Hunter v. De Luxe Drive-In Theaters

• Decision Date: 06 April 1953
• Docket Number: DRIVE-IN,No. 21879,21879
• Citation: 257 S.W.2d 255
• Parties: HUNTER et al. v. DE LUXETHEATERS, Inc.
• Court: Missouri Court of Appeals

Page 255

257 S.W.2d 255

HUNTER et al. v. DE LUXE DRIVE-IN THEATERS, Inc.

No. 21879.

Kansas City Court of Appeals, Missouri.

April 6, 1953.

William Boatright, Kansas City, for appellant.

James T. Blair, Jr., Thomas P. Rose, Jefferson City, for respondents.

DEW, Judge.

Respondents (hereinafter referred to as Hunter Construction Company), as plaintiffs in the trial court, brought suit to recover $5,906.20, the amount of a compromised claim under a grading contract, with interest accrued. Appellant (hereinafter referred to as DeLuxe), defendant in the action, filed a counterclaim for $3,250, for which amount it had settled and satisfied a separate default judgment against it in a damage suit originally instituted against it and the Hunter Construction Company by one Grover C. Clardy for damages growing out of the performance of the grading contract, and for $567.90 attorneys' fees and costs incurred and paid by DeLuxe in the damage suit, making a total counterclaim of $3,817.90. The trial court, sitting without a jury in the present case, gave judgment for the Hunter Construction Company on its petition herein for $5,906.20, plus accrued interest of $632.33, a total of $6,538.53, and found in its favor and against DeLuxe on the counterclaim. From this judgment DeLuxe has appealed.

On May 19, 1949, Hunter Construction Company submitted a proposal to defendant for certain grading to be done on a site near Fulton, Missouri, where DeLuxe was planning the construction of a drive-in theater, the contract price for the grading to be $5,355. This proposal was accepted by DeLuxe May 31, 1949, on the condition, among other things, that Hunter Construction Company furnish proof of public liability and workmen's compensation insurance, together with a performance bond. The Hunter Construction Company accordingly obtained a policy June 20, 1949, from the Bituminous Casualty Corporation, insuring it against workmen's compensation, public liability and other risks on the job in question, and caused a copy of the policy to be mailed to DeLuxe containing the insurer's certificate of issuance. After the completion of the grading job a difference arose as to extras, and the parties agreed on an adjusted total due Hunter Construction Company of $5,906.20. This amount was never paid because of the events that next ensued.

On or about April 4, 1950, DeLuxe was served at its Kansas City office with a summons in an action entitled Grover C. Clardy v. DeLuxe Drive-In-Theaters, a Corporation, and James O. Hunter and John Rathouz, d/b/a Hunter Construction Company, pending in the Circuit Court of the County of Callaway, Missouri, returnable in thirty days after service. Investigation showed that a petition had been filed in the Clardy case against the defendants named in the summons, wherein Clardy alleged that he owned certain real estate adjoining the site upon which the grading job had been done; alleged that DeLuxe employed Hunter and Rathouz, d/b/a Hunter Construction Company, as its agents, servants and employees in certain construction work there, who used certain heavy machinery on the job, well knowing that vibrations therefrom would injure the Clardy property, but, nevertheless, did use said machinery and did damage Clardy's property by the vibrations therefrom, and by such operation the defendants encroached and trespassed on the Clardy property to the plaintiff's damage of $4,875. Upon receipt of the summons in the Clardy case, a Kansas City representative of DeLuxe telephoned the Kansas City office of the Bituminous Casualty Corporation and inquired if the policy was still in effect, stating that his company had received a summons in the Clardy case. He was told that the policy was still in effect, that the matter of the summons was not one for the insurance company, and it was suggested that he communicate with Mr. Hunter. The agent for the insurance company testified that he told the inquirer that the insurance company would not defend DeLuxe but would defend only its insured, the Hunter Construction Company. DeLuxe thereupon, on April 14, 1950, wrote to the Hunter Construction Company as follows:

'I am in receipt of a summons No. 23939, to appear before the Circuit Court of Callaway County on or before the 4th of May. This summons is a charge that Grover C. Clardy has made against you for damage to his farm. I am of the opinion that this matter is sufficiently covered by insurance. Please advise'.

To the above letter the Hunter Construction Company promptly replied as follows:

'This will acknowledge receipt of your letter dated April 14, 1950 regarding summons No. 23939 for a charge by Grover C. Clardy against the Hunter Construction Company for damage to his farm. This matter was called to our attention some time back, and we referred it to our insurance company, the Bituminous Casualty Corporation.

'The insurance company in turn has employed lawyers Lauf and Bond of Jefferson City, Missouri, and the case is being handled in the proper manner'.

The representative of DeLuxe thereupon placed the summons in the drawer of his desk and took no further action in the matter until his secretary brought to his attention an article appearing in the Jefferson City Post Tribune of June 26, 1950, to the effect that Clardy had been awarded a judgment of $4,700 against the DeLuxe Drive-In-Theaters, Inc. in the Callaway County Circuit Court at Fulton, as damages to his property by use of the machinery in the construction of the theater mentioned, and that the case had been dismissed as to the Hunter Construction Company. The article stated that the Hunter Construction Company was represented in court, but no counsel appeared for the DeLuxe Drive-In-Theaters, Inc., and that the judgment was by default.

One of the attorney employed by the Bituminous Casualty Corporation to represent the Hunter Construction Company in the Clardy case immediately inquired of a local manager of DeLuxe at Fulton about the suit, relative to what pleadings would be filed and was told that DeLuxe had not been served in the suit, but that the matter would be checked. The attorney testified that he never heard from DeLuxe and had never represented it in the suit in any way, nor was ever requested so to do. That attorney and his associate promptly filed a separate and special appearance in the Clardy case with a separate motion to dismiss as to James O. Hunter and John Rathouz, d/b/a Hunter Construction Company, and a separate general denial in their behalf. The separate motion to dismiss was a plea to the jurisdiction over those defendants, wherein they alleged that the DeLuxe Drive-In-Theaters, Inc. had been joined as a defendant therein 'for the sole purpose of compelling defendants James O. Hunter and John Rathouz d/b/a Hunter Construction Company to be subjected to the jurisdiction of this court, and that plaintiff well knows that no cause of action exists against said defendant DeLuxe Drive-In-Theaters, a corporation, with their principal offices in Kansas City, Missouri'. The motion stated that the movants were not residents of Callaway County, but were served in Cole County, and no service on them was had in Callaway County, where the plaintiff was a resident; that the Callaway County Circuit Court cannot obtain jurisdiction or venue over the movants by joining the DeLuxe Company, whose principal office is in Kansas City, Missouri, even though it had a local representative in Callaway County.

The separate motion of the Hunter Construction Company to dismiss was not submitted nor argued, but after its attorneys had discussed the motion with Clardy's attorneys, Clardy, on June 3, 1950, dismissed his action as to Hunter, Rathouz, and the Hunter Construction Company. At this time the Hunter attorneys knew that the DeLuxe Drive-In-Theaters, Inc. had filed no pleading in the Clardy case, and they had been told by Clardy's attorneys that Clardy intended to take a default judgment against defendant DeLuxe Drive-In-Theaters, Inc. On the same day, June 3, the Clardy case was accordingly dismissed as to J. O. Hunter and John Rathouz, a copartnership, d/b/a Hunter Construction Company, without prejudice, and a default judgment was taken on that day against the DeLuxe Drive-In-Theaters, Inc. and June 26, 1950 was set as the day to fix and assess the damages therein. Thereafter on June 27, 1950, a hearing was had on the matter of damages. Counsel for Hunter Construction Company was present. The case was taken under advisement and on July 8, 1950, a judgment by default was rendered against the DeLuxe Drive-In-Theaters, Inc. in the amount of $4,700 and costs.

Defendant DeLuxe had no knowledge of any of the above proceedings in the case since receiving the letter of Hunter Construction Company of April 15, 1950, advising it that the Clardy case had been placed in the hands of attorneys for the insurance company and that 'the case is being handled in the proper manner', until defendant's secretary brought to its attention the newspaper article of June 26, 1950, in the Jefferson City Post Tribune, stating that a default judgment had been rendered against DeLuxe for $4,700 and the case had been dismissed as to Hunter Construction Company.

Upon learning of the default judgment rendered against it in the Clardy case, DeLuxe immediately engaged counsel who filed various motions with supporting affidavits, seeking to have that judgment set aside, all of which were denied by the court. Thereafter, the judgment against it having become final, DeLuxe effected a compromise of the Clardy judgment for $3,250 and paid the same, in satisfaction and release of the judgment of $4,700, and paid costs therein of $54.85, and incurred and paid attorneys' fees in the sum of $513.05, making a total outlay in that case of $3,817.90, the amount of the counterclaim in the present action.

It was stipulated in the present action that if Hunter Construction Company is entitled to...