Ingram v. Osborn

• Decision Date: 22 November 1887
• Citation: 35 N.W. 304,70 Wis. 184
• Parties: INGRAM, SURVIVING PARTNER, v. OSBORN, GARNISHEE.
• Court: Wisconsin Supreme Court

70 Wis. 184

35 N.W. 304

INGRAM, SURVIVING PARTNER,

v.OSBORN, GARNISHEE.

Supreme Court of Wisconsin.

November 22, 1887.

Appeal from circuit court, Eau Claire county.

September 29, 1884, C. C. Smith, the principal defendant herein, entered into a written contract with the Milwaukee, Lake Shore & Western Railway Company, wherein he agreed to perform all the labor and furnish all the materials necessary to fully complete, in the most substantial and workmanlike manner, and to the satisfaction and acceptance of said company's chief engineer, an ore dock at Ashland, according to specifications annexed, under the direction of the superintendent in charge of the work and said chief engineer, upon (among others) the terms and conditions (1) that such work should be commenced within 10 days thereafter and fully completed on or before June 15, 1885, except as to filling with slabs and rock, and the same was to be completed by July 15, 1885; (2) that said superintendent and chief engineer should have full power to reject and condemn all work and materials which, in their opinion, should not conform to the spirit of such agreement, and to decide every question which might or could arise thereunder, and their decision was to be conclusive upon both parties; (3) that the contract was to be performed in such a manner that Smith was not to be relieved from the immediate charge and responsibility of the work, no part of which was to be transferred or sublet to other parties, unless by the sanction of the company; (4) that if any foreman or laborer employed by Smith, should, in the opinion of the superintendent, execute his work unfaithfully or unskillfully, or should be remiss, inadequate, disrespectful, or riotous, he might discharge him; (5) that if any damage should be done by Smith or any of his men to any lands adjoining, or in the vicinity of such work, the company might pay the same and deduct it from the value of the work; (6) that in doing the work, Smith was not to keep or to suffer to be kept or used by any of his men any ardent spirits, and was liable to discharge if he did. It was also agreed therein that the company was to pay as agreed, upon the engineer's certificate of completion of the work; that estimates were to be made during the progress of the work on or about the first of each month, and payments made upon the certificate of the superintendent approved by the engineer, on the twentieth of each month for the amount of such estimate less 10 per cent.; that, upon such payments being made, the title to the property covered thereby was to vest in the company as security for such payments; that Smith execute and deliver to the company a bond in the penal sum of $25,000, with two good and sufficient sureties to be approved by it, conditioned for the full and faithful performance of all the terms, conditions, covenants, and agreements contained in the contract; that, if Smith refused or neglected to remedy an imperfection pointed out, or violated any of the conditions of the contract, then, in certain conditions, the engineer was empowered to terminate the contract, and the company was thereupon authorized to retain such percentage and recover the full penalty of the bond, or take measures to complete the work and deduct the expense from the contract price; that said chief engineer was thereby made an umpire to decide all matters of dispute between the parties arising or growing out of the contract, and his decision to be final and conclusive.

In taking the contract, Smith's bid was some $30,000 lower than any other, and, being insolvent, he was unable for a time to give the requisite bond. He thereupon offered a half interest in the contract to the garnishee, Osborn, if he would furnish the bond and sureties required, and the means to perform the contract, which he represented would not exceed $5,000. About November 10, 1884, by verbal agreement, Osborn accepted such offer, by which he was to have a half interest in the contract and the profits accruing therefrom, and furnish such bond and sureties, which he did, and thereby agreed to put $5,000 into the business, but with the understanding that he was not to devote more than a week in a month to the business. Smith was then, to the knowledge of Osborn, badly embarrassed, insolvent, and practically bankrupt. December 29, 1884, and after Osborn had put $4,800 into the business in pursuance of such agreement, and when it was evident that he would have to put in $3,000 more the next month, and devote his whole time to the business, Smith, by an instrument in writing, with the consent of said sureties and the company, sold, assigned, conveyed, and set over to said Osborn all his right, title, and interest in and to said contract, together with all profits which had accrued or might thereafter accrue thereon, together with all contracts made by Smith for timber, rock, materials, tools, and supplies to carry out said contract, together with all such things and supplies then on hand for such purpose, together with all moneys due or to become due from the company thereon, upon the express condition, however, that Osborn, by the acceptance thereof, agreed to and did assume and pay all liabilities on Smith's part arising or growing out of said contract with the company, and such other contracts, fully and faithfully,--the business of carrying out and completing said contract to be done by Osborn in the name of “C. C. Smith & Co.;” that at the same time, Osborn, in writing, accepted of said assignment upon the terms and conditions stated, and thereby agreed, in consideration of such consent of the company, and said assignment, to fully and faithfully carry out and complete said contract, and to keep and perform all the terms and conditions thereof on the part of said Smith, and also to pay said Smith, for his services as superintendent of the work of such performance of said contract, $200 per month from the commencement of the ore dock, November 15, 1884, to the time of its completion, and that if the net profits accruing therefrom should equal or exceed $13,600, then to pay to the Batavian Bank of La Crosse $5,000, to be applied on the indebtedness of Smith to said bank; that if said net profits should be less than $13,600, then he agreed to pay said bank one-half of the amount of said net profits less the said $200 per month. Osborn received from the company on the contract, $177,000, and the net profits he had received thereon amounted to $17,392.14, including the $5,000 paid, and he hoped to get $1,715.55 more. He paid to the bank $2,000, July 27, 1885, and $3,000, September 28, 1885, and the same were indorsed on said agreement. June 23, 1885, the plaintiff commenced this action by the service of the summons and complaint upon Smith, and the garnishee summons and papers upon Osborn. At that time the contract with the company had been performed to within $1,000. The complaint against Smith was upon notes dated March 1, 1884, and in which judgment was entered in favor of the plaintiff for $5,715.40 damages and costs, September 27, 1886. Osborn, as garnishee, answered in time, denying any indebtedness or liability as such garnishee. The plaintiff took issue in due form. Upon the trial of the garnishee action, the only evidence consisted of said several writings, the judgment roll against Smith, and the testimony of said garnishee; and thereupon the court found as a conclusion of fact, in effect, that at the time of the service of the garnishee papers on said Osborn, he was not indebted to said Smith in any sum whatever, and had no property or effects in his hands belonging to him, or in which he had any interest. And as conclusions of law the court found that said garnishee should have judgment, that said garnishee proceedings against him be dismissed, and that he recover of the plaintiff the costs of the action. From the judgment entered thereon the plaintiff brings this appeal.

L. M. Vilas, for appellant.

Cameron, Losey & Traer, for respondent.

CASSODAY, J.

The plaintiff's indebtedness against Smith, upon which this action was brought, was incurred more than six months before the making of the contract with the railroad company. At the time of taking that contract, Smith had no available means and was insolvent, and...