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ALBEE HOMES, INC. v. LUTMAN

November 3, 1967

ALBEE HOMES, INC. and Albee Summit Homes, Inc.
v.
Meir LUTMAN



The opinion of the court was delivered by: LORD, III

 This case arises out of a business transaction in which defendant exchanged a 50% interest in Albee Summit Homes, Inc. ("Summit"), a 7.5% interest in Albee Tri-State Homes, Inc. ("Tri-State"), and a 7.5% interest in Albee Grand Homes, Inc. ("Grand") for 14.5 shares of Albee Homes, Inc. ("Albee"). Defendant had been employed by Summit and after the exchange continued to be employed by Albee. Plaintiffs' claim was that defendant, while employed by plaintiffs, had drawn or borrowed substantially more than he was entitled to, claiming $76,899, with interest. Defendant's contention was that in addition to his salary with Summit he was entitled to a 5% commission on his own sales on credit and a 6% commission on his own sales for cash, which he never received. Defendant conceded a $30,000 overdraft, but contended that in October 1960 there was a mutual forgiveness of indebtedness, - by Summit of the $30,000 and by defendant of the unpaid commissions. The balance of the alleged overdraft was disputed.

 Defendant also filed a counterclaim in three counts, *fn1" asserting (1) that he exchanged his stock in Summit, Tri-State and Grand for Albee stock as a result of fraudulent misrepresentation as to the value of Albee; (2) that his salary with Albee was $35,000 per year, of which he received only $20,000; he claimed $15,000 with interest.

 The jury, in answer to interrogatories, found for defendant on plaintiffs' claim, for plaintiffs on Count I of defendant's counterclaim, and for defendant on Count II of the counterclaim in the amount of $18,903.00.

 We granted a partial new trial as to four *fn2" of the six checks, all dated after the date of the alleged forgiveness, even though there had been no exception at the trial to permitting the jury to find that they were covered by the forgiveness. We felt that fundamental fairness required this result. We denied a new trial on the other two grounds without opinion because we thought them plainly without substance. However, since we have concluded that defendant's motion merits an opinion, we might just as well discuss briefly plaintiffs' motion.

 1. Permitting withdrawal of a stipulation.

 Defendant stipulated that a long series of checks were properly chargeable to him. Counsel later discovered that two checks had been inadvertently included in the stipulation and the court permitted defendant to withdraw those two from the agreement. "A court may relieve a party of his stipulation if necessary to prevent an injustice, particularly where facts contrary to the stipulation are established by the evidence." H. B. Zachry Company v. United States, 344 F.2d 352, 357, 170 Ct.Cl. 115 (1965). And in any event, since the jury found a forgiveness of defendant's indebtedness, there could have been no conceivable prejudice to plaintiffs.

 2. The trial judge created an atmosphere detrimental to plaintiffs.

 It would serve no useful purpose to set forth at length the matters of which plaintiffs complain. Suffice it to say that they were either rulings of law, were called for by plaintiffs' counsel's conduct of the trial, or are taken out of context. As to the last, even when considered out of context and on their face, they are totally innocuous. Of equal importance is the fact that plaintiffs' counsel made no objection, did not move for a mistrial, and asked for no corrective action. In Faudree v. Iron City Sand & Gravel Company, 315 F.2d 647 (C.A. 3, 1963), the court said, at pages 651-652:

 
"Finally, it should be noted that at no time during the trial did defendant's counsel take exception to any remark made by the trial judge, nor did he make any formal objection to any of the matters he now contends were so prejudicial as to justify the granting of a new trial. If in fact defendant's counsel felt aggrieved by the alleged prejudicial comments and conduct, he should have called the matter to the court's attention so as to give the court an opportunity to take corrective action. * * *"

 3. Defendant's motion for new trial on Count I of the counterclaim.

 We charged:

 
"* * * he [defendant] must prove that there was an intentional representation which was intentionally false and upon which he acted and relied upon reasonably; in other words, that his ...

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