Corn Belt Products Co. v. Mullins

• Decision Date: 29 September 1961
• Docket Number: No. 34856,34856
• Citation: 172 Neb. 561,110 N.W.2d 845
• Parties: CORN BELT PRODUCTS COMPANY, a corporation, and Erwin Equipment Company, a corporation, Appellees, v. Paul MULLINS and Benita Mullins, Appellants. Impleaded with Farmers Bank, Cook, Nebraska, a corporation, et al., Appellees.
• Court: Nebraska Supreme Court

Page 845

110 N.W.2d 845

172 Neb. 561

CORN BELT PRODUCTS COMPANY, a corporation, and Erwin Equipment Company, a corporation, Appellees, v. Paul MULLINS and Benita Mullins, Appellants Impleaded with Farmers Bank, Cook, Nebraska, a corporation, et al., Appellees.

No. 34856.

Supreme Court of Nebraska.

Sept. 29, 1961.

Syllabus by the Court

1. Where no exceptions are filed to the findings of fact of a referee prior to confirmation by the trial court, the findings of fact are binding on all parties.

2. Objections to the appointment of a referee, or to the qualifications of the person appointed as referee, must be made at the time of the appointment and will not be considered when made for the first time after the report of the referee has been filed and confirmed by the court.

3. Venue in a transitory action is a matter which may be waived and is waived where timely objection is not made.

4. The basis for equity jurisdiction in an action for an accounting is inadequacy of the remedy at law.

5. Where a court of equity has obtained jurisdiction of a case for any purpose, it will retain it for all, and will proceed to a final determination of the case, adjudicate all matters in issue, and thus avoid unnecessary litigation.

6. When one person obtains property of another by theft or fraud, equity will raise a constructive trust in favor of the defrauded party.

7. Payments made or credits given under a mistake of fact may be rescinded.

8. A homestead right does not attach to the title or interest of a purchase under a real estate contract as against the enforcement of the consideration provided for in the contract.

9. Strict foreclosure of a real estate contract will be granted under peculiar and special circumstances, where in the exercise of a sound judicial discretion it would be inequitable or unjust to refuse strict foreclosure.

William L. Walker, Earl Ludlam, Lincoln, for appellants.

Philip F. Nestor, Jr., Tecumseh, Herman Ginsburg, Lincoln, for Corn Belt Products Co.

Heard before SIMMONS, C. J., and CARTER, MESSMORE, YEAGER, SPENCER, BOSLAUGH, and BROWER, JJ.

BOSLAUGH, Justice.

This is an action for an accounting and other equitable relief. The cause was referred to a referee to make findings of fact and conclusions of law, to hear evidence and report upon all of the issues, and to make a decision thereon as prescribed in section 25-1131, R.R.S.1943.

The referee filed his report on February 25, 1960. By a decree dated March 28, 1960, the district court approved and confirmed the report of the referee and entered judgment in accordance therewith. The transcript does not contain exceptions or objections to the report of the referee filed by any of the parties. However, the decree which approved and confirmed the report of the referee recites that the plaintiffs filed a motion to confirm the report of the referee except for a modification in one particular and that no other objections were filed.

On April 5, 1960, the appellants Paul Mullins and Benita Mullins, who were the principal defendants, filed two motions for new trial. One of the motions, which was filed pro se, is largely an attack upon the report of the referee. The other motion, which was filed by the lawyers who represented the defendants at the hearing before the referee, complains only of alleged errors in the decree of the district court. Both motions for new trial were overruled.

A number of the defendants' assignments of error complain of the findings of the referee. The failure of the defendants to file objections to the report of the referee in the trial court prior to confirmation of the report by the trial court prevents consideration of objections to the report of the referee at this time. 'The unchallenged findings of fact by a referee, when confirmed by the court, are binding on the party against whom they operate, and from the legal consequences flowing therefrom he cannot escape.' Chicago Lumber Co. v. Bancroft, 64 Neb. 176, 89 N.W. 780, 57 L.R.A. 910. See, also McMurtry v. Brown, 6 Neb. 368; 45 Am.Jur., References, s. 39, p. 570; 76 C.J.S. References § 158, p. 278. Thus, for the purposes of this appeal, the findings of fact of the referee, except as modified by the trial court in the decree dated March 28, 1960, will be accepted as true. The only assignments of error which will be considered are those relating to alleged errors of law. There is no cross-appeal.

The appellees, who were the plaintiffs in the court below, are the Corn Belt Products Company and Erwin Equipment Company. Their petition alleged that the plaintiffs were corporations engaged in the sale of farm machinery, equipment, and supplies; that Paul Mullins was an employee of the plaintiffs; that on April 18, 1959, the plaintiffs discovered that Paul Mullins had converted personal property of the plaintiffs having a value of approximately $20,000; that proceeds from such property had been invested in certain other described property or deposited in a bank to the account of Paul Mullins; and that the defendants were insolvent. The petition prayed that the defendants be required to account for all of the plaintiffs' property then in the possession of the defendants and the proceeds from the sale of the plaintiffs' property; that the plaintiffs be adjudged to be the owners of property purchased by the defendants with the proceeds from the sale of the plaintiffs' property; that the defendants be enjoined from further disposing of the plaintiffs' property; that a receiver be appointed; and that the plaintiffs have judgment for the amount due them.

The defendants filed an answer and cross-petition. The answer contained a general denial and alleged that in November 1953 the plaintiffs employed Paul Mullins as a twine salesman; that in March 1954 his employment was changed to that of warehouse manager at Tecumseh, Nebraska, and other points in southeastern Nebraska, northeastern Kansas, and northwestern Missouri; that Paul Mullins was to be reimbursed for all of his expenses and was to receive a bonus of one-half of the net profits from his operations; that the plaintiffs failed to account to Paul Mullins for the bonus due him; and that he retained the sum of $7,310.85 to apply upon the amount due him. The cross-petition alleged that there was in excess of $47,500 due Paul Mullins as bonus and the sum of $1,925 for other services; that the plaintiffs advanced money to the defendant Paul Mullins to purchase and modernize a residence property in Tecumseh; that all but approximately $500 of the money advanced had been repaid to the plaintiffs by deductions from the drawing account of Paul Mullins; that the plaintiffs had wrongfully caused the Corn Belt Products Company to become the record owner of the property; and that the property was the homestead of the defendants. The defendants prayed for an accounting, judgment for the amounts due them, and that the title to the residence property be quieted in them.

The plaintiffs filed a reply and answer to the cross-petition containing a general denial and alleging that the defendants had defaulted in their contract to purchase the residence property and that pursuant to the terms of the contract the defendants' rights in the property were forfeited; that in an action of replevin pending in the same court the plaintiffs had taken possession of property previously entrusted to Paul Mullins having a value of approximately $19,000; that it was necessary that the ownership of the property taken in replevin be determined in this action; that after giving the defendants credit for this property there was more than $32,000 due the plaintiffs for property converted by the defendants; and that the defendants were given credits upon the purchase of the residence property without knowledge by the plaintiffs that the defendants had converted the plaintiffs' property.

The referee found that Paul Mullins was an employee of the plaintiffs and that there was no agreement for a bonus as alleged by the defendants; that the property taken in the replevin action was the property of the plaintiffs; that Paul Mullins had converted property of the plaintiffs having a value of $17,516.60; that of this amount $7,337.10 was represented by a bank account and other property purchased by Mullins which should be turned over to the plaintiffs; that the plaintiffs should have judgment against the defendant Paul Mullins for the balance of $10,179.50; that the plaintiffs purchased the residence property in Tecumseh and then entered into a contract to sell the property to the defendants for $4,500; that deductions from the salary of Paul Mullins had reduced the balance due on the contract to $841.20; that approximately $2,000 had been paid on the contract before any substantial conversion of the plaintiffs' property had occurred; that the defendants should be required to pay the plaintiffs $2,500 to receive title to the property; and that if the defendants fail to pay the $2,500, the plaintiffs should pay the defendants $2,000 and retain the title to the property. The referee recommended that judgment be entered in accordance with his findings.

The district court generally approved and confirmed the report of the referee. The court found and adjudged that the property taken in the replevin action was the property of the plaintiffs; that the plaintiffs should receive the bank account and other property which had been purchased by the defendants with the proceeds from the sale of the plaintiffs' property; that the plaintiffs should have judgment against Paul Mullins for $10,179.50; that the plaintiff Corn Belt Products Company was the owner of the residence property in Tecumseh and that there was a balance of $2,500 due upon the contract; and that unless the defendants paid the sum of $2,500 within 60 days, the Corn Belt Products Company was entitled to strict foreclosure of the contract.

The assignments of error which require...