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Talbot v. James

Supreme Court of South Carolina
190 S.E.2d 759 (1972)


C.N. Talbot (Talbot) (plaintiff), Lula Talbot (plaintiff), and W.A. James (defendant) formed Chicora Apartments, Inc. in 1963. The purpose of the corporation was to build and operate an apartment complex. James negotiated for a construction loan that was to be insured by the Federal Housing Administration (FHA). The board of Chicora Apartments, which consisted of James and Talbot, passed a resolution authorizing James to enter into the loan agreement and any other agreement FHA might require, including a construction agreement. The next day, on November 6, 1963, James executed a contract on behalf of Chicory Apartments with James Construction, which was James’ personal construction company. James ultimately received $25,025 from the loan proceeds as payment for his company’s work. The structure was completed in July 1964. By 1968 the business was in distress, and James and Talbot disagreed about its future direction. James himself took control of day-to-day management, replacing the manager Talbot had hired. Talbot then discovered the contract with James Construction, and sued for an accounting. At trial, James testified that he had informed Talbot that he would do the construction himself, though this was not reflected in the minutes. Talbot testified that he was not informed of the contract. A master at the trial court level credited Talbot’s testimony and found that James was not entitled to the money his company earned from the construction contract. The appellate court reversed. The Talbots now appeal.

Rule of Law


Holding and Reasoning (Moss, C.J.)

Dissent (Bussey, J.)

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