Fox v. Burton

• Decision Date: 11 April 1966
• Docket Number: No. 1,No. 51506,51506,1
• Citation: 402 S.W.2d 329
• Parties: Gerald L. FOX, Individually, James M. Canavan, Francis A. Dunnagan, Normal H. Halls, Edward E. Haverstick and Alfred Lee Shapleigh, II, Copartners, Doing Business Under the Name of Smith-moore and Company, Respondents and Conditional Appellants, v. John G. BURTON, Appellant, and David A. Bianton Jr. Conditional Respondent
• Court: Missouri Supreme Court

Page 329

402 S.W.2d 329

Gerald L. FOX, Individually, James M. Canavan, Francis A Dunnagan, Normal H. Halls, Edward E. Haverstick and Alfred Lee Shapleigh, II, Copartners, Doing Business Under the Name of Smith-moore and Company, Respondents and Conditional Appellants, v. John G. BURTON, Appellant and David A. Bianton Jr. Conditional Respondent.

No. 51506.

Supreme Court of Missouri, Division No. 1.

April 11, 1966.

Motion for Rehearing or for Transfer to Court En Banc Denied

May 9, 1966.

Raymond F. McNally, Jr., St. Louis, for appellant.

Lon Hocker, Stephen M. Boyd, St. Louis, for respondents; Hocker, Goodwin & MacGreevy, Bryan, Cave, McPheeters & McRoberts, St. Louis, of counsel.

Flynn, Parker & Badaracco, Norman C. Parker, St. Louis, for respondent Blanton.

HIGGINS, Commissioner.

In this action for broker's commission plaintiffs had verdict and judgment for $51,632 against defendant John G. Burton, and he seeks to be relieved from that judgment on this appeal. There is also a 'conditional' appeal by plaintiff Gerald L. Fox from a judgment in favor of defendant David A. Blanton, Jr., on Fox's alternative count against Blanton for $73,200 for reasonable value of services.

Count I of the petition alleges: Plaintiffs are engaged in the brokerage business in St. Louis, missouri, and plaintiff Gerald L. Fox is associated with the firm of Smith-Moore & Company in which the other plaintiffs are partners, Fox's fees being divided 60 per cent to Fox and 40 per cent to Smith-Moore & Company. In 1958 Fox was employed by defendant David A. Blanton, Jr., to obtain a buyer for The Blanton Company for a commission which, in March 1961, was agreed would not exceed five per cent of the sale price. From the time of his employment until May 11, 1962, Fox attempted to procure a buyer for Blanton and, among other prospects, contacted Drew Chemical Company in the spring and summer of 1961 but was unable to interest Drew sufficiently at that time to consummate a sale. On May 11, 1962, Blanton wrote to Fox:

'Dear Mr. Fox:

'This is to confirm our recent conversation with respect to the sale of the assets of The Blanton Company.

'Over the past year you have been endeavoring to interest some responsible buyer. Since none has developed we have agreed that you will exert no further efforts.

'Our arrangement has therefore been terminated with no obligation upon either of us to the other.

'Just for our records, please sign and return the enclosed copy of this letter.

'Sincerely,

/s/David A. Blanton, Jr., President.'

The petition continues: On June 28, 1962, Fox's contact at Drew telephoned Fox about acquisition of Blanton which Fox reported to Blanton and asserted his claim to a fee on any sale of Blanton to Drew since he had interested Drew in Blanton prior to the termination of his agency as Blanton's broker. Blanton replied that he had employed defendant Burton as broker and requested that Fox approach Burton with respect to the fee in the event of a sale of Blanton to Drew. 'Accordingly (paragraph 9), on or about June 28, 1962, Fox spoke to , Buton on the telephone and they agreed that in consideration of Fox's waiving his claim against Blanton for the full commission, in the event of a sale to Drew Chemical Company, they would in that event share equally the commission to be earned under Burton's contract with spoke to Burton on the telephone and they

Count I concludes with the allegation of a sale of Blanton to Drew in late October or early November, 1962, for $2,500,000, and that Burton earned a commission of $105,000, of which plaintiffs are entitled to one half, or $52,500.

In Count II Fox alone sues defendant Blanton alleging 'In the alternative, and in the event it shall be held that the contract alleged in Count I * * * was not entered into, or was invalid,' that Fox was the procuring cause of the sale and that the reasonable value of his services is $125,000, in which his interest is $3,000 for expenses plus 60 per cent of the remainder. (The Smith-Moore & Company partners did not join in this count due to personal friendships with Blanton.)

Burton denied the agreement alleged in paragraph 9 of the petition. He admitted a commission of $103,264 and answered further that by writing 'Approved' on the letter of May 11, 1962, from Blanton to Fox, Fox abandoned his employment with Blanton and any claims for commission for services he may have performed, and that the alleged agreement was without any consideration.

The evidence shows that Gerald L. Fox had been in the brokerage business since 1939. He had known David A. Blanton, Sr., David A. Blanton, Jr., and The Blanton Company since 1948. Sometime after the death of David Blanton, Sr., in 1957, defendant Blanton asked Fox to attempt discreetly to find a buyer for the company. He made a number of efforts with several prospective purchasers, some of whom sent representatives to visit the plant. He did some traveling and incurred expenses of $3,000. Fox's commission was not to exceed five per cent, an arrangement which was confirmed in writing March 16, 1961. Fox first thought of Drew Chemical Company as a prospect when he read an article reporting that Lehman Brothers, a New York investment house, had purchased the Drew Company which engaged in vegetable oil refining, as did Blanton. 'I immediately contacted Dave (defendant Blanton) and we discussed * * * whether * * * they might be a very fine prospect * * *. And we dicided that I should go to New York and contact them, which I did.' During the week of April 24, 1961, he met with representatives of Lehman Brothers, including Mr. Donald Loomis, head of the legal department, and Mr. Alan Sternlieb of the industrial department. Fox quoted a price of $4,800,000, gave them certain information on the company, and arranged to send additional information. Negotiations went along, 'off and on for, I would say, several months. And then there was a period in which Lehman Brothers indicated to me there was no way they could fit it in with the Drew Company * * *.' He continued his attempt to find a buyer until the spring of 1962 when his agency was terminated by a meeting between Fox and Blanton in which Blanton proposed that, in order to make other arrangements, 'we would mutually agree to give up the association as far as obtaining any additional inquiries.' This meeting led to the letter of May 11, 1962.

John G. Burton had been engaged for 16 years as a 'business finder' under the name of John G. Burton & Associates in St. Louis. In April 1962, blanton called on him upon the recommendation of an officer of Blanton's creditor, the First National Bank. On May 11, 1962, Blanton and Burton entered into a contract whereby Burton was given exclusive agency to sell The Blanton Company. Blanton advised burton of the termination of Fox's agency and later sent him a copy of the May 11th letter showing the approval of Fox. Burton and Blanton made a list of prospects which did not include the Lehman Brothers-Drew Company contact.

On June 28, 1962, Fox received a call from his April, 1961, contact, Mr. Sternlieb of Lehman Brothers. '(He) wanted to know, since he was going to be in St. Louis right after the 4th of July or thereabouts, he wanted to know if he could come and inspect the Blanton Company plant. And I said I hadn't talked to Dave just recently, and that he had taken it out of my hands, and that I would have to check with Dave. * * * So, I called Dave and told him of this call from Mr. Sternlieb, and Dave was quite interested, of course. And I said, 'He wants to come out.' And so, Dave said, 'Before you do anything, you must call Mr. Burton, who I have made an exclusive contract with.' * * *

'I called Mr. Burton and told him what Dave told me, and that I had this call from New York and Mr. Sternlieb, and Mr. Burton said he had the company up with a considerable number of companies, and until he had cleared with them, he wasn't interested in discussing anything with me. And I said I felt anything we had initiated, and there was a chance to sell the company, I certainly felt we should participate on a fifty-fifty per cent--* * * And he, then, agreed he saw no objection in having Mr. Sternlieb come and look at the plant, saw no reason to object to it. And, if anything did come of anything that was initiated by Smith-Moore & Co. and me, then he would agree to go fifty-fifty. * * * He continued to even explain to me the type of contract that he had with Mr. Blanton. * * *

'I then immediately called Mr. Blanton and told him Mr. Burton and I had an agreement, and that I then wanted his permission to go ahead and allow Mr. Sternlieb to come. * * * I told him of the conversation I had with Mr. burton, and that we had an agreement on how we would share commission on anything that might develop from the Lehman and Drew contact. And he then gave me permission to have Mr. Sternlieb come. And I called Mr. Sternlieb in New York, and immediately told him to call Dave direct and make his own arrangements for the time he wanted to come.'

Burton denied making any agreement to split a fee with Fox. He said he told Fox in their only conversation that he would not split because he had just received his exclusive situation.

Fox had no other contacts until October 29, 1962. 'I called Dave, told him I was going to New York, and would he like for me to contact Alan Sternlieb to see if anything could be done to revive the Drew matter. And he said, 'No, don't do anything, we have got something going, and it might muddy the water.''

Between June 28, 1962, and October 29, 1962, Sternlieb called Blanton and arranged to visit the plant. Negotiations for the sale of all Blanton stock followed in New York and St. Louis which were attended by Blanton and Burton, Loomis and Sternlieb, and others, and, on November 1, 1962, the sale of Blanton to Drew was consummated. On November 2, 1962, Fox read of the sale and Mr. Edward E. Haverstick of Smith- ...