Bellanca Corp. v. Bellanca

• Decision Date: 07 March 1961
• Citation: 3 Storey 378,53 Del. 378,169 A.2d 620
• Parties: , 53 Del. 378 BELLANCA CORPORATION, a Delaware corporation, Defendant Below, Appellant, v. John G. BELLANCA, Plaintiff Below, Appellee.
• Court: Supreme Court of Delaware

Page 620

169 A.2d 620

3 Storey 378, 53 Del. 378

BELLANCA CORPORATION, a Delaware corporation, Defendant Below, Appellant, v. John G. BELLANCA, Plaintiff Below, Appellee.

Supreme Court of Delaware.

March 7, 1961.

Reargument Denied April 3, 1961.

Edmund D. Lyons, Morris, James, Hitchens & Williams, Wilmington, for appellant.

William E. Taylor, Jr., Wilmington, for appellee.

WOLCOTT and BRAMHALL, Justices, and TERRY, President Judge, sitting.

WOLCOTT, Justice.

This is an appeal from a judgment of the Superior Court entered on a jury's verdict. The action seeks to recover the value of John Bellanca's services (hereafter John) in obtaining an ultimate purchaser for certain of Bellanca Corporation's assets (hereafter Bellanca). The complaint as originally filed set forth a claim based upon an alleged express contract between John and Bellanca obligating Bellanca to pay a commission of 5% of the final purchase price. The New Castle plant of Bellanca was ultimately sold for $1,300,000 to Piasecki Aircraft Company (hereafter Piasecki). At the end of John's case, on his motion and over the objection of Bellanca, the complaint was amended to add a second cause of action seeking recovery on a quantum meruit basis. The jury returned a verdict of $45,000, plus interest at 5%. Bellanca moved for a new trial and, upon its denial, followed with this appeal.

Bellanca's attack upon the judgment primarily is a contention that the evidence is insufficient as a matter of law to permit the submission of the case to the jury. This contention requires us to examine the evidence in the most favorable light to John, and to make all permissible inferences from the evidence in John's favor. We must then determine whether or not there was evidence which, if believed by the jury, would support a finding of liability on the part of Bellanca under either of John's theories. Nailor v. Maryland, D. & V. Ry. Co., 6 Boyce 145, 97 A. 418; Kent v. Parker, 8 Terry 151, 89 A.2d 133.

Before proceeding to this, however, we first notice a contention of Bellanca that the trial judge committed error in permitting John at the close of his case to amend his complaint to state a claim in quantum meruit. The amendment was allowed under Rule 15(b), Del.C.Ann., in order to conform the pleadings to the evidence. The fact is, of course, that much of the evidence offered in support of John's theory of an express contract with Bellanca was admissible also in support of a claim for a quantum meruit recovery. John testified that the express contract for payment of a commission was agreed upon orally by himself and Baldini, an employee of Bellanca, who had told him that Sidney Albert, the president of Bellanca, had agreed. This was the only offer of proof as to the authority of Baldini to bind Bellanca to such an agreement. Whether or not this was sufficient, we need not consider for John's counsel, either from a superabundance of caution, or from doubt as to the sufficiency of the proof to establish the authority of Baldini, moved to amend the complaint. The grant of the right to amend is now urged by Bellanca as reversible error.

Application to amend the pleadings to conform to the evidence and to permit the decision of causes upon their merits is not of new growth in this State. Indeed, such power is reposed in the Superior Court by Article IV, Section 21 of the Constitution, Del.C.Ann. The promulgation of the Civil Rules of 1948 did little more than standardize and make more definite the practice with respect to the allowance of such amendments. See Kirwan Mfg. Co. v. Truxton, 2 Pennewill 48, 44 A. 427; Mac-Farlane v. Garrett, 3 Pennewill 36, 49 A. 175; Saunders v. Cresswell Roll Forming Co., 7 Terry 329, 83 A.2d 697.

Rule 15 is the same as Rule 15 of the Federal Rules of Civil Procedure, 28 U.S.C.A. This rule is written upon the assumption that pleadings are not an end in themselves but are designed to assist, not deter, the disposition of litigation on its merits. Motions to amend the pleadings are always addressed to the discretion of the trial judge. A trial judge in his discretion must always permit or deny the amendment by weighing the desirability of ending the litigation on its merits against possible prejudice or surprise to the other side. See 3 Moore's Federal Practice, 804, 843.

We think the trial judge properly allowed this amendment. After its allowance no additional evidence was offered in John's behalf and there can be, therefore, no possible prejudice to Bellanca. The only result was to permit John to argue two alternative theories of his case, the evidence for both of which was in large part at least the same. In our view the amendment was well designed to permit a final disposition of the litigation on its merits. We find no abuse of discretion by the trial judge in allowing it.

We now come to the basic question of the appeal, viz., whether there is evidence in the record to support the verdict. Bellanca argues, by reason of the fact that the amount of the verdict is less than 5% of the purchase price paid, that thereby the verdict in effect is a finding against John on the express contract theory. Indeed, the trial judge apparently held the same view, although it is not so clear to us that a verdict in a less amount than an alleged agreedupon commission automatically results in a finding of no contract. See 8 Am.Jur., Brokers, § 219. In any event, we think we do not reach the question for in our opinion the verdict must be sustained on the quantum meruit theory.

Under this theory John seeks to recover the reasonable value of his services in procuring a purchaser of the Bellanca property under principles of law imposing legal relationships under the name of a quasi-contract. Quasi-contractual relationships are imposed by law in order to work justice and without reference to the actual intention of the parties. Fundamentally, it seems, quasi-contractual relationships are based upon unjust enrichment and upon an imposed duty to restore a plaintiff to a former status. 1 Williston on Contracts (Rev.Ed.), § 3. One of the more common instances of resort to the law of quasi-contracts is in attempts to recover the reasonable value of services performed under a mistaken belief that the defendant would pay. 1 Williston on Contracts (Rev.Ed.), § 36; 2 Restatement of Agency 2d, § 441.

A person invoking the doctrine of quasi-contract may recover the reasonable value of his services only if he establishes that the services were performed with an expectation that the recipient of the benefit would pay for them, and, further, that the services were performed, absent a promise to pay, under circumstances which should have put the recipient of the benefit upon notice that the plaintiff expected to be paid. 5 Williston on Contracts, § 1575; 8 Am.Jur., Brokers, § 159. We turn to the record to determine whether or not evidence was offered which, if accepted in the light most favorable to John, would have justified the jury in concluding that he had established these necessary factual elements.

Initially, we observe that the evidence more than amply sustains a finding that John performed the services for which he claims compensation. Not only did he testify that he, and he alone, interested Piasecki in purchasing from Bellanca, but the two officials of Piasecki who testified corroborated his testimony. In addition, Baldini, an employee and later director of Bellanca, confirmed the fact that the first meeting between Piasecki and himself at which the negotiations ultimately leading to the sale were initiated was arranged by John. There can be no doubt, we think, that the record sustains the conclusion that John procured the purchaser for Bellanca, without which, under no circumstances, could he claim compensation. Slaughter v. Stafford, 1 Storey 168, 141 A.2d 141.

The crucial fact which must be established by John is that notice of his activities in procuring a purchaser for the Bellanca property was given to the officials of Bellanca directly, or that the circumstances were such that the officials of Bellanca should have known or have been put on guard that John was active and expected to be paid. This follows from the rule that a person who knowingly permits another to perform services for him impliedly agrees to compensation for performance unless there is a specific agreement to the effect that the services are to be performed gratuitously. Restatement of Agency 2d, § 441, Comment c; Restatement, Restitution, § 40.

If, therefore, the officials of Bellanca knew, or should have known, of the procuring of the purchaser by John, the law will imply a promise on their part, and through them Bellanca, to compensate John for his services. It is necessary, therefore, to examine the record to ascertain whether or not there is evidence from which the jury could have concluded that the officials of Bellanca were put on notice that John obtained the purchaser and expected to be paid. In so examining the record, we must, of course, consider the evidence in the light most favorable to John.

We think the evidence would permit the jury to have concluded that the following were the facts:

The crucial period in this controversy is June to November, 1956. Prior to this, Bellanca Corporation had been acquired by Mr. Sidney Albert who owned at least in excess of 50% of its more than one million outstanding shares. Bellanca had been transformed by Albert from an aircraft manufactory to a holding company used to acquire ownership of various operating companies. The business of Bellanca was conducted by a board of directors of apparently six members. These directors were Mr. Albert, president, who owned in excess of 50% of the stock; Blythe, executive vice-president, who owned no stock; Rothchild, treasurer, who owned no stock; Baldini, assistant secretary and assistant treasurer, who owned no stock; a Colonel Rydall, who owned no stock, and a Mr. Holland,...