Pungs v. American Brake Beam Co.

Mr. Presiding Justice Windes delivered the opinion of the court. The principal contest in this case is made upon the contract between appellee and appellant set out in the statement, and as to the transactions had under said contracts, the only other item being that of §46, which the appellee claims was wrongfully paid out of its money by appellant on a private matter of his own. As to this item of $46, it seems sufficient to say that we have examined the evidence pertaining to it, which appears to Be conflicting, but is sufficient, in our opinion, to justify a verdict for the plaintiff including that amount. As to the contracts dated November 25, 1895, and January 1, 1897, above referred to, the first claim of appellant is that they are illegal and void, as being against public policy. Numerous decisions are cited in support of the contention, but we think none of them are directly applicable to the facts of this case. They relate, in so far as they may have a bearing on this question, to secret interests or profits or advantages to be derived by an officer of or stockholder in a corporation, in corporate contracts, or to persons acting in a public capacity, and not to cases like this, where the corporation whose officer, the appellant, made these contracts, which were either approved directly through its board of directors, or the corporation permitted him to act thereunder, with full knowledge of all the facts relating thereto. Appellant’s counsel, in their argument, based their claim as to the illegality of the first contract upon the fact that by its recitals it was not to become operative unless another contract satisfactory to appellee was entered into for the sale by the Supply Co. to appellee of its brake beam machinery, and because the large salary which it gives to appellant was an inducement to him to use his influence in his capacity as officer, stockholder and director of the Supply Co., to bring about the execution by that company of the contract between it and the appellee. Certainly these matters would be of the greatest importance to the Supply Co. in entering into its contract to sell its machinery to the appellee, and it might well be, under the authorities cited and relied upon by appellant, that his contract to act as superintendent for appellee would be void, had it been kept secret by appellant from the Supply Co. The evidence shows that at the time of the making of this contract the appellant was the general manager and director of and stockholder in the Supply Co., and that the business relations between it and the appellee company were very close, the appellant having theretofore acted as agent of the appellee company, and it was the desire of the Supply Co. to dispose of its brake beam machinery to the appellee, lease a portion of the Supply Co.’s factory to the appellee, manufacture brake beams for it, and at the same time utilize all the waste material (which was quite considerable) in the manufacture of the beams, in the business of the Supply Co. In view of all these matters and of the fact that the Supply Co., by its board of directors, approved of both the contracts of date November 25, 1895, we think the appellant’s contract of that date with appellee was a valid and binding contract upon him. The Supply Co. is not complaining, and the appellant should not be heard to question the validity of the contract. Dexter v. McClelland, 116 Ala. 37-49; 1 Beach on Contr., Sec. 717. Moreover, this contract relates to merely private matters which concern only the two corporations and the appellant, and in no way relate to any public interest. So long as all the parties interested acted under the contracts with full knowledge of all the facts, it is doubtful, to say the least, whether any matter of public interest is at all involved. That being so, the contract should rather receive that interpretation which would make it binding upon the parties, than one which would render it invalid. The rights of the individual in mere private contracts should, as a general rule, prevail over the rights of the public in doubtful cases. 1 Chitty on Contrs. (11th Amer. Ed.), 112; 1 Beach on Mod. Law of Contrs., Sec. 717, and cases cited; Barrett v. Carden, 65 Vt. 431, and cases cited; Shreffler v. Nadelhoffer, 133 Ill. 536-55; Houlton v. Nichol, 93 Wis. 393; Thompson v. Seavor, 91 Ill. App. 500, and cases cited; affirmed 189 Ill. 159. Before a contract should be held to be void, as contrary to law or a sound public policy, it should be made to appear clearly—beyond reasonable controversy. The contract of January 1, 1897, between the appellee and the appellant, as well as the contract of the same date between the Supply Co. and the appellee, was made upon the same lines as the other two contracts above referred to, of ¡November 25, 1895. "While no express ratification of the latter two contracts was made by the Supply Co., the salary of the defendant, by his contract of January 1, 1897, is less than one-half of what the appellee agreed to pay him for like services under the contract of ¡November 25, 1895. The contract of January 1,1897, between the Supply Co. and the appellee, seems to be in the interest of the Supply Co., and the same intimate business relations between the two companies as under the former contract appear to be continued by this new contract. The two companies, as appears from the evidence, acted under this latter contract, and the Supply Co., all the time during the existence of the appellant’s contract with the appellee, dated January 1,1897, knew of appellant’s relations to and his employment by the appellee. In fact it appears from the record that counsel for appellant on the trial offered to concede that the contracts of ¡November 25, 1895, were ratified by the two companies, provided that was coupled with a statement that the contract of January 1, 1897, was also ratified by the two companies. In view of all these matters, we think that appellant’s contract with appellee of January 1, 1897, is valid and binding. The next contention of appellant is that, conceding the validity of the contract of ¡November 25, 1895, still the overcharge "amounts for sheets of rolled steel claimed by appellee only amount to $456.64, instead of $1,312.50. If appellant’s construction of this contract were the correct one, his computation as to the overcharges would probably be about the correct figure. His claim is that under that contract he was only bound to furnish 10,000 sheets of steel. A reading of the first division of that contract, in the light of the evidence, as we think, demonstrates that this construction of the contract is not the correct one. The latter part of this provision is as follows: “ If it be within his power to increase this quantity at these rates, and it be the desire of the Brake Beam Company to have him do so, he will increase the quantity, but it shall not be his obligation under the contract to actually furnish more than 10,000 sheets; this steel to be paid for thirty days from date of invoices.” The evidence shows that the appellant actually undertook to furnish and did furnish about 20,000 sheets of steel at the prices provided by the contract, and the clear preponderance of the evidence is, in our opinion, that it was within the appellant’s power to increase the quantity (10,000 sheets)$< at these rates,” viz., the rates provided in the contract, and that the overcharges for the steel aetually furnished by appellant to the appellee, figured at the contract rates, would make a larger amount by $19.36, as we figure it, than the amount claimed. The evidence of appellee also shows that at a time before the commencement of the suit, the defendant and his bookkeeper made a computation of the alleged overcharges which substantially agreed with the claim now made by the appellee. It is also claimed by appellant that there was a mistake in the contract as to the prices at which sheet steel were to be furnished by him, and that the appellee, acting through its general manager, Laughlin, acknowledged this mistake when it was discovered, and thereafter, by mutual agreement between appellant and appellee, this mistake was corrected, so that instead of charging, as provided by the contract, $1.30 per 100 pounds for freight beams, and-$1.40 per 100 pounds for locomotive and passenger beams, these figures were just transposed. As to both the amount of the overcharges and the alleged mistake in the contract and its correction, it seems sufficient to say, as is the fact, there is a sharp conflict in the evidence, and we are not prepared to say but that the verdict of the jury is sustained by the weight of the evidence. The next point is as to the matter of $1,000 for commission or profits, which, it is claimed by appellee, was received by appellant on the purchase of 500 tons of steel from the Wheeling Steel & Iron Co. As to this item, appellant’s counsel claim that there can be no recovery, both because of the alleged invalidity of the two contracts between appellant and appellee hereinabove referred to, and because, by the declaration, this claim is based on the contract of January 1, 1897. We have disposed of the question of the illegality of the contracts. The other contention we think is not tenable. The contract for the purchase of this steel was made in November, 1896, and two deliveries of it were made during that month and the remaining deliveries during 1897. The money from the profits or rebates on this transaction was received by appellant during 1897, except one item of $216.56, which appellant received on December 12, 1896. In so far as appellee’s right of recovery may be said to be based upon the contract of November 25, 1895, by reason of the provision in that contract w’hich made it appellant’s duty to provide the necessary material that might be required by the appellee in its business “ on the best terms possible,” the first and second counts constitute a sufficient pleading to justify the recovery to the full amount of the claims made. If appellee’s right of recovery can be said to be based upon the contract of January 1, 1897, which has a similar provision to the other contract, because of the deliveries made and the profits or rebates received by appellant, then the third and fourth counts are sufficient pleadings to justify the recovery as to all the deliveries made and money received on this transaction during 1897. The emplojnnent of appellant as appellee’s agent is alleged in each of these four counts under a videlieit, and a careful reading of them shows that they are so framed as to cover this transaction, although, upon a casual reading, it may be said that the first two counts relate only to the overcharges as herein-above mentioned, aggregating $1,312.50, for steel purchased wholly in 1896, which does not appear to have been purchased from the Wheeling Co. The gist of each of the four counts is the wrongful act of the appellant in procuring the sale to appellee of steel at a price beyond “the best terms possible,” and the other matters specifically set out may be considered as mere inducement. The duty of appellant and his obligation to plaintiff under each of the con- - tracts is the same, and we think it clear from the proof that his violation of the contracts is established beyond question. In fact, the record shows that he admitted the liability in an affidavit made by him to set aside a default and judgment which was rendered in the early progress of the case. A claim by appellant that the court erred in giving instruction numbered 3, quoted in the statement, which permits a recovery under the contract of January, 1, 1897, for this item, is not tenable. If, strictly and technically, the instruction is erroneous, it is, in our opinion, without prejudice, for the reasons above stated. A further claim by appellant is made with regard to certain brake beams, 3,740 in number, which it is charged by the appellee in the fifth and sixth counts, were defectively manufactured under the superintendence of appellant, and an amount of $325 paid by appellee for certain No. 3 Christie special heads at the instance of appellant, as set out in the seventh count, which, it is alleged, was a clear loss to appellee. These brake beams were manufactured in 1897, and the Christie special heads were purchased during the same year while appellant was working under his contract of January 1, 1897. By that contract appellant’s duty was to cause the work done on the brake beams to be done efficiently, promptly, and to the satisfaction of appellee, and at the least possible cost to it, and he will transact the business in the manner required by the appellee; also, it was his duty to maintain the then present high standard of workmanship and material employed in the manufacture of said beams. It appears from the evidence that brake beams to the number of 3,740 were manufactured under the superintendence of appellant which were defective in that the mandrel, a device used in their manufacture, consisting of a piece of steel around which the parts of the brake beams were pressed, became worn, reduced in size by the constant use and friction, so that the beams thus manufactured were of no use as brake beams. On this point, however, there is a sharp conflict in the evidence, which is very voluminous, and to state even the substance of it would greatly extend this opinion. We have carefully read and considered it, and think that the verdict of the jury in making an allowance for this claim, can not be said to be clearly and manifestly against the evidence. The appellee’s evidence, besides making a prima facie case as to these defective beams, and that it was appellant’s fault (which is not overcome by the appellant’s evidence), also shows that it suffered a loss of $2,980 by reason thereof, and an additional sum of $325 for certain Christie special heads, which were ordered by appellant for appellee, and proved a loss to it of that amount. There is evidence on behalf of appellant tending to show that appellee offered to settle this matter for a much less amount, and that appellant at one time offered to take the defective beams in question from appellee, agreeing to dispose of them outside of the United States, so as to avoid loss thereon, which offer was rejected, because, at the time of the offer, the beams had been “ scrapped;” but when it is all considered we can not say the allowance of the claim was not justified. It is also said by appellant that the amount of this claim should, in any event, be reduced by the value of the material in the defective beams. There is no evidence to sustain this contention. The evidence on behalf of appellee shows that the defective beams were worthless as such, and there is no evidence in the record to show what, if anything, was the value of the material in them. As bearing on this claim, appellant contends that evidence of the witness, Crane, was erroneously admitted, because it related to alleged defective beams claimed to have been returned by different customers of appellee prior to the year 1897.. We think this claim is untenable, for the reason that it does not appear clearly from the testimony of this witness that the beams of which he testified .were not a part of the beams in question. And even if he did refer to beams manufactured prior to 1897, still we think the error should not be considered as sufficient to reverse. As bearing on this claim, appellant contends that instructions numbered four and five, quoted in the statement, are erroneous, since they, in effect, as is claimed, tell the jury there may be a recovery on account of the alleged defective beams, because they were not manufactured to the satisfaction of the plaintiff. We think these instructions are not fairly subject to this criticism. They only allow a recovery, as we construe them, upon a showing by the evidence that the beams were rendered unfit for brake beams by reason of their defective manufacture. Moreover, it is well settled that the instructions in a given case must be considered as a series, and if, when so considered, they fairly and fully instruct the jury as to every material fact in controversy, they will be considered sufficient. R. R. Co. v. Bannister, 195 Ill. 48, and cases cited. The instructions, considered as a whole, we think fulfill this requirement. And by instructions given on behalf of appellant the jury were in effect told that it was incumbent upon the appellee to prove every material issue of fact essential to a recovery by a preponderance of the evidence, and on a failure so to do as to any material fact alleged, there could be no recovery. We think the jury were not misled by these instructions. It is also said that the court erred in receiving in evidence certain records of the appellee company relating to the discharge of. appellant, which contains a long and prejudicial report relating to him. It is sufficient answer to this claim that no exception to the court’s action in that regard was preserved. Considerable evidence was offered on behalf of appellee under the eighth, ninth, tenth and eleventh counts which, it is claimed, were not offered in good faith and forthe expresspurpose of prejudicing appellant before the jury. We are at a loss to fully understand why evidence was offered under these counts, as it seems quite clear from appellant’s evidence that the matters therein claimed had been a subject of arbitration between the appellee and the Michigan Eailway Supply Co., and that an award had been made including the items in question under these counts, with others which had been paid, all of which must have been known to appellee. We think the court should have instructed the jury that there could be no recovery under these counts, but we are inclined to the opinion that any error in this regard and any prejudice to the appellant by reason of the evidence in support of these counts, is obviated by a remittitur which the bill of exceptions shows includes the amounts of appellee’s claims under these counts and interest thereon. Claim is made that the court erred in giving instruction Ho. 7, quoted in the statement, in that it permits the jury to allow interest in an action of tort. We think that the instruction as to interest does not permit the jury to allow interest upon the item of defective brake beams, but only on moneys actually paid by the appellee because of the wrongful acts of the appellant. And we think it apparent, when the several amounts which we have held the jury were justified in including in the verdict are added to the interest at five per cent per annum upon the moneys actually paid out by appellee, the amount of the verdict is not too large. That interest is allowable on the moneys paid out, we think was proper under the statute. Chap. 74, Sec. 2, title, Interest. Being of opinion that there is no reversible error in the record, the judgment of the Circuit Court is affirmed.