State ex rel. Studebaker Corporation of America v. Trimble

• Decision Date: 08 December 1922
• Parties: THE STATE ex rel. STUDEBAKER CORPORATION OF AMERICA v. FRANCIS H. TRIMBLE et al., Judges of Kansas City Court of Appeals
• Court: Missouri Supreme Court

247 S.W. 119

295 Mo. 667

THE STATE ex rel. STUDEBAKER CORPORATION OF AMERICA v. FRANCIS H. TRIMBLE et al., Judges of Kansas City Court of Appeals

Supreme Court of Missouri, Second Division

December 8, 1922

Record quashed.

Warner Dean, Langworthy, Thomson & Borders for relator; John F Cotter of counsel.

(1) This court in determining whether the decision of the Court of Appeals is in conflict with the decisions of this court may consider the pleadings and the entire contract referred to in the opinion of the Court of Appeals. State ex rel v. Reynolds, 235 S.W. 88. (2) The Court of Appeals in construing the dealer's contract in question has failed to follow the decisions of this court with reference to the rules for the construction of contracts. The Court of Appeals in its opinion construed the contract in question directly contrary to the plain provisions and terms of the contract, and directly contrary to the plain intent of the parties thereto. In so doing the Court of Appeals ignored and failed to follow the following decisions of this court announcing the correct rules for the construction of contracts: Mecartney v. Trust Co., 274 Mo. 224, 238; Donovan v. Boeck, 217 Mo. 87; Bolt & Nut Co. v. Caldwell, 240 Mo. 365; Arensmeyer v. Insurance Co., 254 Mo. 380; Liggett v. Bank, 233 Mo. 601. The decision of the Court of Appeals is also in direct conflict with the decision of the Circuit Court of Appeals for the Third Circuit construing the very contract in question. Studebaker Corporation of America v. Wilson, 247 F. 403. Under the very terms of the contract in question, and under the rules and decisions announced by this court in reference to the interpretation of contracts, the Court of Appeals should have declared as a matter of law that the Holliday Company was not entitled to recover upon its counterclaim, and that the Studebaker Corporation was entitled to recover as a matter of law upon its petition.

Orestes Mitchell and Groves & Watkins for respondents.

(1) The Court of Appeals properly affirmed the action of the lower court in overruling plaintiff's demurrer to the counterclaim of Holliday Motor Car Company, where the "transaction" originated in a contract. The defendant may recover for breach of the contract by way of counterclaim, although plaintiff's action be in tort. Ritchie v. Hayward, 71 Mo. 560; McCormick Harvesting Machine Co. v. Hill, 104 Mo.App. 544, 551; Ruth v. McPherson, 150 Mo.App. 694, 704; Collins v. Leather Co., 196 Mo.App. 611. The counterclaim of the Holliday Motor Car Company is based on the same contract and arises out of the same transaction upon which the relator relied as a basis for its action (2) The court properly allowed the Holliday Motor Car Company to recover on its counterclaim, not only the money it had up with the Studebaker Corporation on deposit account, but also discounts earned on cars delivered on the contract, and discounts on cars to which it was entitled under the contract and which it was fraudulently deprived of. Laswell v. Handle Co., 147 Mo.App. 497. (3) The courts of Missouri, in construing contracts, give such a construction as will be reasonable and fair between the parties and will not give one an unfair advantage over another. Relator asks the court to assist it in the perpetration of a fraud and to give it an unfair advantage. Mecartney v. Trust Co., 274 Mo. 238. Respondents contend it is immaterial what construction be placed upon the dealer's contract. In addition to a counterclaim for money on deposit with the relator, and in addition to a parts account, which the relator owed the Holliday Motor Car Company, the Holliday Motor Car Company based another item of its counterclaim on actual fraud of the relator, who had taken orders for cars, which in fact, were fraudulently withheld from the Holliday Motor Car Company, and turned over to the Robidoux Motor Company, which was organized by J. W. Holliday, who was general agent of the relator at the time. While the counterclaim arose out of the same transaction, yet it was not based upon any interpretation of the contract. It was based upon the actual fraud perpetrated on the Holliday Motor Car Company by the relator and its general agent, J. W. Holliday. It is elementary that "collusions of any wrongful sort between A and B to impair the rights of C makes another case of fraud in the way of circumvention." The counterclaim was based upon actual fraud and collusion to the injury of the Holliday Motor Car Company. Substantial evidence was offered in support of the fraudulent misconduct of the relator. The court will not assist one in perpetrating a fraud or allow him the benefit of his fraudulent acts. 27 Corpus Juris, p. 7; Denny v. Kile, 16 Mo. 450; Day v. Graham, 97 Mo. 398; Sedalia Board of Trade v. Brady, 78 Mo.App. 585; Young v. Gans, 134 Mo.App. 166; Haggerty v. Ia. Mfg. Co., 143 Mo. 238; Whitmore v. Supreme Lodge, 100 Mo. 36; Knight v. Linzey, 80 Mich. 396, 8 L. R. A. 476. (4) The only matters to be passed upon by the Supreme Court on certiorari, are matters of record proper. State ex rel. Armour Packing Co. v. Stephens, 146 Mo. 662; State ex rel. Summerson v. Goodrick, 257 Mo. 40. (5) It will not consider any evidence admitted in the action even though included in the return to the writ. Ward v. Board of Equalization, 135 Mo. 309; State ex rel. Brema v. Walbridge, 62 Mo.App. 162.

OPINION

Certiorari.

HIGBEE P. J.

Certiorari to quash the judgment of the Kansas City Court of Appeals, in the case of Studebaker Corporation, appellant, against the Holliday Motor Car Company. The opinion states the facts, issues and rulings thereon, as follows:

"This is a suit in conversion. The action was instituted by plaintiff (the Studebaker Corporation) April 15, 1916, in the Circuit Court of Buchanan County, against defendant, Holliday Motor Car Company, a corporation, and Henry Wyatt personally, to recover the value of three automobiles alleged to have been converted by defendants, of the value of $ 2372.06, for which a check was given by defendant Holliday Motor Car Company, and upon which payment was stopped.

"Defendant Wyatt filed a separate answer in the nature of a general denial. The Holliday Motor Car Company filed a separate answer in the nature of a general denial and a counterclaim, praying for the cancellation of its said check held by the plaintiff and for judgment in the sum of $ 931.76. At the close of the case a demurrer was sustained as to defendant Wyatt. Verdict and judgment were in favor of defendant Holliday Motor Car Company, and against the plaintiff, and a further finding in favor of defendant and against plaintiff upon its counterclaim in the sum of $ 900.

"On February 29, 1916, defendant Motor Car Company purchased three Studebaker motor cars of plaintiff for $ 2369.31, which said cars were delivered to the defendant company and in payment therefor a check was issued, signed Holliday Motor Car Company, by Henry Wyatt, president, and upon which payment afterwards was stopped. Thereafter plaintiff, through its agent, J. W. Holliday, demanded that defendants return said automobiles, which demand was refused. The petition alleges that defendant wrongfully converted said cars to their own use.

"Defendant Holliday Motor Car Company, in its answer and counterclaim, alleged that defendant controlled the agency for the Studebaker automobiles and parts manufactured by plaintiff, and that this agency was exclusive in certain territory named, and for which said agency defendant held a contract; that by the terms of said contract plaintiff was to deliver all automobiles and parts thereof which defendant should order, and that defendant hired salesmen, mechanics, etc., and incurred other great expense to operate the business of selling plaintiff's cars, etc., and said contract between plaintiff and defendant became effective July 1, 1915, and continued in force until cancelled by plaintiff by letter from its main office at Detroit, dated March 9, 1916. Defendant further stated that it gave its check for $ 2369.31, in payment of the three cars in question, but that after execution and delivery of the check it learned that plaintiff intended to cancel the contract with said defendant, and the payment of the check was stopped.

"The answer and counterclaim further alleged that defendant demanded of plaintiff that it fulfill its contract in regard to delivering the cars already ordered, which plaintiff refused to do; that although defendant had given plaintiff its check for $ 2369.31, no such sum was due plaintiff, because defendant had a large cash deposit with plaintiff, and because additional commissions due defendant had not been paid by plaintiff to defendant; that defendant had ordered certain automobiles from plaintiff to fill orders already taken, and had tendered cash for same, and that said tender was refused. The prayer of the answer and counterclaim was for judgment for $ 931.75 and interest, and for an order cancelling the check for $ 2369.31.

"Plaintiff duly demurred to the separate answer and counterclaim, and also filed a motion to strike out certain parts of said answer and counterclaim, both of which motions were by the court overruled.

"During the progress of the trial defendant Holliday Motor Car Company, by permission of the court, amended its said answer and counterclaim by interlienation, as follows: 'That the plaintiff fraudulently refused to deliver said cars and fraudulently cancelled said contract at the time it did for the sole purpose of preventing this defendant from receiving the discounts provided in said contract for the purchase of seventy or more cars by defendant under said contract and before its cancellation.' This amendment was permitted by the court over the...