Winston v. McKnab

• Decision Date: 07 November 1931
• Docket Number: 29996.
• Parties: WINSTON v. McKNAB.
• Court: Kansas Supreme Court

4 P.2d 401

134 Kan. 75

WINSTON v. McKNAB.

No. 29996.

Supreme Court of Kansas

November 7, 1931

Syllabus by the Court.

Where verdict clearly discloses that jury disregarded instructions given by court, new trial should be granted.

Where controverted material issue is submitted to jury, both plaintiff and defendant are each entitled to have fair determination of such issue.

In the trial of a civil action to a jury, the instructions of the court embody the law which should govern the jury in its deliberations. When it is clear from the verdict that the jury has disregarded the instructions of the court, a new trial should be granted.

When a controverted issue, material to the decision of an action, is submitted to a jury, each party to the action is entitled to have a fair determination of the issue.

Appeal from District Court, Cowley County; Oliver P. Fuller, Judge.

Action by Gus V. Winston against W. M. McKnab. Judgment for the plaintiff, and the defendant appeals.

Reversed and a new trial granted.

James A. McDermott and Richard B. McDermott, both of Winfield, for appellant.

Thos C. Wilson, Henry Lampl, and Rupert Teall, all of Wichita, and L. D. Moore and Harry O. Janicke, both of Winfield, for appellee.

HARVEY J.

This is an action to recover $4,664.06, the balance alleged to be due plaintiff from defendant on a specific oral contract for services rendered as an income tax accountant. Defendant pleaded the statute of limitations, denied liability to plaintiff, and averred that he had paid plaintiff for all services rendered. The court held the statute of limitations not applicable, instructed the jury that plaintiff could recover nothing unless he established the contract alleged but, in the event that contract was established, plaintiff should recover in accordance therewith. The jury returned a verdict for plaintiff for $2,750. Defendant has appealed and contends (1) that the court erred in holding the statute of limitations not applicable, and (2) that a new trial should have been granted for the reason that the jury disregarded the court's instructions.

Briefly the pertinent facts are: Defendant, an oil well drilling contractor, with other interests, had made a federal income tax return for 1917. Later, officials of the Internal Revenue Department made an audit of defendant's business for that year, as a result of which he was charged with an additional tax. In November, 1922, he employed plaintiff, who had had some experience as an income tax accountant, to go over the audit, recheck his books, and endeavor to have the additional tax abated. Later, the government officials checked defendant's income tax returns for the years 1918, 1919, 1920, and 1921, and compiled one audit covering those years, as a result of which defendant was charged with additional taxes. Defendant was informed of this, perhaps early in 1923, and had plaintiff check his business for the years covered by the later audit, with the view of having the additional taxes abated or reduced. As a result of plaintiff's efforts, the difference, or saving, to defendant between the additional taxes charged by the government and the taxes finally paid by him was $8,785.01 for the year 1917, and $49,045.89 for the years 1918, 1919, 1920, and 1921. Prior to the bringing of this action, defendant had paid plaintiff $4,645.20 on account of his services. There was no substantial controversy with respect to the facts as so far stated.

The contract relied upon by plaintiff as the basis for his action, as his petition was finally amended, was "*** That said defendant orally agreed with this plaintiff on the -- day of November, 1922, to pay this plaintiff for his said services a sum equal to twenty (20) percent of the amount saved to the defendant on his taxes; that thereafter and on the -- day of September, 1926, said agreement for compensation was modified by plaintiff and defendant, being orally agreed between them that the plaintiff's compensation for his work on the tax returns for 1918, 1919, 1920 and 1921 should be twenty (20) percent. of the first Twenty-five Thousand Dollars ($25,000) saved to said defendant, and ten (10) percent for the second Twenty-five Thousand Dollars ($25,000) saved to said defendant; five (5) percent for the third Twenty-five Thousand Dollars ($25,000). ***"

With respect to this contract, plaintiff testified that he was first employed by defendant in November, 1922, with respect to the audit and income tax for the year 1917, and the oral agreement was that he was to receive for his services 20 percent. of the amount saved to defendant; that the second audit, covering the years from 1918 to 1921, inclusive, had not been made at that time; that while he was working on the audit for 1917, and some time in the year 1923, the audit for the years 1918 to 1921, inclusive, was made by the government officials, and, at the defendant's request, he went to checking that over; that the work on both audits continued, as required, until in September, 1926, when he and defendant had a parol agreement modifying their original contract in such a way that with respect to the second audit, covering the years 1918 to 1921, inclusive, his compensation should be 20 percent. on the first $25,000 saved, 10 percent. on the second, and 5 percent. on the third. The payment which had been made to him on account of services was made in April, 1928. He further testified that he completed the work on the 1917 audit, and had that closed with the government, in April, 1924, although there was some talk by the government officials later, and extending on up to 1927, that this 1917 audit might be reopened. When the evidence disclosed that the work on the 1917 audit was completed in April, 1924, defendant asked the court to apply the three years' statute of limitations to any claim for the services on that audit. The court declined to do so, for the reason that the payment in 1928 could have been applied by plaintiff on that item, if he so desired, in the absence of any agreement to the contrary, and no such agreement was shown. In this, the ruling of the court was correct, and for an additional reason, that, as finally pleaded by plaintiff, he had but one contract with defendant, which was later modified to defendant's advantage. A part of the plaintiff's testimony supported those allegations, although his answers to some questions tended to show two separate contracts. The entire work appears not to have been completed until some time in 1927. This action was filed September 12, 1929, within three years thereafter, and was not barred by the statute of limitations.

On behalf of the defendant, the evidence was that there was no agreement for the compensation of plaintiff for his services based upon a percentage of the amount saved; that there was no talk of any percentage basis until in September, 1926 when plaintiff's services were substantially completed, at which time plaintiff proposed compensation on a percentage basis, which proposition was refused by defendant; that their...