Negbaur v. Fogel Const. Co.

• Decision Date: 06 February 1933
• Docket Number: No. 17648.,17648.
• Parties: NEGBAUR et al. v. FOGEL CONST. CO.
• Court: Missouri Court of Appeals

58 S.W.2d 346

NEGBAUR et al. v. FOGEL CONST. CO.

No. 17648.

Kansas City Court of Appeals. Missouri.

February 6, 1933.

Rehearing Denied March 6, 1933.

Appeal from Circuit Court, Jackson County; Ben Terte, Judge.

Action by Morris S. Negbaur and others, copartners doing business as Negbaur & Sons, against the Fogel Construction Company. From the judgment, defendant appeals.

Affirmed.

McVey, Freet & Randolph, of Kansas City, for appellant.

Walsh & Aylward, James P. Aylward, and A. A. Ridge, all of Kansas City, for respondents.

BOYER, Commissioner.

This is an action at law to recover a balance due on open account for merchandise sold and delivered to defendant. The case was tried and submitted under an amended petition which charges that between November 30, 1927, and May 9, 1928, at the special instance and request of defendant, plaintiffs sold and delivered to defendant, and defendant accepted and used, merchandise described in an itemized statement attached to the petition of the reasonable value of $7,705.70; that defendant is entitled to credit on said account in the sum of $4,623.42, leaving a balance due to plaintiffs in the sum of $3,082.28, which upon demand defendant has failed and refused to pay. Judgment is demanded for that sum, with interest.

The answer is a general denial, and further states that defendant at the time of the alleged purchase was engaged in constructing and remodeling certain buildings upon lands owned by the West Spring Street Corporation, and that defendant purchased the merchandise in substantially the amount set forth in plaintiffs' petition for the last-named corporation; and further answering states that on December 21, 1927, plaintiffs, with others who had furnished material in the construction and equipment of the buildings on the lands of the West Spring Street Corporation, entered into an agreement with said corporation, which is attached to the answer as an exhibit; that, by the terms of said agreement, plaintiffs and others agreed to accept the payment of 60 per cent. of their accounts in cash, and for the balance thereof plaintiffs were to receive an equivalent amount of the bonds of the West Spring Street Corporation at 95, with a repurchase condition of said bonds within six months; that 60 per cent. of the account of plaintiffs was paid in cash, and that bonds as provided were delivered to plaintiffs and accepted and received by them "as payment of their account"; that the account has been fully paid and released; that the original agreement of purchase was merged and extinguished by the new contract, and defendant "by and under the terms of said contract of December 21, 1927, has been discharged and released from any and all liability to these plaintiffs."

The reply to the new matter contained in the answer denies each and every allegation, and further states that, as shown by the contract attached to and forming a part of the answer as an exhibit, the bonds alleged to have been delivered to plaintiffs were delivered as collateral security for the account due, and that said bonds so pledged to plaintiffs were accepted by them as collateral security for the payment of the balance of the account and were not accepted in payment of said balance; that plaintiffs have not foreclosed their lien upon said bonds and hold same subject to the terms of the collateral contract.

With the issues thus framed the case proceeded to trial before the court and a jury, but before the case was concluded, by agreement, the jury was discharged and the case submitted to the court upon all the issues of law and fact and upon requested findings of fact and conclusions of law to be presented by the parties if they so desired. Such findings and conclusions were requested by both parties. The requests of plaintiffs were granted. Some requests of the defendant were granted and some refused as shown by the bill of exceptions, although the order and judgment of the court recites that plaintiffs' requested findings of fact and conclusions of law were allowed, and that defendant's requested findings of fact and conclusions of law were denied. The court found the issues for the plaintiffs and against defendant and gave judgment accordingly for the amount demanded, with interest. After timely motions for new trial and in arrest were overruled, defendant duly appealed and assigns errors (1) in giving certain of plaintiffs' findings of fact and conclusions of law and in refusing certain findings and conclusions requested by defendant; (2) that defendant purchased the goods for a disclosed principal and is not liable as agent; (3) that by the contract of December 21, 1927, plaintiffs discovered the principal, elected to hold it, and thereby discharged the defendant agent; and (4) that defendant has fulfilled its obligations under the contract and all claims of plaintiffs against defendant have been fully satisfied.

The contract referred to was introduced in evidence by both parties. The meaning and effect of this document is the foundation for appellant's main point, that the agreement constituted an election on the part of plaintiffs and has the effect of a novation abrogating the original contract of purchase made by defendant as agent, and substituting therefor the liability of the disclosed principal. We deem it better to show the contract in full, and omitting signatures it is the following:

"Agreement

"For and in consideration of the mutual covenants herein contained, it is hereby agreed by and between the undersigned parties as follows, to-wit:

"Whereas, The Fogel Construction Company and West Spring Street Corporation are indebted to the undersigned parties, as of this date, in the approximate amounts set opposite their names for building materials used in the construction and improvement of properties known as the Pla-Mor properties and the adjacent buildings, including the ice skating rink and the swimming pool, and

"Whereas, It becomes necessary for said Fogel Construction Company and West Spring Street Corporation to put up, with the undersigned bonding company, security in the amount of $25,000.00, in addition to other securities to be furnished by said Fogel Construction Company and West Spring Street Corporation, and

"Whereas, It has become necessary for the Fogel Construction Company and West Spring Street Corporation to secure assistance from the undersigned in order to enable them to procure a first mortgage loan, now agreed to, from the Liberty National Bank, and

"Whereas, The procuring of said loan will enable the said Fogel Construction Company and West Spring Street Corporation to pay to the undersigned 60 per cent. of their account herein referred to.

"Now, Therefore, It is agreed between the undersigned that the said Fogel Construction Company and West Spring Street Corporation shall pay out of the proceeds of said loan 60 per cent. of said account, 35 per cent. thereof to be paid in cash to the undersigned, the other 25 per cent. to be paid by a certificate of deposit, payable to each of the undersigned, and each of the undersigned does severally agree to endorse said certificate of deposit, representing 30 per cent. of said unpaid account, without recourse, and agrees that the same may be held by the Liberty National Bank or by such bonding company as may write a satisfactory bond to said Liberty National Bank, or either of them, to be held by them, or either of them, in escrow for the benefit of the undersigned, with the understanding that said certificates of deposits shall be considered deposited as security to protect the said bonding company, which writes the bond hereinbefore referred to, from any loss which said bonding company might hereafter be required to pay as a result of a pending suit brought in the Circuit Court of Jackson County, Missouri, entitled suit number 64021, Owen E. Fristoe et al., plaintiff, v. Paul M. Fogel et al., defendant.

"It is further agreed that as soon as said suit, above referred to, is settled, dismissed or finally determined that said certificates of deposit shall be returned to each of the undersigned, respectively, together with such interest as the same may draw, provided there be no loss. It is further understood and agreed between the undersigned that if there be a loss that the same shall be prorated between the undersigned parties in proportion to the amount of said certificate of deposit deposited under the terms of this agreement.

"It is further agreed by and between the parties that if there is a loss suffered by any of the undersigned that Paul Fogel, Fogel Construction Company and West Spring Street Corporation, parties hereto, agree to reimburse said parties in the amount of their respective losses, with interest at the rate of six per cent. per annum from date of said loss, and such additional security as is pledged by the said Paul Fogel, Fogel Construction Company and West Spring Street Corporation to said bonding company, to secure this account, shall be turned over to the undersigned creditors, or such person or persons as may be designated by them, to be held by them for their benefit, as security for such loss as they might suffer by reason of this arrangement.

"As collateral security to the undersigned for the balance remaining unpaid upon their respective accounts, the Fogel Construction Company and West Spring Street Corporation agree to deliver respectively to the undersigned an equivalent amount of the bonds, at 95, of the West Spring Street Corporation, out of the existing issue of $1,000,000 of bonds under which the Kansas City Title & Trust Company is trustee, being bonds of the same issue purchased and acquired by the Liberty National Bank. Each of the undersigned contracts that these bonds may be repurchased at any time within six months from date hereof and each of the undersigned contracts that his said bonds shall be returnable to the West Spring Street Corporation and delivered to...