Schmidt v. Morival Farms

• Decision Date: 18 July 1950
• Docket Number: No. 27984,27984
• Citation: 232 S.W.2d 215
• Parties: SCHMIDT v. MORIVAL FARMS, Inc.
• Court: Missouri Court of Appeals

Page 215

232 S.W.2d 215

SCHMIDT v. MORIVAL FARMS, Inc.

No. 27984.

St. Louis Court of Appeals, Missouri.

July 18, 1950.

Frank W. Jenny, Union, and Leo A. Politte, Raymond S. Davis, and Jos. T. Davis, all of Washington, for appellant.

R. G. Church, St. Louis, and Joseph T. Tate, Owensville, for respondent.

BENNICK, Commissioner.

This is an action in two counts, the first upon an alleged express contract of employment, and the second for the reasonable value of goods and merchandise sold and delivered by plaintiff to defendant.

Along with its answer defendant interposed a counterclaim in four counts.

From a judgment in favor of plaintiff on his cause of action for the sum of $6,643.34, and also in favor of plaintiff on defendant's counterclaim, defendant appealed to the Supreme Court, which thereafter sustained plaintiff's motion to transfer, and ordered that the cause be transferred here.

So far as the personal equation is concerned, the controversy is between plaintiff, Ray H. Schmidt, and Joseph T. Davis, the promoter and organizer, and later the principal owner, president, and chief executive officer, of defendant, Morival Farms, Inc.

Plaintiff and his father, Otto Schmidt, were the owners of a farm of some 500 acres lying in the Missouri River bottom near Labadie, in Franklin County, Missouri. During the summer of 1945 Davis entered into negotiations with the Schmidts relative to the purchase of their farm, and on August 29, 1945, he wrote plaintiff a letter in which he proposed certain specific terms upon which he would be willing to compensate plaintiff for staying on the farm and acting as manager in the event the sale was consummated.

At about the same time Davis was also considering the purchase of what is referred to in the evidence as the Dorman farm consisting of some 120 acres of hill land adjoining the Schmidts' property.

The plan which Davis had in mind was to form a corporation to take title to the land, and on October 25, 1945, defendant, Morival Farms, Inc., was duly incorporated. The word 'Morival' is a combined form derived from the abbreviations of the three words 'Missouri River Valley'. Davis owned all of the stock except for certain qualifying shares which were issued to the other incorporators and officers including plaintiff, and had himself elected to the offices of president and treasurer. Plaintiff was vice-president of the corporation until his resignation in January, 1947.

The deal for the sale of the farm to defendant corporation was finally completed, and possession was delivered on March 1, 1946, at which time plaintiff assumed the duties of manager. There is no contention that he was ever formally employed by the corporation itself, but instead plaintiff's theory is that the corporation, by accepting his services under all the circumstances of the case, ratified and affirmed what Davis had proposed in his letter of August 29, 1945, while negotiating for the purchase of the farm, and while acting as promoter of the proposed corporation.

Plaintiff continued to serve as manager of the farm until February 28, 1947, when he was discharged by Davis acting on behalf of defendant corporation. The present action was instituted on July 25, 1947.

In the first count of his petition plaintiff set out the terms upon which Davis had offered to employ him; his subsequent employment by defendant corporation on March 1, 1946, in alleged accordance with the proposal theretofore made by Davis; the rendition of services under such employment for the period of one year; and defendant's failure and refusal to compensate him according to the terms of his alleged contract. He prayed judgment under the first count of his petition for the sum of $6,767.85, with interest from March 1, 1947.

In the second count of his petition plaintiff alleged that during the year he served as manager of the farm he had sold and delivered to defendant certain enumerated items of feedstuff, fertilizer, oil, gasoline, lumber, paint, nails, wire, and the like for which defendant had also failed and refused to pay. He prayed judgment under the second count of his petition for the sum of $1,102.95, with interest from March 1, 1947.

Defendant answered, denying that Davis had offered to have it (the corporation) employ plaintiff as manager of its farm, and further denying that Davis had possessed authority to negotiate with plaintiff on behalf of the corporation, or that any agreement he may have made with plaintiff was ever approved or ratified by the corporation.

Defendant admitted that plaintiff had assumed the duties of manager of its farm on March 1, 1946, but averred that there was no express agreement in regard to his compensation, and that he was merely to be paid a reasonable compensation. It was alleged, however, that plaintiff, after entering upon the duties of manager, had wholly failed and refused to perform his duties in many specific particulars, with the result that there was nothing due him from defendant under the first count as reasonable compensation.

As for the second count, the defense was, in substance, that the items sold and delivered by plaintiff to defendant were not reasonably of the value claimed in the petition.

In the first count of its counterclaim defendant sought an accounting from plaintiff for his alleged use of certain of its equipment in connection with the prosecution of his private business, and also for the earnings he had derived from his private business while he was allegedly obligated to devote his entire time to defendant's business. There was no prayer under such first count for any specific sum of money, but only that plaintiff be required to account.

In the second count defendant prayed judgment against plaintiff with triple damages because of his sale to defendant of certain machinery and equipment for sums in alleged excess of the actual value of such machinery and equipment, and in alleged excess of ceiling prices placed upon such machinery and equipment by the Office of Price Administration. Judgment was prayed under this count for the total sum of $10,000.

In the third count defendant sought to recover for certain alleged overcharges made by plaintiff for cultivating the land and planting crops in 1945, and for corn sold it by plaintiff in alleged excess of the ceiling price. Defendant prayed judgment under the third count for the sum of $485.67.

In the fourth count recovery was sought for alleged overcharges in connection with plaintiff's sale of hogs to defendant, as well as in connection with his purchase of hogs on its behalf, all in excess of the ceiling price. The judgment prayed...