Mosby v. United States ex rel. Printy & Jones

DENISON, Circuit Judge (after stating the facts as above). [1] The record indicates no reason for not giving full effect according to [349] its terms to the settlement agreement of December 14, 1908. A dispute had arisen. Mosby and his sureties, on the one side, and Printy & Jones on the other, undertook to make a settlement of the dispute. Many different items were recited and disposed of, and there was ample consideration. [2] The items for per diem of teams and freight upon outfit amounted to $2,924. About half accrued, if ever, as debts from Printy & Jones to Mosby, in September. On December 14th, the remainder, for the return per diem and freight, if we may judge from the dates upon the account rendered, had not been liquidated!. However, the coming expense and the return expense were of the same class; they were both elements of the damage accruing to Mosby because of Printy & Jones’ contract default; and we think these charges, as an entity, were, on December 14th, fairly within the descriptive phrase “debts due from Printy & Jones to W. U Mosby,” and that their pres-cut assertion is therefore barred by this contract, unless they are within the exception, “bills of Walsh & Bro.” It is clear and, indeed, is conceded, that the items for per diem cannot be brought within this exception, because Walsli & Bro. had nothing to do with these items. The freight had been paid by Walsh & Bro. in September, and was paid by them in December, and was later repaid to them by Mosby. Whether this phrase, “bills of Wialsh & Bro.,” as used by the parties at the time, was intended to cover, and so did cover, their bills against Mosby for what they did for him and charged directly to him, or was intended to be confined to their bills against Printy & Jones for which they looked to Mosby for pay, will be a question of fact for the jury to decide, if there should be another trial and if the pleadings shall be reshaped so as to permit the question to arise. [3, 4] Upon the present record, these questions are immaterial, because Mosby can have no claim against Printy & Jones for the expenses incurred by Mosby in taking on and finishing up the job, except upon the theory that Printy & Jones breached their contract with him, whereby he was compelled to do the work himself, and that his measure of damages is the difference between his contract price with Printy & Jones and what it did actually cost him to do the work. Upon this theory, he should charge Printy & Jones with the entire cost to him of completing the work, and should credit them with 19 cents per yard out of the price which he received from the government. He did not shape his conduct, his pleadings, or his proofs according to any such theory. The record does not show what the total cost to Mosby was, but does show he appropriated! to himself the entire price, 22 cents per yard, received for the part of the work which he did. There is nothing anywhere in the record to indicate that the work cost him more than 19 cents per yard, or that he was damaged at all by any breach of the contract which Printy & Jones may have committed. Under this state of the pleadings and proofs, Printy & Jones would! have been entitled to a positive instruction that Mosby could not retain or set off any portion of this sum of $2,924. It therefore becomes unnecessary to consider the errors assigned by counsel for Mos-by on this branch of the case. He suffered no prejudice. [350] [5] The question whether the $500 matter was open to litigation in spite of the compromise settlement is more complicated, but we cannot say that there was no issue upon this matter upon which plaintiffs had a right to g‘o to the jury. By that contract, Jones agreed to pay the mortgage which he had given to secure the $500 note. After receiving the government money- on finishing the contract, Mosby paid to the bank $513, the amount due upon this note which he had discounted at the bank. This amount he repaid to himself by charging the same to Printy & Jones in the account rendered which was the basis of this verdict, and that charge was not directly disturbed by the verdict. It therefore follows that Jones’ agreement to pay the note has been performed, and that, in the matters which are now to be stated, there is no tendency to vary or modify this part of the terms of this written agreement. In this account i-endered, Mosby gave Printy & Jones no credit for the $1,000 which he had received in July on discounting Printy’s note, nor for the $500 which he had received at the same time as the proceeds of Jones’ note. Pie must excuse the failure to make these credits by the fact that he has not charged against them in the account J:he same $1,000 paid to them at their former location, nor the same $500, paid, as he says, to Printy at St. Louis. The payment of the $1,000 is conceded and so neutralizes the omitted $1,000 credit. As to the $500, Jones (who, at the time of the trial, seemed to be the active party plaintiff, Printy having gone away) claims, in terms or by necessary implication, that it was agreed Mosby should use this retained $500 as if it had been a special deposit with him by the partnership for the purpose of paying certain freight bills amounting to about that sum ($480.90); that such bills were paid by Mosby and stand charged to Printy & Jones in the account rendered; that at the time of the December 14th contract he (Jones) supposed Mosby, in his final account, would charge himself with the $500 received! and take credit for this freight paid; that he did not know that any dispute or question existed on this point; and that he never heard of the alleged payment to Printy until he heard Mosby’s testimony on the trial. If Mosby’s theory is correct, and if he did pay this $500 to the partnership through Printy, that is an end of the question, and he does not need to depend on the December 14th contract. If such payment had not been made, then the partners had a right to assume that Mosby would not, in .stating the Walsh bills, take credit for this $480 freight without charging himself with the $500 he received. Not only was Mosby’s liability to account for the $500 he received not one of “the debts due from Printy & Jones, or either of them, to W. L. Mosby,” but it cannot be supposed Printy & Jones were settling a controversy which they did not know existed. We conclude, then, that the settlement contract did not prevent Jones from having submitted to the jury the question whether Mosby should account for the $500 he received from Jones’ note, or, what is the same thing, whether Mosby should have credit for the $500 he claims to have paid Printy. [6] Upon this subject it is clear that there was a general partnership andl that a loan or advance to either partner for the partnership, [351] or if Mosby had reasonable belief that it was for the partnership, was, prima facie, a loan to the partnership. If, however, it was true, as was suggested to us by counsel on the argument, that this money was paid to Printy for his individual use, and with knowledge by Mosby that it was asked and received for Printy’s then pressing personal needs, and in a way that would make it a fraud by both of them to charge it to the partnership, Mosby would not be entitled to such credit; and, as bearing on such question of fact, it will be material, if true, as Jones claims, that there had been this special agreement by Mosby to retain this $500 and use it himself to pay this freight for the partnership, as this would have some bearing on the good faith of Mosby’s claim that he supposed Printy desired the money for that same purpose. [7] The jury was charged, in effect, that Mosby was not entitled to credit for this item, if it was paid Printy for any other purpose except to pay this freight. This was too narrow a statement of the rule of partnership authority, and gave too much force to the disputed claim that the money had become a specific fund which could be devoted tó a specific purpose only. If Mosby paid Printy the $500, as and for a payment or advance to the partnership of Printy & Jones, and having no reason to believe that Printy was not getting it for some legitimate partnership purpose, he should have the credit. For this error, to which exception was noted, and upon which an assignment is based, the judgment must be reversed, and a new trial ordered, unless the plaintiffs below see fit to remit $500 from their judgment, as of the date of the judgment. If within 30 days they file here the certificate of the clerk of the District Court that such remitti-tur has been there filed, then such judgment will be affirmed. In either event, plaintiff in error will recover the costs oí this court.