Jeff-Cole Quarries, Inc. v. Bell

• Decision Date: 11 May 1970
• Docket Number: JEFF-COLE,No. 54546,No. 2,54546,2
• Citation: 454 S.W.2d 5
• Parties: QUARRIES, INC., Respondent, v. Frances M. BELL and Mary Louise Hilton, Appellants
• Court: Missouri Supreme Court

Page 5

454 S.W.2d 5

JEFF-COLE QUARRIES, INC., Respondent, v. Frances M. BELL and Mary Louise Hilton, Appellants.

No. 54546.

Supreme Court of Missouri, Division No. 2.

May 11, 1970.

David Brydon, Victor Tell Neff, Graham & Hawkins, Morris E. Osburn, Jefferson City, for Jeff-Cole Quarries, Inc.

Lawrence J. Lee, St. Louis, for Frances M. Bell and Mary Louise Hilton.

HENRY I. EAGER, Special Commissioner.

Plaintiff, a corporation, filed suit for a money judgment on account of work done under a contract for a removal of rock from building sites, and to establish a mechanic's lien upon the real estate. The amount claimed in the petition was $57,375, that amount being allegedly based upon a contract price of $15 per cubic yard. Plaintiff attached to the petition as exhibits a copy of its lien statement and a copy of the contract. The defendants were Frances M. Bell, Mary Louise Hilton, A. E. Bell, Irvin Hilton (the latter two being the husbands of the women), and Meridian Construction Company, a Missouri corporation (which we shall designate as Meridian). After rulings on various motions all defendants filed answers. It will not be necessary to review the pleadings in any detail; Mr. Bell and Mr. Hilton denied ownership of the real estate; all four individuals alleged that it was owned solely by the two women; the latter asserted their ownership as tenants in common and denied that the other defendants were ever their agents; all four individuals denied generally the plaintiff's allegations. Meridian admitted that it entered into a building contract with Mrs. Bell and Mrs. Hilton to construct improvements on the property at a fixed price, and that it entered into a contract with plaintiff as a subcontractor for the removal of rock. It specifically denied plaintiff's allegations of the amount of rock removed, and generally denied the substantive claims of plaintiff. We need not discuss the motions for production and inspection or the various interrogatories, objections and answers. No point is made here concerning them. These cover many pages of the transcript.

Suit was filed in Cole County where the real estate is located; the case was transferred to Osage County on a change of venue and a jury was waived. At the conclusion of a rather lengthy trial, the court found the issues for plaintiff against Meridian and the two women, and entered judgment against them for $51,645; it also found that plaintiff was entitled to a mechanic's lien on the real estate, describing it; it ordered that execution be levied on the real estate if no sufficient property of those three defendants should be found otherwise. Plaintiff's petition was dismissed by the court as to the defendants Irvin Hilton and A. E. Bell.

A detailed joint motion for a new trial was filed and overruled; we may say here that it fairly raised all points now to be considered. The two women filed a joint notice of appeal and Meridian filed its own notice. Thereafter Meridian voluntarily dismissed its appeal in this Court. The sole remaining defendants here are Mrs. Hilton and Mrs. Bell.

The trial court made no findings of fact and entered no conclusions of law. None were requested. We are left somewhat in the dark, therefore, concerning its views both on the facts and the law. A detailed statement of the facts will be necessary. The individual defendants live in St. Louis. The business address used for all defendants was 7827 Olive Blvd., St. Louis, a one-story building. Mr. Bell was an accountant, with his business office there; Mr. Hilton was, as he said, 'basically in the construction business,' with his office there, and he had been so engaged since 1950. He had organized the Meridian Construction Company, a Missouri corporation, in which he owned all the stock. He and Mr. Bell and Mrs. Bell were the directors and officers; he was its president. It had done general construction work for others for some years before the present controversy arose. Mr. Hilton was also interested in (and perhaps organized) another Missouri corporation, Olive Realty and Development Corporation, in which he owned at least 50% of the stock; he and the Bells were the officers and directors; originally others (not designated) were interested parties. Hilton testified that the corporation was not very active, and that he was authorized by its By-Laws to transact real estate business for it.

Mr. Hilton testified: that his wife and Mrs. Bell had money of their own and that they were looking for investments; that they had made prior investments together with their own money; that he learned of the availability of the real estate now in question, consulted with the wives, and negotiated a sales contract from the owners to Olive Realty and Development Corporation (hereafter called 'Olive'), actually as a 'straw' buyer; that he, on behalf the same work for Meridian on the other Frances M. Bell and Mary Louise Hilton on November 15, 1962, and that the warranty deeds from the sellers were made direct to 'Frances M. Bell and Mary Louise Hilton,' as grantees.

Other nearby apartments had been built by Meridian for Mrs. Hilton and Mrs. Bell prior to the present controversy. The sale price on the land now in question was rock, and some rock not classed as solid on $500 deposit). The sales contract and the warranty deeds were received in evidence as exhibits. Mr. Hilton signed an acceptance of the closing statement on April 4, 1963.

On August 3, 1965, a construction contract was executed by Mrs. Bell and Mrs. Hilton as owners and the Meridian Construction Company as 'General Contractor,' Mr. Hilton signing for the corporation as 'President.' In that contract it was stipulated: that Meridian should be the general contractor; that it agreed to procure and furnish all labor, materials and equipment, subcontractors, and all else required for the construction of three ten-family apartment buildings on the property, two and one-half stories each, of the size of 44 feet by 74 feet, to be designated as 607, 609, and 611 Blair Drive North, in Jefferson City; that the contractor would As already indicated, other apartments had been built by Meridian beginning in 1963 for these same owners, under similar or almost identical arrangements, and at the same unit price; they had been finished prior to February, 1964, for rent was then being collected. On the present project a construction loan was arranged with Community Federal Savings & Loan Company of St. Louis; the husbands, or in any event Mr. Hilton, helped in making those arrangements and the lender insisted that both husbands sign the note and deed of trust because of their marital interests. The amount of this loan constituted (supposedly) the entire construction cost, exclusive of certain minor incidental expenses. An attorney, Mr. Tucker, also assisted the wives in those negotiations and, according to Mr. Hilton, represented them. The construction contract was made without competitive bidding, and it was apparently intended from the beginning that Meridian would be the general contractor. Meridian was paid for its work as the construction proceeded, but later payments from the loan were apparently held up because of this litigation. Any profits of Meridian were taken by Mr. Hilton as salary or dividends.

provide all necessary insurance, and that it guaranteed against defects in materials and workmanship; that the owners agreed not to delay the progress of construction, that they would provide fire, hail, windstorm and vandalism insurance, and that they would pay to the 'General Contractor' the sum of $77,797.87 for each completed building, or a total of $233,393.61. The contract further provided: that the buildings would be constructed according to the designs of certain named architects, that changes must be set forth and accepted by supplemental contracts in writing with adjustment of the sum to be paid, that payments would be made as the work progressed but not to exceed the ratio of the total sum to the percentage of completion; and that the contractor should hold the owners harmless from all liens arising from the construction. Certain formal provisions were also contained in the contract such as one prohibiting assignments, for arbitration, etc., which are immaterial here. The evidence showed that Meridian thereafter arranged for and made all subcontracts, and that it purchased all materials, except for a few minor items which a Mr. Stockman purchased locally.

At some time around September 5, 1965, Meridian contracted with Willard Stockman, a construction contractor of Jefferson City, as a subcontractor, to supervise the construction of these three apartment buildings for a stated fee, and also to perform all carpenter labor (not furnishing materials) at a fixed fee. This contract covered much detail. (Stockman had done and same work for Meridian on the other buildings already completed.) Mr. Spencer Thomas, a local engineer, staked out the area and set grade stakes; he testified that he did all of this at one time. Another contractor had done some grading (which he described as 'a lot of grading,' with some rock) before Mr. Adrian, President of plaintiff company, was called to the job. At that time there was loose dirt, solid rock, and some rock not classes as solid on the site. Mr. Stockman estimated that not over 25% of the material to be removed was solid rock, i.e., rock which had to be blasted. Mr. Adrian testified that he saw the three building sites which were staked and told Stockman that he would excavate the rock for $14,000 or at $15 a cubic yard; that Stockman said he would have to let him know later; that Stockman called later and stated that they would take the offer of $15 a cubic yard. His company proceeded with the work; he testified: that Meridian had later decided to excavate an additional area outside the building sites; that all the rock excavated was solid and that they blasted it and hauled it out; that...