Thomas v. Thomas Truck & Caster Co., No. 2--56622

CourtUnited States State Supreme Court of Iowa
Writing for the CourtHeard by MOORE; REYNOLDSON
Citation228 N.W.2d 52
Docket NumberNo. 2--56622
Decision Date16 April 1975
PartiesJ. Faulkner THOMAS, Appellee, v. THOMAS TRUCK AND CASTER COMPANY, Appellant.

Page 52

228 N.W.2d 52
J. Faulkner THOMAS, Appellee,
v.
THOMAS TRUCK AND CASTER COMPANY, Appellant.
No. 2--56622.
Supreme Court of Iowa.
April 16, 1975.

Page 53

Bell & Hansen, New London, for appellant.

Deitchler, Thomas, Lawse & Saunders, Fort Madison, for appellee.

Heard by MOORE, C.J., and MASON, LeGRAND, REYNOLDSON and HARRIS, JJ.

REYNOLDSON, Justice.

The sole issue in this case is whether the plaintiff, J. Faulkner Thomas, breached an agreement made with defendant Company and resultantly forfeited a contractual right to lifetime payments of $20,000 per year and related life insurance benefits. Trial court held there was no breach. We agree.

The facts before us are uncontroverted. Thomas, 76 years old at trial, founded the Company in 1937. In 1955 he sustained a heart attack and was thereafter only semi-active in the business. His son Walter became the managing officer. In 1963 Thomas had a stroke.

July 15, 1968, Walter, acting as his father's agent, contracted to sell the latter's majority stock interest for a large sum of money to John F. Raney. In this instrument, Walter obtained a two-year option to purchase 100 percent of the stock of Buffalo Caster and Wheel Company, a wholly-owned subsidiary.

Page 54

The sales agreement provided 'in further consideration of the transfer' Thomas would be retained on the payroll,

'* * * at a consideration to be paid sufficient to assure the continued participation of Mr. J. Faulkner Thomas in and to certain life insurance policies * * * which said policies require the employment of the said J. Faulkner Thomas as a prerequisite coverage afforded under the policies, in a yearly compensation determined under the terms of the * * * contracts * * *.'

This agreement was '(s)ubject to the preparation and execution of a more detailed and formal agreement' and to 'the preparation of necessary collateral documents.'

There followed on October 28, 1968, a written 'agreement' between the Company and Thomas. Thomas agreed 'to act as advisor and consultant' to the Company for so long as he lived, and as chairman of the board of directors for so long as the Company desired. Thomas further agreed 'not to engage as consultant or otherwise to any competitor' of the Company. In consideration of the foregoing promises, the Company agreed to pay Thomas $20,000 per year for so long as he lived. This was apparently the amount required to keep in force $37,500 in coverage for Thomas under certain executive group life policies.

Pursuant to the July 15, 1968 sales agreement, Walter, the son, was retained by the Company as vice president and general manager. At some subsequent time his services were terminated. May 1, 1969 Walter exercised his option to acquire Buffalo Caster and Wheel Company, which was thereafter in direct competition with defendant Company until Buffalo went out of business in April 1972. Walter was at all times subsequent to May 1, 1969, president and principal stockholder of Buffalo.

From May 1, 1969 through April 1972, Thomas co-signed one $90,000 promissory note with Walter and made gifts and loans to him totaling $54,683.65. Thomas paid $30,000 on the $90,000 note and as surety stands liable for a $20,000 balance due on that indebtedness. Of the money advanced to his son Walter by Thomas, $30,500 was in the form of loans and the balance was a gift. Walter used most of the money so advanced in the business of Buffalo, as Thomas knew.

Thomas suffered from poor health. He was called upon only three or four times to advise or consult the Company. His testimony he had at all times held himself available for consultation was not disputed. There was no evidence he advised or consulted Buffalo or any of its officers.

The Company terminated its $1666 monthly payments to Thomas January 31, 1972. February 9, 1972 the Company sent Thomas written notice it would not make future payments, charging he had breached their agreement. Thomas filed suit for specific performance of the contract and later amended to ask for damages. Jury was waived. The cause was tried in equity.

Trial court awarded Thomas damages of $31,062.53 (unpaid installments with five percent interest) and specific performance of the contract, including maintenance of the insurance policies.

I. This matter was tried below in equity and our review is therefore De novo. Buda v. Fulton, 261 Iowa 981, 985, 157 N.W.2d 336, 338 (1968). In any event, the facts are conceded and we are confronted with the construction of a contract, a matter of law for the court. C & J Fertilizer, Inc. v. Allied Mutual Insurance Company, 227 N.W.2d 169 (Iowa 1975); Farmers Insurance Group...

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12 practice notes
  • Aiken Industries, Inc. v. Estate of Wilson
    • United States
    • United States State Supreme Court of Pennsylvania
    • 11 Abril 1978
    ...seller's activity did not attract customers of the business sold to the son-in-law's business. In Thomas v. Thomas Truck and Caster Co., 228 N.W.2d 52 (Iowa 1975), the court held that an agreement "not to engage as consultant or otherwise to any competitor" was not violated when t......
  • Pitts v. Ashcraft, No. 1444
    • United States
    • Court of Appeals of Texas. Court of Civil Appeals of Texas
    • 30 Agosto 1979
    ...dism'd). See: e. g., Buckingham Tool Corp. v. Evans, 35 Mich.App. 74, 192 N.W.2d 362 (1971); Thomas v. Thomas Truck & Caster Co., 228 N.W.2d 52 (Iowa 1975); Slate Co. v. Bikash, 343 Mass. 172, 177 N.E.2d 780 (1961); Adams v. Adams, 156 Neb. 778, 58 N.W.2d 172 (1953); Annot., Rendering F......
  • Evergreen Crane Services, Inc. v. Ford, No. 59611-0-I (Wash. App. 4/28/2008), No. 59611-0-I.
    • United States
    • Court of Appeals of Washington
    • 28 Abril 2008
    ...683, 245 P. 10 (1926). See also Pitts v. Ashcraft, 586 S.W.2d 685, 692 (Tex. Civ. App. 1979); Thomas v. Thomas Truck & Caster Co., 228 N.W.2d 52 (Iowa 1975); Buckingham Tool Corp. v. Evans, 35 Mich. App. 74, 192 N.W.2d 362 (1971); Slate Co. v. Bikash, 343 Mass. 172, 177 N.E.2d 780 6. 51......
  • Evergreen Crane Services, Inc. v. Ford, 59611-0-I
    • United States
    • Court of Appeals of Washington
    • 28 Abril 2008
    ...683, 245 P. 10 (1926). See also Pitts v. Ashcraft, 586 S.W.2d 685, 692 (Tex. Civ. App. 1979); Thomas v. Thomas Truck & Caster Co., 228 N.W.2d 52 (Iowa 1975); Buckingham Tool Corp. v. Evans, 35 Mich.App. 74, 192 N.W.2d 362 (1971); Slate Co. v. Bikash, 343 Mass. 172, 177 N.E.2d 780 (1961)......
  • Request a trial to view additional results
12 cases
  • Aiken Industries, Inc. v. Estate of Wilson
    • United States
    • United States State Supreme Court of Pennsylvania
    • 11 Abril 1978
    ...seller's activity did not attract customers of the business sold to the son-in-law's business. In Thomas v. Thomas Truck and Caster Co., 228 N.W.2d 52 (Iowa 1975), the court held that an agreement "not to engage as consultant or otherwise to any competitor" was not violated when t......
  • Pitts v. Ashcraft, No. 1444
    • United States
    • Court of Appeals of Texas. Court of Civil Appeals of Texas
    • 30 Agosto 1979
    ...dism'd). See: e. g., Buckingham Tool Corp. v. Evans, 35 Mich.App. 74, 192 N.W.2d 362 (1971); Thomas v. Thomas Truck & Caster Co., 228 N.W.2d 52 (Iowa 1975); Slate Co. v. Bikash, 343 Mass. 172, 177 N.E.2d 780 (1961); Adams v. Adams, 156 Neb. 778, 58 N.W.2d 172 (1953); Annot., Rendering F......
  • Evergreen Crane Services, Inc. v. Ford, No. 59611-0-I (Wash. App. 4/28/2008), No. 59611-0-I.
    • United States
    • Court of Appeals of Washington
    • 28 Abril 2008
    ...683, 245 P. 10 (1926). See also Pitts v. Ashcraft, 586 S.W.2d 685, 692 (Tex. Civ. App. 1979); Thomas v. Thomas Truck & Caster Co., 228 N.W.2d 52 (Iowa 1975); Buckingham Tool Corp. v. Evans, 35 Mich. App. 74, 192 N.W.2d 362 (1971); Slate Co. v. Bikash, 343 Mass. 172, 177 N.E.2d 780 6. 51......
  • Evergreen Crane Services, Inc. v. Ford, 59611-0-I
    • United States
    • Court of Appeals of Washington
    • 28 Abril 2008
    ...683, 245 P. 10 (1926). See also Pitts v. Ashcraft, 586 S.W.2d 685, 692 (Tex. Civ. App. 1979); Thomas v. Thomas Truck & Caster Co., 228 N.W.2d 52 (Iowa 1975); Buckingham Tool Corp. v. Evans, 35 Mich.App. 74, 192 N.W.2d 362 (1971); Slate Co. v. Bikash, 343 Mass. 172, 177 N.E.2d 780 (1961)......
  • Request a trial to view additional results

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