Maxwell v. Cardinal Petroleum Corp.
| Citation | 460 S.W.2d 436 |
| Decision Date | 10 September 1970 |
| Docket Number | No. 7153,7153 |
| Parties | A.P. MAXWELL, Appellant, v. CARDINAL PETROLEUM CORP., Appellee. |
| Court | Court of Appeals of Texas. Court of Civil Appeals of Texas |
Orgain, Bell & Tucker, Joe Farris, Jr., Beaumont, for appellant.
Mehaffy, Weber, Keith & Gonsolin, Beaumont, Cox, Smith, Smith, Hale & Guenther, San Antonio, for appellee.
This is an action for damages for breach of an employment contract . Although trial was to a jury, the court instructed the verdict for defendant at the close of plaintiff's evidence and judgment was entered accordingly. The parties will be referred to here as they were in the trial court. The plaintiff, Arthur Paul Maxwell, will be called 'Maxwell'; Mission Enterprises, Inc. will be called 'Mission'; and Cardinal Petroleum Corp. will be called 'Cardinal'.
The pleadings and the evidence show that Maxwell had been in the crude oil business in the Beaumont area as a stockholder and president of Mission since 1963. At the time of the sale of this business to Cardinal by Mission, the business consisted of buying crude oil at the wellhead, transporting it to market and selling it at a profit. Purchases of oil were limited to production where no pipeline connections were had. In November, 1967, Cardinal and Maxwell reached an agreement whereby Cardinal agreed to purchase the principal assets of Mission, a family-owned corporation of which Maxwell was president. Negotiations having been completed, the parties entered into a written memorandum of their agreement on November 16, 1967. This memorandum contained no provisions for the employment of Maxwell by Cardinal for a period of five years, but did provide for employment of Maxwell by Cardinal for an unspecified period at a salary of $24,000.00 per year upon the consummation of the purchase-sale transaction. This memorandum contemplated a formal contract between the parties, but no other instrument in writing was executed, except on November 29, 1967, the president of Cardinal wrote Maxwell the following letter:
The word 'minimum' was added to the typewritten letter in ink and initialed in the margin.
The letter specifically and clearly provides that the employment at the stated sallary would continue 'providing that you are able and satisfactorily perform the necessary services.'
The parties closed their agreed transaction on November 30, 1967. The monetary considerations expressed in the memorandum were than and have been since, recognized as the total agreed monetary considerations. Maxwell has acknowledged receipt of all monetary payments thus far due under the agreement and additionally expects the final payment of $25,000.00 in January, 1971. The considerations paid and received by Maxwell under the contract of sale are as follows:
Agreed down payment of $25,000.00 cash paid November 30, 1967;
Debts totaling $27,119.30 assumed by Cardinal November 30, 1967;
Initial $25,000.00 cash payment made on the negative covenant provision January 10, 1968;
Second $25,000.00 cash payment made on the negative covenant provision January 10, 1969;
Third $25,000.00 cash payment made on the negative covenant provision January 10, 1970;
A sum of $25,000.00 cash remains to be paid to Maxwell on January 10, 1971, under the negative covenant provision of the memorandum.
Maxwell went to work for Cardinal on December 1, 1967, under the provisions of the letter agreement. He had been in the crude oil purchase-sale business approximately 27 years. He was designated Cardinal's Southeast Texas Division Manager. He had convinced Cardinal he could increase crude oil purchases and sales in excess of what Mission was then purchasing and selling and could acquire substantial production for Cardinal in the the negative covenant provision January his business in an area where they had not previously operated, making the investment with the idea of increasing the volume of business. In negotiating the sale, the possibility of obtaining new business for Cardinal was discussed with Maxwell. He suggested he could do a better job if he were relieved of some of the burdens which he had previously had as owner-manager of Mission. At the time Maxwell sold the business to Cardinal, he was operating three trucks in the Beaumont-Houston trade area.
In a letter dated April 23, 1968 from Cardinal to Maxwell, which he admitted receiving, it complains:
'You can readily see that we have over extended our equipment projection for this area and need to do something about increasing this volume immediately.'
Maxwell admitted that not only on April 23, 1968, but prior thereto, Cardinal complained to him of his failure to obtain new business, but denied that Cardinal made 'some trucks and trailers available to provide you for the additional transportation you predicted' but admitted that on a regular basis he had, at least for March, two more trucks assigned to him than he had on December 1, to take care of the additional business he obtained immediately before his sale to Cardinal.
Maxwell testified that at the time of purchase he knew Cardinal expected him to increase business. Cardinal relieved him of many of the burdens he had previously had as owner-manager of Mission. Always he understood that he had to earn his salary and to pay his way. Cardinal relieved him of the duties of supervising and pushing trucks, buying pipelines and pipeline right-of-ways and supervising pipeline activities, and the burdens of debt, finance and direct management. To further assist him in obtaining new production, Cardinal provided Maxwell with an office, secretarial services, trade reports, a car and expense account. Maxwell knew before the sale to Cardinal and thereafter that a purchaser of crude oil would have no business eventually if he did not continuously acquire new business. He knew old wells would be depleted and pipelines would sometimes take other production previously marketed by truck.
Beginning in the second month after Maxwell was employed by Cardinal, he knew his necessary services were not being performed to Cardinal's satisfaction for the reason that he was not obtaining new business. Cardinal continuously thereafter kept in contact with Maxwell, urging him to try to get new business and finally gave him notice to get new business or his employment would be terminated. Having failed to obtain any new business in four months, he was discharged at the end of December, 1967. He was paid his thirteen months salary during the time of his employment--$26,000.00.
It is undisputed that all the other facets of the crude oil business were taken care of by other members of the Cardinal organization. There was no other 'necessary service' to be performed by Maxwell for Cardinal except to buy additional and new production of oil. It is true that the contract of November 29, 1967 did not spell out in detail the exact duties that Maxwell was to perform or the means and methods that he was to use in achieving the contemplated results. But there was no occasion for such detail . Presumably, Maxwell, as a man of experience in this crude oil purchase-sale business, knew what he was supposed to do and how to do it. The practical construction placed upon this employment contract by the parties themselves constitutes the highest evidence of their intention. Lone Star Gas Company v. X-Ray Gas Company, 139 Tex. 546, 164 S.W.2d 504 (1942).
It is undisputed that Cardinal was dissatisfied with the services rendered by Maxwell because he was not able to satisfactorily acquire new business which was a necessary service for which he was employed. Guardian Trust Company v. Bauereisen, 132 Tex. 396, 121 S .W.2d 579 (1938) holds on page 583:
As stated in Maxwell's brief:
'Trinity Universal Insurance Co. v. Ponsford Bros., (Tex.Civ.App.,) 414 S.W.2d 16, affirmed, Trinity Universal v. Ponsford Bros, 423 S.W.2d 517 (Sup.Ct.1968):
"To sum up, it has long been the law that the basic rule in construing a contract is to ascertain the intention of the parties from the words used in the contract, construed in the light of the facts and circumstances surrounding the parties at the time the contract was made, as well as the purpose sought to be accomplished, and such proof or evidence is not considered to be an attempt to vary the terms of an executed instrument."
The details and duties Maxwell had to perform to acquire new crude oil, although not spelled out in detail, were real and certain, constituting the 'necessary service' to Cardinal. As its Southeast Texas Division Manager, he did not satisfactorily perform. This was a good and sufficient ground for his discharge. As stated in 56 C.J .S. Master and Servant § 54, p. 461:
'What constitutes a good and sufficient cause for the discharge of the employee is...
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Maxwell v. Cardinal Petroleum Corp., B--2469
...of Maxwell's evidence, the trial court instructed a verdict and rendered judgment for Cardinal. The court of civil appeals has affirmed. 460 S.W.2d 436. Maxwell contends that the courts below erred in failing to view the evidence in the light most favorable to him and concluding that he fai......