Haggerty v. Western Barge, Inc., 10668

• Decision Date: 22 December 1971
• Docket Number: No. 10668,10668
• Citation: 492 P.2d 48,94 Idaho 509
• Parties: John C. HAGGERTY and Margaret Haggerty, husband and wife, Plaintiffs-Respondents, v. WESTERN BARGE, INC., an Idaho Corporation, Defendant-Appellant.
• Court: Idaho Supreme Court

Page 48

492 P.2d 48

94 Idaho 509

John C. HAGGERTY and Margaret Haggerty, husband and wife, Plaintiffs-Respondents, v. WESTERN BARGE, INC., an Idaho Corporation, Defendant-Appellant.

No. 10668.

Supreme Court of Idaho.

Dec. 22, 1971.

Rehearing Denied Jan. 12, 1972.

Peter B. Wilson, of Wilson & Walter, Bonners Ferry, for defendant-appellant.

Thomas A. Mitchell, Coeur d'Alene, for plaintiffs-respondents.

McFADDEN, Justice.

This appeal is from a judgment in favor of plaintiffs John C. Haggerty and wife, Margaret, and from a related order denying the motion of defendant Western Barge, Inc., for a new trial and amendment of certain findings of fact. The district court judgment awarded plaintiffs the sum of $18,085.33, with interest. That sum included three months' rent on trucks at $3,000 per month with accumulated interest; two months' wages for the plaintiffs together with accumulated interest; $2,185.36 with accumulated interest for sums advanced by plaintiffs on behalf of defendant; and $2,025.02 (with accumulated interest) representing interest due on the balance of the option price under an agreement for the sale of plaintiffs' trucking firm. In the judgment the court also cancelled a promissory note and second chattel mortgage on two trucks.

This action was tried to the court sitting without a jury on the issues framed by plaintiffs' complaint, the defendant's answer and cross-complaint, and the plaintiffs' answer to the cross-complaint. Following trial the court entered a comprehensive memorandum decision and thereafter findings of fact, conclusions of law and judgment in favor of the plaintiffs.

A complicated factual picture was presented to the district court in this case. Little is to be gained by an extended recital of all the facts, and this opinion will relate only those facts which give the background necessary to understand the import of the district court's judgment.

Prior to May 12, 1967, John Haggerty had been granted an Interstate Commerce Commission permit to operate a trucking business as a common carrier of goods between the midwest and Alaska. He was doing business as an individual under the name of Fairbanks Midwest Truck Lines, and owned (subject to a chattel mortgage with an Alaskan bank) two truck-tractors. On May 12, 1967, he executed a written instrument wherein he agreed to sell his trucking business, which included the I.C.C. permit and the two trucks, to Western Barge, Inc. This agreement was in the form of an option, with the total sale price being $50,000. In general the agreement provided: (1) for the first ninety days Western Barge was given the right to lease the two truck-tractors at $3,000 per month, with the provision that two-thirds of the rental payments were applicable to the purchase price if the purchase option were exercised; (2) an option to purchase Fairbanks Midwest by Western Barge under a lease-purchase plan, the pertinent language reading:

'3. Owner-Lessor agrees to sell to Buyer-Lessee said Fairbanks Midwest Truck Lines business * * * in the following manner:

(a) Buyer-Lessee may, by payment of $9,000.00, $1,000.00 of which is hereby acknowledged received, and an additional $8,000.00, said latter sum by these presents escrowed with National Bank of Alaska, lease the operating rights and equipment of said company for a period of ninety (90) days from date of I.C.C. approval, and thereafter by the payment of $3,000.00 per each monthly period, payable in advance of such monthly commencement date, continue to lease said equipment and operating rights, it being understood and agreed that two-thirds (2/3) of all lease payments including the initial payments shall be applied to the purchase price of said $50,000.00, said unpaid balance of purchase price to accrue interest at the rate of six percent (6%) per annum.

(b) Buyer-Lessee may at any time pay off the unpaid balance.

(c) Buyer-Lessee has by these presents elected to lease only said equipment and operating rights for a period of ninetly (90) days without obligation to purchase, but with the option to purchase upon the above terms(;)'

and, (3) a recital that Haggerty desired to sell 'his going business' through a corporation to be organized, and that the parties would use their best efforts to effectuate the sale and obtain I.C.C. approval.

At the time of the agreement, Fairbanks Midwest Truck Lines was not an operating company. The tractors were parked on a lot in Alaska while Haggerty worked for another trucking firm. After it was learned that the I.C.C. denied approval of the transfer of the permit by Haggerty to the company he and his wife had incorporated, Western Barge took possession of the tractors on August 1, 1967, as agreed, and leased them to the firm that employed Haggerty. Ultimately Haggerty received the $9,000.00 for the rentals for this ninety-day period. (Haggerty received $1,000.00 on execution of the agreement, and later the bank escrow holder by direction of officers of Western Barge first released $2,000.00 to Haggerty and in October, 1967, the other $6,000.00.)

In the latter part of October, 1967, the plaintiffs and certain officers and directors of Western Barge met in Coeur d'Alene and discussed the future of the May 12 agreement and what further was to be done. Although there is a great deal of conflicting testimony as to just what did take place at this meeting, the district court in its memorandum opinion determined that the parties agreed Fairbanks Midwest should be made into a viable, operating company, and to that end agreed that the Haggertys would begin to operate under their permit and that they would leave their present employment and become employees of Western Barge on November 1, at a monthly salary of $1,250.00 for Mr. Haggerty and $500.00 for Mrs. Haggerty. It was agreed Mr. Haggerty would set up operations in Omaha, Nebraska, and that Alfred Ghezzi, an officer of Western Barge, would organize operations in Anchorage, Alaska. At the Coeur d'Alene meeting there was a discussion as to how the operation was to be financed, which apparently was not fully resolved.

In November, 1967, word was received that the I.C.C., after reconsideration, had approved the transfer of Haggerty's permit to his corporation, such approval becoming effective in January, 1968. After November 1, the trucks were parked in Seattle, Washington, and about November 22, the trucks were moved to Omaha by an employee of Western Barge. During this period of time the Haggertys were advancing their own money to get the operations under way. In November, Western Barge advanced $10,000.00 but required that this advance be evidenced by a promissory note secured by a second mortgage on the two trucks. The note and mortgage, dated November 27, 1967, were executed by Fairbanks Midwest Truck Lines, Inc.,...