Short v. Sunflower Plastic Pipe, Inc.

• Decision Date: 19 July 1972
• Docket Number: No. 46415,46415
• Citation: 210 Kan. 68,500 P.2d 39
• Parties: William L. SHORT, Appellant, v. SUNFLOWER PLASTIC PIPE, INC., a corporation, et al., Appellees.
• Court: Kansas Supreme Court

Page 39

500 P.2d 39

210 Kan. 68

William L. SHORT, Appellant, v. SUNFLOWER PLASTIC PIPE, INC., a corporation, et al., Appellees.

No. 46415.

Supreme Court of Kansas.

July 19, 1972.

Syllabus by the Court

1. Under K.S.A. 60-252(a) where trial is to the court, the trial judge shall find the controlling facts, and on appellate review the findings of fact made by the trial judge shall not be set aside unless clearly erroneous, and due regard shall be given to the opportunity of the trial court to judge of the credibility of the witnesses.

2. When the findings of fact of a trial judge are attacked for insufficiency of evidence, or as being contrary to the evidence, the duty of the appellate court extends only to a search of the record for the purpose of determining whether there is competent substantial evidence to support the findings. The appellate court will not weigh the evidence or pass upon the credibility of the witnesses. Under these circumstances the appellate court must review the evidence in the light most favorable to the prevailing party below.

3. A negative finding is descriptive of a trial court's failure to find the existence of a fact, or of a trial court's finding of the nonexistence of a fact or set of facts.

4. The effect of a negative finding is that the party upon whom the burden of proff is cast did not sustain the requisite burden. Absent arbitrary and capricious disregard of undisputed evidence or some extrinsic consideration such as bias, passion or prejudice on the part of the trial judge, the finding cannot be disturbed. An appellate court cannot nullify a trial judge's disbelief of evidence nor can it determine the persuasiveness of evidence which the trial judge may have believed.

5. While affirmative findings of a trial judge are not to be set aside unless clearly erroneous under K.S.A. 60-252(a), the setting aside of a negative finding usually requires the nullification of a trial court's disbelief of evidence, or rejection of evidence.

6. Where the parties to a proposed multiyear employment contract contemplate and intend a formal written instrument to be signed by the parties before it takes effect, absent such executed written document there is no enforceable contract between the parties.

7. Whether the parties negotiating a contract are bound by their oral agreement, prior to the execution of a formal written contract, is a question of fact dependent upon the intent of the parties.

Phillip Mellor, of Holmes, Darrah & Mellor, Wichita, argued the cause and was on the brief for appellant.

Jerry G. Elliott, of Foulston, Siefkin, Powers & Eberhardt, Wichita, argued the cause, and Ray H. Tinder, Wichita, was with him on the brief for appellees.

SCHROEDER, Justice.

This is an action for breach of an alleged oral contract of employment and, alternatively, to recover the value of services performed on the theory of quantum meruit. The matter was tried to the court without a jury, and after making extensive findings and conclusions the court entered judgment for the defendants. Appeal has been duly perfected.

While the appellant asserts numerous points on appeal for reversal of the trial court's judgment, the issues presented indicate that primarily the court is confronted with a fact case on appellate review.

William L. Short (plaintiff-appellant) is a consulting engineer specializing in plastics. The individual defendants are six brothers and are the sole stockholders of F & W Wholesale Supply, Inc. (hereafter referred to as F & W). They are also the stockholders of Sunflower Plastic Pipe, Inc. (hereafter referred to as Sunflower). The officers and directors of both corporations are elected from among the stockholders and at least one stockholder holds an office in both corporations. Kenneth Frederick is president of F & W, and Ardith Frederick, who is also known as Melvin A. Frederick, is president of Sunflower.

It is the appellant's contention generally that he was retained because of his unique qualifications as an engineer skilled in the production of plastics; that he rendered services as an engineer to establish a plastic pipe extrusion plant owned by Sunflower Plastic Pipe, Inc. (defendant-appellee); that in addition to the engineering services for which he claims he was to receive his share of the profits, he was to do millwright work for which he was to receive and did receive an hourly rate of pay.

In the year 1967 the appellant and Kenneth Frederick became acquainted as a result of purchases made by the appellant from F & W. Thereafter the appellant and Kenneth discussed the possibility of forming a partnership, but the idea was abandoned when they could not obtain any financial backing.

Later Kenneth learned of a plastic pipe company in Texas in financial trouble, whose equipment might be for sale. The appellant accompanied Kenneth on a trip to view the equipment.

Ardith Frederick also went on the trip for company and companionship because he was Kenneth's brother. The appellant had other business interests, and after the trip to Texas, he returned to his home and businesses in Independence, Missouri.

Shortly after April 18, 1968, the equipment was purchased and the appellant volunteered to bring the equipment from Texas to Wichita and install it for the appellees, the appellant agreeing to do such work for $12.50 per hour. The appellant stated, 'I volunteered by services to help load the equipment in Texas, ship it to Wichita and install it. I rendered a bill for those services at $12,50 per hour and was paid.' When the appellant agreed to install the equipment, there was no condition concerning a prolonged employment thereafter. Kenneth Frederick, with ratification of the other stockholders of Sunflower, which was in the process of being incorporated, hired the appellant for the purpose of installing the equipment. Kenneth Frederick located the building in Wichita to house the Sunflower plant and the appellant described it as ideal.

The appellant made numerous proposals to the appellees that he be hired on a long term basis as a consultant. Numerous meetings were had between the parties and lawyers seeking to reach that end. So far as the appellees were concerned and thing became clear. Any agreement between the appellees and the appellant would have to be in writing-no oral agreements would be acceptable. After a meeting on May 17, 1968, between some of the parties, the appellant caused a draft of a contract to be drawn by his attorneys, which, in the appellant's words, 'I presented to defendant Kenneth for him to present to his brothers for approval. They did not sign it. Kenneth submitted a draft of his own back to me for my approval.' (Emphasis added.)

Ward Lawrence, one of the appellant's attorneys, testified that after the meeting in his office on May 17, 1968, and after the draft had been prepared, the appellant told him that both he (appellant) and the appellees wanted changes made in the draft. The appellant admitted the contractual arrangements 'were to be reduced to writing.' One of the terms in the proposed written agreement, drafted in the office of appellant's counsel, reads:

'The term of this agreement shall commence on the date this instrument is signed, and shall continue for a period of ten years unless terminated sooner as hereinafter provided. . . .'

The negotiations eventually broke down. The appellees rejected the appellant's proposals, and the appellant rejected the appellees' proposals. The appellees did not like the idea that the appellant could terminate the contractual relationship at will, but that the appellees were bound even after the appellant's death. They also were in disagreement as to the term of the contract, whether it should be for a term of five or ten years. The parties were in disagreement as to whether the appellant was to work a certain number of days per month or a number of days per year.

Sunflower was incorporated by charter on the 19th day of June, 1968, and the affidavit of paid-in capital was filed June 26, 1968. Substantial advancements were made by F & W on behalf of Sunflower pending its incorporation, and it is clear the proposed agreement of May 17, 1968, was designed to bind the appellant and Sunflower once it was executed.

Ardith Frederick testified that on or about the 15th day of July, 1968, in flagged down the appellant on a street in the city of Wichita and asked him about the proposals. He said, 'He (appellant) told me his address and said if we wanted him to work for Sunflower, we should sign the contract and mail it to him and he would mail it back to us.'

On the 19th day of July, 1968, Ardith Frederick on behalf of Sunflower sent a telegram to the appellant stating he should not return to Wichita as there was no contract. After the appellant received the telegram, he called Ardith Frederick and was told 'we had no contract and that we never had a contract and he (Ardith) asked me (Short) to pick up my things and leave.'

The appellant admitted at the trial he had no written contract with the appellees, but contended he had an enforceable oral contract with them.

The trial court found the parties intended not to be bound by any enforceable obligations until the contract was reduced to writing and executed. It ruled there was no enforceable contract between the appellant and the appellees. The trial court also found the appellant had not proved entitlement to any remuneration on a quantum meruit theory.

The appellant in his first three points contends the trial court erred: (a) in concluding the contract was not effective until signed by the parties; (b) in finding that plaintiff's evidence failed to prove he had not been paid for his services; and (c) in finding plaintiff had not proved the value of his services.

The trial court found that on May 17, 1968, the appellant and Kenneth Frederick, acting for the group who later became the stockholders of Sunflower, orally...