Carter v. Matthey Laundry & Dry Cleaning Co., 48432

• Court: Missouri Supreme Court
• Writing for the Court: STORCKMAN
• Citation: Carter v. Matthey Laundry & Dry Cleaning Co., 350 S.W.2d 786 (Mo. 1961)
• Decision Date: 09 October 1961
• Docket Number: No. 2,No. 48432,48432,2
• Parties: C. T. CARTER, Appellant-Respondent, v. MATTHEY LAUNDRY & DRY CLEANING COMPANY, a Corporation, Mabro Investment Company, a Corporation, and National Laundry, Inc., a Corporation, Appellants-Respondents

Page 786

350 S.W.2d 786

C. T. CARTER, Appellant-Respondent, v. MATTHEY LAUNDRY & DRY CLEANING COMPANY, a Corporation, Mabro Investment Company, a Corporation, and National Laundry, Inc., a Corporation Appellants-Respondents.

No. 48432.

Supreme Court of Missouri, Division No. 2.

Oct. 9, 1961.

Motion for Rehearing or to Transfer to Court en Banc Denied

Nov. 13, 1961.

August W. Jaudes, A. Robert Belscher, St. Louis, for appellant carter.

Flynn, Parker & Badaracco, Norman C. Parker, St. Louis, for respondents.

STORCKMAN, Judge.

This is an action in two counts for damages claimed to have been sustained by the plaintiff, C. T. Carter, as the result of an alleged breach of a written contract entered into between him and the defendant, Matthey Laundry & Dry Cleaning Company in connection with the liquidation of National Laundry Company, a corporation. The plaintiff alleged that certain assets were liquidated in a manner violative of his contract and that he was thereby denied remuneration to which he was entitled.

Count 1 of plaintiff's second amended petition involved the disposition of the real estate and plant equipment and was directed against Matthey Laundry & Dry Cleaning Company and Mabro Investment Company, both Missouri corporations. On this count the jury found in favor of the plaintiff and against both defendants in the sum of $20,000. The defendants filed separate motions for judgment in accordance with their motions for directed verdicts or, in the alternative, for a new trial. The defendants' motions for judgment were overruled, but their separate motions for a new trial on Count 1 were sustained on the ground that the verdict was against the weight of the evidence. The defendants have appealed from the overruling of their motions for judgment as to Count 1. The plaintiff has appealed from the order sustaining the defendants' motions for a new trial.

Count 3 involved 'the customer accounts of the National Laundry Company and the good will attached thereto' and sought a judgment for $21,951.50 against Matthey Laundry & Dry Cleaning Company and National Laundry, Inc., also a Missouri corporation. The jury found in favor of the defendants on this count. The plaintiff filed his motion for a new trial as to Count 3 which motion was overruled and he appealed.

Other counts of the second amended petition have gone out of the case. A previous appeal in this litigation was before this court in Carter v. Mattey Laundry & Dry Cleaning Co., Mo., 330 S.W.2d 771. In the present appeal the plaintiff contends that the court erred in granting the defendants a new trial on Count 1 on the ground that the verdict was against the weight of the evidence because the plaintiff had been granted a new trial on the same ground as a result of the first trial; and that as to Count 3 the court erred in admitting incompetent evidence offered by the defendants. The defendants' appellate contentions are that their motions for judgment should have been sustained as to Count 1 because the plaintiff's evidence was insufficient to justify the submission of Count 1 to the jury; that the court was justified in granting the defendants' motions for new trial for the reason specified and others; and that the evidence of which the plaintiff complains as to Count 3 was properly admitted. The defendant Matthey Laundry & Dry Cleaning Company will sometimes be referred to as Matthey Company or Matthey; the Mabro Investment Company as Mabro; and the National Laundry Company as National Company or National.

Since 1936 plaintiff Carter had been president of National Laundry Company which owned and operated its plant at Laclede and Channing Streets in St. Louis. For a number of years family laundry business had been on the decline and National accounts were mostly commercial, consisting of hotels and motels. The defendant Matthey Company was also engaged in the laundry business in St. Louis. L. H. Matthey, Jr., was its president and L. H. Matthey, Sr., had also been connected with the Company but had retired at the time of the trial.

On November 3, 1954, an ordinance of the City of St. Louis found the Mill Creek Valley area in St. Louis to be blighted and that redevelopment of the area was necessary. There had been newspaper publicity of this proposal in September 1954. The ordinance provided that the study and planning for acquisition, clearance, improvement and sale for redevelopment and rehabilitation of the land in said blighted area should be undertaken by Land Clearance for Redevelopment Authority of the City of St. Louis. The blighted area included the location of the National plant and real estate. Sometime in the fall of 1954, Mr. Matthey, Jr. contacted the plaintiff and after numerous conferences submitted alternate written proposals. One was for the purchase of the shares of capital stock and the other was for the purchase of the business customers and trucks of National Laundry Company. Both of these proposals were rejected, but a third, submitted later, was accepted. This proposal was made in writing by Matthey Company to the plaintiff, C. T. Carter, and Percy W. Neslage as representatives of the shareholders of National. The proposal offered to purchase all of the outstanding stock of National Company, consisting of 3,000 shares at a price of $40 per share and was conditioned upon the acceptance by the holders of at least 80 per cent of the outstanding stock and the deposit of their shares. The purchase of the shares deposited was to be closed within 10 days after acceptance by the required number of shareholders and 50 per cent of the purchase price was to be paid on the date of closing and the balance on or before one year from the date of closing with interest at 5 per cent on the unpaid balance. The proposal called for the resignation of all directors and officers of National Laundry Company except the plaintiff and that he would be employed at not less than his present salary for a period of at least three months. This written offer to purchase was dated March 14, 1955. The offer was accepted by holders of approximately 91 per cent of the capital stock of National which included 158 shares owned by the plaintiff. The sale was closed and the first installment of $20 per share, which was 50 per cent of the purchase price, was paid on March 23, 1955.

Under date of March 22, 1955, the Matthey Company entered into a contract with the plaintiff individually which was introduced in evidence as plaintiff's Exhibit 3. This is the contract upon which plaintiff's claim is based. The first two paragraphs of this agreement provide that the plaintiff would be employed for a period of three months from the closing date of the purchase agreement at the rate of $230 per week, which period might be extended for an additional three months by mutual agreement. The third paragraph restricted the plaintiff from engaging in the laundry business in a specific area for a period of three years. The consideration for this covenant was keyed into the liquidation of the National Laundry Company with certain minimum guarantees as provided in paragraph numbered 4, which is as follows: 'In consideration of the agreement of Carter contained in paragraph 3 Matthey shall pay to Carter a sum computed as follows: Upon liquidation of the National Laundry Company in the event the proceeds of such liquidation exceed $115,000 Carter shall be paid an amount equal to the portion of such excess distributable to Mattey by virtue of its ownership of stock in National Laundry Company which shall be paid to Carter in three equal annual installments, the first payment to be made upon receipt by Matthey of its final liquidating distribution of stock in the National Laundry Company, and the remaining payments to be made on the same date of each year thereafter for two years.

'In the event that the liquidation of National Laundry Company is completed in less than six (6) months, the minimum amount to be paid to Carter hereunder shall be Three Thousand Dollars ($3,000.00), irrespective of the actual amount of the proceeds of the liquidation, and in the event the liquidation is not completed until after six (6) months, the minimum amount to be paid to Carter shall be Five Hundred Dollars ($500), the first one-third (1/3) of which shall be payable May 1st, 1956, if the liquidation is not completed prior to that time.

'In the event that any real estate of National should be purchased by Matthey, the price to be paid for the same shall be determined by mutual agreement between Matthey and Carter, or if they are unable to agree the price shall be determined by an appraiser selected by mutual agreement between Carter and Matthey.'

After Matthey Company acquired the controlling stock, the board of directors of National Laundry Company on March 23, 1955, adopted a resolution recommending to the shareholders that the Company be dissolved. On April 5, 1955, the shareholders adopted a resolution providing for the dissolution of the corporation, the liquidation of all of its assets and their distribution to the shareholders and authorizing the directors and officers to complete the liquidation and to declare liquidating dividends. On the same day the directors met and implemented the plan of liquidation by authorizing the officers to proceed with the liquidation 'as rapidly as possible' and to sell the assets including the real estate. The officers were L. H. Matthey, Jr., the plaintiff, and Edward G. Fohrell. The liquidation was completed within a year after approval of the plan by the shareholders and directors. The total amount realized was $114,720, which was less that the $115,000 required to provide the plaintiff with compensation in excess of the minimum guaranteed by his contract. The items of which the plaintiff complains are the real estate and plant equipment and the customer accounts and good will. The real estate was not disposed of within the first six months of...