Mertens v. MGR Inc., s. 35293

• Decision Date: 12 March 1974
• Docket Number: Nos. 35293,35294,s. 35293
• Citation: 507 S.W.2d 433
• Parties: Vivian M. MERTENS, Plaintiff-Respondent, v. MGR INCORPORATED, a corporation, and Jerome M. Mertens, Defendants. Jerome M. Mertens, Defendant-Appellant (two cases). . Louis District, Division One
• Court: Missouri Court of Appeals

Page 433

507 S.W.2d 433

Vivian M. MERTENS, Plaintiff-Respondent, v. MGR INCORPORATED, a corporation, and Jerome M. Mertens, Defendants Jerome M. Mertens, Defendant-Appellant (two cases).

Nos. 35293, 35294.

Missouri Court of Appeals, St. Louis District, Division One.

March 12, 1974.

Dempsey, Dempsey & McCarthy, Richard B. Dempsey, St. Louis, for defendant-appellant.

Hessel & Hessel, Mildred R. Hessel, Clayton, for plaintiff-respondent.

DOWD, Chief Judge.

These contract actions were instituted in St. Louis County Magistrate Court and were appealed to the Circuit Court of St. Louis County. The defendant, Jerome M. Mertans, has appealed from adverse judgments in both actions. We granted the appellant's motion for consolidation of these appeals.

These cases were submitted on stipulated facts to the trial court. The defendant MGR Incorporated (hereinafter MGR) owned and operated a restaurant known as London Char in Clayton, Missouri. Louis F. Mertens, now deceased, was employed by MGR as the manager of London Char. Vivian M. Mertens was employed by MGR as a 'cook and salad girl' at London Char. On April 1, 1970, $850 was owed to Louis Mertens and $490 was owed to Vivian Mertens as unpaid salary.

Jerome M. Mertens, the appellant, John Ross and Joseph Gallagher, Jr. were the owners of all the outstanding stock of MGR and were the officers and directors of that corporation. On April 1, 1970, an agreement was entered into among appellant, Ross, Gallagher and MGR, the pertinent parts of which are as follows:

'WHEREAS, 'Company' (MGR) operates a certain restaurant business * * * under the name of 'London Char'; and * * *

'WHEREAS, in order to raise sufficient operating capital to finance the operation of the business known as 'London Char', it was necessary for the parties herein to contract with the Arnold Savings Bank of Arnold, Missouri, to obtain borrowed funds for said purpose and as part consideration for the loan of such monies by the aforesaid Bank, it was necessary for the named parties herein to guarantee the payment by the Company of said obligations to said Bank; and

'WHEREAS, Mertens is desirous of acquiring all of the common stock presently held by Ross and Gallagher in order that he will own all of the issued and outstanding shares of stock of the Company, provided that Ross and Gallagher will each pay one-third (1/3) of the outstanding indebtedness due Arnold Savings Bank to diminish the notes payable accounts of the Company; and

'WHEREAS, Ross and Gallagher are each desirous of selling all of their issued and outstanding shares of stock to Mertens and are each willing to pay one-third (1/3) of the total outstanding indebtedness due Arnold Savings Bank as of the date of the execution of this agreement, only if Mertens and the Company will pay off the remainder of the indebtedness due the Arnold Savings Bank and all other present indebtedness due all creditors of the corporation and agree to hold Gallagher and Ross harmless from any and all claims resulting from such indebtedness.

'NOW, THEREFORE, for and in consideration of the premises and of the mutual covenants and agreements contained herein and for the sums hereinafter determined, the parties hereto mutually agree as follows: * * *

'5. The current and long-term liabilities of the Company, other than the aforesaid Arnold Savings Bank obligations, are more particularly set out in Schedule A attached hereto and are incorporated herein by reference and total in the aggregate sum of $32,507.96.

'It is understood and agreed that Mertens and Company shall pay all of the outstanding indebtedness and all the creditors of the Company, including but not limited to those accounts and creditors listed on the attached Schedule A, and that Gallagher and Ross shall not be liable for any such obligations, debts, liabilities or commitments of Mertens or the Company, except only those expressly assumed hereunder to Arnold Savings Bank. * * *

'6. Mertens and the Company warrant and represent as follows:

'c. Mertens and the Company will pay or otherwise satisfy all liabilities owed by the Company, contingent or fixed, known or unknown, and Ross and Gallagher shall not be liable for any obligations, debts, liabilities or commitments of the Company or Mertens. In this regard, Mertens and MGR., INCORPORATED, shall remain liable for and will hold Ross and Gallagher harmless from any and all debts, obligations, claims, demands and liabilities of any kind whatsoever arising from any act or omission of MGR., INCORPORATED, in the conduct of its business. * * *'

Louis and Vivian Mertens brought these actions against MGR and Jerome Mertens for the amounts of their unpaid salaries owed at the time the agreement was made. The parties stipulated that the plaintiffs were entitled to judgments against MGR in these amounts and that the sole question for the trial court was whether judgment for the same amounts...