Dubail v. Medical West Bldg. Corp., 49688

• Decision Date: 11 November 1963
• Docket Number: No. 2,No. 49688,49688,2
• Citation: Dubail v. Medical West Bldg. Corp., 372 S.W.2d 128 (Mo. 1963)
• Court: Missouri Supreme Court
• Parties: W. Donald DUBAIL, Charles R. Judge, and Robert S. Kilker, d/b/a Dubail, Judge & Kilker, Plaintiffs-Respondents, v. MEDICAL WEST BUILDING CORPORATION, a Corporation, O. S. Rudman and Ann Rudman, His Wife, Defendants-Appellants

Page 128

372 S.W.2d 128

W. Donald DUBAIL, Charles R. Judge, and Robert S. Kilker d/b/a Dubail, Judge & Kilker, Plaintiffs-Respondents, v.MEDICAL WEST BUILDING CORPORATION, a Corporation, O. S Rudman and Ann Rudman, His Wife, Defendants-Appellants.

No. 49688.

Supreme Court of Missouri, Division No. 2.

Nov. 11, 1963.

Gentry, Bryant & Sheppard, Arnot L. Sheppard, St. Louis, for plaintiffs-respondents.

Guilfoil, Caruthers, Symington & Montrey, St. Louis, for defendants-appellants.

WESTHUES, Special Commissioner.

Plaintiffs-respondents in this case, W. Donald Dubail, Charles R. Judge, and Robert S. Kilker, are lawyers doing business under the firm name of Dubail, Judge & Kilker in St. Louis, Missouri.The defendants-appellants are Medical West Building Corporation, a corporation, and O. S. Rudman and his wife, Ann Rudman.Plaintiffs sued defendants to recover a balance of $21,487.11 for attorney fees and for advancements made to the corporation by plaintiffs while the corporation was being incorporated in 1954 and thereafter until February, 1958, when the Rudmans purchased controlling interest in the corporation.

A trial resulted in a jury verdict for plaintiffs in the sum of $21,487.11 and interest thereon at 6% from February 11, 1959, in the sum of $4,297.40, or a total of $25,784.51.The trial court overruled defendants' motion for a new trial and an appeal was taken from the judgment entered.

(The parties will continue to be referred to as styled below.)

Plaintiffs filed a motion to dismiss defendants' appeal stating as grounds therefor that the statement of facts in the brief violated S.Ct.Rule 83.05(c), V.A.M.R.We deem it best to pass on the merits of the case and overrule the motion to dismiss without comment.

Plaintiffs, in their petition, asked for a judgment on two theories, one based on quantum meruit, the other on contract.The quantum meruit theory was not submitted to a jury and may be disregarded.

Defendants, in general, denied liability and the Rudmans filed a counterclaim which was abandoned.The issues before us on this appeal lie between plaintiffs' claim, based on contract, and defendants' denial of liability.

We may state here that all of the legal services for which plaintiffs ask recovery were performed by Charles R. Judge and that he was the only witness to testify during the trial.Other evidence consisted of various documents.

The first three assignments of error, briefed by the defendants, concern instruction No. 1 given on plaintiffs' behalf.In the fourth and last assignment, defendants claim error was committed by the trial court in permitting plaintiffs' counsel to comment on the failure of defendantO. S. Rudman to testify.

The instruction which defendants attack on various grounds reads:

'The Court instructs the jury that if you find and believe from the evidence that the Plaintiff, Charles Judge, was employed by and performed legal services for Defendant, Medical West Building Corporation, and advanced monies to or for said defendant corporation, if you so find, and if you further find from the evidence that by reason of the performance of such legal services and advancements of money by said plaintiff, defendantMedical West Building Corporation became and was obligated to said plaintiff, Charles Judge, therefor at the time of the executing of the contract referred to in evidence as Exhibit A, if you so find, and if you further find and believe from the evidence that such obligation, if any, was one which defendantMedical West Building Corporation had the legal right to and did incur without violating any law, then your verdict must be in favor of plaintiffs and against all defendants in such amount, if any, as you may find to be due under the contract mentioned in the evidence as Exhibit A, not to exceed the sum of $21,487.11, together with interest thereon at the rate of six per cent (6%) per annum from February 11, 1959.'

In one of the assignments of error in the motion for new trial, marked paragraph 9, it was stated that the instruction erroneously submitted a question of law to the jury.This is apparent and was so to the trial court.At the time of the overruling of the new trial motion, the court entered the following memorandum:

'Par. (9) of defendants' Motion for New Trial correctly points out error in InstructionNo. 1 but the error is not prejudicial to defendants.The erroneous part of that instruction does not involve a matter in dispute.'

For reasons to be stated later in this opinion, we agree with the trial court that the error was not prejudicial.

The evidence shows the following to have occurred.About April or May, 1954, plaintiffCharles R. Judge was employed by Richard J. Zoernig to form a corporation, the main purpose of the corporation to be the construction of an office building for doctors and dentists.Judge prepared the necessary papers and a charter was issued dated July 7, 1954, under the name of Medical West Building Corporation.The shareholders named in the articles of incorporation were Richard J. Zoernig, 48 shares, Maryan Sheppard, 1 share, and Charles R. Judge, 1 share.The authorized capital stock was 20,000 shares of $10 par value per share.The number of directors was to be five.However, at the first meeting of the stockholders, held on July 20, 1954, only three were elected.They were Richard J. Zoernig, Emil L. Zoernig, and Charles R. Judge.From that time until February 13, 1958, after the Rudmans acquired the controlling interest in the corporation, the board consisted of only three directors.

In 1957, negotiations were begun for a sale of the stock owned by Judge and the Zoernigs and others to the Rudmans.This sale, as above noted, was completed in February, 1958.

After the corporation came to life in 1954, negotiations began for a tract of land upon which to construct an office building.A number of sites were considered before one was purchased.The corporation borrowed large sums of money to be used for the construction of the building.One loan was in the sum of $930,000.The building was constructed and numerous rental leases were prepared and signed by doctors and dentists.While not material to the issues in this case, persons interested in the operation of the building and the dispute over terms of leases after the Rudmans purchased the stock may be interested in reading the opinion in the case of Bryan v. Medical West Building Corporation, Mo.App., 345 S.W.2d 389.

Turning now to the matters pertaining to the vital issues in the case, we find that the contract which is the subject of this lawsuit was signed by the parties on the 3rd day of February, 1958.The parties of the first part were Richard J. Zoernig, E. L. Zoernig, and Charles R. Judge.The parties of the second part were O. S. Rudman and his wife, Ann Rudman.Let it be noted here that the defendant corporation was not a party to the contract and did not sign it.Plaintiffs in their petition, claimed that the corporation adopted all of the provisions of the contract and was bound by all of its terms.

The sales contract in general provided for the sale of all of the stock owned by the Zoernigs and Judge.There was a provision in the contract that the sale should not take effect if the Rudmans were unable to negotiate for the purchase of stock owned by certain other shareholders.It was provided that Richard J. Zoernig should be employed by the corporation as manager of the building.There was a provision whereby the Zoernigs and Judge should indemnify and hold harmless the corporation from any claims that might be asserted by Miran Corporation and others aristing out of a contract dated August 31, 1955.

For a better understanding of certain portions of the contract material to the issues, we quote the following:

"2.With respect to moneys payable to First Parties by the corporation, (and first parties warrant that the same are just and lawful obligations of the corporation to the first parties) it is agreed that Second Parties will cause the corporation to pay as follows:

"To Richard J. Zoernig $47,580.00 payable under the terms of a certain contract with the corporation dated August 31, 1955 and the sum of $784.53 representing one-half of the interest during construction advanced to the corporation by Richard J. Zoernig, in six (6)...