Pratt v. McCoy

• Decision Date: 27 March 1911
• Docket Number: 18,520
• Court: Louisiana Supreme Court
• Parties: PRATT v. McCOY et al

54 So. 1012

128 La. 570

PRATT
v.
McCOY et al

No. 18,520

Supreme Court of Louisiana

March 27, 1911

[54 So. 1013]

Appeal from Civil District Court, Parish of Orleans; Walter B. Sommerville, Judge.

Suit by Geo. K. Pratt against John F. McCoy and another for specific performance of a contract. From the judgment, plaintiff appeals. Judgment set aside, and suit dismissed, and writs of sequestration and injunction dissolved, and judgment rendered as stated.

See, also, 125 La. 1040, 52 So. 151.

Charles P. Fenner, for appellant. ^[1]

H. M. Ansley and G. W. Flynn, for appellees.

OPINION

PROVOSTY, J. [54 So. 1014]

[128 La. 574] The defendant John F. McCoy, an experienced contractor in street drainage and paving work, desiring to bid on certain contracts that were being advertised by the city of New Orleans for that kind of work, but lacking the large amount of ready money that would be needed for carrying out these contracts, proposed to the plaintiff, Dr. George K. Pratt, a man of supposed large means, that the latter join him in the enterprise, on the basis of an equal division of the profits, and Dr. Pratt consented, and to evidence their agreement the parties executed the following instrument:

"This agreement, this day made and entered into by and between John F. McCoy and the Concrete Construction & Contracting Company, both of the city of New Orleans, parties of the first part, and George K. Pratt, of the city of New Orleans, party of the second part:

"Witnesseth, that, whereas, said Concrete Construction & Contracting Company has bid on certain repaving and subsurface drainage work, and is about to enter into contract with the city of New Orleans, as follows:

[128 La. 575]

Subsurface drainage contract on Maga-
zine street, from Canal to Julia, about	$ 32,690 00
Repaving contract on Magazine street,
from Canal to Julia, about	30,860 50
Subsurface drainage contract on Gravier
street, from Camp to Delta, about	25,620 00
Repaving contract on Gravier street, from
Camp to Delta, about	12,000 00
Subsurface drainage contract on Common
street from Magazine to Front, about	16,558 00
Repaving contract on Common street,
from Magazine to Front, about	6,400 00
$ 124,130 60

"And, whereas, under authority of a resolution of the board of directors of the said Concrete Construction & Contracting Company, adopted May 24, 1907, the said John F. McCoy has entered into an agreement with the said George K. Pratt, whereby, in consideration of the payment to him of one-half of the profits which may be derived from said contracts, the said George K. Pratt will finance the said undertaking and advance such moneys as may be necessary for the carrying on of the same:

"Now, therefore, in consideration of the foregoing, the parties of the first and second parts severally bind and obligate themselves as follows:

"Upon the execution of this agreement the several contracts above referred to, as well as all certificates and payments in connection with the same, shall be transferred and assigned to said George K. Pratt, or to his order, or to such bank as he may select and designate as subrogee.

"Upon completion of each of the aforesaid six contracts, accounts shall be audited, and the net profit or loss upon same shall be definitely fixed and determined by the parties to this agreement, reimbursement being first made of all amounts advanced, and, in so doing, the same shall be taken from the proceeds derived [54 So. 1015] from the property owners' portion of certificates when issued and collected, and the balance (if any) out of the city's portion of said certificates, when sold as hereinafter provided, and written acknowledgment shall be given by and to both parties to this agreement as to the existing conditions after auditing.

"All certificates and the cash derived from the sale or collection of the same shall remain in the control of the said George K. Pratt until after the completion and auditing of all of said contracts, to be used by him exclusively in making payments or in securing funds for the carrying on of said contracts and the work upon the same, or as collateral in connection with the bond required by the city of New Orleans.

"The said George K. Pratt shall have the right, in his discretion, to pledge any and all certificates for advances necessary to carry out this agreement, and he shall further have the right to sell a sufficient amount of certificates, representing the city's portion of payments under said contracts: Provided, that sufficient [128 La. 576] funds are not derived from the collection of the property holders' certificates for advances made by him: Provided, further, that, in selling the city's portion of said certificates, both parties to this contract do agree as to the price, or, in the event of disagreement, that he give written notice to the parties of the first part, designating the particular certificates of the city's portion that he proposes to sell, the price of the same, and the purpose of said sale, and that said parties of the first part, after such notification, do fail within sixty days to procure and produce a bona fide purchaser for said city's portion of said certificates at a higher price.

"All material accounts and labor rolls and other 'necessary incidentals' shall be charged to and as expenses.

"In consideration of the time and efforts of the said John F. McCoy, as general manager, being given to the carrying on of the aforesaid contracts and their rapid completion, the salaries of the officers of the Concrete Construction & Contracting Company and bookkeeper and office expenses, as may be designated by the said John F. McCoy, shall be advanced to him monthly for account of said company by the party of the second part during the running of the said contracts, and until the final completion of the same: Provided, however, that the total amount so advanced shall be no more or less than the sum of $ 500 per month, and that it shall be reimbursed to said party of the second part, and may be taken by him out of the profit of the parties of the first part, and may be adjusted in the regular auditing following the completion of each contract: And provided, further, that said advances shall in no event be made for a longer period than twelve months.

"The said parties of the first part shall furnish the said George K. Pratt their notes for advances in and for pay rolls, materials, and incidental accounts and salaries, etc., monthly, which he may discount or use as he may deem proper, returning the same when, after auditing, it shall appear that sufficient moneys have been realized from the proceeds of said contracts to meet and pay all expense accounts and indebtedness of said Concrete Construction & Contracting Company.

"In the event of legal services being required in connection with any of the contracts aforesaid, the party of the second part shall have the right of naming and employing the attorney at law who shall be engaged for such purpose.

"The party of the second part shall also have the right to appoint one man to act as time-keeper, paymaster, and material clerk, at a salary of seventy dollars per month, whose duties shall be the paying of the men employed, receiving of material, and the keeping of the men's time. He shall have no authority to hire or discharge, and shall be under the supervision of the manager, John F. McCoy, by whom all bills and pay rolls must be approved before payment. The salary of said appointee shall not be paid from the five hundred dollars per [128 La. 577] month stipulated for above as salaries and office expenses, but shall be charged to the expense account, and said John F. McCoy shall have the right to discharge said employe if unsatisfactory, and shall, in such case, notify the party of the second part to replace with another appointee.

"Itemized reports of materials received, material used, and cost of labor, and all other expenses, will be furnished the party of the second part daily, duly signed by manager and timekeeper.

"After all contracts have been completed and all expenses paid, the net profit derived from said contracts shall be determined and divided as follows: All claims due and all unused material and tools and implements purchased in connection with said contracts shall be fairly appraised, all certificates still unsold and uncollected shall be duly classified, and the amount of the cash balance on hand from the sale or collection of certificates shall be exactly ascertained. One-half of said appraisement and certificates and cash shall be given and belong to said party of the second part under the terms of this agreement, and the remaining half of said appraisement and certificates and cash shall belong to the parties of the first part, subject to reduction for reimbursement to the party of the second part of such amount as may be due him for advances for salaries and office expenses at the rate of five hundred dollars per month, as hereinabove set forth, and of such other sum or sums as the parties of the first part may have, by written acknowledgement, declared to be payable out of their share of the profits to the said party of the second part.

"In testimony whereof, the parties of the first and second parts have hereunto signed their names, at the city of New Orleans, this 12th day of August, 1907, in execution of the foregoing agreement, the same being made in duplicate.

"Concrete Construction & Contracting Co.,

"William Demourelle,

"President.

"John F. McCoy,

"Secy. and Treas.

"John F. McCoy.

"George K. Pratt.

"Attest:

"John A. McCoy.

"Jas. McConnell, Jr."

It is well to mention here that the Concrete Construction & Contracting Company...