56 Neb. 88 | Neb. | 1898
This was' an action by McDonald against Buckstaff, the object of which was to secure an accounting of certain transactions growing out of the paving of streets in the city of Lincoln. The case resulted in a judgment in the district court against Buckstaff for $4,392.72. Buckstaff perfected an appeal to this court, and on the; same transcript McDonald caused a notice of appeal to be issued and served. Buckstaff now objects to the consideration of the case in the light of an appeal by McDonald on the ground that Buckstaff alone provided and filed the transcript. The filing of a duplicate transcript would be an idle procedure, and the uniform practice of the court, which is certainly not opposed to statute, has been to consider a cross-appeal based on the appellant’s transcript. This practice will here be followed.
Early in 1888 the city of Lincoln awarded to Buckstaff
“Each party is to furnish and pay in one-half the cash required to carry on said business as the same is needed.
“Books are to be kept which shall contain correct entries of all matters relating to said partnership business; said books shall contain nothing save what relates to said partnership business. Buckstaff shall have the general management and control of said business; he shall pay out all the money on account of said firm, and he alone shall draw and sign drafts, checks, and orders for money on said firm account. For his compensation for managing said business Buckstaff shall receive from said firm the sum of $200 per month.
“Each party is to bear one-half the expense of said business, each party to bear one-half the loss of said business, and each party to receive one-half the profits of said business. In the purchase of material for use in said work, both parties shall be consulted, and they shall agree upon the material and the price to be paid therefor before the same is purchased. Neither of said parties shall draw or false out of the firm account any money until the said work is fully completed.”
Shortly afterwards the following contract was made between Stout & Buckstaff on the one side and the plaintiff McDonald on the other: “This agreement made this 17th day of May, A. D. 1888, by and between the firm of
While the work was progressing Buckstaff purchased Stout’s interest, so when it came to the settlement, McDonald and Buckstaff were the only interested parties.
The controversy relates to a number of different items or transactions growing out of the business performed,
Taking up in the first place Buckstaff’» appeal, the first matter in controversy arises out of the disallowance of charges to the amount of $8,800 on account of salary of Buckstaff as manager of the business. The case was in the district court first heard by a referee under a general order of reference. The referee disallowed this item on the theory that McDonald was not a party to the contract between Stout & Buckstaff, and that as between McDonald & Buckstaff there was no agreement whereby the latter was entitled to a salary. This finding of the referee was approved by the district judge, but as already indicated we think the construction thus put on the contracts was erroneous. The matter of Buckstaff’s salary was not a mere matter of book-keeping as between Stout & Buckstaff. It was contemplated that Buckstaff should have entire charge of the business operations, and to compensate him in this behalf it was provided that he should receive from the firm of Stout & Buckstaff a salary of $200 per month. If the partners had contracted to employ a third person for this purpose there could be no doubt that this item would be properly an item of expense, to be deducted from the receipts in ascertaining the profits of the partnership. It is none the less so because this work was entrusted to one of the partners. The purchase by Buckstaff of his partner’s interest pending the work did not abrogate this provision. McDonald knew, or had the right to know and might have known, when he agreed to receive a portion of the profits as his compensation, what expenses had been assumed, or were contemplated, which might affect the item of profits. This salary should have been allowed, not because it was a part of McDonald’s contract, but because it was an agreed item of expense in the Stout & Buckstaff contract, with reference to which the profits mu$t be ascertained,
The referee in the district court disallowed to Buckstaff interest charges appearing on the books to the amount of $15,708.50. These arise in the following manner: It was found that the brick makers near Lincoln were entirely unable to furMsh brick to the number and of the quality required for the work, and that to procure such brick from a distance would be so expensive as to materially impair if not destroy the profit wMch should be realized under the contracts. Accordingly there was organized a corporation known as the Vitrified Paving & Pressed Brick Company, and this corporation established a plant at Lincoln and furMshed nearly all the brick required for the work. Stout and Buckstaff were the principal incorporators, and Buckstaff seems to have acquired Stout’s interest. While an eff ort was made to show that other persons were interested in the brick company that effort was a signal failure, and the evidence entirely supports the finding that the brick company and Buckstaff were substantially identical. TMs brick company required a large amount of money to establish itself and conduct its operations. From the funds of Stout & Buck-staff, or Buckstaff, arising out of the paving, Buckstaff advanced to the brick company large sums of money. He also borrowed on behalf of the paving concern large sums and advanced these to the brick company. The brick company paid to the paving concern no interest, and Buckstaff sought to charge the paving concern with interest on all money borrowed 'by it and advanced to the brick company. TMs charge constituted tfhe item the dis-allowance of which is now complained of. We think the referee and the district court were quite right in disallowing this item. It is true there is evidence tending to show that McDonald knew of these advances and aeqMesced therein. It is also true that the evidence tends to show that the net result of the arrangement was a decided benefit to the paving contractors, as they were
The referee finds that while the work was in progress McDonald took men engaged thereon and, during time for which they were paid by Buckstaff, used them in the building of a house for McDonald. He did not, however, in the accounting charge McDonald with any amount because thereof, but, in the report, disposed of this in connection with several other items “as afterthoughts sprouting out of the warmth and fertility of this hotbed of litigation after it commenced.” We are convinced that this disposition of these minor matters was entirely justified by the proof. It appears that the paving work frequently suffered delays for want of material wherewith to proceed, and considerable laxity was evidently indulged during these periods. The amount of labor thus diverted by McDonald does not appear to any degree of certainty from the evidence, but it does appear that McDonald made s-ome payments to these men himself, and that certain charges for their time were made .against him on the books. We cannot -say that these charges did not cover the whole item of labor so diverted; or, if they did not, that Buckstaff suffered any damage by reason thereof.
By recurrence to McDonald’s contract it will be seen that he agreed to devote his whole time to the work. While that work was in progress McDonald, in connection with O. P. Ma-son, entered into a contract with the city to pave certain other districts, and from this con
McDonald employed, as foreman on the work, one Christopher. Buckstaff claimed that Christopher spent his time drinking and gambling and neglected the work. He demanded his discharge. McDonald refused to discharge him, and Buckstaff refused thereafter to pay him his wages. Christopher brought suit against Buckstaff and recovered judgment for his wages. The referee and district court charged the total costs of this suit to Buck-staff personally. This item amounted to $78.80. We shall not disturb this finding. McDonald’s contract gave him the right to employ and discharge ail men except the book-keeper. Under proper allegations' and proof Buck-staff might recover for the willful retention of incompetent men, but under the contract Buckstaff had no right to discharge them. When McDonáld refused to discharge Christopher his wages were a proper charge against the paving contract. It was Buckstaff’s duty to pay them. The judgment determined that they were earned. The
The bid of Stout & Buckstaff for the paving seems to have been at the rate of $1.75^- per yard, but for some reason the contract was executed at the rate of $1.75 per yard. A portion of the paving was settled for at á rate of $1.75-1', but the discrepancy between the bid and the contract having been discovered the city allowed for the remainder only $1.75—the contract rate. Buckstaff presented a claim to the council for the additional half cent per yard. It was disallowed, and the proceedings stopped. Buckstaff sought to charge McDonald with the amount so lost, on the theory that McDonald had interfered and prevented the allowance of the claim. This charge was properly denied. If there was a mistake in the contract, Buckstaff had his remedy by appropriate legal proceedings against the city for its reformation. If the mistake was not of such character that it might be so reformed then no legal damage resulted.
Complaint is made in the briefs that McDonald was not charged with sufficient cash. In his petition he admitted receiving $8,663.41, and it is said that the referee charged him only with $8,292.29; but an inspection of the report will show that there are charges made of moneys received outside of the item of $8,292.29, which came directly from the paving contracts, more than sufficient to meet the admission of receipts in the petition. In this connection it is also argued that McDonald should be charged interest on certain loans of money made by Buckstaff. An examination of the evidence in this behalf entirely justifies the conclusion which seems to have been made by the referee—that these loans were treated as advances on account of the work and carried into McDonald’s account. This is true except with regard to a note for $125 made August 1, 1889, due in one year, and stipulated to bear ten per cent interest after maturity. This was an express contract to pay interest and was probably overlooked by
On McDonald’s appeal the-principal controversy is as to the expenses incurred for brick used in the paving. The books show an expense for brick of a little over $250,-000. The referee first proceeded by deducting from this $6,183.29 on account of certain brick furnished by the Vitrified Paving & Pressed Brick Company, and charged at the rate of $11 per.thousand instead of $10, the contract rate. He then made a computation of the number of brick used in the paving, estimated at 101 per square yard, and computing the price of these brick, found an additional overcharge of $11,355.86. He deducted these two items from the book figures and allowed for brick $232,171.39. .Apparently after the draft had been made of his report, and before his report had been filed, he, on his own motion, re-opened the case for further testimony as to the number of brick. Complaint is made of his so doing, but his decision had not been rendered, and we have no .doubt of his power, before filing his report, to permit the introduction of further evidence. The evidence so received was of certain persons who made an actual count of the brick at some sixty-seven different places within the paving districts. As a result of this, the referee made special findings that the pavement contained, in the top course, 66.55 bricks per square yard, and in the bottom course 11.15. He then revised his finding- of the cost of the brick by adding $10,271.80 thereto. The district court on .exceptions by Buckstaff set aside the finding as to the tothl number of brick used, and then found from the evidence that the cost of brick was not less than $216,576. The. account was finally settled in accordance with that finding. As the case is presented
The referee charged as expense against the work an item of $728.75 as loss suffered by the discounting of city warrants issued in payment of the work. This was upon the theory that the discounting of these warrants was within the ordinary financial operations of the business, and a matter entrusted to Buckstaff’s discretion. This theory of the law was correct, but' an examination of the books and the evidence discloses that a number of the warrants were discounted at a time when considerable
There was much controversy on the hearing over certain items of expense o f a suspicious, but unfortunately, perhaps, not of an uncommon, character in connection with such contracts. As to these expenditures Buckstaff testified, not. very certainly, but sufficiently so to disclose their real character. In one place he stated: “It was to pay somebody to keep still and do as we wanted them to.” In another: “It was for expense of administration; for service rendered by people whose names I do not care to state.” And generally the testimony was that the expense was for “lobbying.” From $5,000 to $5,500 of these expenses did not appear upon the' books. The referee allowed it as a proper expense, on the theory that the contract was executed, and the parties should be left where they were. The court disallowed this item, but it ■allowed items of a kindred nature amounting to $1,820 which appeared on the books. We can see no reason for discriminating between the two classes of items. Buck-staff was the business manager and received all the money coming from the‘concern. I-Ie had charge of these operations and the burden devolved upon him of accounting for the expenditures. As to these items he is asking the assistance of the court to embrace them in the account as charges against McDonald. Every consideration of public policy demands that money paid out- by a public contractor to induce men to keep still, to make them do as he wrants them to, to lobby to secure him contracts, or to secure the allowance of estimates, should be considered as a corrupt and unlawful expenditure.
An effort was made to show that the referee made an improper adjustment- of what was called the “tool account.” The tools used in the work were also used to a certain extent by Mason & McDonald, and by Buckstaff individually. They were finally sold in a damaged condition for a small sum. We are asked to readjust the apportionment made of the depreciation in the tools owing to their different uses. If the readjustment were made it could not very appreciably affect the account, and the condition of the item is such that no exact adjustment is possible. We do not feel we could improve on that made by the district court.
Correcting the judgment in accordance with the results here reached, we add to the expenses, $8,800, Buck-staff’s salary, and deduct therefrom the items of discount of warrants, $728.75, and the various so-called lobbying expenses, $1,820. The net result of these'corrections is the increase of expense account by $6,251.25, and decrease of profits accordingly. McDonald’s fourth of the profits so ascertained is found to be $15,255.50, which other credits allowed by the referee and court increase to $15,-400.36. From this there should be deducted charges against McDonald, as found by the court, $12,898.57, and also the item of interest on the note above mentioned,
Decree accordingly.