Feinberg v. Millner, 26549.

• Decision Date: 08 February 1944
• Docket Number: No. 26549.,26549.
• Citation: 178 S.W.2d 108
• Parties: FEINBERG et al. v. MILLNER et al.
• Court: Missouri Court of Appeals

178 S.W.2d 108

FEINBERG et al. v. MILLNER et al.

No. 26549.

St. Louis Court of Appeals. Missouri.

February 8, 1944.

Rehearing Denied February 29, 1944.

Appeal from St. Louis Circuit Court; Charles B. Williams, Judge.

"Not to be reported in State Reports."

Action by David Feinberg and Hans Wulff against Isadore Millner, also known as Irwin Millner, and George Allen, seeking an accounting from the profits of a joint adventure. From a judgment for plaintiffs as against defendant Isadore Millner, he appeals.

Affirmed.

Malcolm I. Frank, of St. Louis, for appellant.

William W. Sleater, Jr., of St. Louis, for respondents.

BENNICK, Commissioner.

This is a suit in equity in which two of the parties to a joint adventure seek an accounting from the remaining two parties of the profits realized from the sale of the property which was the subject of the enterprise.

The property consisted of all the physical assets, good will and the like, of the St. Mary's Oil Engine Company, located in St. Charles, Missouri. The company had apparently been through a receivership, and at the time in question was under the control of one Gray in Chicago as the nominee for the bondholders.

The plaintiffs in this case are David Feinberg, a real estate broker, and Hans Wulff, an attorney, while the defendants are Isadore Millner, also known as Irwin Millner, a machinery, oil, and mining broker, and George Allen, a resident of St. Charles, who lives in the immediate vicinity of the plant of the St. Mary's Oil Engine Company.

In November, 1939, Allen brought the question of the sale of the property to the attention of Millner as a broker, and at that time the two of them entered into a written agreement for the equal division of any profits that might result from any sale effected through their efforts. Millner thereupon contacted Gray, and obtained an option for the sale of the property for the sum of $40,000, of which there was to be a down payment of $5,000 in the event the option should be exercised.

Millner was unable to find a purchaser; and shortly before the expiration of his option, which was due to expire in March or April, 1940, he came to see Wulff in the latter's office in the Wainwright building in the City of St. Louis with respect to securing Wulff's assistance in finding some one to carry out the terms of the option. Feinberg had space in Wulff's office; and on a subsequent occasion he was brought into the discussion, in the course of which it was orally agreed that immediate steps should be taken to get an extension of the option, and that each of the three men should do everything in his power to find a buyer, with all three of them to divide any profits that might be realized from a sale of the property under the option. There was no mention by Millner of his previous agreement with Allen, and in undertaking to work with Millner in the enterprise, neither Wulff nor Feinberg was aware that Allen had an interest in the proposition.

In conformity with the undertaking thus agreed upon, Wulff accompanied Millner to Chicago where an extension of the option was obtained from Gray; and when the property was not sold during the period of the first extension, a further extension was secured which carried the option over to the date of the ultimate sale of the property. The only change was that at some point in the negotiations the option price was increased to $45,000, with a minimum of a $10,000 down payment if the option should be exercised.

During the progress of the matter, Wulff learned of Allen's claim to an interest in the proposition; and when Millner admitted his previous contract with Allen, Wulff arranged for Allen to come to his office, where the four men met together and (according to the testimony of Wulff and Feinberg) orally agreed among themselves that they would thenceforth contribute their joint efforts towards finding a purchaser for the property, and in the event of a sale, regardless of whose efforts might be the procuring cause, would divide the profits one fourth to each of the four participants in the enterprise. This agreement was entered into in September, 1940; and it is the agreement upon which Wulff and Feinberg rely in bringing their suit to have an accounting of the profits.

After entering into the agreement, active steps were taken by the parties to it towards interesting some one in the purchase of the property; likely prospects were contacted in several of the larger cities throughout the country; and substantial sums of money were expended, particularly by Wulff, towards the expenses of the enterprise, including certain reconditioning of the property in an effort to make it more attractive.

In the early fall of 1940, Millner contacted one Williams, the vice-president of the Aluminum Ore Company, who at that time resided in Chicago where his company had its headquarters, but had formerly lived in St. Louis for a number of years. Wulff testified that Williams' name was suggested to Millner and himself "through some doctors on South Grand avenue", but admitted that Millner was the one who introduced him to Williams. Millner testified, on the other hand, that he met Williams through a reference from Charles Fox, the president of the Aluminum Ore Company, and not under circumstances with which Wulff had any connection.

At any rate, Williams became interested in the sale of the property, and advanced some $3,000 of his own money to keep the business going while the search for a purchaser continued.

Eventually Williams succeeded in interesting one Weiss in Chicago in the exercise of the option, and induced Weiss and his associate, Richard Levy of Michael Tauber & Company, licensed auctioneers, to put up the total sum of $48,000, of which the sum of $3,500 was to be applied to a repayment of the $3,000 which Williams had advanced to keep the business going, as well as a further item of $500 which Williams had advanced as forfeit money in the event the option should not be exercised. An escrow agreement was entered into under which title was taken in Millner's name as trustee for the Weiss group, and a further agreement was made between Millner, Williams, and the latter's St. Louis attorney, Mr. William N. Fitch, whereby the three of them agreed to divide their share of any profits in the deal one third to each. It is evident that in making such agreement Millner was in no sense undertaking to act for his original partners in the enterprise, since in writing a letter to Williams purporting to embody the terms of the agreement, he had recited that "you and William N. Fitch are my sole associates among whom a division of my interest in the Weiss-Millner syndicate will be divided". It further appeared that as a part of the escrow agreement between Millner and Weiss, it was provided that if neither of them should find a purchaser for the property on or before the close of business on March 10, 1941, Weiss should be the sole judge of the manner in which the property should be sold or liquidated, in either of which events the net profit, if any, should be divided on a basis whereby Weiss should receive 60% and Millner 40%.

No purchaser could be found by any one of the parties interested in the sale of the property, and finally Weiss decided to sell the property at auction, for which the services of Michael Tauber & Company were enlisted. The sale was held at St. Charles on April 17, 1941, with a gross sum realized of $73,974.96. Deducting from this the sum of $48,000 advanced by Weiss, and the further sum of $4,804.78 as the expenses incurred in carrying out the sale, left a net profit of $21,170.18, to be divided 60% to Weiss and 40% to Millner, according to the terms of their agreement.

While Wulff, Feinberg, and Allen were informed that Weiss had become interested in the enterprise and were agreed that he and his associates should share in the profits in return for putting up the money to close the option, they took the position that they themselves were entitled to share with Millner in the portion of the profits coming to him, but were unable to get an accounting from him, although numerous demands were made upon him in the months that followed the completion of the sale.

Finally Allen went to Chicago and instituted a suit for an accounting based upon his original written contract with Millner which had provided that he and Millner would share equally in the division of any profits that might accrue from the sale of the property. Allen denied, incidentally, that he had ever become a party to the oral agreement of September, 1940, but instead insisted that he had at all times stood upon his own contract with Millner, and had refused to agree to any proposition that would involve the sharing of his profits with Wulff and Feinberg. Upon learning of Allen's suit, Wulff and Feinberg attempted to intervene as parties to it, but were denied the right to intervene upon the ground that inasmuch as one of the incidents of the suit was the attachment of the proceeds of the sale in the hands of Michael Tauber & Company, the court lacked authority to permit third parties to intervene. That suit was later compromised between Allen and Millner, and as a consequence, when Wulff and Feinberg eventually instituted their own suit in the Circuit Court of the City of...