289 F. 436 | 2d Cir. | 1923
(after stating the facts as above). The pleadings in this case so disguise and obscure the issues that it will be necessary, after investigating the proof, to give decree regardless of their technicalities, on the principles stated in The Volunteer, 149 Fed. 723, 79 C. C. A. 429, and Dampskibs Thor v. Tropical Fruit Co. (C. C. A.) 281 Fed. 740.
“It is not * * * competent for the court to refer the entire decision of a case to [a master or commissioner] without the consent of the parties. It cannot, of its own motion, or upon the request of one party, abdicate its duty to determine by its own judgment the controversy presented.” Kimberly v. Arms, 129 U. S. 512, 524, 9 Sup. Ct. 355, 359 (32 L. Ed. 764); Garinger v. Palmer, 126 Fed. 906, 61 C. C. A. 436.
The commissioner in this case could only have proceeded to try the whole case by consent; hence our inference, we being loath to infer illegality. Result is that the decree appealed from rests on a commissioner’s report, which to be sure allows a certain sum as damages, but is much more concerned in declaring why any damages are allowed, and why appellant should pay them; matters properly for the court’s adjudication before assessment directed.
(1) There is no evidence that libelant and claimant ever made any contract for changing the Spica for $130,000.
(2) There is not enough evidence to enable libelant to recover as for an “account stated,” by which the parties meant an agreement between Figari and libelant that the latter’s bills as presented would be paid with certain inconsiderable deductions. While the reference was in progress, libelant applied to the court for leave to amend its libel, and set up such a promise. The application was denied, but we have examined the evidence without reference to this singular piece of practice or its fate.
(3) It is not proven by a fair preponderance of evidence that libel-ant did its work so badly, or so injured the Spica as to confer on claimant either a good defense .or good counterclaim. It is true that the Spica as an auxiliary was a failure, but that misfortune was in our opinion wholly due to the engine. Whether the engine failed because of inherent vice, bad installation, or ignorance of how to operate and care for it, we cannot be certain; but for none of these faults was libelant responsible.
Beyond engine failure, claimant’s charges are that due allowance was not made for the difficulty of enabling any propeller, inserted where this one was, properly to catch the water, and further that the space created for the propeller impaired the steering qualities of the Spica while under sail. As to those matters we hold that libelant did not guarantee results, and did not engage for anything but a mechanical job. But, even if more than that degree of skill was impliedly promised, the proof fails to show that Spica was not a fair merchantable piece of work. She certainly functioned as an auxiliary when supplied with another engine.
We are thus brought to the question whether libelant proved what it pleaded, a matter first to be considered without reference to claimant’s attempted defenses. 8
It follows that discussion of and reliance on such cases as Stephens v. Phoenix Bridge Co., 139 Fed. 248, 71 C. C. A. 374, is irrelevant. Let it be assumed that at law a contractor can maintain an action demanding quantum meruit, without any obligation to produce, as part of his own case, the contract under which he worked; it remains true
. Whether on this point of pleas at law the statements of Hawkins v. United States, 96 U. S. 689, 697, 24 L. Ed. 607, can be wholly reconciled with Dermott v. Jones, 2 Wall. 1, 9, 17 L. Ed. 762, and Hubbard v. Investment Co., 119 U. S. 696, 701, 7 Sup. Ct. 353, 30 L. Ed. 548, is a nice matter of no present importance; but it may be noted that in the Stevens Case, plaintiff’s object in choosing to declare for a quantum meruit was to prevent even an apparent variance between allegations of assumpsit and substantial performance, and proof of a formal written, contract containing penalty clauses. This procedure left defendant to introduce the contract, which, when produced, was given as much effect as the law ordinarily gives to penalty clauses; i. e., an opportunity to prove actual damage. But the contract was given its legal measure of validity.
The common instance of the same result in the admiralty is to sue for cargo loss with a bald statement of shipment received in good order and delivered in bad, leaving it to the party defending to introduce the bill of lading; but no one has ever doubted that, once produced, the bill governs the relation of parties.
As a further preliminary to the inquiry whether libelant proved what it pleaded, we must again insist on admiralty’s freedom from the formal and technical trammels of the common-law rules of evidence. The Rosalia (C. C. A.) 264 Fed. 285, 289. The citations made in that case show that the admiralty has always exercised freedom in respect of evidence, being often satisfied with “half proof,” instead of demanding the “full proof” of its civil-law origin. But the same history and same reasons equally justify the freedom from common law shackles above asserted.
Nevertheless, in a day and country where the same counsel and judges administer law, equity, and admiralty, it is most desirable that even the historic freedom of admiralty should pursue that system of fact finding which is deemed by. leaders in legal thought best suited to current conditions of human activity.
What libelant produced as proof was this: • The first witness was a high officer of the Morse Company, who confessedly had no personal knowledge of any detail either of work or accounting. He identified the bills rendered and stated that they were made upon the basis of “day’s work, labor, and material.” Of the system by which the items of such work, etc., were recorded, he said nothing, except that the said bills' were made up in the usual way, whereupon copies of the bills were offered in evidence. They are the usual shipyard bills, similar to the specimen printed in The Norma, 68 Fed. 509.
Libelant then produced an employee who was “in charge of the billing department.” He said that the bills in evidence had been compiled under his supervision from what he called “charge sheets,” which were documents prepared in the cost department and contained the daily charges against the Spica. Apparently these charge sheets were
This witness testified to the system, viz. that each workman received a “time-card” on reporting for work, and he entered thereon, e. g., that he had worked for so long a time on the Spica. He might labor on several different jobs during the day, and it was his business to enter each piece of work on the card. When he knocked off, his card was signed by his foreman and dropped in a box, with many others. Libelant had many hundreds of men whose time and labor were thus recorded. Materials as wanted were obtained from store, by a foreman filling out a requisition for same, sending it to the storekeeper, who had the requisition receipted by whomsoever took the articles, and kept the requisition, which also showed the “job” for which the material was wanted.
At convenient times, apparently daily, these workmen’s cards and the requisitions were turned into the cost department, where clerks examined the time-cards to see that they had been signed by the proper foreman. Whether the requisitions for material were subjected to any similar criticism does not appear. From the time-cards the pay rolls of the laborers were prepared, and from both cards and requisitions were (e. g.) obtained the items put on the Spica’s charge sheets, which then went to the billing department.
The employee in charge of the clerks who made up the charge sheets was also produced. He confirmed the above statement of system, and produced a large number of time-cards which also were marked for identification, but never put in evidence. This witness was asked whether the cards and charge sheets “compared correctly,” and replied, “They do;” but it nowhere appeared that he personally, or any other witness, made any entry, even on the charge sheets not in evidence, much less on the bills in evidence. No books of account of any kind are referred to in the testimony, other than the papers or documents above described. This is the whole case.
This court has twice spoken on this question, as exemplified by ship repairing, in The Norma, supra, and The Maryanne, 262 Fed. 129. That the proofs here offered are insufficient under those decisions is apparent, because no one even offered to prove that the time-cards and requisitions were correct when made. If those cases are to be taken literally, it would be enough to say that libelant had failed because the foremen did not testify; and the inference might be that, were the foremen called, or if they testified, as they did in The Maryanne, and did not in -The Norma, the law would be satisfied.
But this would fail to. answer the question as to how to prove rea
This case seems to us to furnish an opportunity of applying to a matter peculiarly of admiralty cognizance the principles stated in the fifty-first chapter of Wigmore on Evidence, §§ 1517—1558. We recognize the fundamental similarity between the exception to the hearsay rule as to parties’ books, and that as to regular entries (1517); but in this case we are not aware that libelant kept any books, as that phrase has been used in legal history. We do consider the admissibility of entries by the party’s clerks or employees.
Apply this procedure to the matter in hand. That necessity existed for offering entries rather than the workmen who signed cards may be - assumed rather than found. There is small evidence, though we have no doubt of the fact. But there is no evidence at all as to why the foremen who requisitioned the material were not produced, if the requisitions are the original entries. Still less is there any evidence as to why the clerks who allocated items to the Spica’s charge sheets and made the entries thereon were not called.
As to the material requisitions, we are also of opinion that the charge sheet was- the original entry and the requisitions memoranda; but considering the vital necessity of showing the propriety of using ship material, and the lack of knowledge of accountants as to such matters, the trustworthiness test would probably require the production of the requisitioning foremen, or at least of enough of them to evidence their reliability as a class. This" seems to have been the course pursued in Matson, etc., Co. v. United, etc., Works, 213 Fed. 293, 129 C. C. A. 639, a case which cites with apparent approval the Wisconsin Co. decision, supra. That the entrants on the charge sheets should have been produced, or their attendance shown to be impossible, is quite clear. It Is, of course, obvious that the bills, the only documents actually in evidence, are not entries, original or derivative. They are demands on the customer.
There is a third and not inconsiderable class of charges in libelant’s bills, as to which the evidence is silent; i. e., expense for tugs in towing and shifting. No reason is shown in the apostles why such items should not be proven without any recourse to hearsay. The matter was probably overlooked. Result is that we now recognize, on proof of necessity and trustworthiness, the admissibility of original entries regularly and cotemporaneously kept in a regular business and pertaining to that business. We emphasize the word “admissible”; we are not speaking of the probative value of that which is admitted; such value will always vary with the circumstances of every litigation.
The result intended is to give to vendors and contractors, in a way of business requiring many and shifting workmen, and complex accounting systems, an opportunity of making prima facie proof in ac
This branch of legal administration ought not to be regarded as capable of fixation, any more than are the business habits out of which it grows. At present we think the foregoing furnishes to large employers, performing complicated work by many hands, a reasonable means of proving to fair men by fair means what they have done and how much it cost to do it. It is clear that libelant did not produce admissible evidence, and for that reason the decree appealed from must be set aside.
The meaning of cost is too clear for exposition; it means actual proved cost to contractor. Buck v. Burk, 18 N. Y. 337; Bull v. Quincy, 155 Ill. 566, 40 N. E. 1035. To this is to be added such a rate for overhead expenses as may be proven. This word or phrase has received a great deal of attention of late years in rate-making cases. Sufficient guidance for the purposes of this litigation will be found in Consolidated, etc., Co. v. Newton (D. C.) 267 Fed. 231, 253-259. To the total of cost and overhead should be added the 15 per cent, profit contracted for.
One illustration may be taken from the evidence before us as showing the wide possible divergence between what libelant asserted and tried to prove and what the evidence showed it contracted to do. Capt. Figari complained that one of the items in the bill was a charge for the labor of certain men at $10.60 per day of 8 hours, when the amount actually paid each man was 82 cents an hour or $6.56. Such a charge obviously contains both overhead and profit. It is true that in a certain sense cost includes overhead, but by this contract libelant agreed in effect to charge for such a laborer what was actually paid the man plus a reasonable overhead and plus 15 per cent. That meant, among other things, that it was necessary to prove the overhead. Ui
It is ordered that this cause be referred to William Parkin, Esq., as special commissioner, to ascertain what was the actual cost to libelant of doing the work on the steamer, and what is a reasonable overhead addition thereto, and to compute the amount recoverable by libelant in accordance with the principles hereinabove set forth; all questions, of costs, both in this court and the court below, to await the coming in of the report.
This ease is an effort to follow Wigmore, § 1530, which is erroneously-cited as 1730.