Case Name: J. W. LAHART, Appellant, v. MINNESOTA GRAIN COMPANY, a Corporation, Respondent
Court: North Dakota Supreme Court
Jurisdiction: North Dakota
Decision Date: 1918-04-13
Citations: 41 N.D. 111
Docket Number: 
Parties: J. W. LAHART, Appellant, v. MINNESOTA GRAIN COMPANY, a Corporation, Respondent.
Judges: 
Reporter: North Dakota Reports
Volume: 41
Pages: 111–127

Head Matter:
J. W. LAHART, Appellant, v. MINNESOTA GRAIN COMPANY, a Corporation, Respondent.
(170 N. W. 328.)
Accounting —• action for —- evidence — judgment.
In an action for accounting, evidence examined and held to sustain the judgment.
Opinion filed April 13, 1918.
Rehearing denied November 30, 1918.
From a judgment of the District Court of Foster County, Coffey, J., plaintiff appeals.
Affirmed.
Maddux & Rinlcer and George H. Stillman, for appellant.
“Where it is apparent from the pleadings that a record or instrument will be necessary on the trial, as the best evidence, no previous demand is necessary.” Owens v. Bemus, 22 N. D. 158, with point squarely stated on page 168.
Boots and accounts made up from other and original records by bookkeepers are not the best evidence, and it is error to admit them over objection, and especially where demand is made for the original entries and accounts, and their production is refused. Kayo v. Tay lor, 28 N. D. 293; Sykes v. Beck, 12 N. D. 242.
A litigant, having in his possession the primary or original record, cannot establish bis contention by parol evidence or unauthenticated copies or posted records. Hurley v. St. Paul, 86 N. W. 427; Sykes v. Beck, supra; Monton v. By. 128 Ala. 537; Mason v. Bull, 26 Ark. 164; Adams v. Trustees, 37 Fla. 266; Chicago v. McGraw, 75 Ill. 566; Mandel v. Land Co. 154 Ill. 177; Downing v. Haston, 21 Kan. 178; Bank v. Bowen, 19 Ky. L. Bep. 1416; Avery v. Butters, 11 Me. 404; Beppy v. County, 47 Mo. 66; Vale v. School Dist. 75 N. W. 855.
It is only where the best evidence is out of control of the party and he is unable to produce it, that substitute or secondary evidence is ¿dmissible. Company v. Cannon, 31 Fed. 313; Bogan v. McCutcheon, 48 Ala. 393.
•7ames B. Manly and Alvord 0. Egelston, for respondent.
"Every contract by which the possession of personal property is transferred as security only is to be deemed a pledge.” Comp. Laws 1913, § 6771; 31 Cyc. 787.
The rights and obligations of the parties to a pledge may be modified indefinitely by special contract between them. Jones, Collateral Securities — Pledges, § 14.
In this, as in all other cases of contracts, the courts will endeavor to ascertain the intention of the parties, and give effect thereto. 31 Cyc. 788; Dungan v. Mutual etc. Ins. Co. 38 Md. 242; Jones, Collateral Securities, Pledges, note to § 9; Palmer v. Mutual L. Ins. Co. 114 Minn. 1.
Entries in partnership books are admissible as between partners, and are also competent in favor of third persons in actions against the partners, in the nature of admissions of the facts stated. 2 Ene. Ev. 667.

Opinion:
Christianson, J.
This is an action for an accounting. Plaintiff was engaged in the elevator business. He owned and operated two elevators individually; and the. Gribbin-Alair Grain Company, a co-partnership in which plaintiff had a one-third interest, owned and operated seven other elevators. Both plaintiff and the copartnership were indebted to the defendant for moneys borrowed from it. The plaintiff individually owed the defendant something over $30,000. On June 7, 1907, for the purpose of securing the payment of $10,000 of suck indebtedness, tbe plaintiff executed and delivered to the defendant the following written instrument:
I, X W. Lahart, for and in consideration of the sum of ten thousand ($10,000) dollars in hand to me paid by the Minnesota Gráin Company of Minneapolis, Minnesota, do hereby sell, assign, and transfer to the Minnesota Grain Company all my interest and share in the elevators now operated and owned in North Dakota by the Gribbin-Alair Grain Company, my interest being the one-third interest, the said elevators being situated in the following towns in North Dakota, to wit: New Rockford, Sykeston, Hurdsfield, Heaton, Bowdon, Den-hoff and Jud.
That the Gribbin-Alair Grain Company is incorporated under the laws of the state of North Dakota, and owner of the elevators in the above-described towns, and is incorporated for the sum of $60,000, and I am the owner of one-third interest in the incorporation, but that the stock has never been issued to me, and I hereby authorize the Gribbin-Alair Grain Company to issue the stock which should be issued to me in the due course of business, and at the time they should be issued, to the Minnesota Grain Company or its assigns.
Dated this 7 th day of June,' 1907.
J. W. Lahart.
Signed in the presence of R. F. Rinker, Olivé Couch.
He also turned over, to the defendant the two elevators owned by plaintiff individually, for which it was agreed he was to receive a consideration of $13,650. The balance of such individual indebtedness, plaintiff paid.
This controversy arises over the elevators mentioned in the written agreement above set forth. The Gribbin-Alair Grain Company was originally a copartnership consisting of the plaintiff, Thos. Gribbin, and E. E. Alair, each of whom owned a one-third interest in the partnership. Later they determined to incorporate the firm, each member to receive an equal amount of corporate stock. It appears that prior to the execution of such agreement the Gribbin-Alair Grain Company had been duly incorporated under the laws of this state, but no capital stock had been issued. After the execution and delivery of the assignment to the defendant, tbe respective stockholders met and perfected a corporate organization, issued stock, and elected officers. The Gribbin-Alair Grain Company owed a considerable amount 'to the defendant. It also; was indebted to P. B. Mann Company, which indebtedness was taken over by the defendant.
The Gribbin-Alair • Grain Company continued in business for some time. But eventually it disposed of all its elevators, and converted its assets into cash. No complaint is made with respect to the sale of the assets of the company, but plaintiff asks for an accounting of the moneys realized from such sale and from the operation of such elevators while retained by the Gribbin-Alair Grain Company, including proceeds from the sale of grain on hand at the time plaintiff assigned his interest to the defendant.
It is undisputed that plaintiff owned a one-third interest in the Gribbin-Alair Grain Company, and that this interest was assigned to the defendant to secure a $10,000 debt which plaintiff owed to the defendant. Hence, it is conceded that the defendant is entitled to retain $10,000 and legal interest thereon out of plaintiff's distributive share of the assets of the Gribbin-Alair Grain Company. But plaintiff contends that defendant has received not only sufficient to discharge such indebtedness, but a sum considerably in excess thereof.
At the close of the trial, the trial court summarized the facts as follows: "On or about June I, 1901, Mr. Lahart was personally indebted to. the Minnesota Grain Company, in the sum of something over $30,000. Two elevators in Warviek and McVille not owned by the partnership of Gribbin-Alair Grain Company were turned into the Minnesota Grain Company, at an agreed price of about $13,650. At the same time there was cash paid, .at one time of about $150, proceeds of grain from the elevators at McVille and Warwick, and another check of about $4,000 from the same source, or from some cash of Tom Lahart personally. In addition to that, Mr. Lahart assigned or authorized to be issued stock in the Gribbin-Alair Grain Company to the extent of $10,000. That stock was issued and came into the possession of the Minnesota Grain Company and defendant. It seems to be clear and conceded that these payments wiped out and canceled and discharged the personal indebtedness of J. W. Lahart, the plaintiff, to the Minnesota Grain Company. That is shown and seems to be conceded in tbe evidence taken here about a year ago. At about the same time, June 7, 1907, Gribbin-Alair Company paid the P. 33. Mann Company about $6,000. To discharge that indebtedness, the Gribbin-Alair Company authorized the closing out of the grain which was owned by thorn, the turning oyer to the Minnesota Grain Company of the proceeds of, the grain in the elevator, and the value of the buildings, the elevator buildings at seven different points; stated in exhibit C. And it was understood that the business should be closed out conveniently, and it seems that it was closed out on or before January 1, 1908. So far as the evidence in this case discloses, there was at that time, January 1, 1908, owned in the way of equities $36,348.68, and that amount is disclosed after the Minnesota Grain Company had applied the value of the elevators and the grain in elevators upon the indebtedness of Gribbin-Alair Grain Company, to the P. 33. Mann Company and to the Minnesota Grain Company. At this time it appearing that the Minnesota Grain Company had taken over the indebtedness of the Gribbin-Alair Company to the P. 33.- Mann Company and held it against the Gribbin-Alair Company, all of which seems to have been agreed to and the books were closed, and the business has proceeded upon that theory. Now, here is $36,548.68. If Mr. Lahart has assigned his stock of $10,000 to the Minnesota Grain Company absolutely without any condition, then Mr. Lahart has no interest whatsoever in that amount at this time, because the Minnesota Grain Company has purchased upon that theory his interest in the Gribbin-Alair Company stock, and had secured the stock and were in the possession of the same. Upon the theory, however, which I have followed and adopted in this case, that this stock was assigned to the Minnesota Grain Company, as security only, then Mr. Lahart would be entitled to receive in this action one-third interest in $36,548.68, which amount would he $12,182.89, which would be his after he had paid the indebtedness of $10,000, with interest on the amount. But in this case, looking at it from the most favorable standpoint for Mr. Lahart, and considering that the assignment of his stock was made as security, the record shows about as follows1: That he owes the Minnesota Grain Company $10,000, and that he owes them the further sum of over $3,000 on a book account, making the sum of several hundred dollars at least in excess of $12,182.- 89, and in this action be is clearly not entitled to recover anything. The defendant in this case has not asked for any affirmative relief against Mr. Lahart's account, and of course will be awarded none. But under this state of facts Mr. Lahart is not entitled to recover anything."
After a careful examination and consideration of the evidence we find that the material facts summarized are established by the evidence. In fact the ultimate deductions drawn by the trial court are the only ones which could have been drawn by any reasonable, fair-minded man. The judgment appealed from is clearly right and must be affirmed. It is so ordered.