated to pursue the intent of the parties by resort to parol evidence. Barnett v. Getty Oil Company, 266 So.2d 581, 586 (Miss. 1972). In addition, the construction which the parties have placed upon the contract, or what the parties to the contract do thereunder, is relevant extrinsic evidence, and often the best evidence, of what the contract requires them to do. Delta Wildlife & Forestry. Inc. v. Bear Kelso Plant, Inc., 281 So.2d 683, 686 (Miss. 1973). Finally, the vagueness and ambiguity found in the writing at ...


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