McMillan v. Malloy.

In some of the early English cases it was held that in actions for work and labor, negligence or badness of materials constituted no defense to an action for the agreed price, but the party for whom the work was done must pay the stipulated price and resort to a cross action to indemnify himself for a deficiency in the consideration. Browne v. Davis, cited in 7 East, 480; Templar v. McLadlan, 2 N. R. 156; 2 Smith Lead. Cas. (6th ed.) 34. The doctrine of recoupment in such cases seems to have had its origin at a later date than the cases cited. Basten v. Butter, 7 East, 479. These facts must be kept in view in considering the early decisions, and doubtless had considerable weight in their determination. There is no difference in principle between the case of a vendee receiving and retaining a quantity of goods sold under an entire contract, after the vendor has refused to deliver the residue, and that of a party who has employed another to perform certain labor, but who, after performing a portion of the labor under the contract, neglects or refuses to perform the remainder. In neither case can an action be maintained on the original contract, but in both the party has received and appropriated what is done. And to the extent that he is benefited over and above the damage which has resulted from a breach of the contract by the other party, the law implies a promise to pay for such excess. Any other rule is fraught with gross injustice, and assumes that the party failing to perform is in all cases at fault, and offers an inducement to the opposing party indirectly to prevent a performance. But where a contract is shown' to have existed, the measure of recovery for the services rendered is the price fixed in the contract, less the damages sustained by the employer by reason of the non-performance. Doolittle v. McCullough, 12 Ohio St. 360; Corwin v. Wallace, 17 Iowa, 374.

The court therefore erred in instructing the jury to allow what the work was reasonably worth. It is unnecessary to notice the other instructions. The defendant failed to prove damages, even if the jury had found that the plaintiff had failed to perform his contract in such manner as would entitle him to recover. There is a general allegation in the testimony of the defendant that he sustained $25 damages; but he fails to state a single fact that would entitle him to recover. The jury therefore were justified in rejecting his claim.

As to the third cause of defense, there is no statement in the bill of exceptions as to what was proposed to be proved by the defend.

McMillan v. Malloy.

ant. It is not sufficient to be available on error, that the court sustains an objection to a question; the party must offer to prove certain facts, and if they are excluded, embody the testimony thus offered in the bill of exceptions. There is no error therefore available to the defendant in the third defense, as set forth in the answer. As it is clear from the record that the weight of testimony sustains the verdict of the jury, but as damages were assessed under the instructions of the court for the reasonable worth of the threshing, instead of the contract price, the plaintiff in the court below has leave to remit from the judgment the sum of $13 within thirty days from this date; and upon condition that said remittance is filed as above provided, the judgment of the District Court is affirmed. In case of the failure of the plaintiff to remit from the judgment the sum specified above within the time designated, the judgment is reversed, and the cause remanded for further proceedings, the costs in this court to be taxed to the defendant in error. Judgment accordingly.

NOTE BY THE REPORTER- In Parcell v. McComber, Nebraska Supreme Court, December, 1880, M. agreed to work for P. for one year, from October 1, 1876, for the sum of $195; worked five months, and sued for his wages, March 2, 1877. Held, that he could recover the actual value of his labor, not exceeding the rate agreed upon, less any damages sustained by P. by reason of the failure of M. to work the entire year. The court said: "There is an im. portant question presented in this case; one upon which it cannot be claimed that the authorities, either as expressed in the opinions of courts or the treatises of text-writers, are agreed. Until within the last fifty years it was quite generally held to be the law, both in England and America, that where a person, having agreed to work for another for a definite period of time, voluntarily leaves such service without any fault on the part of the employer, and without his consent, before the expiration of the term, he cannot recover in any form of action for the services actually rendered. The reasoning upon which the decisions holding this view were generally sustained is well expressed by MORTON, J., in delivering the opinion of the court in Olmstead v. Beale, 19 Pick. 528, in the following language: 'The plaintiff cannot recover on his express contract, because he has not executed it on his part, and the performance is a condition precedent to the payment. He cannot recover on a quantum meruit for the labor he has performed, because an express contract always excludes an implied one in relation to the same matter.'

"But in the case of Britton v. Turner, 6 N. H. 481, decided in 1834, a marked departure was taken from the former line of decisions. In that case, one quite parallel to the case at bar,it was held that where a contract is made of such a character a party actually receives labor or materials, and thereby derives a benefit and advantage over and above the damage which has resulted from the breach of the contract by the other party, the labor actually done, and the value received, furnish a new consideration, and the law thereon raises a promise to pay to the extent of the reasonable worth of such excess.' And again: 'In fact, we think the technical reasoning that the performance of the whole labor is a condition precedent, and the right to recover any thing dependent upon it — that the contract being entire, there can be no apportionment, and there being an express contract, no other can be implied, even upon the subsequent performance of service is not properly applicable to this species of contract, where a beneficial service has been actually performed; for we have abundant reason to believe that the general understanding of the community is that the hired laborer shall be entitled to compensation for the service actually per

Ward v. School District.

formed, though he do not continue the entire term contracted for; and such contracts must be presumed to be made with reference to that understanding, unless an express stipulation shows the contrary. Where a beneficial service has been performed and received therefor, under contracts of this kind, the mutual agreements cannot be considered as going to the whole of the consideration, so as to make them mutual conditions, the one precedent to the other, without a specific proviso to that effect.'

"This case has been quite generally though not uniformly followed, and the principles announced by it seem to be quite generally approved by the profession and the people; and while according much weight to some of the arguments on the other side, I think it would be unsafe to adopt them. The well-considered case of Duncan v. Baker, 21 Kans. 99,* contains the latest adjudication of the question involved in this case to which my attention has been called. After an exhaustive review of the authorities, the court reaches the same conclusions as those announced in Britton v. Turner. And so I think the law may be considered to be pretty generally settled throughout the western States." To the same effect is Steeples v. Newton, 7 Or. 110; s. c., 33 Am. Rep. 705.

WARD V. SCHOOL DISTRICT.

(10 Neb. 293.)

Office and officer - school district treasurer — liability for money lost by failure of

depositary.

A school district treasurer deposited school money in a bank to his own indi. vidual credit, directing the bank to pay out of it certain school district bonds about maturing, payable at that bank. The bank failed and the money was lost. Held, that the treasurer was liable for it in an action on his bond.t

A

The opinion

CTION on bond of school district treasurer.
states the case. The plaintiff had judgment below.

C. J. Phelps, for plaintiff in error.

Hoxie, Russell & Chambers, for defendant in error.

LAKE, J. [Omitting a minor point.] Not only was this branch of the defendant's answer wholly inadequate as a defense, but in the matter of proof respecting the particular item of Ward's account in controversy they were equally unfortunate. The mode in which all school moneys must be disbursed is found in section 41 of the general school law, which provides that: "It shall be the

*See note, 31 Am. Rep. 102.-REP.

✦See Lowry v. Polk County (51 Iowa, 53), & Am. Rep. 114; Comm'rs of Jefferson County V. Aneberger, ante, p. 462.

Ward v. School District.

duty of the treasurer of each (school) district to apply for and receive from the county treasurer all school moneys apportioned to the district, or collected for the same by the county treasurer, and to pay over, on the order of the director, countersigned by the moderator of such district, all moneys received by him." Gen. Stat. 968. And by section 52 of the same act it is made the duty of the director to "draw and sign all orders upon the treasury for all moneys to be disbursed by the district, and all warrants upon the county treasurer for moneys raised for district purposes, or apportioned to the district by the county superintendent, and present the same to the moderator to be signed by him." Gen. Stat. 970.

From these provisions of the statute, as well as others that might be quoted of similar import, we see that the funds belonging to school districts are carefully guarded against illegal disbursement, either through fraud or mistake. The order for its payment in every case must be drawn and signed by the director, then it must pass the scrutiny of and be signed by the moderator, and finally the treasurer himself must be satisfied that it was drawn for a legal object, and upon the proper fund, before he is justified in parting with the money. And further, the treasurer should take a receipt from the person to whom such payment is made, so that he may have the same as a voucher to exhibit at the annual meeting in his settlement with the district, as provided in section 42 of the school law. Now it is not pretended in this case that Ward paid out the $262.90 sued for on such order, nor even that he paid it on any order. It is undisputed that Ward had deposited the money to his own individual credit in Frank E. Frye's bank, in Schuyler, and while in this condition the bank failed, resulting in its loss.

It is doubtless true that Ward informed Frye of the purpose for which he intended this deposit to be made. And it is probable that he directed Frye to pay it over to the holder of certain of said school district bonds then about to fall due, and which were made payable at said bank. But in all this Frye was the agent of Ward, and not of the school district. It was Ward's duty, under the law, to keep the money securely until properly directed, as before shown, to pay it over to the holder of the district bonds. The money was within his control, placed there by force of the statute, and if he saw fit to intrust it to the care of another he did so at his peril.

Skinner v Reynick.

Under the testimony the court was clearly right in instructing the jury to find a verdict in favor of the school district, for none other could be upheld.

Judgment affirmed.

SKINNER V. REYNICK.

(10 Neb. 323.)

Homestead -mortgage - assumption of — estoppel.

A homestead may be mortgaged, and one who purchases the premises subject to and agreeing to pay such mortgage, cannot avoid it.

MAXWELL, C. J. This is an action to foreclose a mortgage on real estate. The petition alleges that on the twentieth day of May, 1875, George Reynick and Mary, his wife, being possessed of a homestead on the public lands under the laws of the United States, upon which final proof had not been made, mortgaged the same to the plaintiff to secure the sum of $40; that after completing the entry of said lands, and on or about the thirty-first day of March, 1876, Reynick and wife sold and conveyed the same, subject to said mortgage, to one Edward Newton, who, on or about the first day of April of that year, sold and conveyed said lands, subject to said mortgage, to one James G. Bailey, one of the defendants in this action, who promised to pay the same. It is also alleged that through mistake the mortgage was not recorded; that the same has not been paid, and that no action at law has been brought to recover the amount due thereon. The defendant Bailey demurred to the petition on the ground that the facts stated therein were not sufficient to constitute a cause of action. The demurrer was sustained and the action dismissed. The plaintiff appeals to this court.

Is the defendant Bailey in a condition to question the validity of the mortgagee in question? We think not. In Kruger v. Harves