Cline v. Fountain Rock Lime & Brick Co.

• Court: Maryland Supreme Court
• Writing for the Court: Before BRUNE; BRUNE
• Citation: Cline v. Fountain Rock Lime & Brick Co., 134 A.2d 304, 214 Md. 251 (Md. 1957)
• Decision Date: 26 July 1957
• Docket Number: No. 225,225
• Parties: Earl H. CLINE v. FOUNTAIN ROCK LIME & BRICK CO., Inc.

Page 251

214 Md. 251

134 A.2d 304

Earl H. CLINE v. FOUNTAIN ROCK LIME & BRICK CO., Inc.

No. 225.

Court of Appeals of Maryland.

July 26, 1957.

Charles McC. Mathias, Jr., Frederick, Md., and Stanford Hoff, Westminster, Md., for appellant.

Edward D. Storm, Frederick, Md., and Charles O. Fisher, Westminster, Md., for appellee.

Before BRUNE, C. J., and COLLINS, HENDERSON, HAMMOND and PRESCOTT, JJ.

BRUNE, Chief Judge.

This is the second appeal in this case. For the first appeal, see Cline v. Fountain Rock Lime and Brick Co., Inc., 210 Md. 78, 122 A.2d 449. The principal question presented on the present appeal is whether or not the amended or substituted declaration filed after the case was remanded constituted a new cause of action, which was barred by limitations when this amended declaration was filed. The Circuit Court for Carroll County held that it was not; and the trial resulted in a verdict and judgment for the plaintiff, Fountain Rock Lime and Brick Co., Inc. ('Fountain Rock'), for $9,125 (as against $7,000 on the first trial) from which the defendant, Cline, appeals.

The case was submitted to the jury on two issues, with instructions to determine and report the amount of damages assessed against Cline, if either of the issues was answered 'Yes.' The issues were these: '1. Was there an oral agreement between * * * Cline and Fountain Rock * * * in the year 1949 for the establishment and operation of a stone business on a fifty-fifty basis' and '2. Did * * * Cline agree with Fountain Rock * * * to the terms and provisions of the unsigned lease dated May ___, 1950.' The answer to the first issue was 'Yes,' and to the second, 'No.' Damages were assessed at $9,125.

The facts as developed by the testimony at the second trial do not differ greatly from those developed by the testimony at the first. A rather full statement with regard to them is contained in our opinion on the first appeal, and we shall not review them in detail here. Among the salient facts out of which this controversy developed are the following: (1) the appellant, Cline, is a general contractor in Frederick; (2) the appellee, Fountain Rock, is a corporation which owns a limestone quarry in Frederick County; (3) John W. Quynn owns 2,001 of the 2,002 issued and outstanding shares of stock of Fountain Rock (the other share being owned by a member of his immediate family) and he completely controls Fountain Rock and is its general manager; (4) in 1949 an extensive road building program was about to get under way in Frederick County and Quynn and Fountain Rock wanted either to sell the quarry or to get into the stone business (as distinguished from the lime business) and to share in the profits of furnishing stone for the roads program; (5) Fountain Rock was in no position to get into that business because it lacked both equipment and capital; (6) Cline, as a general contractor and as the owner of trucks which could be used to haul stone, was in a position to get such business, either as a prime contractor or as a subcontractor, and he could use Fountain Rock's stone in such business; and (7) there was some arrangement relating to the use by Cline of stone from the Fountain Rock quarry.

Fountain Rock instituted a suit at law against Cline in the Circuit Court for Frederick County on January 11, 1952. (The case was later removed to Carroll County for trial.) The declaration contained the common counts and a special count, which, as slightly amended, alleged that 'during the year 1949 the * * * defendant [Cline] agreed with the plaintiff [Fountain Rock] to lease the plaintiff's real estate plant and equipment and to pay the plaintiff for the same a percentage of profit with guaranteed minimum amount; that the defendant took possession under the terms of the said oral agreement, of the plaintiff's property and used it for his own benefit but has never made any payment under his agreement, although the plaintiff has done everything under the contract that it was supposed to do.' In response to an order to furnish the particulars of its claim, Fountain Rock filed a bill of particulars consisting of eleven items. Most of them were apparently founded upon the terms of a proposed written lease dated, May ___, 1950, which Quynn executed on behalf of Fountain Rock, but which he never succeeded in getting Cline to execute.

The principal item in controversy on both the first and second appeals is Fountain Rock's claim to a share of the profit which Cline made on a contract or subcontract with Conduit and Foundation Company (the 'Conduit Company'), which had a contract to do some work for the State Roads Commission. This subcontract was to furnish and install stone riprap work. The claim is based upon an alleged oral joint adventure agreement between Cline and Fountain Rock made in 1949, at a time when Quynn had been trying to sell the Fountain Rock quarry. The agreement as testified to by Quynn was that if Quynn or Fountain Rock would hold onto the quarry until the end of that year, Cline would put in the crushing equipment and the parties would 'go ahead in the stone business.' Quynn said that it was understood that they would share the profits equally. On the first appeal Fountain Rock contended that the alleged joint adventure agreement and Fountain Rock's claim for a share of the profits thereunder were properly provable under the eleventh item of the bill of particulars which claimed 'special damages for destroying the plaintiff's good will and causing plaintiff's business to be destroyed by the defendant's holding himself out to be the owner of the plaintiff's property and receiving contracts and profits on the strength of his representations.' That was the only item in the bill of particulars which Fountain Rock put forward as supporting this claim. We held that this claim was not covered by the bill of particulars and hence that evidence pertaining to it should not have been admitted.

There were also some errors with regard to other items which the jury was allowed to consider at the first trial in awarding damages, and we pointed out that there had been no finding by the jury that the defendant had agreed orally to the terms of the unexecuted lease. We need not now go into any claims based upon the proposed lease dated May ___, 1950, since, on the second trial, the issue as to whether or not the defendant had ever agreed to it was squarely submitted to the jury, and was answered 'no.' Under the court's instructions any claims based upon that lease were excluded from the damages which might be allowed, if that issue were answered in the negative.

On the former appeal we noted (at 210 Md. 90, 122 A.2d 455) that Fountain Rock sought to recover on an oral contract or on two oral contracts, and that the bill of particulars referred to only one. That one was the unexecuted lease, which Fountain Rock claimed Cline had agreed to orally. The bill of particulars did not refer to or rely upon the joint adventure agreement.

The amended declaration filed after the remand of the case undertook to allege both the oral joint adventure agreement of 1949 and the unexecuted or oral lease dated May ___, 1950. This declaration contains six common counts and a special count. This count began with the allegation that 'during the year 1949 the said Defendant agreed with the Plaintiff that if the latter would not sell its lime plant and stone quarry, but hold it until the end of that year, the Defendant would purchase certain equipment needed to modernize the plant as a stone quarry and they would go into business together; that the Plaintiff thereupon concentrated its principal officer's and owner's efforts in preparing to further their joint adventure and the Defendant also performed certain acts and spent certain moneys fulfilling their agreement.' It also alleged, inter alia: that Cline took possession of Fountain Rock's real estate and used it for his own benefit; that in the spring of 1950, when Cline became involved in Federal income tax difficulties, Quynn proposed a lease instead of a joint adventure agreement; that Cline continued to use the property while holding the unsigned lease; that he never rejected the lease and 'acted partially under it'; that Quynn continued his efforts to promote the joint adventure; that he demanded that Cline sign the written lease, that Cline, without refusing to sign it, asked for more time, and that Quynn then withdrew the lease; that Cline then accepted a large and remunerative contract [the Conduit Company contract] for himself; and that Cline accepted the advantages and profits from the proposed joint adventure and the proposed lease but failed to pay either a percentage of his profits or the minimum amount provided for in said proposed lease. There followed the enumeration of claims in the nature of a statement of particulars, paragraphs j and k of which asserted claims for: (j) 'a share in the profits from the stone business with all stone purchasers until after the acceptance of the first large contract when Defendant caused Plaintiff to cease his relationship with him;' and (k) 'special damages for misleading the Plaintiff into relying on the joint adventure or lease agreement from 1949 until 1951 * * *.'

In view of the jury's finding with regard to the unexecuted lease the issue is now narrowed to the oral joint adventure agreement and the claims based thereon. To these the defendant pleaded limitations--that the amended declaration set up a new cause of action and that it did not accrue within three years of the filing of the amended declaration.

The original declaration--or rather the first amended declaration--which was before us on the first appeal (and is hereinafter referred to as the 'original declaration') set up an oral lease of real estate, plant and equipment, under which the lessee was 'to pay a percentage of profit with guaranteed minimum amount.' The only words which might suggest a...