Merritt v. Johnston

Troup, District Judge. Plaintiff brought his suit at law to recover from defendant an alleged balance due him for compensation as manager of defendant’s business, under a certain written contract set forth in his petition, wherein it is stipulated that plaintiff was to receive for his services $150 a month, and in addition thereto one-half of the net income from the business. Plaintiff alleges he entered defendant’s employment on September 26, 1918, and remained until November 18, 1920, during which time he drew $150 a month and in every way fulfilled his part of the agreement; that the net income of the business, during the time aforesaid, amounted to $15,-936.63; that plaintiff received from defendant on account thereof the sum of $1,195, and no more, and that there remains due him the sum of $7,145.81, for which he prays judgment. Defendant, answering, admits the contract set forth in the petition; that plaintiff entered employment of defendant thereunder, as . stated, and so continued to November 18, 1920, at which time plaintiff, desiring to ■terminate said contract, offered to accept and thereupon was paid by defendant the sum of $1,200 in full settlement of any amounts that might be due him under said — 861 — contract. Further answering defendant denies that the net income of the business is as stated in the petition, and avers that at the time of the settlement • the net income had not been ascertained, but that plaintiff, haying had full charge of the books, knew better than defendant what the net income was. Plaintiff’s reply denies all new matter in defendant’s answer. At the close of plaintiff’s testimony the defendant moved the court “to dismiss the jury and to refer the case to the equity court, for the reason that the same; upon the showing made by plaintiff, involves an accounting, and hence is not proper to be submitted to the jury.” The motion was overruled; the trial proceeded with the introduction of defendant’s evidence; the case was submitted to the jury, and a verdict rendered for plaintiff in the sum of $3,750. Defendant appeals. The first contention made by defendant is that the contract between the parties hereto is one of partnership, and not employment. We cannot- take that view of it. The contract is as follows: ■ “This agreement, made this 26th day of September, 1918, between ■ Joseph Johnstpn, doing business as the Western' Plumbing & Heating Company of Omaha, Douglas county, Nebraska, and R. C. Merritt of Omaha, Douglas county, Nebraska, Witnesseth: “Joseph Johnston is the owner of a plumbing and heating business which is conducted under the name of the Western Plumbing & Heating Company, and is desirous of obtaining the services of R. C. Merritt as manager of said business, and R. C. Merritt is desirous of accepting said employment. “Joseph Johnston agrees to pay to R. C. Merritt for his services the sum of $150 per - month, and one-half of the net income received from said business, after the payment of all expenses; and after the payment of an equal salary, to wit, $150 per month to the said Joseph Johnston. “It is further agreed that in the event of the withdraw — 862 — al of said Joseph Johnston from the plumbing and heating business for any reason whatsoever, or upon the death of the said Joseph Johnston, R. C. Merritt in consideration of said services shall further have a right to continue to conduct said business under the name of Western' Plumbing & Heating Company, and shall be from henceforth a joint owner with the said Joseph Johnston of said trade name. “R. C. Merritt hereby agrees to accept said employment and agrees to devote his best energies and his time to the prosecution of said business and the management of the same. . “In witness whereof the parties have hereunto signed their names this 26th day of September, 1918. “(Signed) Joe Johnston. “(Signed) R. C. Merritt. “(Signed) E. M. Owen, witness.” It would seem that a mere reading of the contract must convince one that it is but a contract for hire, pure and simple, and that the parties to the same must-have had no other contemplation in view, except and until at least one or both of the contingencies mentioned in paragraph 4 of said contract should arise. Neither of these contingencies did arise. That the contract provided that part of the compensation to be received by the plaintiff for his services should be a certain portion of the net income of the business does not tend to render it any the less a contract for employment. Aetna Ins. Co. v. Bank of Wilcox, 48 Neb. 544; Whitney v. Gretna-State Bank, 50 Neb. 438; Agnew v. Montgomery, 72 Neb. 9. Such a stipulation in a contract 'between master and servant is of frequent occurence and becoming more so every year, and is generally considered to be highly promotive of the interests of both employer and employed. Besides, the parties themselves have regarded the contract as one of employment only, as evidenced by their pleadings, the substance of which is above set forth; neither was a contrary view assumed by either — 863 — party at the trial. In such a case ordinarily for that reason alone the court will 'be justified in adopting the construction given it by the parties. School District v. Estes, 13 Neb. 52; Paxton & Gallagher v. Smith & Co. 41 Neb. 56; Fiscus v. Wilson, 74 Neb. 444; Jobst v. Hayden Bros., 84 Neb. 735. The next position taken by defendant is that, even if the court should hold the contract to be not one of partnership, still the cause of action is of such a nature as that the only proper forum for its determination is a court of equity where an accounting may 'be had between the parties, and that the trial court erred in not sustaining defendant’s motion to transfer the case to an equity court. We do not believe this position is well founded. This action does not call for an accounting. Certainly the defendant does not require one, for he makes no counter charges against the plaintiff in his answer and none arises in the evidence. The action .is simply one upon a contract, and its purpose is to recover for a breach thereof, that is, for a failure to pay a part of the compensation stipulated therein. Primarily, therefore, this would be a law action cognizable for trial before a court and jury, and the mere fact that the compensation sued for consists of a portion of the net income of defendant’s business, to determine which requires some examination of defendant’s books of account, would by no .means necessarily transform the case from one at law to one in equity. Lee v. Washburn, 80 App. Div. (N. Y.) 410, and cases cited. Before, if at all, a so-called “accounting”, and a court of equity to handle the same, can be demanded in a case like the present one, it must appear that the issues’ and items are so numerous, complex and technical that it becomes apparent that a jury is unable to deal with it. As was said in the case of De Bevoise v. H. & W. Co., 67 N. J. Eq. 472, wherein it appeared that plaintiff was to xeceive $2,000 a year salary and 25 per cent, of the net profits: ■ — 864 — “To ■ justify, a' bill in equity for an accounting, the issues must be so numerous, so distinct, and the evidence to sustain them- so variant, technical and voluminous, that a jury is incompetent to deal intelligently .with them and come to a just conclusion.” Such a situation is not present in the instant case. The defendant employed an expert auditor and accountant to go over his entire accounts with a view of showing just. what was desired to be known by either party. Both plaintiff and defendant joined in aiding the accountant in this behalf, with the result that the accountant exhibited to the court and jury a complete, accurate, itemized, typewritten statement of just what the defendant’s books showed in this regard and a deduction therefrom of what the net income was for the given time required; so that -there was but little or no occasion for any material dispute to arise, and, as we view the evidence, but little or no material dispute did arise, except one pertaining to the correct inventory of defendant’s stock, which arose 'as follows: After the audit was completed and the accountant had fully finished his work, the defendant intimated that the accountant had not taken the correct inventory of the stock as a basis for computation. The accountant stated that he had taken the only inventory Avhich appeared in his books and the only- one to which his attention had ■been called. Defendant stated that he had an inventory at home which defendant, his boy (13 years old), and two of his hired men had taken, and which was materially different and more favorable to defendant than the-one taken by the accountant. The accountant stated to defendant that as a responsible public accountant he could not accept an inventory so casually arising and so lacking in authenticity, and the inventory employed by the accountant in the first instance was allowed to stand for the time being -and remain as part of his audit. Nevertheless, at the trial the defendant was allowed to introduce the inventory referred to in — 865 — evidence and the jury and defendant had the benefit of what it purported to show. The question of alleged settlement between plaintiff and defendant, as averred in defendant’s answer, was likewise fairly submitted to the jury and the jury evidently found against the defendant on that issue. The jury returned a verdict for plaintiff for $3,750, but little more than half of what plaintiff claimed was due and considerably less than what the jury might have awarded under the evidence, and respecting which no complaint seems to be made by defendant, provided the contract in question is to be held one of nonpartnership, which we have decided it is. We find no reason why the judgment of the lower court should not stand, and the same is therefore Affirmed.