Farmers State Bank v. Const. Co. , 39 Wyo. 238 ( 1928 )

ON PETITION FOR REHEARING Counsel, in the petition for rehearing, allege that our former opinion in this case is in irreconcilable conflict with a number of decisions of this court, and cite Edwards v. Wilson, 30 Wyo. 275; Conway v. Smith Mercantile Co., 6 Wyo. 468; Patterson v. Hardware Co., 7 Wyo. 401; Columbia Mining Co. v. Duchess Mining Co., 13 Wyo. 244; Phalen v. Cheyenne Brick Co., 26 Wyo. 495; Lellman v. Mills, 15 Wyo. 152; and Farmers State Bank v. Northern Trust Co., (Wyo.) 270 P. 163.

All of the above decisions hold, directly or in effect, that a judgment of the lower court will not be disturbed if there is sufficient evidence to sustain the same. We agree with these former decisions, but do not agree with counsel in his contention that there is sufficient evidence to sustain that portion of the judgment that we modified in the former decision.

We gave this case our undivided attention for a considerable length of time and carefully read the entire voluminous record and extensive briefs, and over 250 pages of pleadings, and again we have gone over this same ground and feel now, as then, on the questions involved in this litigation.

We devoted considerable space to discussing the evidence in our former opinion; in fact, we went into considerable detail, and we shall not encumber this opinion with another discourse on that subject.

Counsel for plaintiff further contend that the decision in this case is in irreconcilable conflict with the following Federal decisions: Spofford v. Kirk, 97 U.S. 484, 24 L. Ed. 1032; National Bank of Commerce v. Downey, 218 U.S. 345, 31 Sup. Ct. 89, 54 U.S. (L.Ed.) 1065, 161 Fed. 839; in re Rudford Co., 257 Fed. 722; Indemnity Co. v. Endres, 290 Fed. 98; Hall v. Chandler, 289 Fed. 675; Lindborg v. Humphrey, 280 Fed. 901; In re Waters-Colver Co., 206 Fed. 845; McGowan v. Parish, 35 Sup. Ct. 543.

Counsel for the plaintiff further contends that the Petry contracts and agreements affecting the funds derived from the bridge contract with the Government are absolutely void under the above authorities.

The above authorities construe Section 3477 of the Revised Statutes of the United States, and are not in point under the facts and pleadings in this case.

An examination of the authorities above cited by counsel and the authorities hereinafter cited will disclose that most of these authorities and decisions can be classified in one of three groups:

1. Cases where an assignee of a claim has brought suit against the Government to recover on his assignment; United States v. Gillis, 95 U.S. 407-417, 24 L. Ed. 503; St. Paul Duluth R.R. Co. v. United States, 112 U.S. 733, 5 Sup. Ct. 366, 28 L. Ed. 861; Hager v. Swayne, 149 U.S. 242, 37 L. Ed. 719.

2. Cases where there has been an assignment by the operation of law, such as assignments in bankruptcy and claims passing to heirs and devisees of deceased, etc.; Erwin v. United States,97 U.S. 392, 24 L. Ed. 503; Seaboard Air Line v. United States,256 U.S. 655, 65 L. Ed. 1149; Hobbs, Assignee v. McLean, 117 U.S. 567,29 L. Ed. 940; Goodman v. Niblack, 102 U.S. 556, 26 L. Ed. 229; Butler v. Goreley, 146 U.S. 303, 36 L. Ed. 981; Price v. Forrest,173 U.S. 410, 43 L. Ed. 749; National Bank of Commerce v. Downie,218 U.S. 345, 54 L. Ed. 1065.

3. A miscellaneous group of authorities where the facts are such that they cannot be classified in either of the two beforementioned major groups: Bailey v. United States,109 U.S. 484, 24 L. Ed. 1032; Nutt v. Knut, 200 U.S. 13, 50 L. Ed. 348.

The case at bar is quite peculiar in some respects.

A significant fact in this case is the total lack of an attempt by anyone to avoid or qualify the Buffalo Fork bridge contract of employment between the construction company and Petry. The parties, by their pleadings in the lower court, all allege that it was simply an employment contract. There is no claim by anyone that it was an assignment, and the construction company and Chatterton were the most emphatic in their pleadings on that score.

The contract between Petry and the construction company for employment on the Buffalo Fork bridge provides in part as follows: "That for and in consideration of the premises, and the payment of the sum of $1,000, to be made in the manner hereinafter provided for, first party is employed and does hereby employ second party to do and perform all of the work and labor and to furnish and supply all of the materials and other things required for the said construction hereinabove more specifically mentioned," etc. It is expressly provided in the contract that the construction company shall collect and receive the moneys from the Government.

The pleadings of plaintiff bank and defendant Construction Company show, all the way through the record, that the main dispute throughout the trial was over an alleged open running account claimed by the Construction Company against Petry.

The Construction Company, in effect, ratified the bridge contract with Petry at numerous times, and as late as February 23, 1923, nearly two years after the last money was paid to the Construction Company by the Government on the bridge contract, the Construction Company set up in its pleadings and alleges affirmatively:

That Petry was employed personally, to do and perform all the work and labor and to furnish and supply all of the materials and other things to be done in the construction of the bridge over the Buffalo Fork, etc. That such employment was a personal employment of the said N.G. Petry, which could not lawfully be by him assigned or delegated to another, etc. That the so-called contract referred to (being the Construction Company-Petry bridge contract) shows upon its face that it is simply a memorandum of a personal employment of the said N.G. Petry, etc.; that Article 13 of said agreement between said Riverton Construction Company and the said United States of America, for the construction of said bridge, provided that, "neither this contract nor any interest therein, shall be transferred or assigned by the contractor to any other person or persons; any such transfer or assignment shall cause the annulment of the contract so far as the United States is concerned." All of which was well known to said N.G. Petry at the time of his said employment, and said defendants further allege that his said employment did not in any manner constitute him an assignee of said contract or of any interest therein or to receive the consideration for the construction of said bridge from the United States of America. That said defendants allege that during the time of the construction of the said bridge said Riverton Construction Company received partial payments for materials furnished and labor performed upon said bridge, etc. That thereafter, a difference having arisen between N.G. Petry and the Riverton Construction Company relative to the disposition of certain payments remaining due said Riverton Construction Company, on account of the construction of said bridge, said Petry and Riverton Construction Company entered into a stipulation (being the trust agreement between Petry and the Construction Company) etc. That on the 14th of February, 1921, Petry was indebted to the Riverton Construction Company upon an open account on the books of said company in the sum of $4648; that thereafter, on the 20th day of April, 1921, final payment of the sum of $3293 by the United States on account of the construction of said bridge, was made to the Riverton Construction Company and by it credited to the said N.G. Petry upon said account, and that said N.G. Petry at the time of filing its reply, is justly indebted to the Riverton Construction Company upon said open account in the sum of $1354.

An examination of the record in this case soon convinces anyone that the plaintiff and the construction company have worked in perfect harmony throughout this litigation, and apparently there has been no friction between Petry and Brothers, and the litigants soon formed into two groups as a natural outcome of the litigation.

In the District Court, the plaintiff bank and construction company claimed:

The contract with Petry to build the bridge was legal and that he should receive all the moneys for the work, etc.; that the Government had accepted the bridge and paid for it, and the Construction Company had paid it all to Petry, with one exception, by giving him credit on the account, and that there was no assignment of the contract or interest in it, but just a contract of employment.

But lo and behold, when they get up here in this court, this simple little employment contract blossoms into an unlawful thing of no force and effect, an assignment and contract absolutely void.

In our former opinion we said: "We are not convinced that the contract between Petry and the construction company was an assignment." We say now we are convinced that it is not an assignment of a claim against the United States.

Counsel for the plaintiff may contend that, if it is not an assignment, it is a contract which would be illegal under Section 3477 of the United States statutes. And further, that it is void. We cannot agree with that contention either. Of course Petry could not have enforced any of its terms against the Government, but as we have said before in our former opinion the Government was not in any manner interested in this contract of employment. The Government accepted the work, paid the Construction Company in full for it, and the Construction Company ratified the contract after receiving the money from the Government, by crediting Petry with the money on the alleged book account and then plead the validity of the contract in this case, not to mention the recognition of the contract, apparently, by placing the $740 in the trustee's hands, according to the trust agreement, awaiting the outcome of the accounting with Petry on the open running account.

Never was there a claim or intimation that Petry's employment contract was not good. The main dispute was whether the Construction Company could credit Petry with the money on the alleged book account. The Construction Company maintained throughout the trial that Petry was entitled to the money and not Brothers. If the plaintiff and Construction Company could accomplish their desires in that respect, then they could credit Petry's alleged debt due the Construction Company, then the Construction Company could pay it into the plaintiff bank on the notes of the Construction Company that were endorsed or guaranteed by Petry, thus in effect paying two accounts with one sum.

We cannot agree with counsel that Brother's assignment from Petry was bogus or invalid, and surely, the assignment given at Denver shortly after the trust agreement between Petry and the Construction Company was made was not void and subject to attack.

Brothers paid Petry the balance due him under their agreement and took the assignment from Petry of whatever was due him under the bridge employment contract, and at that time the Construction Company, through Chatterton, had $742 in the bank, in a special account, which had been received from the Government on this contract.

True, there was a dispute about this alleged book account between Petry and the Construction Company. But, as mentioned before, that would not prohibit Petry from making a valid assignment of the money due him to whomsoever he might choose.

Counsel further contend in their brief that Petry was a trustee for the moneys of the Riverton Construction Company and that the burden was upon him, as trustee, to make a proper and satisfactory accounting for the funds coming into his hands.

We do not, under the evidence in this case, believe that the doctrine contended for applies in this case, and even if it did, we think it has been fully met, as already shown in our former opinion.

So we say again, the evidence in the case was insufficent to sustain counsel's contention, and the Federal decisions are not in point, and Section 3477, United States Revised Statutes, does not apply, under the facts and pleadings in this case, and the contract between Petry and the Construction Company must still remain a mere contract of employment, notwithstanding counsel's apparent desire at this time to ignore the pleadings in the case.

The petition for rehearing will be denied.

BLUME, Ch. J., and RINER, J., concur.