McKeown v. John Nooter Boiler Works Co.

Full title: McKEOWN v. JOHN NOOTER BOILER WORKS CO

Court: St. Louis Court of Appeals, Missouri

Date published: Feb 20, 1951

237 S.W.2d 217 (Mo. Ct. App. 1951)

Opinion

No. 28048.

February 20, 1951.

APPEAL FROM THE ST. LOUIS CIRCUIT COURT, WILLIAM B. FLYNN, J.

Lewis, Rice, Tucker, Allen Chubb, R. Walston Chubb and Lyle M. Allen, Jr., all of St. Louis, for appellant.

Leahy Leahy, John S. Leahy and Joseph L. Badaracco, all of St. Louis, for respondent.

McCULLEN, Judge.

This suit was brought by James A. McKeown, a dealer in machinery, as plaintiff to recover from John Nooter Boiler Works Company as defendant, a commission of 7 1/2% on the sale of a twenty ton traveling electric crane which defendant purchased for the sum of $18,000.00. The petition was originally in two counts. The first count was based on an alleged oral contract for said commission. The second count was in quantum meruit. At the trial before the court, a jury having been waived, at the close of plaintiff's evidence, defendant moved the court to require plaintiff to elect between the express contract count and the quantum meruit count in his petition. Defendant's motion was sustained and plaintiff elected to proceed on the count based upon an express contract. On March 7, 1950, the court found the issues in favor of plaintiff and against defendant and entered judgment for plaintiff in the sum of $1350.00 with interest at 6% from July 26. 1947, amounting to $211.45, making a total of $1561.45. In due time defendant filed a motion for a new trial including therein a motion in the alternative to enter judgment in favor of defendant. These motions were overruled by the court and defendant duly appealed.

It appears from the evidence that plaintiff McKeown was engaged in the buying and selling of machinery under the name "John O'Brien Boiler Works Company"; that plaintiff was the former president of said boiler works company which had surrendered its corporate charter but had procured a license from the State of Missouri to do business under the name of John O'Brien Boiler Works Company and was engaged in buying and selling machinery of various kinds; that in 1947 defendant advertised in a trade paper that it desired to buy overhead traveling cranes of certain types; that plaintiff saw said advertisement and through his employee, a Mr. Miller, sent a letter dated April 21, 1947, to the defendant company enclosing clippings from the list of cranes which plaintiff had seen advertised for sale and asking if defendant was interested in any of them; that in said letter plaintiff stated: "We received the enclosed list of cranes from an eastern dealer with whom we have done business in the past. If you are interested in any of the numbers offered and will so indicate, we will put them in touch with you." Said letter was introduced in evidence as defendant's exhibit 1.

Plaintiff testified that the list of cranes enclosed with said letter had been cut from a list sent out by Economy Company, Inc., and the dealer referred to in plaintiff's letter of April 21, 1947, was that company. It appears that after Mr. Tracy, defendant's secretary-treasurer, received plaintiff's letter of April 21, 1947, he had a telephone conversation with plaintiff's employee, Mr. Miller, who told Tracy that if he would write a letter stating which cranes he was interested in, he would put defendant in touch with the concern advertising them. On April 22, 1947, Tracy on behalf of defendant wrote Mr. Miller stating that defendant was interested, particularly in a sixty foot, twenty ton crane (which defendant later purchased) and requested that plaintiff have the dealer get in touch with defendant. Plaintiff testified that when he wrote to defendant on April 21, 1947, he did not know whether or not Economy Company, Inc, owned the cranes listed in its advertisement or whether that company had authority to represent the owner if that company itself did not own the cranes.

The evidence shows that about a week after receiving Tracy's letter of April 22, 1947, plaintiff told Tracy that the sixty foot, twenty ton crane in which defendant was interested was located in Columbus, Ohio, and that a man named Marcus in that city representing Economy Company, Inc., could show the crane to defendant's representatives. In May 1947, Tracy went to Columbus, Ohio, and inspected the crane. Plaintiff testified that in discussing with Tracy the matter of defendant purchasing the electric crane Tracy said to plaintiff that he, Tracy, knew it was customary for a commission to be paid and asked plaintiff what commission plaintiff expected. Plaintiff further testified:

"I told him that 10% commission was customary on used equipment, but in this particular instance we were willing to take 7-1/2%, and that 7-1/2% was offered to us by the owner, but if the crane was not bought through them that we would look to him for the payment, so he said it was satisfactory and he wanted to know where the crane was.

"We gave him the name of the party in Columbus, Ohio, who had the crane in charge who, incidentally, at that time was only the representative; not the owner. And he wanted to go there to see if he could not get a better price. I told him it was entirely legitimate to try and get a better price and to go there and I gave him the address, the telephone number of where he could reach the party if he was not at the flying field, that he could meet him. I also advised him if he had any trouble connecting with this Marcus, and I gave him the telephone number of the Company in New York who was offering the crane for sale, and I told him he could call them, and he did catch up with this Marcus who had the crane for sale for the owner. He was successful apparently in reducing the price to $18,000.00."

After Tracy returned from Columbus, Ohio, he informed plaintiff that he was negotiating to buy and had made an offer on the electric crane. Plaintiff testified in this connection, referring to Mr. Tracy:

"A. And he asked me at that time, on his return, again, `How much commission did you say you were to get?' That was the first question he asked me. I told him he knew very plainly that 7-1/2% was what I was supposed to get and he said, `Well, I got Marcus to put up $250.00 and I will put up $250.00 to match it.' I said, `You will do nothing of the kind.'

"Q. To match it for what purpose? A. To match Marcus.

"Q. To pay you the commission? A. To pay me the commission, and I said `You will do nothing of the kind. I was to get 7-1/2%' * * * I said to him, `You saved $4,200.00 for reason of the information that I gave you and that should be sufficient.' He then offered a raise of another $250.00."

Plaintiff further stated at the trial that he was uncertain at the time he discussed these matters with Tracy by telephone as to the identity of the person who owned the electric crane but was certain as to the person who had charge of the sale of the crane and the location thereof. On cross examination plaintiff was asked whether he had any understanding with the eastern company which had advertised the electric crane for sale as to whether that company was going to protect him for a commission and he answered: "They would protect me if the crane was purchased through them."

Plaintiff testified on cross examination that on April 24, 1947, he wrote a letter signed "John O'Brien Boiler Works Co." to Economy Company, Inc., in which he requested protection for "the regular Machinery Dealers commission of 10% through our subsidiary, Farrell Machinery Co. now operating out of this office"; that he received a telegram from Economy Company, Inc., dated April 29, 1947, as follows: "Re Phone Will protect you for 7-1/2% commission on the sale of crane located at Columbus Ohio to John Nooter Boiler Works St. Louis Missouri Economy Co."

The evidence shows that on April 29, 1947, Tracy, on behalf of defendant, wrote Mr. Marcus at Columbus, Ohio, asking details as to when and where the twenty ton overhead traveling crane could be seen and inspected. Mr. Marcus answered Tracy's letter on May 2, 1947, stating that the crane was located in Columbus, Ohio, and that he would be glad to show it to Tracy. Tracy then went to Columbus, Ohio, and inspected the crane on May 6, 1947, and after his return Tracy told plaintiff that he had offered Marcus $18,000 for the crane and later told plaintiff that he had purchased the crane on May 19, 1947.

On cross examination plaintiff testified that after Tracy's return from Columbus, Ohio, plaintiff wrote to Economy Company, Inc., a letter in which plaintiff said: "It is unfortunate that you failed to have your representative present when Nooter's men were there and we were wondering where we will come in for our commission if Marcus makes the sale direct, as he will certainly not care to protect either you or ourselves if he should sell to Nooter." Plaintiff further stated in said letter: "Have you a sales agreement with Marcus to make the sale if so it would be advisable to contact him as he apparently tried to sell to Nooter direct, stating that he had never talked to you about the crane and he was surprised to know that you were offering it for sale."

On cross examination plaintiff further testified that he did not go to Columbus, Ohio, to see the crane in question and did not take part in the negotiations for its purchase except through correspondence and had nothing to do with the shipment of the crane or the collection of the purchase price.

On July 26, 1947, plaintiff wrote defendant a lengthy letter, plaintiff's exhibit B, setting forth the various steps he had taken and the work he had done to put defendant in position to make the purchase of the twenty ton crane in question and reminded defendant of the various conversations between plaintiff and defendant's representatives to aid defendant in accomplishing its purpose to purchase the crane in question. In said letter plaintiff asked defendant the following question: "When may we expect your check for our commission on the 20-ton crane, which at your request we located and made possible for your to purchase?" In that letter plaintiff reminded defendant that he, plaintiff, had agreed that defendant might legitimately negotiate for a price lower than the quoted price of $22,200.00 for the twenty ton crane but stated that he, plaintiff, did not expect defendant "to question the amount of our commission. You were fully informed and understood the percentage we were to receive which was not to be changed after you were able to purchase the crane on information furnished by us and without which you could not have consummated the deal. As you purchased the crane for $18,000.00 our commission at 7-1/2% is $1350.00. Please send us your check." The letter was signed by plaintiff James A. McKeown.

The testimony shows without dispute that plaintiff was never paid anything by defendant in connection with defendant's purchase of the electric crane and that defendant never paid Economy Company, Inc., anything in connection with the transaction. The evidence shows that on May 23, 1947, defendant received a letter from Economy Company, Inc., stating that it had come to that company's attention that defendant had purchased the crane direct without considering that Economy Company, Inc., had participated as brokers in the transaction. In that letter Economy Company, Inc., stated: "It was due to our efforts that you were able to inspect and purchase the crane in question, and were it not for the fact that we made the necessary arrangements for you to inspect the crane located in Columbus, Ohio, you would not have been in a position to execute said purchase."

Mr. Simon C. Tracy, secretary-treasurer of the defendant company, in his testimony admitted that his company had advertised that it desired to buy an electric crane; that he received a letter from plaintiff containing a list of machinery that was for sale and that the list contained descriptions of various traveling cranes. Tracy further admitted that he had a conversation with plaintiff and received from plaintiff the name of Toddy Marcus of Columbus, Ohio, as the person for him to contact for the purpose of negotiating for the purchase by defendant of such electric crane; that after receiving this information from plaintiff he, Tracy, made a visit to Columbus, Ohio, where he met Mr. Marcus and purchased the electric traveling crane from Marcus at a price which was $4200.00 less than the price at which it had been advertised.

Mr. Tracy testified that there never was any agreement on the part of defendant to pay a commission to plaintiff; that on the contrary, in his conversations with plaintiff nothing was ever said about any commissions to be paid by defendant or about plaintiff looking to defendant for commissions if Economy Company, Inc., did not pay the commission to plaintiff; that after his return from Columbus but before defendant had actually purchased the electric crane in question he had a conversation with plaintiff on the telephone in which there was some mention of commission but that plaintiff never told Tracy until after his offer for the crane had been accepted that he, plaintiff, expected any commission from defendant; that after plaintiff had stated he was entitled to be paid a commission of 7 1/2% by defendant he told plaintiff that he had got Marcus to put up $250.00 which defendant would match with a like sum and pay it to plaintiff as a donation to him for the part he had played in bringing Marcus and defendant together to consummate mate defendant's purchase of the crane; that plaintiff refused to accept the $500.00 in settlement of his claim; that he, Tracy, then offered on behalf of defendant company to add another $250.00, making the total sum offered to plaintiff $750.00 which plaintiff also refused.

In explaining these offers made to plaintiff Tracy testified that he had learned from Marcus that Marcus did not recognize either plaintiff or Economy Company, Inc., in connection with the sale of the electric crane but that he had induced Marcus to allow $250.00 off the purchase price of the crane to be offered to plaintiff because Tracy felt that plaintiff had performed a service for Marcus and was entitled to it. Tracy further testified that he did not believe plaintiff was entitled to anything except what Marcus had donated, coupled with what defendant had been induced to donate, "not as commission but as a donation," in order to "settle the thing." Mr. Tracy further explained that defendant was offering to pay plaintiff for what he did "to get out of a nuisance proposition" and that at that time defendant knew that Economy Company, Inc., was not going to pay plaintiff any commission because that company was "not in the deal."

It further appears from Mr. Tracy's testimony that the offer of $750.00 to plaintiff was to be conditioned upon plaintiff's holding the defendant company harmless from any entanglements with Economy Company, Inc.

Defendant offered in evidence a duplicate copy of the actual purchase order for the electric crane sent by defendant to Marcus (defendant's exhibit 6) which contained the arrangement between Marcus and defendant for contributions to the offer of settlement to be made to plaintiff but the court sustained plaintiff's objection to the offer on the ground that the proffered exhibit constituted hearsay as to plaintiff.

C. L. McDonald testified on behalf of defendant that he had been a machinery dealer in St. Louis for about sixty years and had frequently acted as broker or commission man in buying and selling machinery and that the custom in that trade, in the absence of an express contract as to payment of commissions, was that the commission was "definitely" paid by the seller.

Defendant contends that the great weight of the evidence, including plaintiff's written admissions, shows that there was no agreement between plaintiff and defendant for the payment of commissions to plaintiff nor any promise by defendant to pay commissions; that plaintiff having failed to establish any contract cannot recover and the judgment for him is clearly erroneous. It is argued by defendant that under Section 114(d) of the Civil Code of Missouri, Laws Mo. 1943, page 388, Mo.R.S.A. Section 847.114(d), R.S. 1949, 510.310, subd. 4 and a number of cases cited by defendant, the findings of the trial court are not binding upon the appellate court and the judgment in favor of plaintiff should be reversed.

It is true, as defendant contends, that under Section 114(d), supra, it is the duty of an appellate court in a law case tried by the court without a jury to "review the case upon both the law and the evidence as in suits of an equitable nature." However, it is also true that the same statute, supra, provides that: "The judgment 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." (Emphasis ours.)

In this case there is a strong direct conflict between the testimony on behalf of plaintiff and that on behalf of the defendant as to just what did happen and what was said by and between Tracy and plaintiff in relation to defendant's purchase of the electric crane in question. Therefore, this case must be determined largely on the basis of the credibility of Tracy and plaintiff as witnesses. Reduced to its simplest terms, plaintiff's positive testimony shows that he had an oral agreement with defendant whereby defendant would pay plaintiff a commission of 7 1/2% of the sale price of the electric crane in question if the sale thereof was not consummated through the Economy Company, Inc.; that if the sale went through said Economy Company, plaintiff would be protected by that company for his commission; that the sale did not go through the Economy Company but went direct from the owner of the crane to defendant and, therefore, Economy Company, Inc., was under no obligation to pay plaintiff a commission; that defendant is liable to plaintiff for said commission on defendant's own direct agreement with plaintiff.

On the other hand, although defendant admits that it was put in touch with the seller of the crane by plaintiff and that it reported to plaintiff the outcome of Tracy's efforts to buy the crane; admits that it accepted and acted on the information it received from plaintiff and received the full benefit thereof, it nevertheless denies through Tracy that there was any agreement on its part to pay plaintiff anything. Furthermore, although it denied that it owed plaintiff anything, defendant admitted that it offered to pay plaintiff first $500.00 and later $750.00 as a "donation" for his information and services. It is very unusual and almost wholly incredible that a business executive would offer to make a "donation" of his company's funds to a claimant who had no basis for a claim against such company. An individual acting in a mood of generosity might make such offers of his own funds to get rid of a claim against him personally even though it be unfounded but in this case Tracy was acting in a position of high trust for the defendant company and would not be likely to offer the defendant company's money to plaintiff unless he believed at that time defendant was indebted to plaintiff. Judged by Tracy's testimony on cross examination, which we shall refer to later herein, it seems reasonable to believe that in the lapse of time between the conversations mentioned and the trial some three years later, Tracy simply failed to remember the details of such conversations.

Of course, the written communications that passed between plaintiff and defendant and the Economy Company, Inc., must all be taken into consideration in our attempt to arrive at a just conclusion. Nevertheless, because we are dealing with an alleged oral agreement herein, the conversations between plaintiff and Tracy constitute the important and vital factors in solving the problem before us. In weighing the testimony of Tracy as against that of plaintiff which we are required to do in this case in order to determine the probability or improbability of the truth of what each testified to, we find that plaintiff twice promptly refused Tracy's offers of less than $1350.00, the amount of the commission plaintiff claimed on the basis of 7 1/2% of the sale price of the crane. It must also be remembered that these offers by defendant and prompt refusals by plaintiff are not disputed.

Furthermore, plaintiff's testimony as to the conversations he had with Tracy wherein plaintiff said Tracy agreed to pay the 7 1/2% commission was positive and clear. On the other hand Tracy's testimony on this point was far from positive and clear. When Tracy was asked on cross examination: "But prior to the time that the purchase was made and you had paid for the crane McKeown never told you that he expected you to remunerate him in any way; is that correct?" Tracy answered: "McKeown talked with me about commissions, but I don't remember — my recollection of the fact is that Nooter was never mentioned as paying any commission." When Tracy was asked on cross examination if, as he claimed, he had never agreed to pay plaintiff a commission why he collected from Toddy Marcus $250.00 to pay a plaintiff, he answered: "A. Because I thought McKeown performed a service for Marcus and he was entitled to it." On further cross examination Tracy testified:

"Q. Now, then, at the time you were talking to Marcus you were fixed in the belief by reason of what McKeown said that he, McKeown, would receive a commission from the Company named Economy of 7-1/2%; is that correct? A. Apparently I have got my dates mixed.

* * * * * *

"Q. I don't quite understand what you mean by that answer. Will you please explain it? A. Certainly. Three years have elapsed since this went into effect.

"Q. Yes. A. It is pretty hard to revive your memory to the exact dates."

Making proper allowance for the opportunity of the trial court to judge of the credibility of the witnesses as we are required to do under the statute, Section 114(d), supra, as well as upon our own reading of the entire record, we are of the opinion that the trial court did not err in finding that there was an oral agreement between plaintiff and defendant whereby defendant was obligated to pay to plaintiff a 7 1/2% commission of the sale price of the crane in question.

Defendant contends that even if the court should find that defendant promised to pay plaintiff a commission in the event no commission was paid plaintiff by Economy Company, Inc., such a promise was within the statute of frauds as one to answer for the debt, default or miscarriage of another and hence was unenforceable because it was not in writing. In the first place, plaintiff did not allege or testify that defendant promised to pay him a commission if Economy Company didn't. Plaintiff's allegations and his evidence were clearly to the effect that if the sale of the crane went through Economy Company, Inc, that company would protect plaintiff on his commission but if the sale did not go through said Economy Company, defendant would pay plaintiff a 7 1/2% commission of the sale price. Since it is not disputed that the sale did not go through the Economy Company, it follows that there has never been a debt owing to plaintiff by the Economy Company, and plaintiff is not seeking to hold defendant for any default or miscarriage of said company or for the debt, default etc., of any person or company except defendant itself. Defendant is being held liable solely under its own separate independent direct agreement with plaintiff.

If Economy Company, Inc., had made the sale of the crane after agreeing to pay plaintiff a commission and failed to pay plaintiff, and plaintiff then sought to hold defendant for the Economy Company's debt, we would have a case to which the statute of frauds would be applicable because the agreement of defendant to pay plaintiff said company's debt, not being in writing, would not be enforceable. However, we have no such situation in this case. It is, therefore, unnecessary to analyze the cases cited by defendant on this point since they are not applicable to the facts shown in this record.

Defendant contends that the trial court committed prejudicial error in admitting over its objections evidence of offers of compromise and settlement made by defendant to plaintiff. The record shows that the court admitted testimony concerning such offers as admissions against interest. It is true, as contended by defendant, that a bare offer to compromise a disputed claim does not constitute an admission on the part of the person making it and is not admissible in evidence against him because of the general rule based upon the sound principle of public policy which favors the settlement of disputed claims out of court. 20 American Jurisprudence, Evidence, Section 565, page 477. However, that general rule is subject to many qualifications, one of which is that "If a statement forming a part of an offer of compromise or made in the course of negotiations to effect a settlement is an admission of an independent fact pertinent to an issue between the parties, it is admissible on the trial of such issue * * *." 20 American Jurisprudence, Evidence, Section 566, page 478.

We are of the opinion that the so-called offers of compromise constituted admissions against interest under the evidence in the case. For example Tracy in his deposition which was introduced in evidence by plaintiff testified: "Q. How did it happen that Toddy Marcus gave you $250.00? A. Because I stated the case to Marcus and I told him McKeown ought to get something out of it, so he allowed $250.00; in other words, he allowed the $250.00 off the purchase of the crane. The crane was $18,000.00, and we paid him $17,750.00. We are retaining $250.00 for McKeown right now."

Tracy testified at the trial: "When I bought the machine from Marcus I mentioned about McKeown, about Economy, and he said he didn't recognize either one of them, and I told him I thought McKeown was entitled to something for his work. He allowed $250.00 and I didn't think it was enough, so we allowed some more, not as commission but as a donation, you might call it."

It will be observed from the testimony of Tracy that he specifically admitted that plaintiff was entitled to payment for his services. These statements by Tracy as to what he said to Marcus about McKeown being entitled to payment for his services although connected with offers by Tracy to plaintiff of an arbitrary amount less than the $1350.00 plaintiff was claiming, were none the less direct admissions against interest and, therefore, admissible, even though they were coupled with efforts at a so-called compromise of plaintiff's claim.

Under the evidence viewed from plaintiff's standpoint defendant owed plaintiff exactly $1350.00, no more and no less. Viewed from defendant's standpoint it owed plaintiff absolutely nothing. If plaintiff were claiming an amount that could be viewed as variable and defendant, for the purpose of settling the claim, made an offer to pay a sum less than the amount claimed by plaintiff and such offer was not connected with admissions against interest, that would be a real compromise offer and evidence thereof would not be admissible because the law favors such compromise settlements and will not permit a party to be placed at a disadvantage at the trial because of bare offers to settle the controversy. We do not have such a situation in the case at bar. Defendant's offers were simply an attempt on its part to pay less for the benefits it received from plaintiff's information and services than plaintiff demanded as compensation therefor under what plaintiff claimed was defendant's specific oral agreement. Such offers were admissible because they were coupled with admissions against interest as we have shown. See Vigeant v. Fidelity Nat. Bank Trust Co., 239 Mo.App. 46, 188 S.W.2d 533.

Furthermore, the objections of defendant to the testimony of which it complains were blanket objections, and even if it be conceded that some parts of it might have been objectionable, we cannot now rule that all of it was inadmissible because defendant made no request to the court to separate the admissible from the inadmissible nor did defendant ask for an instruction limiting such testimony to the admissions against interest contained therein. For all of the foregoing reasons, we rule that the court did not err in permitting plaintiff to introduce the testimony in question. See Wright v. Gillespie Co., 43 Mo.App. 244, 250, 251, 252.

Defendant further contends that even if the offers of settlement made by it to plaintiff were properly admitted the court nevertheless erred in excluding a part of a letter which it wrote to Marcus who sold the crane to defendant in Columbus, Ohio. The excluded part of the letter was as follows: "In accordance with our phone conversation, we have retained $250.00 to be used in the argument we now have with Mr. McKeown. However, if we do not get the proper release from him, we are not going to pay him anything and will return the $250.00; otherwise, it will be applied on a settlement with him and a copy of the release forwarded to you."

We are of the opinion that the court ruled correctly in holding that the excluded matter was hearsay as to plaintiff. It was not shown that plaintiff had any connection with defendant's action in sending said letter to Marcus. What defendant said to Marcus therein could not possibly be binding upon plaintiff. It would add nothing but length to this opinion for us to attempt to analyze the cases cited by defendant on this point. We are satisfied that the excluded part of the letter was clearly hearsay and we shall not labor the point further.

In its brief and in its reply brief herein defendant earnestly presents a number of arguments based upon its interpretation of the evidence from which it draws conclusions different from those which we have drawn from the evidence. It would serve no useful purpose for us to discuss such arguments one by one. We have heretofore set forth the evidence rather fully herein and have given full consideration to all of defendant's contentions, and basing our decision on the entire record, have reached the same conclusion as that reached by the trial court.

In both the trial court and in this court the case was presented by able and resourceful counsel on both sides as shown by the record. We find no reversible errors in the proceedings and the judgment of the trial court should be affirmed. It is so ordered.

ANDERSON, P. J., and BENNICK, J., concur.