No. 306.

75 S.E.2d 534 (1953)

237 N.C. 544


Supreme Court of North Carolina.

April 15, 1953.

Attorney(s) appearing for the Case

Horace Kennedy and Horn & West, Shelby, for plaintiff appellants.

D. Z. Newton and Peyton McSwain, Shelby, for defendant appellee.

BARNHILL, Justice.

Whether the "request" made by counsel for defendant be treated as a demurrer or a motion for judgment on the pleadings, the judgment entered thereon was erroneous and must be vacated.

While the breach of a continuing contract may justify a termination of the contract by the innocent party, the mere fact a breach of one of the provisions of the contract has been committed by one party does not necessarily accomplish that result, as the party not in fault may elect to waive the breach and continue performance regardless of the breach. Lowell v. Wheeler's Estate, 95 Vt. 113, 112 A. 361; Dudzik v. Degrenia, 48 R.I. 430, 138 A. 57, 57 A.L.R. 823; Miller v. Mantik, 116 Md. 279, 81 A. 797; Cook & Bernheimer Co. v. Hagedorn, 82 Ind.App. 444, 131 N.E. 788; Thomas-Bonner Co. v. Hooven, O. & R. Co., D.C., 284 F. 377.

Where there is a breach of a contract or some provision thereof which does not go to the substance of the whole contract and indicate an intention to repudiate it, the breach may be waived by the innocent party. Non constat such breach, he may elect to treat the contract as still subsisting and continue performance on his part. H. M. Wade Manufacturing Co. v. Lefkowitz, 204 N.C. 449, 168 S.E. 517; Danville Lumber & Manufacturing Co. v. Gallivan Building Co., 177 N.C. 103, 97 S.E. 718; Sinclair Refining Co. v. Costin, Tex.Civ.App., 116 S.W.2d 894; 12 A.J. 967-8; 17 C.J.S., Contracts, §§ 475, 491, pages 981-982, 992.

Here, while plaintiffs plead the breach in 1947 of one of the provisions of the contract sued upon, they further allege facts showing a waiver on their part and continued performance; and the defendant, in its answer, expressly pleads waiver. Even so, the defendant moves the court to dismiss the action for that it is barred by the three-year statute of limitations and bases its motion on a unilateral, self-serving, conditional admission that the contract was breached in 1947, more than three years prior to the institution of this action. The judgment entered clearly indicates the court below considered this admission in arriving at its conclusion that the action of the plaintiffs is now barred by the applicable statute of limitations.

In this there was error. Extraneous matter dehors the pleadings may not be considered either on demurrer or on motion for judgment on the pleadings. "The presiding judge should consider the pleadings, and nothing else. * * * He should not hear extrinsic evidence, or make findings of fact." Erickson v. Starling, 235 N.C. 643, 71 S.E.2d 384, 394, and cases cited; Raleigh v. Fisher, 232 N.C. 629, 61 S.E.2d 897.

In any event, the allegations made by plaintiffs are sufficient to repel an attack by demurrer and the facts pleaded by them will not permit the inference, as a matter of law, that their action is barred by the three-year statute of limitations. On the allegations made, one provision of the contract was breached in 1947. But plaintiffs elected not to treat the breach as a repudiation. Thereafter, they continued performance by delivering to defendant—and defendant accepted delivery of— "all the milk produced by Towery's Dairy" as provided by the contract, until 1949. Hence plaintiffs are entitled to be heard on their claim for damages alleged in the complaint.

The other questions debated in the briefs and on oral argument are not presented for decision.

The judgment entered in the court below is reversed.


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