Survis v. A. Y. McDonald Mfg. Co.

• Decision Date: 08 August 1947
• Docket Number: No. 34389.,34389.
• Citation: 28 N.W.2d 720,224 Minn. 479
• Parties: SURVIS v. A. Y. McDONALD MFG. CO. et al.
• Court: Minnesota Supreme Court

28 N.W.2d 720

224 Minn. 479

SURVIS v. A. Y. McDONALD MFG. CO. et al.

No. 34389.

Supreme Court of Minnesota.

August 8, 1947.

Appeal from District Court, Hennepin County; Paul S. Carroll, Judge.

Action by Francis Survis against A. Y. McDonald Mfg. Co. and S. P. Adams to

recover damages for malicious prosecution. A trial resulted in a verdict of $4000 for plaintiff against both defendents. From an order denying defendants' alternative motion for judgment or for a new trial, the defendants appeal.

Order affirmed.

M. E. Culhane and A. E. Bryngelson, both of Minneapolis, for appellants.

Drake & Drake, of Minneapolis, for respondent.

FRANK T. GALLAGHER, Justice.

Appeal from an order denying defendants' alternative motion for judgment or a new trial.

For some time prior to the commencement of the controversy which culminated in the present litigation, plaintiff was engaged in business as a plumbing, heating, and tinning contractor at St. James, Minnesota, under the name "Survis Tin Shop." During this period, defendant A. Y. McDonald Manufacturing Company (hereinafter called McDonald) manufactured and distributed plumbing heating, and tinning equipment and supplies. Defendant S. P. Adams was its credit manager. On September 16, 1942, Adams executed a criminal complaint charging that plaintiff, on or about November 24, 1941, had violated M. S.A. § 514.02, which provides: "Any contractor or subcontractor on any improvement to real estate within the meaning of section 514.01, who, with intent to defraud, shall use the proceeds of any payment made to him on account of such improvement by the owner of such real estate or person having any improvement made, for any other purpose than the payment for labor, skill, material, and machinery contributed to such improvement, while any such labor performed, or skill, material, or machinery furnished for such improvement at the time of such payment remains unpaid for, shall be guilty of larceny of the proceeds of such payment so used."

The acts specified as a violation of this criminal statute were that plaintiff had obtained a "Kewanee boiler and fittings" from McDonald and installed it in the premises owned by the Uleberg Company, and that, having collected, he failed to remit to McDonald the purchase price of this equipment. A warrant issued on this complaint. Plaintiff was arrested in California and extradited to Minnesota. At the preliminary hearing, plaintiff consented to be and was bound over to the district court. While the proceeding was pending in the district court of Watonwan county, it was dismissed upon the motion of the county attorney. Thereafter, plaintiff instituted the present action against defendants, claiming damages for malicious prosecution. A trial by jury in Hennepin county resulted in a verdict of $4,000 for plaintiff against both defendants.

Before considering the assignments of error, it will be necessary to examine in some detail the course of dealing which transpired between McDonald and plaintiff during the years preceding the period now critical and the events which caused defendants to institute the criminal action.

Plaintiff, in explaining the development of his business relations with McDonald during the years following 1935, testified:

"Q. How did you get goods during 1935? A. I sent in cash with orders on the start and then it was sent C. O. D. One day the freight depot called me up and said there was a bill of lading with no invoice attached and if I wanted to pay the freight and take it, it was all right, so I paid the freight and took the shipment home. Before any other shipments came through, Mr. Koppi told me that the company had given me a credit account which continued to December 8, 1941.

"Q. Well, after that how did your goods come with reference to being C. O. D., or with reference to any requirement that you pay for them on delivery? A. They came with terms, figure 2% the tenth of the following month and that carried through all of the time that I dealt with the company up to, and including the last shipment, about December 8, 1941. McDonald Company did not at any time from 1935 to 1941, so far as I know, make any inquiry as to the financial standing of any person with whom I was doing business. I believe they made an inquiry as to the financial standing of Mr. Bishop.

"Q. Mr. Survis, at any time that you were doing business with the McDonald Company, did the company file a lien, or attempt to file a lien in connection with any work done by you? A. No, sir.

"Q. Was there ever any conversation or suggestion on their part that they reserved any rights to file liens? A. No, sir."

The testimony of Adams accords with that of plaintiff on this point, except that he claims that McDonald did on occasion check the credit of persons for whom the materials were to be installed by Survis.

There is some conflict in the evidence with respect to the manner in which orders were handled and accounts maintained. It was agreed that plaintiff, in ordering materials sold directly from his place of business for minor repairs and the like, did not specify the purpose for which such materials were to be used. However, the testimony on behalf of defendants was to the effect that all materials supplied for the improvement of specific real estate were sold by McDonald to plaintiff in response to orders designating the job on which the materials were to be used; that the numbered invoices for the material sent by McDonald to plaintiff named the real estate to be improved; and that remittances made by plaintiff to McDonald also identified the source of the funds remitted and the particular items to be paid. Plaintiff, on the other hand, while apparently conceding that records were frequently maintained in such manner as to indicate the "job" where the supplied materials were to be used, testified that the practice was not an invariable one and, insofar as followed by him, was for personal convenience. He testified: "It was my privilege to specify the payment of the job or invoice, if I wished to. I didn't always do it." The following also appears:

"Q. Will you explain in what manner you found it convenient to have the name of the owner on the invoice? A. Because I bought things that were almost similar, yet were not similar, for different jobs, and in order to reorder for breakage and to keep my own records of who got what, I put those names and wanted those names written in there.

"Q. I think you have testified that there never was any requirement on the part of the company that you furnished them with the name of the owner? A. That is right."

Again plaintiff testified: "The designation on orders was for my own information, not because the company required it. They could ask me, and I would give it to them. On a few occasions they did."

McDonald maintained at its office in Minneapolis ledger accounts summarizing the transactions which occurred between it and plaintiff. These ledger cards, which were an important item of evidence in the case, bear the general caption "F Survis Tin Shop St James Minn." The ledger sheet is divided into nine columns. One of these columns is captioned "Date," another, "Description," a third, "Charges," a fourth, "Credits," and a fifth, "Balance." The ledger cards contained in the printed record cover the period from August 7, 1939, to December 10, 1942. Under the caption "Description," a variety of types of notations appear. Illustrative is the following description: "15320 2% E Perrier." The number apparently refers to the number of the invoice, with the notation "2%" referring to the discount allowed if paid before the tenth of the month, and the name indicating the property owner whose property was to be inproved with the materials supplied. Under the caption "Balance," the total amount of unpaid charges is carried. Where payments are inserted under the caption "Credits," the balance is reduced by the amount of the credit. It does not appear from the ledger sheet that separate accounts are carried for the particular items furnished on a particular job. It does appear from the sheets that the F. Survis Tin Shop is given a rating, presumably for credit purposes. The letter "M" appears following the caption "Rating" on two of the ledger sheets. The last entry appearing on the ledger sheets carries under the caption "Description" the following words: "Reserve Ledger Acct #573"; under the caption "Credits," the amount "$1,279.51"; and under the caption "Balance," ".00." Apparently this entry was made on December 10, 1942. In the lower left-hand column of this ledger sheet are the words written in longhand, "Left for Cal 1/21/42."

In addition to the general ledger, "copies of invoices, statements of remittances and his orders and correspondence" were kept in the office of McDonald.

As previously stated, the specific crime of which plaintiff was charged by defendants related to money paid on account of an installation on the premises of the Uleberg Company, a partnership consisting of A. J. Uleberg and J. C. Ranseen. The ledger sheets, verified by the invoices, show that the following materials were supplied on account of this work, with dates as indicated:

                    9   25   50451   2%      $ 18.38
                    9   23   49824   2%       281.20
                

(It is to be noted that under the caption "Description" the word "Uleberg" is written in longhand with respect to this item.)

                   10    7   51879   2%         4.91
                   10   10   52597   2%        14.25
                

                   10   23   54366   2%        11.66
                   10   22   54326   2%         1.75
                

A letter dated September 22, 1941, from McDonald to plaintiff, reads as follows: "I just OK'ed an order for Kewanee boiler to be shipped to you direct and I would like to inquire the name of the job on which this boiler is to be used. These reports must be sent to our general office. Thanking you very much."

In longhand and signed by plaintiff on the bottom of this letter appears this notation: "This...