Hardwick v. ISC Industries, Inc.

542 S.W.2d 302, 1976 Mo. App. LEXIS 2217
CourtMissouri Court of Appeals
DecidedAugust 30, 1976
DocketNo. KCD 27304
StatusPublished
Cited by1 cases

This text of 542 S.W.2d 302 (Hardwick v. ISC Industries, Inc.) is published on Counsel Stack Legal Research, covering Missouri Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Hardwick v. ISC Industries, Inc., 542 S.W.2d 302, 1976 Mo. App. LEXIS 2217 (Mo. Ct. App. 1976).

Opinion

ROBERT R. WELBORN, Special Judge.

Action for damages for breach of contract. After jury had returned verdict in favor of plaintiff for $91,667, the trial court sustained defendants’ motion for judgment [303]*303and entered judgment for defendants. Plaintiff appealed.

Appellant Thomas Lee Richard Hard-wick, Ray Sims and Frozen Food Express Company were the holders of all of the stock of Hardwick Manufacturing Company. The company was incorporated in 1965 and engaged in the manufacture of heavy duty, off-highway hauling equipment.

In 1969, negotiations began between Hardwick and Gene L. Olson of ISC Industries, Inc., for the acquisition by ISC of 'Hardwick Manufacturing. On February 24, 1969, an Agreement for Exchange of Stock was entered into between Hardwick, Sims and Frozen Food (“Shareholders”) and ISC (“Industries”). Paragraph 1 of the Agreement read:

“1. Industries agrees to offer to Shareholders in exchange for said 1,350 shares of common stock of Hardwick, 48,214 shares of common stock which is voting stock, and Shareholders agree to exchange their 1,350 shares of no par common stock of Hardwick to Industries on or before April 15, 1969. The basis of exchange for each Shareholder is set out as follows:

"Shareholder Hardwick Industries
Thomas Lee Richard Hardwick 676 shares 24,143 shares
Ray Sims 224 8,000
Frozen Food Express, Inc. 450 16,071

Paragraph 2 dealt with patents owned by Hardwick Manufacturing (“Hardwick”). Paragraph 3 read:

“3. Industries agrees that concurrently with the exchange of stock, Hardwick will enter into an employment contract employing Thomas Lee Richard Hardwick for a period of five (5) years for an annual salary of Twenty-five Thousand Dollars ($25,-000.00). The terms and covenants of such contract shall then be acceptable to Thomas Lee Richard Hardwick, Industries and their respective counsel.”

The agreement and an addendum contained other provisions, none of which is here involved.

On April 24, 1969, the exchange of stock was completed. The contract of employment had not been prepared at that time and Olson told Hardwick that it would be submitted later. Some three or four weeks later, Olson presented Hardwick with a draft of a contract by the terms of which Hardwick would be employed as president of Hardwick Manufacturing for five years at an annual salary of $25,000.00. Hard-wick refused to sign the contract. According to Hardwick, his refusal was based upon the absence from the contract of matters agreed upon between himself and Olson in the course of the negotiations. He specifically objected to a provision that the agreement should terminate in the event of Hardwick’s death. According to Olson, Hardwick told him that he did not sign the contract because he didn’t know whether or not he wanted to stay with ISC.

Hardwick acted as president and chief operating officer of Hardwick Manufacturing at a $25,000 per year salary until July 31, 1970, when he received notice that his employment was terminated. He filed this action, claiming that ISC had breached Paragraph 3 of the Agreement for Exchange of Stock and asked damages of $91,-667, the amount which he would have received as salary had his employment continued for five years at $25,000 per year. His petition also contained a count for fraud, but at the trial his tendered instruction on this theory was rejected by the trial court and appellant does not now question that action.

At the trial Hardwick testified (without objection) that he was to receive for his Hardwick Manufacturing stock “twenty-five thousand per year for the next five years. I was also to receive 24,143 shares of stock.” Later, when Hardwick was asked about the pre-contract negotiations with Olson, counsel for defendants objected on the grounds of the parol evidence rule. Defendants’ counsel stated that he wished to offer the testimony in support of the fraud count. The trial court stated: “Well, I’m going to permit it for that limited purpose with the understanding that it only [304]*304goes to the legal interpretation to be applied to Paragraph 3 of the contract.”

Hardwiek then testified:

“Well, of course, the main thing [Olson represented] was the original contract and exchange of the stock, numbers of shares of stock, and the $125,000 for the five years, and in addition to those two things, there were certain insurance policies to be added to the ones that were in existence that we had. Like we had a group insurance policy before they took over and that was suppos-. ed to have been added to it. And then there were supposed to be fringe benefits, depending upon the progress of the company, as to how it would progress. The one hundred twenty-five thousand was very definitely agreed, that in case of my death, that this was to be paid, it was to be paid whether I was alive or dead, and that that was one of my definite agreements with Mr. Olson so that my wife would have that one hundred twenty-five thousand for the next five years. That was a very definite part of the program.”

On cross-examination he stated that he took the position that he was entitled to receive $125,000 whether or not he worked a single day as president of Hardwick Manufacturing.

Olson, testifying for the defendants, stated that Hardwick never discussed the terms of the proposed employment contract with him and that he gave as his reason for not signing it that he did not know whether or not he wanted to stay with ISC. Olson stated that he never told Hardwick that he would be entitled to $25,000 per year for five years whether he worked or not.

An officer of another ISC subsidiary testified that Hardwick told him that he didn’t sign the employment contract because he did not want to work as much as the agreement would have required.

After the jury had returned its verdict in favor of plaintiff, the trial court sustained defendants’ motion for judgment. In its memorandum, the trial court stated:

“On February 24, 1969, plaintiff and defendant ISC entered into an agreement for exchange of stock. In Paragraph 3 of that document is an agreement to enter into an employment contract.

“Plaintiff was represented by counsel at the time this ‘agreement’ was executed. As a matter of fact, his attorney witnessed the signing of the document.

“For the purpose of this motion, let it be assumed that defendant’s agents did make all the oral representations and agreements claimed by plaintiff, and that thereafter plaintiff executed the agreement of February 24, 1969, in its present terminology?:

“It is perfectly evident that the parties could easily have worded Paragraph 3 of the agreement to cover all of plaintiff’s assertions. Yet it remains that plaintiff executed the agreement supposedly embodying all of the terms of defendant’s representations to him, and now attempts to claim that the agreement which simply and clearly speaks of an employment contract states something else.

“There is no allegation by plaintiff nor any showing or inference that fraud was perpetrated by the defendant in the execution of the agreement. Thus, the only possible conclusion is that the written agreement contains the understandings and provisions of the parties’ prior arrangements.

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Cite This Page — Counsel Stack

Bluebook (online)
542 S.W.2d 302, 1976 Mo. App. LEXIS 2217, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hardwick-v-isc-industries-inc-moctapp-1976.