Paulette v. Sernes

• Decision Date: 05 April 1937
• Docket Number: No. 18672.,18672.
• Citation: 103 S.W.2d 573
• Parties: PAULETTE v. SERNES.
• Court: Missouri Court of Appeals

103 S.W.2d 573

PAULETTE v. SERNES.

No. 18672.

Kansas City Court of Appeals. Missouri.

April 5, 1937.

Appeal from Circuit Court, Jackson County; Allen C. Southern, Judge.

"Not to be reported in State Reports."

Action by Charles T. Paulette against Don C. Sernes, wherein the defendant filed a counterclaim. From an adverse judgment, plaintiff appeals.

Affirmed.

Joseph F. Keirnan, of Kansas City, for appellant.

J. W. McQueen and McAllister, Humphrey, Pew & Broaddus, all of Kansas City, for respondent.

REYNOLDS, Judge.

This is an action for the breach of a contract of employment. The petition was filed May 12, 1930, in the circuit court of Jackson county at Independence.

The plaintiff, Charles T. Paulette, had been employed in the office of the collector of internal revenue for the United States at Kansas City, Mo., in the income tax service, over a period of years. He was chief of that division from 1916 until November 6, 1929, when he reached the age of retirement and retired from the service. In the performance of his duties as chief of such division, he became acquainted with the defendant, Don C. Sernes, and knew him for some ten to twelve years prior to the date of his retirement. The defendant was a public accountant and an income tax consultant and, as such, had been in business in Kansas City since 1920.

In the latter part of September, 1929, the plaintiff disclosed to the defendant his intention of retiring from the service on November 6, 1929, whereupon the defendant inquired of him what he intended doing upon his retirement, to which he replied that he might open an office of his own. The defendant suggested that, before doing anything, the plaintiff should see him and repeated such suggestion on two occasions thereafter.

The plaintiff retired on November 6, 1929, and sought out the office of the defendant and discussed with the defendant the question of his employment by Sernes & Co., of which company the defendant was a member. As a result of these conferences, a written contract was entered into between the plaintiff and Sernes & Co. for a period of one year, under the terms of which the plaintiff was employed by Sernes & Co. and agreed to give all of his time to the company as an income tax consultant and to bring into the company as its business any business arising from connections which he then had or might thereafter make during the life of the contract and agreed that such business so brought in should be considered the business of the company. The contract provided that the plaintiff should have a drawing account of $2,400 per year, payable $200 per month in installments of $100 on the first and the fifteenth days of each month. It was also provided therein that the plaintiff should receive as further compensation a commission of 15 per cent., in addition to the drawing account of $2,400, on all business over $2,400 brought into the company by him. This contract was entered into on November 12, 1929; and the plaintiff entered into the service of Sernes & Co. immediately thereafter and remained for a period of three months, for which he was paid by the defendant at the rate of $200 per month, or a total sum of $600, when he was discharged by the defendant by a letter of date February 12, 1930.

Cards announcing the association of the plaintiff with the firm of Sernes & Co. were sent to various firms and individuals, and also certain advertisements were inserted in Kansas City newspapers telling of such association.

Upon his discharge, the plaintiff made demand upon Sernes & Co. for the wages or drawing account provided by the terms of the contract, which demand was refused. After his discharge, the plaintiff was unable to make any connection with any other income tax firm and set up a private office at his home, where he did little, if any, business.

In May, 1930, this suit was instituted by the plaintiff for the balance in the sum of $1,800 claimed to be due him under the contract.

The petition declares upon the contract and alleges that the plaintiff was employed as an income tax consultant for the term of one year at an annual salary of $2,400, payable semimonthly in the sum of $100 on the first and the fifteenth days of every month, and that the plaintiff agreed to devote his exclusive and entire time to such employment as such income tax consultant and not to work for clients other than the defendant's. It alleges a full compliance by the plaintiff with all of the terms of the contract and alleges that the defendant, in violation of its terms, had failed, neglected, and refused to perform the obligations thereof and to pay the plaintiff the salary due him under such contract subsequent to February 15, 1930. It alleges a demand upon the defendant on March 6, 1930, for the salary of $100 due and owing on March 1, 1930, a refusal by the defendant to pay the same, and a declaration by the defendant, at the time of said refusal, that said contract was at an end and that he did not intend to carry out further the terms thereof. It further alleges that the defendant at such time ordered the plaintiff out of the office and told him never to return and that, by reason of the premises, the defendant had breached the contract and the plaintiff had been damaged in the sum of $1,800, for which sum judgment was prayed.

The defendant filed an answer and counterclaim, in which he formally admits the execution of the contract and makes general denial of all other allegations of the petition. By his answer, the defendant sets up that he was induced to enter into the contract by reason of the false and fraudulent representations of the plaintiff to the effect that he had a large amount of business and a great number of clients whose business he controlled, which he would turn into the firm of Sernes & Co.; that such business was sufficient to bring in a large amount of money; that a drawing account of $200 per month or $2,400 per year represented only a small amount of the money which the business of the clients whom he controlled would bring into the firm. By his answer, the defendant further sets up that, relying on such representations as true and believing that the plaintiff controlled such business as stated and that it would be a material asset to the firm, the defendant entered into the contract with the plaintiff. The answer further alleges that all such representations made by the plaintiff with reference to the business which he controlled which he would bring into the firm and the amount thereof were false and untrue and were known by the plaintiff to be false and untrue or that such statements were recklessly made by the plaintiff without his knowing whether they were true or false. The defendant by his answer alleges that he had been damaged by having entered into such contract with the plaintiff in the sum of $600, the amount which he had paid the plaintiff for his services during the time that the plaintiff was in his service, for which damages he prayed judgment by way of counterclaim.

The reply was a general denial, except as to the admissions of the defendant set forth in such answer.

The cause was tranferred by the court of its own motion to the circuit court of Jackson county, Mo., at Kansas City. It was heard on September 13, 1935, before the court without a jury, a jury having been waived. At the conclusion of the trial, the plaintiff filed a written request asking that the court make written findings of fact in the cause as made and provided by section 952, Revised Statutes of 1929 (Mo.St.Ann. § 952, p. 1225), whereupon the court made and filed its findings of fact, upon which a judgment resulted and was entered in favor of the defendant on the plaintiff's petition and in favor of the defendant on his counterclaim in the sum of $1.

From such judgment, the plaintiff, after unsuccessful motions for a new trial and in arrest of judgment, prosecutes this appeal.

There is evidence tending to show that the plaintiff represented to the defendant that he had certain contacts with taxpayers in the Sixth Missouri District and that he had certain connections with clients who had a large amount of business that he would be able to bring with him which would become the business of the defendant and that he had clients living in St. Joseph, Springfield, Joplin, and Kansas City, Mo., the names of some of whom he gave. The defendant testified that he relied on the representations of the plaintiff in such regard, as to his clients and their business and the volume thereof to be brought by the plaintiff to the defendant, and, believing such representations to be true, was led thereby to enter into the contract in question with the plaintiff.

The plaintiff, while denying that he made such representations, admitted in his testimony that he, in fact, had no clients; that he had no business which he controlled; that he was unable to produce any business which he controlled; and that he was unable to produce any business for the defendant. He testified that he was not an accountant or an auditor or a bookkeeper; that he had not made out an income tax in ten years; and that he had so stated to the defendant.

The defendant testified that, while the plaintiff was designated in the contract as an income tax consultant, he was not, in fact, employed as such but was employed only to get business...