Myers v. St. Louis Structural Steel Co.

• Decision Date: 09 August 1933
• Docket Number: 31147
• Parties: Emmett M. Myers and George R. Wendling, Jr., Co-Partners Doing Business as Myers & Wendling, Appellants, v. St. Louis Structural Steel Company, a Corporation
• Court: Missouri Supreme Court

65 S.W.2d 931

333 Mo. 464

Emmett M. Myers and George R. Wendling, Jr., Co-Partners Doing Business as Myers & Wendling, Appellants, v. St. Louis Structural Steel Company, a Corporation

No. 31147

Supreme Court of Missouri

August 9, 1933

Appeal from Circuit Court of St. Louis City; Hon. H. A Hamilton, Judge.

Affirmed.

Bryan Williams, Cave & McPheeters for appellants.

(1) The following charges of the petition show that the defendant and the Lotz Construction Company were engaged in a joint adventure for profit: (a) That plaintiff had a contract for the construction of the whole of a bridge and that it was not equipped to do the substructure work of it except through another such as the Lotz Construction Company. (b) The contribution by the defendant of a substantial portion of the moneys and capital used in constructing a portion of the bridge, for the construction of the whole of which the defendant was under contract to the State Highway Commission. (c) The contribution of the labor, machinery, etc., for the construction of a portion of the bridge by the Lotz Construction Company. (d) The agreement that the defendant was to have the definite sum of $ 6,000 of the profits which the parties expected to be realized from the adventure. (e) The exercise of supervision and control over all that part of the undertaking calling for the expenditure of moneys on said work by the defendant. (f) The exercise by the defendant of supervision over all purchases of materials and supplies amounting to over $ 500 to be used in said work. And as the petition charges that the insurance policies were for the protection of the defendant's co-adventurer, the Lotz Construction Company, in connection with the work to be done in the construction of the foundation piers and substructure work of said bridge the defendant was and is liable for the payment of said premiums and the court erred in sustaining defendant's demurrer and in rendering judgment against the plaintiff. State ex rel. Hatcliff v. Superior Court, 108 Wash. 443; McCauley's Admr. v Cleveland, 21 Mo. 438; Phillips v. Samuel, 76 Mo. 657; Willoughby v. Hildreth, 182 Mo.App. 80; Reid v. Shaffer, 249 F. 583; Torbert v. Jeffrey, 161 Mo. 645; Minter v. Gidinsky, 228 S.W. 1075; Cleveland v. Anderson, 2 Tex. Civ. App. 146; Denny v. Guyton, 327 Mo. 1030; 33 C. J. 841. (2) The fact that but one of the parties was to suffer the losses, if any, does not prevent the contract from being one of partnership or joint adventure. Martin v. Maxwell, 18 Mo.App. 176; Pasche v. Townsite Co., 190 S.W. 30; Torbert v. Jeffrey, 161 Mo. 645. (3) It is not a necessary attribute or element of the relationship of a joint adventure that the parties are to become the owners of the capital or property to be used in the adventure. Alderton v. Williams, 139 Mich. 296; Reid v. Shaffer, 249 F. 553. (4) That the contributions of one of the parties to the adventure were to be repaid is not inconsistent with a joint adventure relationship. Torbert v. Jeffrey, 161 Mo. 645; Alderton v. Williams, 139 Mich. 296; Reid v. Shaffer, 249 F. 553; Nelson v. Lindsay, 162 N.W. 5. (5) It is sufficient to create the legal relationship of joint adventure that the parties are to share in the profits but it is not necessary to its creation that they shall share equally in the profits. Nelson v. Lindsay, 162 N.W. 3; Reid v. Shaffer, 249 F. 553. (6) The contract between the defendant and the Lotz Construction Company was not a mere money-lending transaction. Reid v. Shaffer, 249 F. 561; Kirkwood v. Smith, 95 N.Y.S. 926; Clinchfield Fuel Co. v. Henderson Iron Works Co., 254 F. 411; National Surety Co. v. Winslow, 143 Minn. 66; Barry v. Bernays, 162 Mo.App. 27.

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

(1) The petition does not contain allegations sufficient to show the relation of partners or joint adventurers between the defendant and Lotz Construction Company and therefore does not state a cause of action against the defendant. 33 C. J. 842; Clark v. Barnes & Sons, 72 Iowa 563; Dunn v. Gilbert, 254 P. 121; Thillman v. Benton, 82 Md. 64; Waverly Natl. Bank v. Hall, 150 Pa. 466. (2) Not only participation in profits, but an interest in the profits as profits and a share in profits as joint owners or principals of the business is necessary to establish a partnership or joint adventure. 47 C. J. 697; Campbell v. Dent, 54 Mo. 325; Hughes v. Ewing, 162 Mo. 261; Hill v. Curtis, 154 A.D. 662, 139 N.Y.S. 428. (3) The petition shows on its face that the relationship between defendant and Lotz Construction Company was simply that of a contractor making a loan to a subcontractor. Thillman v. Benton, 82 Md. 64; Natl. Surety Co. v. Winslow, 143 Minn. 66, 173 N.W. 181; Dubos v. Jones, 34 Fla. 539.

OPINION

Atwood, J.

Demurrer to plaintiffs' petition was sustained in the circuit court on the ground that the petition did not state facts sufficient to constitute a cause of action against defendant. Plaintiffs thereupon refusing to plead further judgment was rendered for defendant from which plaintiffs have appealed.

The petition was in three counts and sought recovery of the principal amount of $ 10,301.98, with interest from May 21, 1927, for insurance premiums on three certain insurance policies. Appellants state that the theory of the petition as to defendant's liability "is that the defendant was a joint or co-adventurer with the Lotz Construction Company in the construction of a substructure of a bridge over the White River at Batesville, Arkansas, and the approaches to it, and that the insurance policies were purchased by the defendant's co-adventurer in the furtherance of said construction work." Appellants further say that "the trial court in sustaining the demurrer of the defendant held that the facts pleaded did not show that the undertaking was a joint adventure between the defendant and the Lotz Construction Company."

Counsel for respondent apparently acquiesce in appellants' statement of the facts charged in the petition, which statement is substantially as follows:

(1) That defendant was engaged in the business of manufacturing and selling structural steel but was not engaged in or equipped for doing foundation and superstructure work of bridges and was not engaged in or equipped for the business of sinking and construcing piers, foundation piles and foundation work generally.

(2) That shortly before August 2, 1926, defendant made a bid to the State Highway Commission of Arkansas for the construction and erection of a bridge and approaches thereto over the White River at Batesville, Arkansas, and that on or about August 2, 1926, the bid was accepted but the formal contract was to be entered into between defendant and said Highway Commission at some other date.

(3) That after the acceptance of said Highway Commission of defendant's bid, but before they had executed the contract, defendant entered into a written contract dated August 5, 1926, with the Lotz Construction Company, a corporation engaged in foundation and substructure work, whereby the latter agreed to take over, assume and perform all of the obligations of defendant under its proposed contract with said Highway Commission, except that defendant reserved the right to perform all the work and furnish all the material in connection with the superstructure of said bridge.

(4) That by its contract with the Lotz Construction Company defendant agreed to pay to the latter for the work to be performed by it exactly the same compensation and upon the same terms and conditions as provided in said proposed contract between defendant and the Highway Commission, and that the construction company agreed to give to the defendant a surety bond satisfactory to it in the sum of $ 200,000, conditioned upon the faithful performance by said construction company of its contract with defendant.

(5) That subsequently it was ascertained that said construction company could not furnish said surety bond and could not provide the necessary funds to carry the payroll and purchase supplies and materials necessary to do the work; that it so informed defendant and that a new contract was then entered into between the construction company and defendant dated October 7, 1926.

(6) That it was provided in the contract of October 7, 1926, as follows:

(a) The construction company was relieved from its obligation to deliver said surety bond.

(b) That in consideration of the furnishing by the construction company of the necessary equipment to be used in the construction of the foundation and substructure work on said bridge and of the supervision and management of the work defendant agreed to contribute to the undertaking as the work progressed such sums as might be needed, not exceeding $ 20,000.

(c) That defendant was to participate in the profits realized from the construction work to the extent of $ 6,000 as and when earned.

(d) That defendant should be entitled to exercise supervision and control over all that part of the undertaking calling for the expenditure of moneys on said work.

(e) That an employee of defendant should be present on the job and that all disbursements for labor and materials should be made through his hands.

(f) That all purchases of materials and supplies amounting to over $ 500 to be used in said work should, as to prices and terms, be subject to the approval of defendant.

(7) That afterwards the foundation and substructure work was begun, the Lotz Construction Company furnishing the equipment and supervising the work, defendant contributing various sums of money when needed and supervising the disbursement of such funds and passing upon and approving the prices and terms for the purchase of material and supplies as needed in the work including all bil...