Shepard v. Shepard

15 N.W.2d 195, 145 Neb. 12, 62 U.S.P.Q. (BNA) 220, 1944 Neb. LEXIS 117
CourtNebraska Supreme Court
DecidedJuly 7, 1944
DocketNo. 31711
StatusPublished
Cited by11 cases

This text of 15 N.W.2d 195 (Shepard v. Shepard) is published on Counsel Stack Legal Research, covering Nebraska Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Shepard v. Shepard, 15 N.W.2d 195, 145 Neb. 12, 62 U.S.P.Q. (BNA) 220, 1944 Neb. LEXIS 117 (Neb. 1944).

Opinion

Messmore, J.

This is an action for an accounting, based on a written contract made and entered into January 1, 1938, by Roy W. Shepard, plaintiff, and his brother, Anson L. Shepard, defendant, wherein plaintiff, being the sole owner of the business known as Shepard Laboratories, sold such business to the defendant. The trial court entered a decree in favor of the plaintiff and credited the defendant with certain items as against the net profits due the plaintiff, which were objected to by the plaintiff. Motion for a new trial was overruled, and the plaintiff appeals.

The contract is for the sale of Shepard Laboratories, and the seller retains no title, lien or other security, except a condition wherein certain percentages of the net profits were to be paid as they accrued. First, the case involves an interpretation of the contract. At the outset paragraphs 1 and 2 of the contract, providing for the sale of equipment, office fixtures and merchandise, have been fully complied with. The other provisions of the contract, necessary to a determination of this case, are in substance as follows: The defendant agrees to pay to the plaintiff “for a period of five years on or before December 31st each year, 20% of the .profit after deducting the following legitimate neces[14]*14sary business expense itemized as follows for an approximate working basis attached marked No. 3A * * * .” No. 3A is not attached to the contract, nor does it appear as an exhibit. Paragraph 4 of the contract provides that on and after January 1, 1943, the defendant agrees to pay plaintiff “10% of the profit on or before December 31st each year and thereafter for five years after deducting the necessary expenses as outlined in paragraph No. 3 * * * .” Paragraph 5 provides that the parties agree to co-operate with each other in furthering the sales of each other’s products, the plaintiff owning a separate company, which will be discussed later in the opinion, with reference to defendant’s cross-petition. The other provisions of the contract need not be referred to at this time.

The pleadings joined the issues upon the interpretation of the contract and the accounting, and the evidence details each item constituting the subject matter of the accounting. While some contention is made by defendant in his brief that the action is one at law upon the breach of a contract, the case was tried and considered as in equity.

“Generally speaking, the cardinal rule in the interpretation of contracts is to ascertain the intention of the parties and to give effect to that intention if it can- be done consistently with legal principles. It has been said that to this paramount rule all others are subordinate. The parties should be bound for what they intended to be bound for, and no more. * * * The law presumes that the parties understood the import of their contract, and that they had the intention which its terms manifest. It is not within the function of the judiciary to look outside of the instrument to get at the intention of the parties, and then carry out that intention regardless of whether the instrument contains language sufficient to. express it; but their sole duty is to find out what was meant by the language of the instrument.” 6 R. C. L., sec. 225, p. 835, and cases cited.

The plaintiff contends that the court erred in taking into consideration issues not contemplated by the contract, by admitting the evidence regarding family affairs and sup[15]*15port of the parents. We will not detail this evidence except to say that the obligation is personal to the plaintiff. The defendant paid their mother the sum of $300, charged it as a legitimate business expense, and received credit as against the 20 per cent net profits due the plaintiff, the amount charged to plaintiff being $60. The contract does, not provide for such item being a legitimate business expense. Paragraph 7 of the contract provides: “There is nothing in this agreement to make either (plaintiff or defendant) * * * financially responsible for each others, indebtedness or responsibilities.” In allowing this item the court erred.

The court decreed that for the years 1940, 1941 and 1942 certain depreciation of automobiles should be charged against the plaintiff’s 20 per cent profits, and- fixed the amounts in the sum of $33 and $42, or a total of $75. The evidence discloses that in the defendant’s business he used an automobile, and there is evidence of trade-ins and of mileage of cars at different times and value thereof, and it is contended by plaintiff that the defendant used the same for 75 or 80 per cent of the time for family and personal purposes. The defendant’s testimony is that he used the car about 10 per cent of the time for such purposes. He arbitrarily fixed an amount of depreciation; the court fixed and determined a reasonable amount in view of all the circumstances, and the amounts so fixed are about as reasonably accurate as can be ascertained from the record. The decree of the trial court in fixing such amounts for depreciation and use, as shown by the decree, is correct.

The trial court decreed that the defendant use as a credit the sum of $200 for attorneys’ fees for his defense of this action as a charge against plaintiff’s 20 per cent profits. In this allowance the court erred. The contract does not provide that the defendant would, in any event, be entitled to a credit for attorneys’ fees for the defense of any action brought against him by plaintiff, and such amount to be charged against plaintiff’s per cent of the profits. The contention that attorneys’ fees are allowable under the law of [16]*16this state is without merit, and the following- authorities are applicable.

In Higgins v. Case Threshing Machine Co., 95 Neb. 3, 144 N. W. 1037, this court said: “It is the practice in this state to allow the recovery of attorneys’ fees only in such cases as are provided for by law, or where the uniform course of procedure has been to allow such recovery. As a general rule of practice in this state, attorneys’ fees are allowed to the successful party in litigation only where such allowance is provided by statute.” See, also, State ex rel. Charvat v. Sagl, 119 Neb. 374, 229 N. W. 118; Blacker v. Kitchen Bros. Hotel Co., 133 Neb. 66, 273 N. W. 836; Voss v. Voss, 144 Neb. 819, 14 N. W. 2d 849.

.Plaintiff predicates error in that the defendant arbitrarily set up an amount of $50 a month for expenses for the years 1938, 1939, 1940 and 1941, and, inasmuch as this action was reopened on June 12, 1943, hearing also included an accounting- on the net profits for 1942. For the first four years mentioned the amount was shown to be $2,435.20, and, in addition, checks were issued to the defendant totaling $855.11, and other items totaling $566.92, making a total for the years 1938 to 1941, inclusive, of $3,857.23. The trial court granted this allowance. These expenses were for traveling purposes and for contacting and entertaining customers and attending trade meetings, to procure and induce customers to purchase the defendant’s products. The record discloses that in February, 1940, the plaintiff accepted the amount of $212, tendered by defendant as plaintiff’s share of the profits under the contract for the years 1938 and 1939, based on quarterly • reports, and the plaintiff accepted from the defendant a credit memorandum for the amount agreed on; thus consummating a full and complete settlement for those years. In this settlement plaintiff recognized the arbitrary deduction of $50 a month, made by defendant and for the purposes for which he made such deductions. Plaintiff offered no complaint.

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Cite This Page — Counsel Stack

Bluebook (online)
15 N.W.2d 195, 145 Neb. 12, 62 U.S.P.Q. (BNA) 220, 1944 Neb. LEXIS 117, Counsel Stack Legal Research, https://law.counselstack.com/opinion/shepard-v-shepard-neb-1944.