Heink v. Lewis

• Decision Date: 26 June 1911
• Docket Number: 16,501
• Parties: OTTO HEINK, APPELLEE, v. THEODORE F. LEWIS, APPELLANT
• Court: Nebraska Supreme Court

131 N.W. 1051

89 Neb. 705

OTTO HEINK, APPELLEE, v. THEODORE F. LEWIS, APPELLANT

No. 16,501

Supreme Court of Nebraska

June 26, 1911

APPEAL from the district court for Douglas county: GEORGE A. DAY JUDGE. Reversed.

REVERSED.

Martin Langdon and Howard B. Smith, for appellant.

Charles W. Haller, contra.

OPINION

FAWCETT, J.

Plaintiff alleges that on or about February 17, 1906, he made an oral agreement with defendant that plaintiff should take charge of a certain brewery at Crete, Nebraska, and perform the duties of superintendent, manager, and brewmaster, and receive from defendant $ 75 a month therefor, which amount defendant agreed to pay; that he duly performed his part of the agreement and worked steadily from said date until January 1 1907, when it was orally agreed between plaintiff and defendant that plaintiff should receive from defendant for said services $ 125 a month, which defendant agreed to pay, and that plaintiff fulfilled his part of said new agreement until June 17, 1907; that defendant paid to plaintiff on account of the foregoing $ 75, $ 35 and $ 10; that during the year 1906 plaintiff at the oral request of defendant furnished money in the payment of help at said brewery and at a new one then building, and to pay for materials, in the sum of $ 750, no part of which has been paid. The answer denies all of the allegations of plaintiff's petition, and alleges "that the Western Brewing Association, the brewery referred to in plaintiff's petition, is a corporation duly organized according to the laws of the state of Nebraska, and located at Crete, Saline county, Nebraska;" that said association leased the old brewery from the estate of one Kobes; that plaintiff was chief promoter of said brewing association and became its president and was a stockholder and director of said brewing association; and that "(9) this defendant further states that he was not the owner of said brewery, and that he had no interest in the same, except as a stockholder; that he was not authorized by said association, nor did he have any authority, directly or indirectly, to hire any party or parties, as superintendent, brewmaster or otherwise, to work for said brewing association." The reply denies paragraph 9 of the answer, and denies that plaintiff was the chief promoter of said association. The jury returned a verdict for plaintiff for $ 500, upon which judgment was entered, and defendant appeals.

Some minor questions are discussed in briefs of counsel, but, having reached the conclusion that the judgment must be reversed for the reason that it is not sustained by the evidence, such other questions need not be considered.

The record shows that on June 1, 1905, plaintiff, Otto Heink, together with P. A. Gavin and A. L. Knabe, organized and incorporated the Western Brewing Association of Crete, Nebraska. The articles of incorporation provided that its capital stock should be $ 100,000, to be divided into shares of $ 10 each; "said capital stock when subscribed for and issued shall be fully paid and non-assessable." Of this capital stock 1,700 shares were issued to Mr. Heink, who was made president of the association, and 1,700 shares to Mr. Gavin, who was made secretary and treasurer. Just how much was issued to Mr. Knabe, who was made vice-president, is not shown. Neither Heink nor Gavin paid anything for their stock. Subsequently Knabe was substituted as treasurer, and Gavin became vice-president, in addition to his secretaryship. All three became directors, and, so far as the record shows, continued as such unless Mr. Lewis, when he later became a member of the association, succeeded Mr. Knabe in that capacity. The evidence upon this point is not very clear. It is clear, however, that Heink and Gavin were directors from start to finish. The original incorporators having paid nothing for their stock, there was no money in the treasury, so that it was a corporation on paper, but without funds. Mr. Knabe was a friend of defendant Lewis, and occupied the same office with him in the New York Life Building in Omaha. At the beginning of their business career Mr. Knabe and Mr. Gavin, who seemed also to have been acquainted with defendant, borrowed money from him from time to time. Among other sums they borrowed $ 2,500 with which to furnish a site for a brewery, and gave him therefor the association's note. Instead of building a brewery, they finally decided to lease the Kobes brewery at Crete, after which they entered upon the brewery business and also conducted a saloon in that city. After they had been borrowing for some time, Heink asked Mr. Knabe from whom they were borrowing money, and finally about July 1, 1906, Heink was introduced to Mr. Lewis by Knabe. Mr. Knabe testifies to this positively, and says that Heink had never met Lewis prior to the time of this introduction. Shortly thereafter, the exact date not being shown, defendant was induced to purchase a block of the association's stock, for which he paid into the association $ 5,000 in cash. The brewery burned in June, 1907, and the books of the association were burned in that fire. Plaintiff does not testify as to the proceeds of sales of beer. Gavin, who, according to the testimony of plaintiff, was to receive $ 100 a month as business manager, was unable to state the amount of such sales. Knabe testified that as treasurer he went over the books with the plaintiff, and that the books as made up by plaintiff showed that plaintiff had received from sales of beer about $ 6,900. This, with the $ 5,000 cash paid in by defendant for his stock, made $ 11,900. This was not sufficient, however, to keep things going, so the association borrowed $ 6,000 more from defendant, making $ 11,000 in all that defendant paid into the treasury of this association. Plaintiff testified that between July, 1905, and February 17, 1906, he and Gavin and defendant met on numerous occasions in Omaha and Crete "and talked and planned about engaging in the brewery business at Crete." According to his statement, these interviews began a month after the corporation had been formed, and ended nearly five months before Knabe says Heink and Lewis had ever met. Plaintiff further testified that on or about February 17, 1906, the three met again in the office of the association in Crete, and that it was there mentioned that the income from the business would not be sufficient to pay plaintiff and Gavin, and that they both stated that they would have to have money for their services, or "we could not live;" that defendant then said, "'Of course, you two men have families to support, and I will pay your salaries out of my own pocket.' He, Lewis, at that time, agreed to pay me out of his own means $ 75 a month for my services as superintendent and brewmaster of the business, and to pay Patrick Gavin $ 100 a month for his services as manager of the business. Under this promise of Lewis I went to work." If the testimony of Knabe be true, then plaintiff commenced to work 4 1/2 months before he had ever met defendant. Plaintiff says that he continued to work under that agreement until January 1, 1907, when he told Lewis that he had an offer of $ 125 a month from a brewery at Wilber; that unless his salary was raised he would quit and go there; that Lewis then agreed to pay him $ 125 a month for his services, and that under this oral agreement he worked steadily from January 1, 1907, to June 17, 1907. He testifies that the only money he ever received from Lewis was $ 75, $ 35 and $ 10, or a total of $ 120, covering a period of time when, according to his testimony, he would have earned from Lewis nearly $ 1,500.

Keeping in mind the declaration which he said he made to defendant that he would have to have money for his services or he could not live, we are next met with the remarkable testimony by plaintiff that defendant told him in January, 1906, which was before the company had commenced to do business, that if he plaintiff, would advance moneys for work, labor, material, and expenses in the business and construction work, as the payments came due, defendant would personally pay back all the money he had so advanced, and that, pursuant to that agreement, he advanced from time to time in 1906 and 1907 $ 750. The first time, according to his testimony, that he made any demand upon Lewis to pay him the salary which had been accruing was in December, 1906, at which time he says defendant told him that when he sold his Dakota and Kansas land "he would pay me, and pay me everything back." He further testifies that on January 10, 1907, defendant showed him all the papers in his proposed land deal in Dakota and Kansas; that these papers were already made out to transfer the property; that defendant then told him that when he got the money from these lands he would pay him. He testifies: "I told him that I would not wait any longer, and went out. He came and called me back into the office, and told me if I would stay he would pay me, and also pay me extra for the trouble I had been put to." He also testifies that Knabe and Gavin were there at the time. Knabe flatly denies any such conversation. Weber, a man who worked at one time for the association, testified to having two interviews with Lewis in Omaha in March or April, 1907. He says: "I telephoned Lewis, and he said he was ready to close the land deal and he was to come down and pay us off;" that by "us" and "we" he meant Heink and himself. He further testified that the work he did was for the association; that the association paid for part of his services, and Lewis promised to pay the rest of it, if he stayed; that President...