Opinion
Submitted on briefs September 15, 1931
Modified November 3, 1931 Rehearing denied and case reversed and remanded April 19, 1932 Motion to modify decree denied May 17, 1932
Appeal from Circuit Court, Clatsop County, D.R. PARKER, Judge.
Suit by the Brookfield Company against Lauritz C. Mart. From a decree for plaintiff, defendant appeals.
MODIFIED. REHEARING DENIED AND CASE REVERSED AND REMANDED.
Edw. C. Judd and G.C. A.C. Fulton, all of Astoria, for appellant.
Norblad Hesse and F.M. Franciscovich, all of Astoria, for respondent.
In Banc.
This is a suit to enjoin the disposal by defendant of certain municipal warrants and cash, which were proceeds of three construction contracts with the municipality of Ilwaco, Washington, and to have such proceeds declared to be the property of plaintiff.
Plaintiff claims that, in entering into and performing said contract, and other contracts of a similar nature, defendant was acting merely as an employee of plaintiff under an oral agreement, entered into sometime in January, 1929, which fixed the remuneration of defendant at $150 per month from February 1, 1929, to December 31, 1929; and provided that, in case a profit of $1,000, or more, should be realized from said contract, defendant should receive a bonus of $500. The other contracts of a similar nature, about which this controversy waged, were with the Klevenhusen Packing Company, J.V. Burns, and the city of Astoria.
A temporary injunction was issued, and contempt proceedings ensued. These contempt proceedings were appealed and the decision of this court thereon is reported in 135 Or. 603 ( 283 P. 23, 295 P. 459).
Municipal warrants of the par value of $13,500, the disposal of which by defendant had thus been enjoined, were deposited in the bank at Astoria. The circuit court decreed that within three days after its decree, if defendant did not endorse and assign these warrants to plaintiff, within said time, said decree should be declared equivalent thereto.
Pursuant to this decree of the circuit court, the plaintiff procured these warrants from said bank before defendant's appeal had been instituted. The record discloses correspondence evidencing an agreement by defendant to negotiate these warrants at 8 per cent discount.
Defendant denies that he was in the employment of plaintiff while performing said contract, and alleges that on February 8, 1929, there was a written contract between plaintiff and defendant executed by defendant, in his own behalf, and by said Larson, president and principal stockholder of plaintiff, in behalf of plaintiff, to the effect that plaintiff would furnish defendant with such bonds and undertakings as were required of defendant in connection with his contracts, from which defendant would hold plaintiff harmless; and that, in consideration thereof, defendant should purchase from plaintiff all of the supplies and materials used in carrying out said contracts. A copy of this written contract is marked exhibit A and attached to defendant's amended answer.
In its reply, plaintiff expressly admits the execution by plaintiff and defendant of said written contract as alleged by defendant.
Over the objections of defendant, the circuit court permitted plaintiff to introduce testimony tending to prove said alleged oral contract. This is assigned as error on this appeal. Over the objection of defendant, Mr. Anderson, a witness called by plaintiff, who had no personal knowledge of the transactions involved, was permitted to testify to facts derived from an inspection of plaintiff's books of account, said books not being offered in evidence and their accuracy not being attested by any testimony. This is also assigned as error.
Pursuant to a stipulation, written summaries, prepared by plaintiff from plaintiff's books of account, were received in evidence as correctly reflecting the transactions involved, except as to the items thereon against which penciled check marks were placed.
Defendant introduced in evidence a written summary of said transactions taken from plaintiff's said books of account. In most instances wherein defendant's summary differed from those of plaintiff, defendant admitted the accuracy of the items involved, but claimed that, because of payment or counterclaim, or by reason of the terms of the existing contract between the parties, defendant ought not to be charged therewith.
From a decree in favor of plaintiff, defendant appeals.
At the outset of this case, we are confronted with defendant's objection to the testimony offered by plaintiff in support of the items of plaintiff's account with respect to the contracts in question. Mr. Anderson, a witness for plaintiff, testified, in effect, that he had no personal knowledge of the transactions involved. He was then permitted, over the objection of defendant, to testify to that which he claimed he was able to ascertain from the books of the plaintiff. In plaintiff's case in chief, there was no testimony to the effect that the books in question had been correctly or accurately kept, the nearest approach thereto being an affirmative answer to the question by plaintiff's counsel referring to said books: "Those are the official records of your company?" Defendant's objection to this testimony should have been sustained: Vol II, Enc. of Evid., p. 688, and cases cited in note 37. Rogers v. O'Barr Dinwiddie (Tex.Civ.App.) 76 S.W. 593; Pabst Brewing Co. v. E. Clemens Horst Co. (C.C.A.) 229 Fed. 913; Dr. R.D. Eaton Chemical Co. v. Doherty, 21 N.D. 175 ( 153 N.W. 966).
We are also confronted with the effect of plaintiff's express, formal and direct admission that the contract, a copy of which is marked exhibit A and attached to defendant's answer, was on the 8th day of February, 1929, entered into by the plaintiff and the defendant. In plaintiff's brief, it is stated that plaintiff did not intend to make this admission. Repeatedly, however, defendant called attention to it in making his objections to testimony offered by plaintiff, which testimony properly could be received only on the theory that issue had been joined on defendant's allegations that said written contract had been executed. No application to amend, by denying said allegation, was made by plaintiff. We have no other recourse than to give it effect. This then defines the relationship existing between plaintiff and defendant. It negatives plaintiff's contention that defendant was merely an employee of plaintiff while performing the work entailed by the improvements contracts involved herein. A mere employee would have no occasion to purchase material for said contracts from his employer. His employer certainly would not agree to sell him the material to be used in the completion of such contracts.
It is upon the allegations of defendant's amended answer and the issues joined by plaintiff's reply thereto that we consider this case. While we have said that defendant's objection should have been sustained to plaintiff's testimony as to the alleged effect of the entries in plaintiff's books of account, nevertheless, since defendant, subsequent to interposing such objections, has seen fit to invoke the result of an examination by himself and his accountant of said books of account in support of the allegations of his amended answer, has presented a summary therefrom, and, in effect, has stipulated that the summaries prepared by plaintiff from said books of account are substantially correct as to amounts, we feel justified in casting the account between the parties hereto and announcing the result thereof.
On the account of the Klevenhusen Packing Company contract, an error appears of ninety-four cents in computing the price of the 149 sacks of cement. On the statement of the J.V. Burns account, there is a similar error of five cents. We hold that the charges for office and overhead and for salary of superintendent should be disallowed. With respect to the Ilwaco contract, defendant testified that plaintiff quoted prices on crushed rock and sand at $2.50 and $2.25 respectively per yard, and defendant introduced in evidence a written memorandum corroborative of that testimony. We have employed those prices in computing the value of the crushed rock and sand used in concrete work which were supplied by plaintiff for the Ilwaco contract. Defendant testified that fifty-five cents per yard was the market price of fill sand used on the Ilwaco contract, and we have used that price instead of one dollar per yard charged by plaintiff. We have disallowed the item of W.K. Inman, $126.22, for the reason that the record convinces us that it was paid by defendant. While we have disallowed the salary of superintendent, we have nevertheless given plaintiff credit for $1,092.30 cash advanced to defendant as stated in defendant's exhibit 20. This covers not only the item which plaintiff claimed comprised such salary but other items as well. Defendant's testimony to the effect that he could not have used the amount of gasoline upon the Ilwaco contract, which is shown by plaintiff's summary, is not sufficient to warrant us in disallowing those items.
Defendant charged plaintiff with the item, "Use of Equipment, Aug. to Dec. 31, 5 mos. at $250 per mo. $1,250." We think that the testimony does not support this charge, and, therefore, we have disallowed it.
With the foregoing explanation, we will content ourselves merely with stating the totals of the respective debits and credits given to the respective parties hereto by reason of the Klevenhusen Packing Company contract, the J.V. Burns contract and the Astoria contract.
With reference to the Ilwaco contract, we find said respective debits and credits to be as follows:
ILWACO CONTRACT
Plaintiff's Credits, Defendant's Debits.
938 1/2 yards crushed rock at $2.50 per yard __ $ 2,346.25 743 1/2 yards sand at $2.25 per yard __________ 1,672.88 119 1/2 yards fill sand at 55 cents per yard __ 65.72 603 paper sacks cement at $3.33 per barrel 501.98 6054 cloth sacks cement at $3.53 per barrel 5,342.65 Builders' supplies ____________________ 357.59 Hauling _______________________________ 136.59 Labor _________________________________ 4,536.28
Sundries —
Expenses of defendant _________ $34.25 Board and room, defendant _____ 48.00 Telephone and cash fare _______ 8.15 1 gallon gasoline for mixer ___ 11
Industrial insurance and medical aid —
March _________________________ 17.07 April and May _________________ 52.78 Transcript of records _________ 18.00 Expenses of F. Nordstom _______ 4.00
Standard Oil Company —
227 gallons gasoline at 16 cents __________________ 36.32 1 barrel Zeroline ___________ 18.46 1 case lubricant ____________ 3.10
Shell Oil Company —
10 pounds grease at 11 cents 1.10 178 gallons gasoline at 14 cents __________________ 24.92 78 gallons gasoline at 13 cents __________________ 10.14
Industrial Insurance and Medical Aid —
June __________________________ 23.90 R.G. Abram, empty sacks _______ 1.90 J.H. Petit ____________________ 19.00 C.H. Svenson __________________ .50 J.L. Latture __________________ 5.67 _____ $ 327.37 Pacific Machine and Blacksmith _____ $ 13.29 Fisher Bros. Co. ____________________ 38.09 J.H. Petit, tools ___________________ 4.35 Rent of mixer _______________________ 300.00 Rent of trucks ______________________ 509.00 Advanced for Mart's tools ___________ 150.00 Bid bond Van Dusen Agency ___________ 5.00 Cash advanced to Mart as per defendant's statement, defendant's exhibit 20 _______________________ 1,092.30 __________ $17,399.60
Plaintiff Debits, Defendant's Credits Handling 1446 barrels cement at 10 cents per bbl. _____________________ 144.60 5588 empty sacks returned at 10 cents each ______________________________ 558.80 Material sold by C.N. Larson _________ 2.55 140 gallons gasoline at 14 cents _____ 19.60 30 gallons oil at 35 cents __________ 10.50 Cash paid on pay roll ________________ 410.56 Amount paid to plaintiff from proceeds of Ilwaco contract as alleged in plaintiff's complaint ___________ 2,737.52 __________ $ 3,884.13 Balance ___________________________ 13,515.47 __________ $17,399.60
The following is a summary of said account:
Summary of Entire Account —
Plaintiff's Credits, Defendant's Debits Klevenhusen Packing Company ____________ $ 458.80 J.V. Burns _____________________________ 412.87 Astoria (47 and Cedar Streets) _________ 2,901.20 Ilwaco _________________________________ 13,515.37 Interest on money advanced to defendant, $7,602.79 at 6 per cent for 4 1/2 months ______________________________ 171.06 __________ $17,459.30
Defendant's Credits, Plaintiff's Debits Klevenhusen Packing Company ___________ $ 661.15 J.V. Burns ____________________________ 440.50 Astoria (47th and Cedar Sts.) ______________________________ 3,408.61 Municipal warrants of the par value of $13,500.00 received since decree herein was rendered in circuit court, less 8 per cent discount _______________________ 12,420.00 __________ $16,930.26 Balance due to plaintiff ______________ 529.04 __________ $17,459.30
Plaintiff's exhibit BBB consists of a statement of the names of various people and institutions for whom defendant constructed sidewalks while engaged in completing the contracts involved in this case, and of the respective amounts received by defendant therefrom aggregating $1,541.90, as shown by said exhibit. Defendant testified that the amount received from this source was $1,591.20. (P. 382, Transcript of Testimony.) Inasmuch as no claim is made that funds or material were advanced or furnished by plaintiff for these last-named contracts, other than as disclosed by plaintiff's summaries hereinbefore mentioned, we are unable to give probative value to said exhibit BBB or the testimony elicited concerning the items therein set forth.
In defendant's brief, complaint is made because the transcript of testimony has been marginally marked by brackets and these bracketed portions have been numbered and lettered. In plaintiff's brief, references are made to this numbering, lettering and marginal bracketing. In several places a line has been drawn through a word and another has been placed above it. As examples: On page 29, the word "money" has a line drawn through it and the word "warrants" is superimposed; on page 57, "any" in the word "anything" has two lines through it, and the word "some" is written above; on page 73, the word "indemnity," is attempted to thus be substituted for "intermediary," and on page 77, the words "did not" are interpolated in an answer. We agree with defendant that such practice is unwarranted and ought not to be followed. The manner in which this numbering and bracketing is treated in plaintiff's brief by repeated reference thereto demonstrates that no thought occurred to plaintiff's counsel of the impropriety of thus treating a record. While we hold that the record should not be marked or changed in any manner either by marginal brackets, underscoring of words or phrases, interpolations, erasures or otherwise, nevertheless we are impelled to add that the personal and professional standing of plaintiff's counsel is such as to dissipate any thought of intentional misconduct or irregularity on their part.
For the reasons stated, the judgment and decree of the circuit court is modified, and it is ordered, adjudged and decreed that plaintiff have and recover judgment against defendant in the sum of Five Hundred and Twenty-nine and 4/100 Dollars ($529.04).
And it is further ordered, adjudged and decreed that neither party hereto recover costs or disbursements in the circuit court, or on this appeal.
Modified and judgment rendered.
Petition for rehearing denied and case reversed and remanded April 19, 1932. ON PETITION FOR REHEARING ( 10 P.2d 594)
In an effort intended only to serve the best interests of the parties hereto by rendering further litigation unnecessary, the writer gave not a little of time and study to the state of accounts between said parties as reflected by the testimony; and, based upon such consideration, cast the accounts and struck a balance as disclosed in the original opinion herein.
A petition for rehearing has been filed by defendant. A careful reading of the brief of defendant upon this petition and of the brief of plaintiff thereupon, which latter brief was filed at the request of the court, convinces the writer that the record will not support the account as stated in the original opinion.
Moreover, upon the contested items thereof, the record is so unsatisfactory that only a very general approximation to accuracy can be attained. Both parties hereto are entitled to a more exact and accurate determination than the testimony in its present state permits.
For these reasons, the original opinion is modified by rescinding and revoking the statement of account therein rendered between the parties; and, because of the errors in law, as determined in the original opinion, it is ordered that the decree of the circuit court be and the same is reversed and the cause remanded for a new trial. We venture to suggest that a reference of this case to an experienced accountant would serve the best interests of both parties, and render the lot of the trial judge more pleasant.
Reversed and remanded.