German v. Universal Oil Products Co.

• Decision Date: 24 January 1934
• Docket Number: 1715.,No. 1714,1714
• Citation: 6 F. Supp. 53
• Court: U.S. District Court — Western District of Missouri
• Parties: GERMAN v. UNIVERSAL OIL PRODUCTS CO. (SKELLY OIL CO., Garnishee). REED v. SAME.

6 F. Supp. 53

GERMAN v. UNIVERSAL OIL PRODUCTS CO. (SKELLY OIL CO., Garnishee).

REED v. SAME.

Nos. 1714, 1715.

District Court, W. D. Missouri, W. D.

January 24, 1934.

Cyrus Crane (of Lathrop, Crane, Reynolds, Sawyer & Mersereau), of Kansas City, Mo., for plaintiffs.

R. R. Brewster, of Kansas City, Mo., and Charles H. Mayer, of St. Joseph, Mo., for defendant.

OTIS, District Judge.

Each of these cases was filed in the circuit court of Jackson county, Mo., May 20, 1931. In neither of them was personal service had upon defendant. Writs of attachment were issued under which the Skelly Oil Company was summoned as garnishee. Thereafter the cases were removed to this court where the defendant has moved to quash the garnishments and to dismiss the cases. These motions are the subject-matter of this memorandum. Since the questions raised by the motions are essentially identical in the two cases, only the first, No. 1714, specifically will be discussed. What is said with reference to it equally is applicable to case No. 1715.

1. I consider first whether the state court had jurisdiction to issue the writ of attachment upon which the summons in garnishment was based. Whether it did have such jurisdiction depends upon the Missouri statutes governing attachments and garnishments as construed by the Missouri courts. That those courts have so construed the statutes as to restrict the jurisdiction of courts to issue writs of attachment and garnishment to actions at law only is settled by the decisions Lafkowitz v. Jackson (8 C. C. A.) 13 F. (2d) 370; State ex rel. v. Blair, 238 Mo. 132, 142 S. W. 326; Lackland v. Garesche, 56 Mo. 267; Beyer v. Trust Co. et al., 63 Mo. App. 521; Brumback v. Weinstein et al., 37 Mo. App. 520; Bachman v. Lewis et al., 27 Mo. App. 81; Atwood v. Hale et al., 17 Mo. App. 81 and admitted by plaintiff's learned counsel who, in his brief, thus states the rule: "The statutory process of garnishment, particularly where based upon a writ of attachment, being a purely legal process, cannot issue in aid of a suit which is fundamentally a suit in equity." The question then is, Does plaintiff's petition state a cause or causes of action at law or in equity?

The petition is in two counts. That the first of these states a cause of action in equity and not at law seems plain to me. Very obviously the pleader intended it to be an equitable proceeding. He affixed to it all the usual labels of a case in equity. He prays for an accounting as between joint adventurers of whom he is one, for a decree adjudging to the plaintiff such an amount from the fruits of the joint adventure "as will be equitable and right in the premises," and he asks "that a subpÔÇna in chancery issue" commanding the defendant to appear and answer.

But more must be examined than the labels affixed to a package if the true nature of its contents is to be ascertained. So we must look into count 1 to discover what really it is. That will more easily be done if its essential allegations are concentrated, omitting mere details and elaboration, but retaining, so far as possible, the very language of the petition. We have:

"Plaintiff * * * states that * * * defendant represented to plaintiff * * * that defendant was the owner (of a certain valuable patent). * * * That if the validity and priority of said patent could be established * * * (it) would be controlling and basic (in the gasoline producing industry). * * * That * * * the Standard Oil Company * * * was * * * infringing the said patent. * * * That the value of the said patent and the rights of the defendant could only be established and proof of their infringement be obtained by the exercise of great skill and the expedition of much time, labor and care. (That the accomplishment of such ends would bring to the defendant from the Standard Oil Company and others millions of dollars). * * *

"* * * That J. Ogden Armour, C. P. Dubbs, Frank L. Belknap, A. F. Reichmann, H. J. Halle and R. J. Dunham had associated themselves together in a joint adventure * * * for the purpose of protecting the said patent rights and developing the processes covered thereby and to secure the value of (those) rights. * * * That it had been determined and agreed upon between (the joint adventurers) and the defendant (that the joint adventure) should be carried out through defendant. * * * (That each of the joint adventurers was qualified to and was to contribute in a specified way to the carrying out of the adventure). * * * That the difficulties to be encountered * * * would be of an unusual, laborious and difficult character. * * * That it was understood and agreed that the success of said adventure depended upon (the exertions of the several adventurers) and that (the several adventurers) were to accept, in the nature of advancements on account of services rendered, payments which would not be compensatory; but that if the adventure were successful all of the benefits and advantages gained were to be equitably divided between all persons aforesaid, including plaintiff.

"That defendant proposed to plaintiff that he associate himself with the parties aforesaid and with defendant in said joint adventure (to do certain legal work required in carrying out the adventure) and that plaintiff should, along with the other parties to said joint adventure, equitably participate in all benefits derived. That plaintiff consented to the terms aforesaid and agreed to perform the services specified and did perform the same. * * * It was, however, especially agreed that defendant would pay as advancements on account (certain stipulated amounts to plaintiff) and that he was to participate as aforesaid in any advantages gained in said adventure. * * * That said contract and agreement remain and still remains in full force and effect.

"That at various times * * * the said agreement and understanding * * * was ratified and confirmed * * * (That various specified things were done, participated in by plaintiff in furtherance of the joint adventure). That all of this was pursuant to the agreement and understanding with plaintiff, * * * (That the objects sought in the joint adventure were accomplished largely through a settlement made with the Standard Oil Company and defendant realized large sums thereby) but that, instead of paying the money thereby received in such settlement into the treasury of (the) court to be there equitably apportioned among all of the joint adventurers, and paying the plaintiff herein such compensation for his contribution and services as should be just and proper (it was arranged by certain of the joint adventurers) that the avails of said settlement should be paid to the defendant * * * and that defendant * * * is proposing to divide the same among said joint adventurers except this plaintiff and * * * all in violation of the understanding and agreement * * * and in derogation of (plaintiff's) rights under his agreement and understanding with the defendant. * * * (That the plaintiff rendered, pursuant to the agreement and understanding, various and difficult services which are specifically described and enumerated, rendering such services over a long period in many places and at great sacrifice to his other professional engagements). That he performed such services upon the agreement and understanding heretofore set out and performed all of the work devolving upon him under the agreement and arrangement herein set out and that he is entitled to an accounting of all profits and benefits derived by reason of said joint adventure, directly or indirectly by said defendant herein or by any of the parties hereto and to a decree of this court awarding to him his full share thereof."

Concerning the cause of action thus stated by plaintiff in count 1 of his petition, plaintiff's learned counsel says that it is "essentially legal," that its fundamentals are "employment (of the plaintiff) as one of several counsel to represent a litigant, the performance of services, the failure of the client to pay and the prayer for recovery."

I cannot reconcile this construction of count 1 with the language used in it. That it is an impossible construction must appear, it seems to me, from any consideration of the foregoing summary of the petition. Over and over again and so clearly as to be wholly free from ambiguity what was the agreement with the plaintiff is set out. It was not an agreement whereby he was to render legal services for their reasonable value, but an agreement whereby he became one with others in a joint adventure and whereby he was to share with them the profits to be realized in the event of success. The cause of action stated in this count is one in equity.

Does the second count of plaintiff's petition state a cause of action in equity or at law?

In hŠc verba count 2 is as follows:

"For a second and further cause of action against defendant, plaintiff states that he refers to the first count of this petition as to the matters and facts therein pleaded, with the same force and effect as though they were repeated here and now in this the second count of this petition.

"Plaintiff further shows to the court that the reasonable value of his services in connection with the matters set forth in the first count of this petition is One Million ($1,000,000) Dollars, and that defendant is indebted to him in that sum.

"Wherefore plaintiff prays judgment against defendant in the sum of One Million ($1,000,000) Dollars, with interest thereon at six per cent per annum, and for costs."

Here, in contrast with count 1, the pleader has made use of certain of the usual labels of a law action. He alleges the reasonable value of his services as would be done in the ordinary quantum meruit case. The prayer is that to be expected in a suit at law. It must be supposed that the pleader designed stating some cause of action other than that stated in count 1. The labels used by him indicate an intention to state a cause...