Second Nat. Bank of Grand Forks v. Sproat , 55 Minn. 14 ( 1893 )

Vanderburgh, J.

Defendant made the note in suit payable to Howes & Dwyer, who got the same discounted at the plaintiff’s bank, and the defendant sold and delivered wheat to the payees, Howes & Dwyer, in consideration of which they were to provide for the payment of the note to the bank; and the defense set up in the answer, in substance, is that the plaintiff bank held certain collateral securities for indebtedness to it of Howes & Dwyer, the surplus proceeds of which over such indebtedness it was mutually agreed should be applied by the bank to the payment of this note, and it is alleged that, after such agreement was made, Howes & Dwyer paid on their indebtedness to the bank $2,095 by the sale and transfer to it of certain pine logs at that price, and that the plaintiff bank has realized from the collaterals in its possession sufficient to pay the note, which defendant is entitled to have applied in satisfaction thereof. The pleading is loosely drawn, but the purpose of the pleader was evidently to set up an equitable assignment to defendant of the collateral securities in question, subject to the indebtedness of Howes & Dwyer, and to allege that sufficient had been collected applicable to the plaintiff’s note in suit to . satisfy the same. The plaintiff having delayed making any objection till the trial, every reasonable intendment will be made in support of the sufficiency of the pleading. The decision of the court sustaining it will not now be disturbed.

Upon the trial, however, it turned out that instead of a sale of the pine logs, as alleged in the answer, it had been agreed between Howes & Dwyer and the plaintiff that the logs should be driven down the stream to which they had been hauled, and manufactured into lumber, and the lumber marketed and sold by the plaintiff, and the surplus proceeds over the expenses necessarily incurred should be applied upon their indebtedness to the bank; and the case was tried on that theory, by the consent of all parties, and the variance waived.

It was the duty of the plaintiff to use reasonable diligence in the manufacture and sale of the lumber to secure the best net results, and it would devolve on it to render an account of its receipts and expenditures, and tbe burden would, of course, rest upon it to sbow wbat expenditures were necessarily or reasonably incurred in tbe management of tbe trust. There was no error in tbe charge on this point. In respect to certain other exceptions, as will appear, tbe matters practically in issue are brought within so narrow a compass that the alleged errors could not have had any effect upon the result.

The evidence tends to show that the plaintiff received:

As the proceeds of the lumber, the gross sum of.... $5,507 99

And from the proceeds of the collateral notes, the further sum of. 821 50

Total. $6,329 49

Indebtedness of Howes & Dwyer to the plaintiff . $1,856 28

Defendant concedes the amount of expenditures by plaintiff, shown by Exhibit E.. 2,770 00

Other items of expense established by the evidence . 647 90 $5,274 18

Balance in plaintiff’s possession subject to disputed claims testified to by Lander.$1,055 31

He testified that he paid out in behalf of the banlc the amounts appearing upon three pay rolls for labor in manufacturing the lumber, viz. $267.82, plus $388.91, plus $632.34, amounting to $1,289.-07, — more than sufficient to exhaust the above balance. They all rest upon the same evidence, and stand or fall together.

In the light of the cross-examination of Lander, the plaintiff failed to establish that the amount of these pay rolls was a reasonable and proper charge. It does not appear that he had personal knowledge of the fact that the wages claimed to have been paid by him were earned. His evidence was hearsay. The time of the men was kept by another person, and Lander gathered the amount which he says he paid from a book kept by such other person. The case is not helped out by the vague and indefinite evidence of Howes on the matter. It was insufficient to verify the record of the timekeeper or to show how much the men earned, how long they worked, or at what wages they were employed. It is fair to infer that the jury rejected these claims, as they should properly have done, and they might well scrutinize carefully the account of the plaintiff’s expenses as presented by it, in view of the fact that they exceeded in amount all the proceeds of the logs and lumber.

(Opinion published 50 N. W. Rep. 254.)

Apart from the pay rolls and the claims for insurance upon the mill, which we think was properly rejected by the trial court, the balance of the account appears to be reasonably established by the evidence, and was presumably allowed by the jury, unless in their judgment, upon the evidence, a reduction of Lander’s claim for his personal services was warranted. But it is obvious that it is unnecessary to investigate this claim; for, if the pay rolls were allowed by the jury, the balance in plaintiff’s possession, as we have seen, would be thereby exhausted, and if they were disallowed, as we must presume they wrere, then there was enough to pay all the rest, including defendant’s claim, which is all he asks. But we think, upon the evidence, it was fairly a matter for the determination of the jury whether Lander’s claim should not have been reduced. The jury could reasonably estimate the time he was employed and the value of his services upon the evidence given upon cross-examination; and this was all the instruction of the court on that question meant, and the jury could hardly understand it otherwise.

Order affirmed.