Nelson v. Massman Construction Co.

• Decision Date: 27 January 1936
• Docket Number: No. 18349.,18349.
• Citation: 91 S.W.2d 623
• Parties: THOMAS NELSON, RESPONDENT, v. MASSMAN CONSTRUCTION COMPANY, A CORPORATION, APPELLANT.
• Court: Missouri Court of Appeals

91 S.W.2d 623

THOMAS NELSON, RESPONDENT, v. MASSMAN CONSTRUCTION COMPANY, A CORPORATION, APPELLANT.

No. 18349.

Kansas City Court of Appeals. Missouri.

January 27, 1936.

Appeal from the Circuit Court of Jackson County. — Hon. Daniel E. Bird, Judge.

AFFIRMED.

Floyd E. Jacobs, Allen E. Cox and Charles L. Townsdin for respondent.

William Buchholz and Martin J. O'Donnell for appellant.

CAMPBELL, C.

Plaintiff brought this suit to recover the reasonable value of services alleged to have been rendered by him to the defendant under an oral contract. The judgment was for plaintiff in the sum of $5500. The defendant has appealed.

The evidence shows that in the year 1926 defendant was engaged in railroad construction and river work; that plaintiff was experienced in highway work; that the parties, defendant acting through its president, H.J. Massman, entered into an oral contract concerning the matter of procuring highway construction work. The plaintiff testified that the parties agreed that defendant "was to furnish all the money necessary to buy the equipment, money to finance it to work with; I was to go and get the work and move the equipment on it and do the work, and after all the expenses of the labor, upkeep of the equipment and cost of bonds and insurance on the men, the profits were to go to pay for the equipment, and when the equipment was paid for I was to own one-half interest in it and any money made after the equipment was paid for I was to participate fifty-fifty, and the work was to go on as long as we were making money."

H.J. Massman, in his direct examination, testified concerning the contract as follows:

"Q. How did that going into business with him start? A. Mr. Nelson came to me and wanted me to go in the State highway grading business. I told Mr. Nelson from what I had known of other contractors and the way the work was going there was no money in it and I did not see any need of engaging in that class of work. He kept prevailing upon me, and what amount of money that he could make and what he could do and finally induced me to go along with him in the enterprise.

"Q. What were you to do? How were you and he to get any returns from the enterprise? A. The arrangement, or deal, that Mr. Nelson and I made was that I was to advance the whole enterprise; in other words, I was to furnish the money for him to buy the outfit, take care of his payrolls, make the bond, take care of the premiums on the insurance, and he was to get out and do the work, handle the work and run the job. We were to retain title in the outfit until such time as he made enough money to reimburse us for the entire amount of money that was spent, including equipment expense on the jobs and all operations. That was the understanding in the deal that we had.

"Q. What was said, if anything, about a drawing account? A. Nelson said that he `did not have any money; he was up against it, and that he would have to have some money to live on,' and I told him, `that is all right; go ahead, and what money he would need, why, we would take care of it;' which we did."

The witness Massman in his cross-examination stated that it was thoroughly understood that either of the parties "had the privilege of quitting at any time we seen fit." In his deposition he stated that it was the agreement that "in the event that the jobs were not making any money we could quit at any time we seen fit." He also said that the statements in his deposition were true.

Plaintiff, in the name of the defendant, obtained three road construction contracts and fully performed each contract. The largest of the contracts is known in the record as the Troy, Kansas, job, which was completed about September 15, 1927. When the Troy job was about half completed Massman went to the place of work and said to plaintiff that the job was losing money and that he was "going to quit" and sell the equipment. Plaintiff contended that the business was profitable and insisted it should be continued. Massman on that point, however, testified that plaintiff acquiesced in the discontinuance of the business. The defendant furnished the funds necessary to purchase the equipment, keep it in repair, pay the cost of the work and the sums received by plaintiff from the drawing account, the amount of which was considered as expense of operations. The defendant also received all the moneys earned under the contracts, including a rental of the equipment. While the Troy job was under construction the parties purchased a new caterpillar tractor for the sum of $5500. The plaintiff testified to the effect that the equipment was in better condition when the work was completed than it was in when the first job was begun.

The parties agree that the defendant was the owner of the equipment and that plaintiff had no ownership therein. After the construction work was completed the equipment was taken to a farm of the defendant and thereafter sold for the sum of $6625. The parties were in disagreement concerning the profits, if any, resulting from the enterprise. For the purpose of settling that controversy they agreed that C.G. Clary should audit their accounts and that each of them would be bound by the audit. The audit was made and as made disclosed that there was a job profit on each job; that the "total net profit from all jobs done by Massman Construction Co., and T.W. Nelson as of March 30, 1928, $13,991.24."

The defendant's first point is that the court erred in overruling its motion in arrest of judgment and its motion for new trial, for the reason that the petition failed to state facts sufficient to constitute a cause of action; and erred in refusing the requested peremptory instruction to find for the defendant. The petition alleged that on or about January 1, 1926, plaintiff was employed by the defendant to make estimates for it of the cost of grading jobs and to make bids for defendant on such grading jobs as might be offered to grading contractors and to manage, superintend, direct and control the actual work of performing such grading contracts as might be "awarded to and accepted by said defendants;" that in lieu of salary or compensation for his services plaintiff was to receive a sum equal to one-half of the net profits earned or received by defendant on all works managed, superintended and controlled by the plaintiff; that plaintiff would not be entitled to receive the said net profits derived from the works until such time as plaintiff's share of the products equal fifty per cent of the funds furnished by the defendant for the purchase of the equipment necessary in carrying on and completing the work; that plaintiff acted upon said agreement, performed faithful and valuable services thereunder for the defendant and that the defendant wrongfully discharged plaintiff from its employ and thereafter refused to carry out the terms and provisions of the contract and refused to permit the plaintiff to continue in its employ; that prior to October 1, 1928, plaintiff had faithfully performed his duties under the terms of said contract; that he had bid for, obtained, superintended and managed to successful completion on behalf of defendant a number of grading jobs from which there was derived a net profit of approximately $14,000; that the equipment purchased by the defendant cost approximately $19,000; that on October 1, 1927, the defendant without cause and in violation of the terms of said agreement refused to permit the plaintiff to further proceed under said contract and agreement, took possession of the equipment and refused to permit the plaintiff to continue to work under the terms of the agreement; that the reasonable value of the services rendered by him to the defendant during the period mentioned under the terms of said contract was of the reasonable value of $10,000, for which sum, less the sum of $1499.66, he prayed judgment.

The defendant's answer was a general denial, a counterclaim based upon the theory that the plaintiff had received from it $24,895, for which he had not accounted. In that counterclaim is the following:

"And for its cause of action against the plaintiff, this defendant, the Massman Construction Company, states that heretofore, to-wit: on or about the first day of January, 1926, the plaintiff and this defendant entered into an agreement by virtue of which it was stipulated and agreed that the parties hereto should engage in grading operations under contracts to be procured by the plaintiff and that the said plaintiff under the said agreement was to superintend, and manage, the grading operations under such contracts and that this defendant was to furnish the money by virtue of which such operations could be carried on; that it was further agreed that this defendant should purchase equipment to be used in the said grading operations and that when the said equipment was paid for out of any profits or income that might be made out of the said grading operations, that the said plaintiff and this defendant should jointly own the said equipment."

The fourth count of the answer is based upon the contention that the parties submitted their controversy to arbitration; that C.G. Clary was the arbitrator and that under his finding the enterprise sustained a loss in the sum of $3552.49 and prayed judgment enforcing the alleged award. The defendant in arguing this point insists that the petition shows that the contract was uncertain; that there was "no mutuality as the alleged agreement did not bind defendants to accept contracts which might be awarded" and hence had right as a matter of law to withdraw from the enterprise at any time. The contract, according to the plaintiff's contention, may be said to consist of two parts. The substance of the terms of the first part were that defendant would furnish the equipment and the funds needed in completing contracts and receive all of the money derived from the work until the profits of the enterprise were...