Durwood v. Dubinsky
| Decision Date | 14 May 1956 |
| Docket Number | No. 2,No. 44509,44509,2 |
| Citation | 291 S.W.2d 909 |
| Parties | Edward D. DURWOOD, Plaintiff-Respondent, v. H. W. DUBINSKY, Irwin Dubinsky, Ruth Dubinsky, Executrix of the Estate of Barney Dubinsky, Deceased, Dubinsky Brothers Theates, Inc., a Corporation, Defendant-Appellants, and Commerce Trust Company, a Corporation, Defendant |
| Court | Missouri Supreme Court |
B. L. Kaufmann, St. Joseph, Sam Mandell, Harry L. Thomas, Kansas City, for appellants, Culver, Phillip, Kaufmann & Smith, St. Joseph, Popham, Thompson, Popham, Mandell & Trusty, Kansas City, of counsel.
William G. Boatright, Terence M. O'Brien, Kansas City, for respondent.
STOCKARD, Commissioner.
This suit was brought in the circuit court of Jackson County, Missouri, by Edward D. Durwood, hereafter referred to as plaintiff, against his two brothers, H. W. Dubinsky and Irwin Dubinsky, and also against Ruth Dubinsky, executrix of the estate of Barney Dubinsky, deceased (another brother of plaintiff), Dubinsky Brothers Theatres, Inc. and Commerce Trust Company. All defendants are appellants here except Commerce Trust Company. Over the objections of appellants, the entire case was referred to a referee. The record before this court is voluminous. It consists of twenty-three volumes of testimony, pleadings and other papers, and more than 2,000 exhibits.
For several years prior to May 9, 1946, plaintiff, Stanley H. Durwood and Marjorie Grant (plaintiff's children), Irwin Dubinsky, H. W. Dubinsky and Barney Dubinsky were partners and were engaged in operating certain theatres under the name, 'Durwood-Dubinsky Brothers Theatres.' A dispute arose concerning the ownership of the theatrical properties, and in an effort to establish their interest Barney, H. W. and Irwin Dubinsky brought suit against Edward D. Durwood, Stanley H. Durwood, Marjorie Grant and several corporations which held the title to, or leases of, some of the theatrical properties. During the trial of that case a settlement was reached, a consent decree entered, and a contract, dated December 7, 1946, was entered into setting out the terms of the settlement. That contract provided that the Durwood-Dubinsky partnership be terminated as of May 8, 1946, and that Barney, Irwin and H. W. Dubinsky disclaimed any right, title, ownership or interest in or to the various theatrical properties employed or used by the former partnership. It was also provided that Edward D. Durwood was to pay to the three Dubinsky brothers the sum of $400,000 and an additional sum equal to 25, of the net profits derived from the operation of certain named theaters earned in the period from January 1, 1946 to May 8, 1946. In addition, Edward D. Durwood agreed to employ each of the Dubinsky brothers for a term beginning May 9, 1946 and expiring June 30, 1949, and as compensation therefor to pay them a sum equal to 25% of the net profits from the operation of the same theaters during the period of employment, 10% to be paid to Barney and Irwin Dubinsky each, and 5% to H. W. Dubinsky. The method of computing net profits was set out in detail, but it was provided that in the event of an 'actual sale' of any of the named theatrical properties the compensation of the Dubinsky brothers should be computed on the basis of the experienced profits for the twelve months preceding the sale. It was also agreed that the Dubinsky brothers could, during their employment, acquire any properties of any kind or character, provided that they did not 'engage in any other business, theatrical or otherwise,' and the Dubinsky brothers were not to engage in the theatrical business 'directly or indirectly' from May 9, 1946 through July 1, 1959 in four named cities, including St. Joseph, Missouri. Plaintiff was required by the agreement to deposit certain notes and corporate stock in escrow with the Commerce Trust Company as a pledge to secure the performance of his contractual obligations. The contract also provided that Edward D. Durwood was to have the sole and exclusive right to use the names 'Dubinsky Bros.' and 'Dubinsky Bros. Theatres' in the four named cities until June 30, 1959.
On July 17, 1948 Barney Dubinsky died, and his right to receive a sum equal to 10% of the net earnings terminated. His executrix is a party to this proceeding, and when reference is made herein to 'Dubinsky brothers' the term includes Irwin and H. W. Dubinsky and also either Barney Dubinsky or his executrix.
In October 1948 H. W. and Irwin Dubinsky filed separate suits against Edward D. Durwood, one in the federal court and the other in the circuit court of Buchanan County, seeking declaratory judgments that the compensation due under the contract had not been paid. This present action was then commenced by plaintiff on November 3, 1948 against the Dubinsky brothers and Commerce Trust Company. The petition was in one count and it alleged that plaintiff had delivered to the Commerce Trust Company the corporate stock and notes for the purposes provided for in the contract, that plaintiff had paid all that was due to the Dubinsky brothers and that all obligations on his part had been met, and that he was entitled to receive back from Commerce Trust Company the security he had pledged to guarantee performance of the contract on his part, but because of the two pending suits against him and the claims of the Dubinsky brothers a cloud had been cast on the title to his property pledged as security. Plaintiff prayed that the Dubinsky brothers be ordered and directed to exhibit all claims and demands against the pledged property, that it be ascertained if any amount be owed by him, and that upon payment thereof, the Commerce Trust Company be ordered to deliver to plaintiff all the property then pledged with it. By answer, Commerce Trust Company stated an unwillingness to re-deliver the pledged property to plaintiff without the direction of the court.
The other defendants filed numerous motions, all of which were overruled, which challenged, among other things, jurisdiction and venue on the ground that Commerce Trust Company was not a real party in interest and was joined fraudulently. The Dubinsky brothers, still protesting jurisdiction and venue, filed separate, similar answers and cross petitions. In each answer it was denied that the Dubinsky brothers had been paid in full the amounts due them under the contract. In each cross petition it was contended that plaintiff had failed to include various named items of gross receipts and had improperly deducted numerous specified items as expense in arriving at net profits. The court was asked to declare the rights and relations of the parties; that plaintiff be required to make his records available for audit; that plaintiff be required to render a true and correct account; and that a lien be declared on the property of plaintiff held by Commerce Trust Company.
On July 10, 1950 plaintiff filed what he called a 'supplemental petition' in which he alleged that he was the owner of the trade names 'Dubinsky Bros.' and 'Dubinsky Bros. Theatres,' and that the Dubinsky brothers had agreed that neither would, directly nor indirectly, engage in the theatrical business in four cities, including St. Joseph, Missouri, for a period expiring July 1, 1959; that pursuant to the contract dated December 7, 1946, as against each of the Dubinsky brothers, plaintiff had the sole and exclusive right until June 30, 1959 to use the name 'Dubinsky Bros.' or 'Dubinsky Bros. Theatres' in the named cities; that about September 13, 1949, Irwin Dubinsky and H. W. Dubinsky formed a Missouri corporation by the name of 'Dubinsky Brothers Theatres, Inc.' with its registered office at St. Joseph, Missouri; and that these defendants had acquired motion picture theaters outside of the named cities and were engaging in the theatrical business from the place of business of said corporation in St. Joseph, Missouri, all in violation of said contract and for the purpose of perpetuating a fraud upon plaintiff and upon the public. Dubinsky Brothers Theatres, Inc. was added as a new party defendant. Plaintiff requested that the defendants named therein be enjoined from doing a theatrical business in St. Joseph, Missouri, and from using the name 'Dubinsky Brothers Theatres, Inc.' The trial court issued a temporary injunction as requested.
On February 11, 1953 the Dubinsky brothers filed what they called their 'joint, separate supplemental cross-petitions' in which they alleged that plaintiff had made 'actual sales' in January 1947 of all the theaters within the meaning of the contract and that they were entitled to receive compensation based on the profits of the theaters during the twelve months preceding the sales. Plaintiff filed what he designated to be an answer to the supplemental cross petitions and denied that the Dubinsky brothers were entitled to compensation other than what he had paid them, and he also alleged 'for further answer' that the Dubinsky brothers had violated the contract by not giving their exclusive services to plaintiff, by engaging in the theatrical business during the term of their employment under the name of 'Dubinsky Brothers Theatres,' and by reason of which said Dubinsky brothers are in equity and good conscience precluded from recovery.'
It was at this stage of the pleadings that the trial court, over the objections of appellants, referred 'this cause' to a referee with directions 'to hear and decide the whole issue herein and to report his findings of fact and his decision thereon to this court.' Trial was commenced before the referee on June 1, 1953 and was concluded on August 18, 1953, a number of recesses intervening. During this hearing and on July 28, 1953, plaintiff filed his 'second supplemental petition' in which he alleged that he was the plaintiff in another and different suit pending in the ...
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