Miller Franklin & Co. v. Gentry

• Decision Date: 05 March 1935
• Docket Number: No. 23060.,23060.
• Citation: 79 S.W.2d 470
• Parties: MILLER FRANKLIN AND COMPANY, INC., APPELLANT, v. WILLIAM R. GENTRY, RESPONDENT.
• Court: Missouri Court of Appeals

79 S.W.2d 470

MILLER FRANKLIN AND COMPANY, INC., APPELLANT, v. WILLIAM R. GENTRY, RESPONDENT.

No. 23060.

St. Louis Court of Appeals. Missouri.

Opinion filed March 5, 1935.

Appeal from Circuit Court of St. Louis County. — Hon. Julius R. Nolte, Judge.

AFFIRMED.

Lewis, Rice, Tucker, Allen & Chubb for appellant.

(1) This court is not bound by and will not defer to the decision of the trial court where the decisive facts are uncontroverted and especially where the evidence consists of written instruments and depositions. Gambs v. Insurance Co., 50 Mo. 44; Willi v. Dryden, 52 Mo. 319; Halstead v. Mustion, 166 Mo. 488; Bank v. Hutton, 224 Mo. 42; Neil v. Cunningham Store Co., 149 Mo. App. 53; Hay v. Bankers Life Co., 207 Mo. App. 277. (2) The defendant, having entered into the contract in excess of his authority as receiver, became personally obligated. This is especially true since defendant advised plaintiff that he had specific authority to make the contract. 1 Clark on Receivers (2 Ed.), pp. 521, 524, 525; 53 C.J., pp. 160, 175; In re Erie Lumber Co., 150 Fed. 817; Haines v. Buckeye Wheel Co., 224 Fed. 289; Barton v. Barbour, 104 U.S. 126; Peoria Steam Marble Works v. Hickey (Iowa), 81 N.W. 473. (3) (a) All trustees and quasi-trustees are personally liable on their contracts. Taylor v. Mayo, 110 U.S. 330; Yeakle v. Priest, 61 Mo. App. 47; Koken Iron Works v. Kinealy, 86 Mo. App. 199; Gnadt v. Moore, 297 S.W. 468. (b) Receivers are protected from personal liability only to the extent that they act strictly under the orders of the court. 1 Clark on Receivers (2 Ed.), pp. 521, 524; Taylor v. Mayo, 110 U.S. 330; Barton v. Barbour, 104 U.S. 126. (c) And, although the estate benefits from a contract made by a receiver in excess of his authority, the receiver remains primarily liable, but with the right to be reimbursed out of available funds. Taylor v. Mayo, 110 U.S. 330; 1 Clark on Receivers (2 Ed.), p. 527. (4) None of the elements of estoppel are present in this case. Vette v. Hackman (Mo.), 237 S.W. 802. (5) The amount sought to be recovered was actually paid by plaintiff to its engineers for their "usual traveling and living expenses" outside of New York City, as shown by plaintiff's records kept in the usual course of business and properly identified. Anchor Milling Co. v. Walsh, 108 Mo. 277; Stetina v. Bergstein, 231 S.W. 1059.

Arnot L. Sheppard for respondent.

Luke E. Hart of counsel.

(1) Appellant had every right to adjudicate the matter involved in this controversy, by a proper application to the federal court which appointed respondent receiver. 53 C.J. 158, sec. 199; 1 Clark on Receivers, sec. 789 (h), pp. 860-861; Standard v. Robert H. Reid & Co., 195 N.Y. 530, 118 App. Div. 504, 88 N.E. 1132, 103 N.Y.S. 521-527; Willett & Olsen v. Janecke, 85 Wash. 654-657, 149 P. 17; Vanderbilt v. Central of Georgia, 43 N.J. Eq. 669, 12 A. 188. (2) The uncontradicted evidence discloses that appellant dealt with respondent only in the latter's official capacity as receiver and looked to respondent only as receiver for its compensation. Under these circumstances, there can be no recovery against respondent in his individual capacity. Greenough v. Safe Deposit & Tr. Co. of Pittsburgh, 251 Pa. 522, 95 Atl. 1053; Southern Supply Co. v. Mathias, 147 Md. 256, 128 Atl. 66; Kansas National Bank v. Bay, 62 Kan. 692, 64 P. 596; In re Wilson's Estate, 252 Pa. St. 373, 374-5; Pa. Eng. Works v. New Castle Stamping Co., 259 Pa. 378, 103 Atl. 215. (3) There is no evidence in this record warranting admission of the documents purporting to show the amount of expenses incurred by appellant in executing the contract here involved for the reason that they were not shown to be correct and authentic. Bedwell v. Capital Mut. Assn., 66 S.W. (2d) 155, and cases cited. (4) The contract provides that the receiver shall pay the usual traveling and living expenses of appellant's employees incurred in connection with the performance of the contract involved herein. (a) "Usual" means "such as commonly occurs in the ordinary course of events or in ordinary practice; customary; frequent; common." Webster's Dictionary. (5) If there is any ambiguity in the contract, such contract must be most strongly construed against the user of the ambiguous expression. Beile v. Travelers Protective Assn. of America, 155 Mo. App. 629; Columbia, etc., Co. v. Fidelity & Casualty Co., 104 Mo. App. 157; United Zinc Co. v. General Accident Ins. Co., 128 S.W. 836. (6) "Usual expenses," as used in this contract, means the actual expenses incurred. Regina v. The Gov. & Guard. of the Poor of Kingston on Hull, 20 Eng. L. & Eq. R. 149; Stoedter v. Turner et al., 237 S.W. 141, 144.

SUTTON, C.

This is an action to recover $2788, being the balance claimed to be due plaintiff for expenses incurred and paid in making a survey of the business of Hamilton-Brown Shoe Company. The cause was tried before the court without a jury. There was a judgment for defendant, and plaintiff appeals.

Plaintiff's position in this court is that under the law and the uncontroverted facts the judgment should have been for plaintiff, and that this court should reverse the judgment of the trial court and remand the cause with directions to enter judgment in favor of plaintiff for the amount sued for.

Plaintiff's principal office is in the city of New York. Its business is industrial engineering service. The principal office of the Hamilton-Brown Shoe Company is in the City of St. Louis.

On August 22, 1930, plaintiff by a letter to Luke E. Hart, attorney for Hamilton-Brown Shoe Company, which was then being operated by defendant as receiver, under appointment by the United States District Court of the Eastern District of Missouri, proposed to make a survey of the business of Hamilton-Brown Shoe Company. It proposed that the survey would coordinate the findings of the examination with modern business practice and requirements, setting forth the shortcomings, faults, and deviations from economical and profitable operation for all divisions of the company, setting forth also the possibility of rectifying the condition and establishing the relation of the shoe company to the industry as a whole. The proposal respecting charges to be made for the survey was stated as follows:

"Our fees for producing the survey and reports will be between twelve and fifteen thousand dollars plus the usual traveling and living expenses of our engineers outside of New York City. The expenses we estimate would be between two and three thousand dollars.

"W are willing to guarantee the fifteen thousand dollar amount as being the maximum fees and will agree to bill Per Diem rates if the Per Diem fees are less than twelve thousand dollars."

On August 27, 1930, plaintiff in a letter to Mr. Hart said:

"You are correct in the understanding that we guarantee our Per Diem fees for the examination will not exceed fifteen thousand dollars, to which, of course the usual traveling and living expenses of our engineers from New York will be added."

On September 8, 1930, the United States District Court, on petition of defendant as receiver, made the following order:

"It is Ordered, That the Receiver be and he is hereby authorized to employ the firm of Miller, Franklin & Company to make a survey of the operations and business of the Hamilton-Brown Shoe Company as expeditiously as possible, at a total cost of not to exceed $18,000.00, and that he proceed with same at once and take credit for the cost thereof in his accounts as Receiver."

On the same day defendant wired plaintiff as follows:

"Judge DAVIS in United States District Court here made order today directing me to have survey of Hamilton-Brown business made by your Company in accordance with terms stated in your letter to Luke E. Hart of August 22, 1930, and your letter to him of August 27, 1930. Please get your organization together and on the ground here and proceed at the earliest possible moment to make a survey as expeditiously as possible. Am confirming this by letter."

On September 15th defendant wrote plaintiff as follows:

"This will confirm my telegram to the effect that pursuant to the order of Judge Davis, of the Federal Court, who appointed me Receiver of the Hamilton-Brown Shoe Company, which order was made on the 8th day of September, 1930, and which granted me authority to employ you to make a survey of the Hamilton-Brown Shoe Company business, you are employed to proceed with that survey according to the terms mentioned in your two letters to Mr. Luke E. Hart, both of which were referred to in my telegram of September 8th, to you."

Plaintiff, upon receipt of defendant's telegram, began the survey, and completed the work in October.

On November 29th plaintiff billed defendant for $15,000 for services, plus $5636.53 for expenses.

On December 8th defendant wrote plaintiff as follows:

"Enclosed herewith I hand you voucher for $15,000 covering the contract price of the making of the survey which I employed your Company to make, pursuant to authority given me by the Federal Court which appointed me Receiver. This amount, of course, does not include anything for expenses and that is for two reasons. First, in view of the statements made in your correspondence with Mr. Hart and with me, we were led to believe that the expenses would in no event exceed the amount of $3000, and, therefore, in my petition to the Court I asked for and procured authority to expend not exceeding $18,000 for the services and the expenses of your organization in making the survey. Therefore, I have no authority at this time to pay more than $3000 for the expenses.

"In the second place, the amount of expenses, $5636.53, is so far in excess of your estimate, that I do not feel that I would be justified even in asking the Court to authorize me to expend that amount without some explanation which I could show the Court showing how and why the expenses ran so far above the $3000...