Title: Rocky Mountain Helicopters, Inc. v. Air Freight, Inc

State: wyoming

Issuer: Wyoming Supreme Court

Document:

Rocky Mountain Helicopters, Inc. v. Air Freight, Inc1989 WY 91773 P.2d 911Case Number: 88-213, 88-214Decided: 04/24/1989Supreme Court of Wyoming
ROCKY MOUNTAIN 
HELICOPTERS, INC., A UTAH CORPORATION; AND AIR TODAY, INC., APPELLANTS 
(DEFENDANTS),

 
 
v.

 
 
AIR FREIGHT, INC., A 
WYOMING CORPORATION; AND KENNETH B. McINTOSH, APPELLEES (PLAINTIFFS). AIR 
FREIGHT, INC., A WYOMING CORPORATION;

 
 
AND KENNETH B. McINTOSH, 
APPELLANTS (PLAINTIFFS),

 
 
v.

 
 
ROCKY MOUNTAIN 
HELICOPTERS, INC., A UTAH CORPORATION; AND AIR TODAY, INC., APPELLEES 
(DEFENDANTS).

 
 
Appeal from the 
DistrictCourtofNatronaCounty, Dan Spangler, 
J.

 
 
Richard R. Wilking of 
Schwartz, Bon, McCrary & Walker, Casper, for Rocky Mountain Helicopters, Inc. and 
Air Today, Inc.

 
 
Robert S. Young, 
Provo, Utah, for Rocky Mountain Helicopters, 
Inc.

 
 
Donald E. Chapin and 
Charles S. Chapin of Crowell & Chapin, P.C., Casper, for Air Freight, Inc. and Kenneth B. 
McIntosh. 

 
 
Before THOMAS, MACY and GOLDEN, JJ., ROONEY, 
Retired J., and LANGDON, District Judge.

 
 

ROONEY, Retired 
Justice.

 
 

[¶1.]     Both the parties 
plaintiff1 and two of the parties defendant2 appeal from a judgment and decree 
in an action in which claims and counterclaims resulted from a sale of corporate 
stock and lease of an aircraft.

 
 

[¶2.]     We affirm the judgment 
and decree of the trial court except for a mathematical correction in the amount 
of interest awarded on two promissory notes involved in the corporate stock sale 
transaction and except for a correction of the figure allowed Rocky Mountain 
Helicopters, Inc. and Air Freight, Inc. as an offset on accounts receivable. The 
case is remanded for the purpose of making such 
corrections.

 
 

[¶3.]     A more than usual 
review of the history of this case is helpful in understanding the issues on 
appeal.

 
 

[¶4.]     Kenneth B. McIntosh 
(McIntosh) owned the stock in Air Freight, Inc. (Freight), and he owned the 
majority of the stock of Air Today, Inc. (Air).

 
 

[¶5.]     Freight operated a 
ground cartage service in Wyoming, Montana and Colorado for distribution to addressees of 
packages and documents which had been transported by air into the area from 
other areas, and for collection of packages and documents from senders in the 
area for delivery to air freight carriers for transportation by air to other 
areas.

 
 

[¶6.]     Air operated a service 
for transportation of packages and documents by air to and from various points 
in the RockyMountain area, connecting in Denver, Colorado with principal air freight carriers 
such as Federal Express.

 
 

[¶7.]     On May 31, 1985, a 
purchase agreement resulted in the purchase of the corporate stock of Air by RMH 
Aeroservices, Inc. RMH Aeroservices, Inc. took over the operation of Air at that 
time, but it was unable to complete its financial obligations under the 
agreement. On October 4, 1985, Rocky Mountain Helicopters, Inc. (RMH) replaced 
RMH Aeroservices, Inc. in the transaction and executed an agreement with 
McIntosh and Air for the purchase of the corporate stock and assets from Air. On 
the same date and in consideration of the purchase, RMH gave a $39,126.72 
promissory installment note to McIntosh and a $14,471.72 promissory installment 
note to Freight.

 
 

[¶8.]     On February 15, 1985, 
Freight leased an aircraft to Air. One of the provisions of the lease required 
payment of an "engine reserve" by lessee Air at the rate of $35 per hour of 
flight. "Engine reserve" is an amount of money set aside or reserved for the 
purpose of paying for the engine, the engine component and the propeller 
overhaul required after they are subject to a set amount of flight 
service.

 
 

[¶9.]     The complaint of 
McIntosh and Freight contained four claims for relief: one on the $39,126.72 
note to McIntosh on which it was alleged there had been no payments; one on the 
$14,471.72 note to Freight on which it was alleged there had been no payments; 
one for $9,1003 alleged for "engine reserve"; and 
one for $50,375.20 for an open account resulting from ground service 
transportation by Freight of packages and documents for Air. There was also a 
request for attorney's fees4 and costs.

 
 

[¶10.]  The answer of RMH, Air and RMH 
Aeroservices, Inc., contained denials and admissions to the allegations of the 
complaint, and it set up affirmative defenses of (1) an offset by amounts 
specified in the counterclaims, (2) estoppel through plaintiffs' "misconduct and 
negligence," (3) failure to state a claim with reference to the claim for relief 
re: "engine reserve," and (4) accord and satisfaction, release, settlement and 
waiver with reference to the claim for relief for payment of open 
accounts.

 
 

[¶11.]  The counterclaim of RMH, Air and RMH 
Aeroservices, Inc., contained eight claims for relief: one for breach of 
warranties and representations by McIntosh; one for furnishing false and 
misleading materials and representations by McIntosh and Freight; one for fraud 
based on the furnishing of such materials and representations; one for 
imputation of actions between McIntosh and Freight (abandoned at the close of 
evidence); two for an accounting; one for a declaratory judgment of the rights, 
liabilities and obligations of the parties; and one for costs and attorney's 
fees. Damages were alleged in the amount of $685,000 with a request for an 
additional $100,000 in punitive damages based on the counterclaim for 
fraud.

 
 

[¶12.]  The district court gave judgment (1) for 
McIntosh and against RMH on the two promissory installment notes for their face 
amount together with interest at the rate of 13%, (2) for Freight and against 
Air for "engine reserve" in the amount of $6,124.87, (3) for Freight and against 
Air on the open account claim in net amount of $23,468.23, after offsetting 
against the amount "substantiated" by Freight ($52,041) the amount 
"substantiated" by Air ($28,572.27), (4) for RMH and against McIntosh and 
Freight in the amount of $9,067.33 on a warranty in the stock purchase agreement 
that tax payments were current as of May 31, 1985, and (5) for Air and against 
McIntosh for a personal debt incurred by use of Air's credit card in the amount 
of $480. The judgment and decree stated that the burden of proof was not carried 
with reference to the claims for relief contained in the counterclaims premised 
on (1) fraud and misrepresentation, (2) on an obligation to make an account, (3) 
on need for declaratory judgment founded on conversion of funds and assets, or 
(4) on a breach of warranty by McIntosh and Freight regarding the collectibility 
of Air's accounts receivable. Attorney's fees were not allowed for either 
party.

 
 

[¶13.]  RMH and Air, appellants in Case No. 
88-213, word the issues on appeal:

 
 
"A. Did the court err in 
failing to award damages on the counterclaims for misrepresentation and breach 
of warranty regarding the collectibility of accounts receivable, the existence 
of prepaid assets and the general profitability of the 
company?

 
 
"B. Does the evidence 
support the court's award of $6,124.87 in unpaid engine reserves due under the 
aircraft lease (Exhibit 12)?

 
 
"C. Did the trial court 
err in finding that Air Today owed Air Freight $6,124.87 on the engine reserve 
claim? Further, did the court err in finding Air Today had failed to 
substantiate the deductions Air Today claimed for `owner 
charge-backs?'

 
 
"D. Did the trial court 
err in rejecting evidence that was offered through Paul Alden of additional 
taxes that had not been paid by McIntosh?

 
 
"E. Did the trial court 
err in refusing evidence of Appellant's attorney's fees?

 
 
"F. Did the court err in 
calculating the interest to be awarded on the judgment?"

 
 

[¶14.]  McIntosh and Freight, appellants in Case 
No. 88-214, word them:

 
 
"A. Did the Trial Court 
error in not awarding Appellants their attorneys fees pursuant to Exhibit 7, the 
October 4, 1985 Agreement between the Appellants and Appellee, Rocky Mountain 
Helicopters, Inc.[?]

 
 
"B. Did the Court error 
when it awarded the Appellee, Air Today on offset against the judgment of Air 
Freight for an open account balance in the amount of $19,573.00 
[sic][?]"

 
 

[¶15.]  Excepting the last three issues stated by 
RMH and Air, i.e., those pertaining to attorney's fees, to rejecting evidence 
offered through witness Alden concerning taxes, and to calculation of interest, 
and excepting the first issue stated by Freight and McIntosh, i.e., that 
pertaining to attorney's fees, all of the stated issues concern the sufficiency 
of the evidence. Accordingly, the following standards are applicable to them: 

 
 
"We have often said that, 
on appeal, we assume the truth of the evidence in favor of the successful party, 
ignore that of the unsuccessful party in conflict therewith, and give that of 
the successful party every favorable inference which may be reasonably drawn 
therefrom. E.g. Goggins v. Harwood, 704 P.2d 1282, 1284 (Wyo. 1985); Stockton v. 
Sowerwine, 690 P.2d 1202, 1205 (Wyo. 1984); In 
Re Merrill's Estate, [80 Wyo. 276] 341 P.2d [506] at 508 (1959); and 
cases cited therein."

 
 
May v. Estate of 
McCormick by Swallow, 769 P.2d 395, 397 (Wyo. 1989).

 
 
"The phrase `burden of 
proof' is often used as meaning the necessity of establishing a fact to a 
legally required extent, or the necessity of finally establishing a fact. 31 
C.J.S. Evidence § 103, p. 709."

 
 
Tench v. Weaver, 374 P.2d 27, 29 (Wyo. 
1962).

 
 
"[T]he term [burden of 
proof] denotes the duty of establishing the truth of a given proposition or 
issue by such a quantum of evidence as the law demands in the case in which the 
issue arises[.]"

 
 
29 Am.Jur.2d Evidence § 
123 at 154 (1967).

 
 
MISREPRESENTATION AND 
BREACH OF WARRANTY

 
 
(Issue A of RMH and 
Air)

 
 

[¶16.]  In their answer, RMH and Air acknowledged 
the execution and delivery of the two promissory notes and the fact that no 
payment had been made thereon. They now argue that they should have been awarded 
setoff damages on their counterclaims (1) for breach of contract and fraud "with 
respect to the financial status of Air Today and specifically to the existence of prepaid 
assets" (emphasis added), and (2) for breach of "warranty that the Air Today 
accounts receivable were collectible." The argument is with reference to the 
representations and warranties contained in Article Two of the October 4, 1985, 
Stock Purchase Agreement. The following are the portions thereof pertinent to 
this issue:

 
 
"ARTICLE TWO: REPRESENTATIONS AND 
WARRANTIES OF SELLERS.[5]

 
 
"SELLERS, jointly and 
severally, hereby represent and warrant that, to the best of their 
knowledge:

 
 
* * * * * 
*

 
 
"E. Exhibit A to this 
agreement sets forth consolidated and consolidating balance sheets of AIR TODAY 
as of April 30, 1985, and the related 
consolidated and consolidating statements of income and retained earnings for 
the period ending on those dates, prepared by Edward T. Hager, AIR TODAY's 
independent public accountants, whose opinions with respect to such financial 
statements are included in that Exhibit. Exhibit A2 to this Agreement sets forth 
unaudited consolidated and consolidating balance sheets of AIR TODAY as of April 30, 1985, together with related unaudited consolidated and consolidating 
statements of income and retained earnings for the four month period ending on 
those dates, certified by the treasurer of AIR TODAY. The financial statements 
in Exhibits A1 and A2 are referred to as the financial statements. The financial 
statements have been prepared in accordance with generally accepted accounting 
principles consistently followed by AIR TODAY throughout the periods indicated, 
and fairly present the financial position of AIR TODAY as of the respective 
dates of the balance sheets included in the financial statements and the results 
of its operations for the respective periods indicated. The parties agree that after May 21, 1985, 
Edward T. Hager has not examined the books and records of AIR TODAY and that the 
accounting for said company has been within the control of 
Sellers.

 
 
"F. AIR TODAY, insofar as it is aware, has no debt, 
liability, or obligation of any nature, whether accrued, absolute, contingent, 
or otherwise, and whether due or to become due, that is not reflected or 
reserved against in AIR TODAY's consolidated balance sheet as of April 30, 1985 
included in the financial statements or set forth in Exhibit A1 and A2 to this 
Agreement, except for those (a) that may have been incurred after the date of 
that consolidated balance sheet and (b) that are not required by generally 
accepted accounting principles to be included in a balance sheet. All debts, 
liabilities, and obligations incurred after that date were incurred in the 
ordinary course of business, and are usual and normal in amount both 
individually and in the aggregate.

 
 
* * * * * 
*

 
 
"I. Exhibit C to this 
Agreement is a complete and accurate schedule of the accounts receivable of AIR 
TODAY as reflected in the consolidated balance sheet included in the financial 
statements, together with an accurate aging of these accounts to May 31, 1985. 
All accounts receivable reflected in Exhibit C arose from valid sales in the 
ordinary course of business. These accounts have in part been collected since 
May 31, 1985, or were on said date, in the opinion of Seller, collectible in 
their full amounts less a reserve of 4% of the aggregate of accounts receivable. 
The parties recognize that after May 31, 1985, Buyer in the operation of AIR 
TODAY, has accrued on the books of said corporation, accounts receivable, has 
received proceeds of those and previous accounts receivable, all of which it 
represents to have deposited in the accounts of AIR TODAY. McIntosh will 
forthwith diligently assist Buyer in the collection of AIR TODAY's delinquent 
accounts receivable.

 
 
"J. AIR TODAY has good 
and marketable title to all its assets and interests in assets, whether real, 
personal, mixed, tangible, or intangible, which constitute all the assets and 
interests in assets that are used in the businesses of AIR TODAY. All these 
assets are free and clear of restrictions on or conditions to transfer or 
assignment, and free and clear of mortgages, liens, pledges, charges, 
encumbrances, equities, claims, easements, rights of way, covenants, conditions, 
or restrictions, except for (1) those disclosed in AIR TODAY's current 
consolidated balance sheet included in the financial statements, or in 
Exhibit[(]s) B1 and B2 to this agreement; (2) the lien of current taxes not yet 
due and payable; and (3) possible minor matters that, in the aggregate, are not 
substantial in amount and do not materially detract from or interfere with the 
present or intended use of any of these assets, nor materially impair business 
operations. All real property and tangible personal property of AIR TODAY is in 
good operating condition and repair, ordinary wear and tear excepted. AIR TODAY 
is [i]n possession of all premises leased to it from 
others.

 
 
* * * * * 
*

 
 
"S. Insofar as Sellers are aware, none of 
the representations and warranties made by the Shareholder or AIR TODAY, or made 
in any certificate or memorandum furnished or to be furnished by any of them, or 
on their behalf, contains or will contain any untrue statement of a material 
fact, or omit any material fact the omission of which would be 
misleading.

 
 
"T. Exhibit G-2 lists all 
accounts payable of AIR TODAY including accurate and complete details by aging 
schedule or each and every party to which AIR TODAY is indebted in any manner." 
(Emphasis added.)

 
 

[¶17.]  Obviously, the first inquiry with 
reference to the nature and extent of the representations and warranties 
contained in Article Two is: To what extent are the representations and 
warranties limited by the words "to the best of their knowledge" in the 
introductory paragraph? To be actionable, must it be shown that "Sellers" had 
knowledge of any inaccuracy in the representations and warranties? If so, such 
was not here shown. There was no evidence that McIntosh or Air had such 
knowledge or that the information in the financial statements and lists of 
accounts receivable furnished by them was not believed by them to be true and 
accurate. This is not a situation in which the fact or facts represented or 
warranted are entirely within the ability of the ones making the representation 
or warranty to personally verify. The financial statements were prepared for 
them by Edgar T. Hager, a certified public accountant, and the accounts 
receivable were listed on a computer printout containing over 1,500 entries, 
many of the invoice amounts being in the less than $100 
range.

 
 
     "On the question 
whether it is necessary to prove that a representation was knowingly false, 
where an action of deceit at law is brought, the authorities are not in entire 
harmony. The rule is well settled, however, in most American jurisdictions and 
in the English courts, that in a law action of deceit in tort, scienter must be 
established. Scienter, a term usually employed in legal issues involving fraud, 
means knowledge on the part of a person making representations, at the time when 
they are made, that they are false. Accordingly, under the rule prevailing in 
most jurisdictions, in order to sustain a charge of fraud in the making of a 
false representation, it must appear either that the party making it knew that 
it was false, or else that it was made under such circumstances as to raise a 
presumption of knowledge. Where all other elements necessary to a cause of 
action are established, one can obviously be held liable in tort for 
representations definitely known to be false and made with a deliberate attempt 
at deception."

 
 
37 Am.Jur.2d Fraud and 
Deceit § 197 at 260-61 (1968) (footnotes omitted). One is not liable in fraud 
for statements made in good faith based on knowledge had at the time. Walter v. 
Moore, 700 P.2d 1219 (Wyo. 
1985).

 
 

[¶18.]  In this case, not only was the element of 
scienter not evidenced, but RMH and Air were forewarned that the financial 
matters and lists of accounts receivable were "to the best of [McIntosh's and 
Freight's] knowledge." Paragraph S of Article Two again recites that the 
representations and warranties will not contain "any untrue statement of a 
material fact, or omit any material fact the omission of which would be 
misleading" prefaced by "[i]nsofar as 
Sellers are aware." (Emphasis added.)

 
 

[¶19.]  Beyond that, proof of the alleged 
breaches was complicated by the fact that the audit upon which they were 
premised6 concerned the period from January 
1, 1985 to October 4, 1985, thus including the period subsequent to May 31, 
1985, when RMH Aeroservices had control of the operations of Air. Paragraphs E 
and I of Article Two of the October 4, 1985 Stock Purchase Agreement contain 
representations as of April 30, 1985 and 
May 31, 1985 respectively. Accordingly, any defects in the audit and 
accounts receivable could have been occasioned during the time the operations 
were under the control of RMH and, therefore, not being attributable to 
McIntosh. This potential was anticipated in the October 4, 1985 Stock Purchase 
Agreement. The last sentence in Section E of Article Two, supra, states that 
"[t]he parties agree that after May 31, 1985, Edward T. Hager has not examined 
the books and records of AIR TODAY and that the accounting for said company has 
been within the control of Sellers." Paragraphs 2 and 3 of the October 4, 1985 
Stock Purchase Agreement provide in part:

 
 
"WHEREAS, the parties 
did, on May 31, 1985, enter into a Stock Purchase Agreement, (hereinafter 
referred to as (`AGREEMENT'), * * *

 
 
"WHEREAS, since the 
execution of the AGREEMENT, Buyer[7] has been managing, operating and 
in control of the business affairs of AIR TODAY, * * *. It is the intention of 
the parties to update the AGREEMENT to represent current status of the 
parties and to recognize the operation of 
AIR TODAY by Buyer since execution of the AGREEMENT." (Emphasis 
added.)

 
 

[¶20.]  Not only could the trial court find the 
evidence insufficient to prove a loss attributable to the period prior to May 
31, 1985 (and therefore that the financial representations as of that date to be 
other than represented), but the fact that RMH had been "managing, operating and 
in control of the business affairs of AIR TODAY" for four months before 
executing the Stock Purchase Agreement was a basis for concluding that RMH had 
become well aware of Air's financial condition before executing the October 4, 
1985 Stock Purchase Agreement. Witness Taft, general manager of Air during the 
period, testified that during that period he talked to the president of RMH 
about the viability of Air. There was testimony that unsuccessful efforts were 
made by Air during the period to obtain loans from two banks. The financial 
material compiled by Mr. Hager and timely furnished to RMH confirmed the 
statement made by McIntosh to the president of RMH prior to May 31, 1985 that 
Air had been "marginally profitable."

 
 

[¶21.]  Thus, there was evidence from which the 
trial court could conclude that RMH did not rely only on the representations of 
McIntosh and Air in executing the Stock Purchase Agreement on October 4, 1985. 
Such reliance is necessary for success in an action for 
fraud:

 
 
"In Johnson v. Soulis, Wyo., 542 P.2d 867, 872 (1975), this court 
reiterated the requisites for fraud when we said:

 
 
"`In Wyoming the elements of 
an action for fraud have been identified as a false representation by a 
defendant of material facts which are 
relied upon by a plaintiff to his damage. Davis v. Schiess, Wyo., 
417 P.2d 19 (1966).'"

 
 

Dawson v. Lohn, 705 P.2d 853, 
857 (Wyo. 
1985) (emphasis added).

 
 

[¶22.]  With reference to the prepaid assets, the 
evidence before the trial court included the status thereof as contained in the 
Hager compilation, and it contained that as contained in the Simpson audit. 
Witness Simpson testified:

 
 
"Q. Can you tell me what 
you found with respect to prepaid assets?

 
 
"A. I wrote off 
approximately $50,000. worth of prepaid aircraft leases that were shown on the 
income statement on the balance sheet.

 
 
"Q. What was the purpose 
of that?

 
 
"A. The company had no 
prepaid assets that I could determine.

 
 
"Q. And where did prepaid 
assets appear?

 
 
"A. Under the category of 
prepaid leases, aircraft, and prepaid fuel, and prepaid insurance, there were 
three categories.

 
 
"Q. All right. But from 
what document did you conclude that the balance sheet reflected an asset, 
prepaid asset?

 
 
"A. Those prepaid assets 
are shown on December 31, 1984 b[a]lance sheet of Ed 
Hager.

 
 
"Q. And it was your 
conclusion in connection with this audit that you performed that those prepaid 
assets did not exist.

 
 
"A. No, they did 
not.

 
 
"Q. And you wrote off 
what amount again?

 
 
"A. All of the prepaid 
balances.

 
 
"Q. Would you give us 
that balance once more?

 
 
"A. Approximately $57,000 
in total."

 
 
As noted supra, an appeal 
court must ignore the evidence of the unsuccessful party in conflict with that 
of the successful party. Here, the evidence of the successful party on this 
issue came from the compilation of Hager, and that of the unsuccessful party 
came through the testimony of Simpson.

 
 

[¶23.]  Additionally, a "write off" of 
"approximately" $50,000 or $57,000 because the witness "concluded" that the 
figures represented assets that did not exist is not clear and convincing 
evidence. 

 
 
"The elements of a claim 
for relief for fraud are a false representation made by the defendant which is 
relied upon by the plaintiff to his damage, the asserted false representation 
must be made to induce action, and the plaintiff must reasonably believe the 
representation to be true. Anderson v. Foothill 
Industrial Bank, Wyo., 674 P.2d 232, 238 (1984). A plaintiff 
who alleges fraud must do so clearly and distinctly, and fraud will not be 
imputed to any party when the facts and circumstances out of which it is alleged 
to arise are consistent with honesty and purity of intention. Reed v. Owen, Wyo., 523 P.2d 869, 871 (1974). Fraud must be 
established by clear, unequivocal and convincing evidence, and will never be 
presumed. Kincheloe v. Milatzo, Wyo., 
678 P.2d 855, 862 (1984).

 
 
"The elements of a 
negligent misrepresentation claim are generally recognized to be as follows: 
False information supplied in the course of one's business for the guidance of 
others in their business, failure to exercise reasonable care in obtaining or 
relating the information, and pecuniary loss resulting from justifiable reliance 
thereon. Restatement of Torts (Second) § 552, p. 126 
(1977)."

 
 
Duffy v. Brown, 708 P.2d 433, 437 (Wyo. 
1985).

 
 

[¶24.]  With reference to the accounts 
receivable, RMH and Air contended that $50,645 thereof was not collectible. The 
figure was presented by witness Knudsen, office manager of Air. She testified 
that the figure was the total of invoice amounts listed on an Air computer 
printout dated May 1985, minus the total of invoice amounts thereon which she 
determined to have been paid up to "about 2 to 3 weeks" before 
trial.

 
 

[¶25.]  On cross-examination she acknowledged 
some deficiencies in the method used by her. She testified to collection efforts 
by correspondence and telephone calls to customers such as Emory, Worldwide, 
Airborne, Purolator, Federal Express, etc., but that such efforts were hindered 
by lack of back-up documentation. She also testified that collection efforts 
were not pursued through use of collection agencies or legal recourse. RMH and 
Air acknowledged that, "It is true that Air Today did not want to create 
conflict with customers with whom it was still doing business." Recognizing that 
referral to collection agencies or legal recourse is not necessary to establish 
the collectibility of accounts - other circumstances being sufficient to do so - 
the stated purpose of avoiding "conflict with customers with whom it was still 
doing business" could have been an element considered by the trial court in its 
finding that: "Further, Defendants have failed to show that the stated accounts 
receivable were indeed uncollectible."8

 
 

[¶26.]  The evidence in this instance was 
sufficiently indefinite and incomplete with reference to the status of the 
accounts receivable and to collection efforts to warrant the trial court's 
finding concerning the failure of RMH and Air to carry "their burden of proof 
with regard to the alleged breach" and concerning the finding quoted supra 
relative to the collectibility of such accounts - certainly the evidence 
presented by RMH and Air would not support their claim in a "clear, unequivocal 
and convincing" manner necessary to a successful fraud action. Duffy, 708 P.2d 433.

 
 

[¶27.]  RMH and Air contend that there is an 
inconsistency in the judgment by virtue of the denial by the court of their 
claim based on misrepresentation and breach of warranty regarding the write-off 
of prepaid assets and collectibility of accounts receivable, whereas the court 
awarded them $9,067.33 on their claim based on a representation and warranty of 
McIntosh and Freight relative to taxes having been paid for the time prior to 
May 31, 1985.9

 
 

[¶28.]  However, the representation and warranty 
relative to taxes anticipated the possibility of a tax deficiency and provided 
for the payment thereof. Section G of Article Two of the Stock Purchase 
Agreement of October 4, 1985 provided:

 
 
"G. Within the times and 
in the manner prescribed by law, AIR TODAY, insofar as Shareholder is aware, has 
filed all federal, state, and local tax returns required by law, including 
employment taxes for the states of Colorado, Montana and Wyoming, and has paid 
or accounted for all taxes, assessments of which it is aware, and penalties due 
and payable. The federal income tax returns of AIR TODAY, if audited by the 
Internal Revenue Service for any fiscal years to and including the fiscal year 
ended December 31, 1984, and the results of these audits are accurately 
reflected in the financial statements. The provisions for taxes reflected in AIR 
TODAY'[s] consolidated balance sheet as of April 30, 1985, are adequate for any 
and all federal, state, county, and local taxes for the period ending on the 
date of that balance sheet and for all prior periods whether or not disputed. Seller specifically warrants full 
payment through May 31, 1985, of the following obligations: Federal Excise Tax; 
Federal Unemployment Tax; Colorado State Unemployment Tax; Montana State 
Unemployment Tax[;] Wyoming State Unemployment Tax; and FICA as it applies to 
AIR TODAY.

 
 
"In the event that Buyer 
or any other governmental agency having the obligation to collect the enumerated 
taxes levies a charge or assessment for said taxes, Buyer shall promptly notify 
Seller of such charge or assessment and the Seller thereafter shall have the obligation 
and right to investigate, negotiate with and, if required, pay any deficiency in 
said unpaid taxes. In the event Buyer ultimately is obligated to pay the 
same, after affording Seller the opportunity to do so, Buyer shall have the 
right to charge against any amounts due the Seller, the amount of the assessment 
together with interest or penalties incrementally assessed thereon. Both parties 
agree to exercise prudent judgment in the evaluation of liability for any 
potentially unpaid taxes. In the event said assessment is supported and the tax 
ultimately paid, Seller shall incur its own expenses for accounting, legal or 
related fees and costs; otherwise, in the event said obligation is determined 
not to be due or owing, the costs, fees and expenses will be an obligation of 
AIR TODAY." (Emphasis added.)

 
 

[¶29.]  None of the other sections of Article Two 
qualify the "to the best of their knowledge" provision of the introductory 
paragraph to Article Two by the "specifically warrants" language used in Section 
G. Nor do they set forth a procedure for adjustment of conditions which are 
contrary to the representation or warranty as does Section 
G.

 
 

[¶30.]  The trial court's judgment and decree 
regarding a tax adjustment between the parties was pursuant to the provisions of 
Section G and not as damages for breach of such 
provisions.

 
 
ENGINE 
RESERVES

 
 
(Issues B and C of RMH 
and Air)

 
 

[¶31.]  In response to Freight's claim in the 
complaint for $9,100 past due "engine reserves," Air and RMH presented evidence 
for the purpose of establishing that "chargebacks"10 were overlooked during several 
months of the lease which should have offset payments which were made on "engine 
reserves." They argue that the net result is an obligation to them in the amount 
of $17,075.25. There was conflicting evidence as to which charges were for 
"engine reserves" and which were for "chargebacks." 

 
 

[¶32.]  A letter dated March 11, 1986, from 
McIntosh to witness Taft, a marketing representative for RMH who acted in a 
consulting basis to manage Air during the period after its sale by McIntosh, 
culminated a series of correspondence between them. It responded to the 
contentions of Air concerning "chargebacks" and "engine reserves" and concluded 
that the balance owed was $6,124.87. Except for a telephone call to obtain a 
copy of the lease, witness Taft did not respond to the letter. The trial court 
considered the evidence and accepted this figure as accurate. As noted supra, on 
appeal, we do not weigh the evidence. We accept that of the successful party as 
true. We affirm the district court on this issue.

 
 
OPEN 
ACCOUNT

 
 
(Issue B of McIntosh and 
Freight)

 
 

[¶33.]  With reference to this issue, the 
judgment and decree provided:

 
 
"6. Plaintiff Air 
Freight, Inc., and Defendant Air Today, Inc., each asserted an open account 
balance to be due and owing from the other. Plaintiff Air Freight, Inc., 
substantiated the existence of its open account balance due from the Defendant 
Air Today, Inc., in the amount of $52,041.00. Alternatively, the Defendant Air 
Today, Inc., substantiated its open account balance due from the Plaintiff Air 
Freight, Inc., in the amount of $28,572.77.

 
 
"7. Based upon the 
foregoing, the court offsets the open account balance of the Plaintiff Air 
Freight, Inc., due from the Defendant Air Today, Inc., in the amount of 
$52,041.00 against the open account balance of the Defendant Air Today, Inc., 
from the Plaintiff Air Freight, Inc., in the amount of $28,572.77. Therefore, 
upon the stated offset, Plaintiff Air Freight, Inc., is entitled to Judgment 
from the Defendant Air Today, Inc., in the net amount of $23,468.23 for sums due 
upon open account."

 
 

[¶34.]  McIntosh and Freight contest the offset. 
But instead of using the $28,572.77 judgment and decree figure, they use the 
figure of $19,573 in forming the issue presented by them to this court. In 
arguing the issue, they also use the figure of $19,573.77. In their answer 
brief, RMH and Air also argue with reference to the $19,573.77 figure. Inasmuch 
as the trial court did not make a finding of the basic facts upon which the 
$28,572.77 figure was premised,11 and inasmuch as both parties now 
accept the $19,573.77 figure as the proper one in controversy with reference to 
the balance of the accounts receivable due Air and RMH from McIntosh and 
Freight, we conclude that the trial court's use of the $28,572.77 figure was a 
result of a mechanical or typographical error and was intended to be 
$19,573.77.

 
 

[¶35.]  Since all parties agreed that witness 
Knudsen testified the account receivable balance owed Air from Freight was 
$19,573.77, there was sufficient evidence of the successful parties on this 
issue to support the trial court's finding. However, Freight and McIntosh argue 
that Air's claim on an open account should not have been granted because there 
was a failure by Air and RMH (1) "to initially plead any cause of action for 
collection of open account," and (2) "to submit sufficient proof to substantiate 
the existence of the open account."

 
 

[¶36.]  In connection with these contentions, it 
is important to note that an action on account (distinguished from that on an 
account stated) refers to the type of relation between the parties and not to 
any specific record; that its purpose is to avoid a multiplicity of suits, each 
based on a separate item or transaction; that it is founded on implied or 
express contract or contracts for the purpose of balancing a series of 
transactions between the parties; that admissibility of records, etc., are 
subject to the usual hearsay rule and exceptions thereto, e.g., business 
records; and that the elements for proof are substantially the same as in any 
other contractual or quantum meruit action.

 
 

[¶37.]  With reference to McIntosh's and 
Freight's contention that the answer and counterclaim of Air and RMH was 
deficient in pleading a claim on an open account, such answer and counterclaim 
did not plead an action on account in the usual fashion. The usual method is set 
forth in W.R.C.P. 84 and the appendix referred to therein. W.R.C.P. 84 
provides:

 
 
"The forms contained in 
the appendix of forms are sufficient under the rules and are intended to 
indicate the simplicity and brevity of statement which the rules 
contemplate."

 
 

[¶38.]  Form 4 contained in the appendix 
provides:

 
 
"Complaint on an 
account.

 
 
"1. Defendant owes 
plaintiff ten thousand dollars according to the account hereto annexed as 
Exhibit A."12

 
 

[¶39.]  In this instance, the answer and 
counterclaim contained a defense of "offset" and a counterclaim to amounts 
claimed, and one of the amounts claimed in the complaint was $50,375.20 for 
"services, goods, labor and materials" provided to Air. The claim for $50,375.20 
was not set forth in the complaint according to Form 4, 
supra.

 
 

[¶40.]  Although the open account claims were not 
pleaded as specifically as could be desired, a contention to the existence of an 
offset to the claimed open account was sufficiently established by Air and RMH - 
especially since there was no objection made at trial to the evidence concerning 
the open account on the basis of failure to have pleaded it in the answer and 
counterclaim.

 
 

[¶41.]  With reference to the sufficiency of 
proof by Air and RMH of the open account, Freight and McIntosh acknowledge the 
testimony of witness Knudsen to the existence of an open account balance due 
from Freight in the amount of $19,573.77, but they contend that her oral 
testimony relative thereto without reference to, and introduction of, 
documentary evidence in support thereof and upon which her testimony was 
predicated is insufficient to support an award on an open 
account.

 
 

[¶42.]  In an action on an account, identifiable 
charges and payments (debits and credits) together with beginning and ending 
balances of the account must be available to the party against whom the 
obligation is claimed in order that such party can contest one or more of such 
items. The exhibit attached to the complaint in accordance with Form 4, supra, 
usually supplies this information, but it can be furnished in other fashions, 
e.g., pursuant to a Bill of Particulars, the discovery procedure, by a witness 
during the trial, etc.

 
 

[¶43.]  In this instance, the parties agreed that 
there was a zero balance on May 31, 1985. Witness Knudsen computed the balance 
of the account resulting from charges and credits subsequent thereto. McIntosh 
and Air had the computations at the time of taking her deposition before trial. 
Four or five errors in her computations were pointed out by McIntosh and Air at 
that time. At trial, she testified to the corrections made to correct these 
errors. She also testified that the rate used was that made by Air to McIntosh. 
She responded, "I have the worksheet" to the following question: "And do you 
have with you your file regarding the Air Freight account, what is owed by Air 
Freight to Air Today if anybody wants to ask you any questions about your 
figures?" Thus, the alleged debits and credits of the account were available for 
inquiry at trial.

 
 

[¶44.]  Under the circumstances of this case, the 
trial court could properly find that the items upon which the open account was 
based were available to Freight and McIntosh, and that, in fact, they had 
reviewed them during discovery and had been made aware of correcting 
computations. The trial court had evidence in favor of the successful party on 
this issue in the form of oral testimony as to the balance of the account being 
$19,573.77.

 
 
REJECTION OF EVIDENCE BY 
WITNESS ALDEN RE: TAXES

 
 
(Issue D of McIntosh and 
Freight)

 
 

[¶45.]  Witness Alden, vice president and general 
manager of Air since April 1986 was testifying on direct examination concerning 
the correspondence between Air and various tax authorities which was contained 
in Exhibit EEE when the following occurred:

 
 
"Q. That is both federal, 
both of those are federal taxes, is that correct?

 
 
"A. 
Yes.

 
 
"Q. Do you know the 
amount for those two?

 
 
"A. I 
do.

 
 
"MR. C. CHAPIN: I am 
going to enter an objection, at this time we don't have corporate records, and I 
don't think we have a foundation. I would object to any oral testimony relative 
to what those obligations are."

 
 
The court sustained the 
objection. Later, and after referring to Exhibit 22, the following 
occurred:

 
 
"Q. And could you give us 
your total figure of the taxes that are due from Mr. McIntosh, according to our 
claims?

 
 
"MR. C. CHAPIN: I am 
going to object to the question for lack of foundation. Again, I think the 
proper documentation resides in the corporate records, and they are not before 
the Court. So I object to oral entry of taxes at this point in 
time."

 
 
The court again sustained 
the objection. Air and RMH argue that the court erred in these two 
instances.

 
 

[¶46.]  Exhibit EEE included correspondence and 
tax statements between Air and taxing authorities, i.e., Internal Revenue 
Service, Montana Department of Revenue, Colorado Department of Revenue and 
Wyoming Employment Security Commission. Exhibit 22 is a letter from the 
treasurer of RMH to McIntosh which recited: "[A]n update on the various tax 
levies for unpaid taxes existing at May 31, 1985, they are as follows: * * *." 
It then set forth the tax amounts due Colorado, 
Wyoming, Utah 
and the United 
States. Whether the court sustained the 
objections on the basis of the best evidence rule or on the basis of failure to 
establish an exception to the hearsay rule (the taxes having occurred before the 
witness was associated with Air), a clear abuse of discretion on the part of the 
trial court in making these rulings is not shown:

 
 
"Evidentiary rulings are 
within the sound discretion of the trial court, and it is the burden of 
appellant to demonstrate that the trial court abused that discretion. Absent a 
clear showing of abuse of discretion, the trial court's ruling will not be 
disturbed. Caterpillar Tractor Company v. Donahue, Wyo., 
674 P.2d 1276 (1983)."

 
 
Banks v. Crowner, 694 P.2d 101, 103 (Wyo. 1985).

 
 
"The question of allowing 
or excluding evidence is essentially a question for the trial court to decide. 
The exclusion or admission of the testimony is generally within the province of 
the trial court and the court's ruling will not be overturned absent a clear 
showing of an abuse of discretion. Kielsmier v. Foster, Colo. App., 669 P.2d 630 
(1983); Krueger v. State Farm Mutual Automobile Ins. Co., 707 F.2d 312 (8th Cir. 
1983)."

 
 
Brockett v. Prater, 675 P.2d 638, 641 (Wyo. 1984).

 
 
"A court does not abuse 
its discretion unless it acts in a manner which exceeds the bounds of reason 
under the circumstances. In determining whether there has been an abuse of 
discretion, the ultimate issue is whether or not the court could reasonably 
conclude as it did. An abuse of discretion has been said to mean an error of law 
committed by the court under the circumstances. Eager v. Derowitsch, 68 
Wyo. 251, 232 P.2d 713 (1951); Anderson v. 
Englehart, 18 Wyo. 409, 108 P. 977 (1910); 
DiPalma v. Wiesen, 163 Conn. 293, 303 A.2d 709 (1972); In re Estate 
of Horman, 265 Cal. App. 2d 796, 71 Cal. Rptr. 780 (1968)."

 
 

Martinez v. State, 611 P.2d 831, 
838 (Wyo. 
1980).

 
 
"Judicial discretion is a 
composite of many things, among which are conclusions drawn from objective 
criteria; it means a sound judgment exercised with regard to what is right under 
the circumstances and without doing so arbitrarily or 
capriciously."

 
 
Martin v. State, 720 P.2d 894, 897 (Wyo. 
1986).

 
 

[¶47.]  Applying the test for abuse of discretion 
set forth in Martinez and Martin to the contested rulings, 
an abuse of discretion did not exist. The exhibits prompting the questions to 
which objections were made were already in evidence. The judgment and decree 
awarded a setoff based on delinquent taxes. It provided in 
part:

 
 
"Pursuant to the terms 
and conditions of the October 4, 1985, stock purchase agreement, Plaintiffs 
warranted that the tax payments due for the operation of Air Today, Inc., were 
all paid or current as of May 31, 1985. However, the Defendants substantiated 
that there were delinquent taxes unpaid and due and owing as of May 31, 1985, in 
the amount of $9,067.33. Therefore, Defendant Rocky Mountain Helicopters, Inc., 
is entitled to an offset in the amount of $9,067.33 from the above stated 
Judgment acquired by the Plaintiffs against said 
Defendant."

 
 
ATTORNEY'S 
FEES

 
 
(Issue E of RMH and Air, 
and Issue A of McIntosh and Freight)

 
 

[¶48.]  "Generally speaking, attorney fees are 
not recoverable unless there is specific statutory authority therefor, or unless 
such are provided for by contract." Werner v. American Surety Company of 
New York, 423 P.2d 86, 88 (Wyo. 1967). And see 
Bowers Welding and Hotshot, Inc. v. Bromley, 699 P.2d 299 (Wyo. 1985) and United 
States through FHA v. Redland, 695 P.2d 1031 (Wyo. 
1985).

 
 

[¶49.]  The two promissory notes upon which two 
of the claims for relief in the complaint of McIntosh and Freight were based 
contain the provision:

 
 
"Maker agrees to pay all 
expenses of collection, including a reasonable sum for attorney's 
fees."

 
 

[¶50.]  Article Ten of the Stock Purchase 
Agreement provides:

 
 
     "If any legal action 
or any arbitration or other proceeding is brought for the enforcement of this 
Agreement, or because of an alleged dispute, breach, default, or 
misrepresentation in connection with any of the provisions of this Agreement, 
the successful or prevailing party or parties shall be entitled to recover 
reasonable attorney's fees and other costs incurred in that action or 
proceeding, in addition to any other relief to which it or they may be 
entitled."

 
 

[¶51.]  RMH and Air contend that the refusal of 
the trial court to allow the introduction of invoices reflecting their 
attorney's fees was error. The objection to the introduction thereof was on the 
basis that they had not been previously listed as an exhibit. The promissory 
notes do not provide for attorney's fees to the maker of the notes, and Article 
Ten of the Stock Purchase Agreement authorizes attorney's fees only for the 
"successful or prevailing" party. RMH and Air cannot be characterized as the 
"successful or prevailing" parties upon consideration of the amounts allowed 
them as setoffs compared to the amounts claimed by them as such, or as compared 
to the amounts awarded them as compared to the amounts awarded the other parties 
- even excluding the amount awarded the other parties on the promissory notes. 
The issue, then, as to the propriety of the trial court's rulings in connection 
with the introduction of the invoices are moot, i.e., such introduction could 
have no effect on the award of the requested fees.

 
 
     "A case is `moot' when 
a determination is sought on a matter which, when rendered, cannot have any 
practical effect on the existing controversy. Leonhart v. McCormick, D.C.Pa., 
395 F. Supp. 1073, 1076. Question is `moot' when it presents no actual 
controversy or where the issues have ceased to exist. Matter of Lawson's Estate, 
41 Ill. App.3d 
37, 353 N.E.2d 345, 347.

 
 
"Generally, an action is 
considered `moot' when it no longer presents a justiciable controversy because 
issues involved have become academic or dead. Sigma Chi Fraternity v. Regents of 
University of 
Colo., D.C.Colo., 258 F. Supp. 515, 523."

 
 
Black's Law Dictionary, 
5th ed. 909 (1979). And see Belondon v. State ex rel. Leimback, 379 P.2d 828 
(Wyo. 
1963).

 
 

[¶52.]  Even if the invoices had been placed in 
evidence and if the amount of reasonable attorney's fees had been established, 
they could not have been awarded to the unsuccessful and non-prevailing 
party.

 
 

[¶53.]  McIntosh and Freight also contend that 
the court erred in denial of their attorney's fees. The judgment and decree 
recited:

 
 
"The Plaintiffs have 
sought, as a part of their cause of action upon the previously stated note, the 
payment of their attorney's fees by Defendant Rocky Mountain Helicopters, Inc. 
However, Plaintiffs have not segregated the value of the work performed by their 
counsel in preparation of their cause of action upon the stated notes from the 
value of the work done on other aspects of this case, as is required by the case 
law of the State of Wyoming. Therefore, attorney's fees cannot be 
awarded to Plaintiff in this action."

 
 

[¶54.]  The opinion letter stated that such 
segregation was a requirement of a "recent ruling" of this court. The trial 
court was apparently referring to the ruling in Miles v. CEC Homes, Inc., 753 P.2d 1021 (Wyo. 1988), wherein the trial court divided the amount of the fees in 
half and awarded the half to the one of two plaintiffs who had a provision in 
his agreement with defendant for the award of attorney fees, whereas the other 
plaintiff did not. On review, this court said:

 
 
"We cannot discern from 
the record an evidentiary basis for the trial court's determination that CEC 
should receive one-half of the total amount of attorney fees. As far as we can 
tell, the only evidence to support this division of fees is the fact that there 
were two plaintiffs. This alone does not provide a sufficient evidentiary basis 
for the award."

 
 

Id. at 
1027.

 
 

[¶55.]  Although the facts of this case are not 
similar to those in Miles v. CEC Homes, Inc., the basic rationale of Miles is 
applicable to this case.

 
 

[¶56.]  If this matter were instituted only on 
the notes, and the plaintiffs were required to meet counterclaims in the nature 
of setoffs in order to prevail, it would be difficult and impractical to 
separate the legal work on the notes from that in opposition to the 
counterclaims, e.g., time spent in depositions will pertain to all intertwined 
issues.

 
 

[¶57.]  However, in addition to claims on the 
notes, the complaint in this matter also had a claim for recovery of "engine 
reserves" under a lease of an aircraft.13 Thus, it was obvious from the 
inception that a segregation of legal work would be necessary insofar as 
practical for a recovery of fees under the provision therefor in the 
notes.

 
 

[¶58.]  The time involved on the accounts 
receivable issue was also not within the attorney's fee provisions of the notes 
or of the Stock Purchase Agreement - except insofar as the work on it was 
intertwined with the work relative to the notes and the issues based on the 
Stock Purchase Agreement.

 
 

[¶59.]  The trial court could properly exercise 
its discretion in determining that the evidence was insufficient in segregating 
the legal work performed on the notes and with reference to the Stock Purchase 
Agreement from that performed on other aspects of the case which were not 
intertwined with work on the notes and that on the Stock Purchase 
Agreement.

 
 

[¶60.]  The answer did not contest the obligation 
on the notes per se. It contended for an offset as set forth in the 
counterclaims. The trial was with reference to the claimed setoffs and to the 
"engine reserves" requested in the complaint. Thus, the attorney's fee provision 
in the notes was only obliquely relevant.

 
 
"While the general rule 
is that a valid provision for attorney's fees in a note is as much an obligation 
of the contract as any part of it, the trial court still has discretion in 
exercising its equitable control to allow only such sum as it thinks reasonable. 
A trial court in its discretion may properly disallow attorney's fees altogether 
on the basis that such recovery would be inequitable. Graves v. Burch, 26 
Wyo. 192, 181 P. 354, 5 A.L.R. 1216."

 
 
Combs v. Walters, 518 P.2d 1254, 1255 (Wyo. 1974).

 
 

[¶61.]  Under the circumstances of this case, it 
cannot be said that the court abused its discretion in not awarding attorney's 
fees to McIntosh and Freight.

 
 
INTEREST

 
 
(Issue F of RMH and 
Air)

 
 

[¶62.]  With reference to the two notes, the 
judgment and decree provided in part:

 
 
"1. Plaintiffs have 
Judgment against the Defendant Rocky Mountain Helicopters, Inc., principal in 
the amount of $39,126.72, together with interest computed thereon at the rate of 
13% per annum from and after October 4, 1985, which amount through June 1, 1988, 
is $14,439.92, daily interest thereafter is computed at the rate of $14.13 until 
entry of Judgment.[14]

 
 
"2. Plaintiffs have 
Judgment against the Defendant Rocky Mountain Helicopters, Inc. in the amount of 
the value of the second note, $14,471.72, together with interest calculated 
thereon at the rate o[f] 13% per annum from and after August 1, 1985, which 
amount through June 1, 1988, is $5,356.54, daily interest thereafter is computed 
at the rate of $5.23 until entry of Judgment."

 
 

[¶63.]  One note was in the amount of $39,126.72 
"together with interest computed from even date herewith,[15] at the rate of Thirteen Percent 
(13%) per annum." The other note was in the amount of $14,471.72 "together with 
interest computed from August 1, 1985, at the rate of Thirteen percent (13%) per 
annum." However, the second note also provided: "Delinquent payments shall bear 
interest at the rate of Eighteen Percent (18%) per annum."

 
 

[¶64.]  RMH and Air argue:

 
 
"Simple mathematics 
reveal that thirteen percent of $39,126.72 is $5,086.47. Dividing the annual 
amount of interest by 365 days leaves a daily reate [sic] of interest of $13.94. 
The period from October 4, 1985 through June 1, 1988 covers a period of 971 
days. 971 days times $13.94 per day totals $13,535.74. Nevertheless, the court, 
based on the calculations of plaintiffs' counsel, awarded $14,439.92 in 
interest.

 
 
"Following a similar 
pattern of simple mathematics, the interest awarded on the promissory note for 
$14,471.72, should have been $5,330.25, rather than the $5,356.54 awarded by the 
court."

 
 

[¶65.]  McIntosh and Freight respond that their 
only dispute with reference to the $39,126.72 note is that interest should be 
calculated on a 360-day basis rather than on a 365-day basis since "[t]he 360 
day basis is the banking conventional method of computation of annualized 
interest." There is nothing in the record requiring the court to compute the 
interest other than as stated in the notes.

 
 

[¶66.]  Accordingly, we will direct a correction 
in the amount awarded for interest by the trial court on the $39,126.72 note 
from $14,439.92 to $13,828.48.16

 
 

[¶67.]  The second note contained an interest 
amount of eighteen percent in the event of delinquent payments. RMH and Air 
contend that McIntosh and Freight cannot now request application of the eighteen 
percent figure since the district court used a thirteen percent figure and the 
difference was not made an issue in their appeal. The issue concerning the 
inaccuracy in computation of interest on both notes was placed before this court 
in the appeal of RMH and Air. We must, insofar as we are able, correct such 
inaccuracies regardless of the effect on the respective parties. Using the 
method used by RMH and Air for such computation, eighteen percent of $14,471.72 
is $2,604.91. Dividing $2,604.91 by 365 days results in a daily rate of interest 
of $7.14. The amount of interest for the 1056 days between August 1, 1985 and 
the date of the judgment is $7,539.84.

 
 

[¶68.]  Accordingly, we will direct a correction 
in the amount awarded for interest by the trial court on the $14,471.72 note 
from $5,356.54 to $7,539.84.

 
 

[¶69.]  Affirmed but remanded with directions to 
correct the figures in the Judgment and Decree relative to the amount of 
interest awarded on the notes and relative to the $28,572.77 figure allowed RMH 
and Freight for offset on the accounts receivable.

 
 
 
 
 
 
FOOTNOTES

 
 

1 Air Freight, Inc. and Kenneth B. 
McIntosh were parties plaintiff.

 
 

2 Rocky Mountain Helicopters, Inc., 
Air Today, Inc., and RMH Aeroservices, Inc. were parties defendant. RMH 
Aeroservices was subsequently dismissed from the action.

 
 

3 The court found $6,124.87 as the 
amount substantiated at trial.

 
 

4 Attorney's fees were claimed in the 
amount of $32,534.10.

 
 

5 The first paragraph of the 
agreement identifies RMH as "Buyer" and McIntosh and Air as 
"Sellers."

 
 

6 Witness Simpson, treasurer of RMH, 
conducted such internal audit of Air during the period of October 4, 1985 and 
December 1985. He testified that the audit showed a loss of $105,573.10 during 
the period of January 1, 1985 through October 4, 1985, and that the loss could 
be attributable to "either RMH Aeroservices and/or Rocky Mountain Helicopters." 
The alleged breaches of the warranties relative to financial condition and 
accounts receivable were based on this audit.

 
 

7 The first paragraph of the October 
4, 1985 agreement identifies RMH as "buyer."

 
 

8 With reference to the 
collectibility of the Purolator Courier account, Air did not accept an offer in 
a letter from Freight dated April 1, 1986, which read:

 
 
"Air Freight, Inc. will accept an 
assignment of the Purolator receivable, which totals approximately $37,000.00, 
and will subtract the total amount assigned from the amount owed Air Freight, 
Inc. by Air Today, with any remaining credit balance being applied to the amount 
owed to Kenneth Mc[I]ntosh."

 
 

9 The $9,067.33 award to RMH and Air 
was not made an issue on appeal.

 
 

10 "Chargebacks" are amounts spent on 
leased aircraft repair, maintenance and inspection other than that for engine, 
engine component and propeller overhaul.

 
 

11 RMH and Air made a timely request 
for the entry of Findings of Fact and Conclusions of Law, and they objected to 
the proposed Judgment and Decree (1) as not stating the Findings of Fact 
separately from the Conclusions of Law as required by W.R.C.P. 52, and (2) as 
stating findings "in general, conclusory terms." The objections were not 
specifically ruled upon, but the proposed Judgment and Decree was entered. 
However, RMH and Air have not made the failure to sustain their objections a 
subject of appeal.

 
 

12 The introductory statement to the 
forms reads in part:

 
 
"The following forms are intended 
for illustration only. * * * While these forms list allegations considered to be 
sufficient in a typical case, other proper allegations may be added or 
substituted as conditions may require."

 
 

13 Although Article Five, Section C of 
the Stock Purchase Agreement provided for receipt of rental payments on the 
aircraft, it made no reference to the lease or to the "engine 
reserves."

 
 

14 The Judgment was entered June 22, 
1988.

 
 

15 The note was dated October 4, 
1985.

 
 

16 $13,535.74 computed as due by RMH 
and Air through June 1, 1988 plus $292.74 computed at the rate of $13.94 per day 
from June 1, 1988 to June 27, 1988, the date of the Judgment and 
Decree.