Enright v. Schaden

• Decision Date: 22 May 1922
• Docket Number: No. 21202.,21202.
• Citation: 242 S.W. 89
• Parties: ENRIGHT v. SCHADEN
• Court: Missouri Supreme Court

242 S.W. 89

ENRIGHT v. SCHADEN

No. 21202.

Supreme Court of Missouri, in Banc.

May 22, 1922.

Appeal from Circuit Court, Jackson County; O. A. Lucas, Judge.

Action by William F. Enright, administrator of the estate of Charles F. Enright, deceased, against M. L. Schaden, administratrix of the estate of George Townsend, deceased. From a judgment for plaintiff, defendant appeals. Affirmed in part; reversed and remanded in part, with directions.

Since this court acquired jurisdiction of this case, C. F. Enright, the respondent, has died, and, upon suggestion thereof, has been revived in the name of William F. Enright, administrator.

The suit is one at law, upon a contract entered into on May 24, 1911, between one George Townsend, as party of the first part, appellant's decedent, and C. F. Enright, respondent's decedent. Enright and Townsend were engaged in the enterprise of railroad building between Kansas City, Mo., and certain named points, and the contract in question was entered into to fix and define their respective rights.

The litigation involved an examination into numerous items of account, and in consequence it was referred to John D. Wendorff of the Kansas City bar, as referee. The petition was filed February 6, 1914, and the issues being made up on November 12th of that year, the case was referred, and thereafter, on January 22, 1918, the referee filed his report, which report, after a hearing on the exceptions thereto, was confirmed by the court, and judgment rendered thereon. Appellant filed her motion for a new trial, wherein she preserved all her exceptions to the report of the referee. The judgment was on two counts of the petition; on the one count for $3,765 and on the other for $12,141.56, together with all costs, including the expenses of the reference, and from this judgment appellant has prosecuted her appeal to this court.

Pleadings.

The petition was in three counts: One in equity and two at law, all founded upon the contract, dated May 24, 1911, as above mentioned. The first count of the petition attempted to allege fraud and misrepresentation with respect to certain provisions of the contract and sought a reformation. To this count of the petition a demurrer was successfully interposed, and eliminated from further consideration, so the suit proceeded only on the second and third counts of the petition, which are, as above stated, actions at law.

The second count of the petition alleged a promise to pay the sum of $3,857, and that same was due and payable at the date of the execution of the contract sued on. The third count alleged that, according to the terms of the contract sued on, respondent's decedent became entitled to 10 per cent. of the net profits of a certain contract therein mentioned; that said net profits amounted to $356,250, and that the plaintiff below was therefore entitled to judgment for $35,625 and such was the prayer. The answer to both counts of the petition was a general denial, except it was alleged that the sum of $1,489.04 had been paid on account of the claim under the second count of the petition.

The Facts.

There is no controversy on the facts. George Townsend, appellant's decedent, died June 24, 1913, and letters of administration were granted July 9, 1913. This action was commenced February 6, 1914, The pertinent provisions of the contract sued on provide that Enright—

"for all his services already performed and to be performed, and all assistance he may render in furthering said enterprise, all of which items are hereinbefore set out, and as his full share thereof, in addition to a bill amounting to $3,857 rendered by party of second part being in full to April 12, 1911, for expenses, salary, rights of way paid for, and all other claims excepting as otherwise provided for in this contract, second party shall receive 10 per cent. of the net profits that may be realized in cash by said first party from the construction contract entered into by the Wyandotte Construction Company, dated May 12, 1911, with the Kansas City, Clay County & St. Joseph Railway Company and the National City Bank of New York and Tucker, Anthony & Co., syndicate managers, for the building and equipping of the above-described railroad."

This provision of the contract is further explained and limited by the following section thereof, immediately following the provisions above set out:

"XXII. It is understood and agreed that the division of 10 per cent. to be made to the second party contemplates that, after paying all employees and repaying all moneys advanced by first and second parties in the acquiring of these properties, and for all labor, tools, plant, and all material of whatsoever nature that enter into the acquiring and constructing of these properties (except as otherwise provided for in paragraphs XII & XIII) together with interest, then the remaining sum is to be considered the net profits, and the 10 per cent. to be paid to the second party is to be 10 per cent. of net profits, it being understood that there will be no charge against the net profits of second party or any one that may hereafter come in on the same basis to participate in the profits of these enterprises, but that all such percentages are to come out of the profits coming to the party of the first part, out of whose profits, all of the profits, as described above, of those associated with him are to be paid, but it is understood and agreed that the profits to be paid by the party of the first part, as hereinbefore described, does not include any profits that are made by those who may purchase the above-described property, or by any bankers or capitalists who may come in and underwrite, or finance the enterprise for the parties of the first and second part."

And paragraph XV is a further provision serving to clarify the respective rights of the parties thereunder, and is as follows:

"XV. It is further understood and agreed that any moneys that may have been heretofore expended by the parties of the first and second part for incorporation expenses, surveys securing rights of way and franchises, grading, salaries, interest on money invested in the enterprise under the terms of the contract between the parties hereto, dated May 12, 1909 (excepting interest for money invested by George Townsend and the Kansas City Junction Railroad Company for terminal lands, rights of way and other lands in Wyandotte county, Kan.) purchase of plant, for commissary outfit, general expenses, or any expenses whatsoever incident to the carrying out of the work (except as otherwise provided for in paragraph XIII of this contract) under the terms of a contract heretofore entered into by the first and second parties hereto and bearing date of the 12th day of May, 1900, is to be a charge against any profits that may be derived from the building of the line between Kansas City, Mo., and St. Joseph, Mo., under a contract between the Wyandotte Construction Company, the Kansas City, Clay County & St. Joseph Railway Company, the National City Bank of New York, and Tucker, Anthony Co., syndicate managers, and such monies are to be repaid to the first and second parties, respectively in the amounts advanced by them out of the first moneys that may be derived as profits under the contract of the Wyandotte Construction Company with the Kansas City, Clay County & St. Joseph Railway Company. The National City Bank of New York, and Tucker, Anthony & Co., syndicate managers."

The contract sued on appropriately referred to a prior contract entered into between the same parties, as of date May 12, 1909, and, according to its terms, was in novation of and a substitution for said contract. It appeared that Enright and Townsend, in the year 1900, had proposed to build a series of connecting railroads between Kansas City and nearby towns; that, in pursuance of said project, considerable work was done and large sums of money expended. This involved the services of each of said parties, the costs of surveying, charts, maps, engineering work, rights of way, and other matters necessary to carry out the enterprise. Due to circumstances, not necessary to mention here, the original plans were abandoned, and, when the contract in suit was entered into, a new enterprise had been projected involving the building of the Kansas City, Clay County & St. Joseph Railway, an interurban line incorporated as the Kansas City, Clay County & St. Joseph Railway Company. This proposed line covered a portion of the rights of way and some of the plans involved in the enterprise now about to be abandoned. Townsend, in connection with others, had made financial arrangements with eastern parties for the construction of said road and had organized the Wyandotte Construction Company. Contracts with eastern parties were made in the name of this corporation, and responsibility for the construction of the road was immediately placed on it. It was agreed between Townsend and his associates in the construction company that he should have five-eighths of the profits accruing to that company. From this apportionment to Townsend, subject to certain limitations and liabilities, fully set out in said contract, and with certain specified deductions therefrom, Enright was to have his 10 per cent, profit computed. It was specifically provided in the contract sued on:

"That all of the surveys, maps, plans and all of the rights of way secured in the name of the Missouri River & Cameron Railroad between Linkville, Mo., and St. Joseph, Mo., is to be assigned by the parties hereto to the Kansas City, Clay County & St. Joseph Railway Company, without any further compensation than the parties hereto are to derive as profits from the building of that part of the line between Kansas City and St. Joseph, under the contract between the Wyandotte Construction Company and the Kansas City, Clay County & St. Joseph Railway Company and Tucker, Anthony & Co., and the National City Bank of New...