Avellone v. John Weisert Tobacco Co.

• Decision Date: 15 June 1948
• Docket Number: 27417
• Parties: AVELLONE v. JOHN WEISERT TOBACCO CO
• Court: Missouri Court of Appeals

213 S.W.2d 222

AVELLONE v. JOHN WEISERT TOBACCO CO

No. 27417

Court of Appeals of Missouri, St. Louis

June 15, 1948

'Not to be reported in State Reports.'

Albert E. Hausman, of St. Louis, for appellant.

Victor Packman and Annalea Welker, both of St. Louis, for respondent.

OPINION

ANDERSON

This is a suit brought by S. C. Avellone, a certified public accountant, to recover for services which he rendered to the John Weisert Tobacco Co., defendant below, in the investigation of defendant's records, and in the preparation of a claim for a refund of processing taxes paid the federal government. There was a verdict and judgment for plaintiff. From the judgment defendant has appealed.

The petition alleged that the services originally were contracted for on a contingent basis, but on May 24, 1940, a new arrangement was entered into, whereby defendant agreed that when the plaintiff should complete his work and submit a bill, plaintiff would be paid in full; that pursuant to an arrangment with defendant, plaintiff gave a voluntary credit to defendant in the sum of $ 450 upon receiving a $ 450 retainer; that the reasonable value of the services rendered between June 1, 1938, and July 10, 1940, was the sum of $ 4,000, and that although a statement was submitted to the defendant company requesting the balance due him of $ 3,100.00 (since the completion of the work), defendant has failed and refused to pay the balance, or any part thereof. The petition prayed for judgment in the sum of $ 3,100.00 'the balance due on a quantum meruit basis for services rendered between May 31, 1938, and July 10, 1940, together with interest thereon at six per cent (6%) per annum from October 29, 1941, the date demand was made.'

The answer of defendant alleged that on May 31, 1938, plaintiff entered into a contract with defendant, whereby plaintiff was to render services as an accountant, before the proper bureau or department of the United States, to obtain for defendant a refund of processing taxes paid by the defendant; that plaintiff agreed that his compensation for such work should be on a purely contingent basis, with no payments to be made by defendant to plaintiff until a refund or refunds should be made and paid to the defendant on account of the processing taxes, and that no refunds were ever obtained or paid to defendant.

The answer further alleged that plaintiff did not at any time while he claimed said contingent contract was in force notify the Treasury Department of the United States of the existence of such contingent contract, and that, therefore, under the rules of the Treasury Department, such contract was null and void and unenforceable.

The answer further denied that any new agreement was ever made between plaintiff and defendant as averred in plaintiff's petition; denied that defendant ever agreed to pay plaintiff any sum of money for representation or work in connection with the refund of said processing taxes, except on a purely contingent basis to be computed on the amount as refunds which plaintiff should procure for defendant and which the United States government should pay to defendant on account of said taxes.

The answer further pleaded that defendant received nothing on account of any refund for said taxes. It then pleaded that there was no consideration for the making of any alleged new arrangement or contract with plaintiff subsequent to the agreement of May 31, 1938. The answer concluded with a general denial of all the other allegations of plaintiff's petition.

Plaintiff's reply alleged that on May 24, 1940, for a good consideration, a new agreement was entered into whereby defendant agreed to pay plaintiff on the basis of the reasonable value of all services; that thereafter defendant withdrew and dismissed the claim for refund of taxes without the knowledge or consent of plaintiff, and that a final bill was submitted to defendant which was not honored.

The reply then alleged that even if there was no agreement other than on a purely contingent basis between the parties, plaintiff would nevertheless be entitled to recover because the defendant's conduct in connection with the disposition of the claim and concealment of facts from the plaintiff made defendant liable as a matter of law in any event for the reasonable value of the services rendered by the plaintiff.

In May, 1938, Richard Weisert, one of the officers of the defendant company, met the plaintiff on one of the downtown streets of St. Louis. During the course of the conversation the matter of the refund of processing taxes was discussed, and plaintiff was told by Richard Weisert that he would have to discuss that matter with his brothers who also were officers of the defendant company. Several days later plaintiff called at defendant's plant and after a discussion of the matter of taxes, an agreement was made with respect to the matter. The basis of the agreement was contained in a power of attorney and a letter. The power of attorney was as follows:

'Power of Attorney

Know All Men by These Presents, that the John Weisert Tobacco Co., a duly incorporated corporation of the state of Missouri, City of St. Louis, has made, constituted and appointed, and by these presents does make, constitute and appoint S. C. Avellone, a public accountant of this city who is enrolled and admitted to practice before the Treasury Department, its true and lawful attorney, for and in its name, places and stead, to attend to the matter of Processing Tax Refunds, claims, abatements or credits from the United States f America, giving and granting to the said attorney full power and authority to do and perform all and every act and thing whatsoever requisite and necessary to be done in and about the premises, as fully, to all intents and purposes, as it might or could do if personally present at the doing thereof, with full power of substitution or revocation; hereby ratifying and confirming all that the said attorney or his substitute, may or shall lawfully do, or cause to be done by virtue hereof.

In

Testimony Whereof, we have hereunto set our hands and seal this 31st day of May, 1938.

John Weisert Tobacco Company, Inc.

(Seal),

(signed) W. A. Weisert, manager,

(signed) Charles Weisert, treasurer.'

The letter given plaintiff at the time was as follows:

'June 3, 1938

Mr. S. C. Avellone

721 Olive St.

St. Louis, Missouri

Dear Sir:

We hereby employ you to attend to refunds, credits, abatements of tax or off sets against other taxes payable, in regard to processing taxes.

For this work we will pay you as follows: On amounts recovered not in excess of $ 10,000.00 50% of the amounts recovered will be paid to you. On amounts recovered in excess of $ 10,000.00, 33 1/3% will be paid to you.

We have this day signed and delivered to you a duly authorized Power of Attorney authorizing you together with this letter to proceed with the matter of Processing Taxes, and other taxes.

Very truly yours,

John Weisert Tobacco Co.,

W. A. Weisert.

WAW:RWL'

Following the execution of these documents, plaintiff Avellone began his examination and analysis of defendant's books and records, in preparation for the presentation of defendant's claim for refund of taxes theretofore paid by defendant to the federal government. Thereafter two claims, totalling $ 25,392.15, were filed. Time records were introduced in evidence, showing 571-3/4 hours devoted by plaintiff and his employee to the preparation and prosecution of these claims.

Immediately after the filing of the claims, a government accountant, Mr. John Reed, called at defendant's plant to examine, audit, and check the claims. He requested Mr. Avellone to come to defendant's office for the purpose of a conference with reference thereto. Plaintiff Avellone asked that the matter be deferred as he was busy with other matters, but Mr. Reed advised plaintiff that he was on a special trip from Wichita, Kansas, to make the audit and examination, and that he would not defer the examination. Mr. Reed requested that plaintiff either come to the office of defendant and be present at the audit, or submit his papers to Reed, and plaintiff declined to do so. Mr. Reed thereupon proceeded with his audit and examination of defendant's records.

Defendant's witness Walter Weisert testified that while Reed was in St. Louis, he, Walter Weisert, made daily efforts to get in touch with plaintiff, without success, and that plaintiff failed to appear at defendant's office in response to those calls.

Plaintiff's attitude with respect to the matter is reflected in a letter addressed to Richard Weisert, which letter is as follows:

'July 11, 1940

11:45 PM.

Dear Richard:

I urge you to withhold your opinion (to the Revenue Examiner) in regard to the claim we have filed.

The fellow is plainly trying to wear you down. This is the time to show you can take it?

He eulogizes his work, and for a purpose. Revenue Examiners, ordinarily, are not given to such boasting of the impregnability of their work, they are susceptible to terrific boners.

He has erred tremendously in arriving at his results.

I urge you not to be talked out of $ 24,000.00.

I am of the opinion that his interest in my papers arises from fear that he has made gross errors, and I am not particularly anxious to fortify him by so doing.

Remember that those fellows are advocates of the cause of the Treasury Dept. They are not in the position

nor capacity (nor do they possess the competency) of impartial judges; and, I am your advocate.

Yours truly,

Avy.

Perhaps, their stuff, is to you, overpowering; whereas, it does not bother me a bit. Standby. I will not disappoint you; the conclusion will bear me out, I am sure, if you don't frustrate my efforts.

Plain envelope is used advisedly.'

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