Myra Foundation v. Harvey

• Decision Date: 30 December 1959
• Docket Number: No. 7779,7779
• Citation: 100 N.W.2d 435,76 A.L.R.2d 1313
• Parties: MYRA FOUNDATION, a domestic corporation, Plaintiff and Appellant, v. L. A. HARVEY, d/b/a L. A. Harvey and Associates, Defendant and Respondent.
• Court: North Dakota Supreme Court

Page 435

100 N.W.2d 435

76 A.L.R.2d 1313

MYRA FOUNDATION, a domestic corporation, Plaintiff and Appellant, v. L. A. HARVEY, d/b/a L. A. Harvey and Associates, Defendant and Respondent.

No. 7779.

Supreme Court of North Dakota.

Dec. 30, 1959.

Rehearing Denied Jan. 21, 1960.

Syllabus by the Court.

1. Where parties enter into a contract, by the terms of which, one party is to perform services for the other, and the contract neither expressly nor impliedly fixes any time for its duration, it may be terminated by either party by giving reasonable notice to the other.

2. It will be presumed that a letter duly directed and mailed was received in the regular course of business. This is a rebuttable presumption, and the question of whether it has been sufficiently rebutted is one for the jury.

3. Ordinarily one who performs services for another, without any express agreement as to compensation, is entitled to the reasonable value of his services.

4. Ordinarily an accountant does not have a lien upon his clients' records for services performed in connection with such records.

5. An accountant may acquire a lien, upon records delivered to him by a client, for services performed in extending and improving such records. Sec. 35-2011 NDRC 1943.

6. Where an accountant after a demand for possession, retained all of the records of a client, including some upon which he had a lien for services and some upon which he had no lien, it was error for the trial court to refuse to permit any evidence of damages for the detention of the records.

7. A plaintiff in an action has the right to open and close unless the judge for special reasons directs otherwise. Sec. 28-1410 NDRC 1943.

8. The fact, that the state of the pleadings is such that the defendant in a case has become the virtual plaintiff, is a sufficient special circumstance to authorize the trial judge to change the order of trial.

Day, Stokes, Vaaler & Gillig, Grand Forks, for appellant.

Shaft, Benson & Shaft, Grand Forks, for respondent.

BURKE, Judge.

On reassignment. Plaintiff brought this action to recover the possession of certain books of account and records which it alleged were being wrongfully detained by the defendant. The defendant answered, asserting that he had legal possession of the books and records by virtue of a lien for fees for services performed for the plaintiff in connection with such books and records and counterclaimed for the reasonable value of such services. The plaintiff in his reply denied any indebtedness for services and alleged damages for the detention of the books and records. Upon the trial of the case the defendant obtained a verdict and judgment upon his counterclaim. Plaintiff thereafter moved for judgment notwithstanding the verdict or a new trial. This motion was denied and plaintiff has appealed both from the order of denial and from the judgment.

There are many specifications of error but plaintiff in its brief states that all issues raised by the specifications may be resolved under three separate headings. They are:

1. Is the verdict of the jury contrary to the evidence and against the law?

2. Did defendant have a lien on plaintiff's books and records?

3. Did the court err in changing the order of trial?

Upon the issue of the sufficiency of the evidence plaintiff asserts that the evidence establishes that auditing and accounting services were performed by the defendant for the plaintiff in accordance with the terms of an express contract which provided that defendant's compensation for such services should be $100 a month. Plaintiff agrees that some amount is owing to the defendant but states that it must be computed according to the provisions of the express contract. Defendant agrees that originally his arrangement with the plaintiff was defined by an express contract but states that this arrangement was terminated and that the services for which he sought compensation in this action were performed without any express agreement as to fees and that he is therefore entitled to recover the reasonable value of his services under an implied contract. Since the trial judge submitted the issue of whether defendant's services were performed under an express or implied contract to the jury and the jury by its verdict determined that the express contract had been terminated and had been succeeded by an implied contract, the real question here is whether the evidence was sufficient to make that issue a question of fact for the jury.

The first contract between the defendant and the plaintiff had its origin in a proposal made by the defendant in a letter to Carroll Day, then president of the defendant, dated December 1, 1952. This proposal was as follows:

'As we understand it, no bookkeeping has been done for the Myra Foundation since January 1, 1952. We would like very much to start in on this and bring it up to date, and we would be willing to take the job on for $100.00 a month. This would include writing up and posting the books, furnishing the regular financial report, and preparation of Federal and State income tax returns.'

There was no written acceptance of this proposal but it was either accepted, orally or impliedly, because the books of the plaintiff were turned over to the defendant, and the work was done and paid for at the rate of $1,200 a year for the years 1951, 1952 and 1953. It will be noted that the contract, neither expressly nor impliedly, fixes any time for its duration. Either party might therefore terminate the contract upon giving reasonable notice to the other. 17 C.J.S. Contracts Sec. 398, p. 887; 12 Am.Jur. (Contracts, Sec. 305) 860.

While there is no testimony to that effect, the bill, presented by the defendant to the plaintiff on December 1, 1955, suggests that at sometime prior to the presentment of the bill, there may have been an agreement to modify the contract. This bill sets forth charges as follows: for accounting services for 1954, $1,200; for preparation of income tax returns for the years 1950, 1951, 1952, 1953 and 1954, $250; and for expert advice $550. Prior to the rendition of this bill the annual charge had been $1,200. According to the proposal contained in the letter of December 1, 1952, this charge was to include compensation for preparing income tax returns. If the contract had not been modified the item of $250 for preparing income tax returns was improper. The bill however was paid and, in so far as the record shows, without protest.

The defendant testified that, attached to the bill of December 1, 1955, was a typewritten note which read:

'Carroll

'It will be positively necessary to substantially raise the cost of our service to the Foundation for the year 1955 and subsequent years due to the constant increase in the cost of doing business.

'Len'

The Carroll to whom this note was addressed was identified as Carroll Day, who was then president of the plaintiff corporation, and the Len who signed the note was identified as the defendant L. A. Harvey. Although some attempt was made to discredit the evidence of the defendant in this regard by testimony that neither the bill nor the note could be found in the files of the plaintiff, the evidence of the defendant as to mailing was explicit, it was supported by his office mailing log and the bill was paid by the plaintiff. The presumption is that a letter duly directed and mailed was received in the regular course of business. Sec. 31-1103 NDRC 1943. If the note was received by plaintiff there can be no question that it operated to terminate the prior contract for compensation for auditing services. It explicitly gave notice that the old contract would not be continued. The question of whether plaintiff received the note was submitted to the jury upon evidence which clearly warranted an inference that it had been received.

In February 1956, the plaintiff turned over to the defendant all of its receipt books, check stubs, invoices and vouchers for the purpose of posting all of the books of the corporation and preparing an audit for the year 1955. It is conceded by all parties that there was no new express agreement for compensation for these services.

In March 1956, Mr. Day died and Mr. A. W. Stokes succeeded to the presidency of the plaintiff corporation. Thereafter Mr. Harvey, the defendant, suggested that the audit and accounting...