Lowe v. Flank Oil Co.

398 P.2d 604, 144 Mont. 490, 1965 Mont. LEXIS 514
Montana Supreme Court·Decided January 8, 1965·No. No. 10636·Published·Cited by 1 cases

Opinion

MR. JUSTICE JOHN C. HARRISON

delivered the Opinion of the Court.

This is an appeal from a judgment of the district court of the thirteenth judicial district of the State of Montana, in and for the County of Yellowstone, the Honorable Ernest E. Fenton, district judge, sitting without a jury.

On August 19, 1958, the defendant and appellant, Flank Oil Company, a corporation (hereinafter called defendant), entered into an agreement with plaintiffs, Howard R. Lowe and John R. Lynn, a partnership, operating as consulting geologists and engineers. The agreement entitled “CONSULTING AGREEMENT” consisted of the following terms which are of interest to this appeal:

1. The life of the contract was six years, commencing March 1, 1958, and ending February 29, 1964.

2. Under the contract the plaintiffs agreed to be available for consultations with defendant for its operations. In addition, defendant agreed to pay plaintiffs an annual retainer of at least $10,000 per year in equal monthly installments.

. 3. Plaintiffs were (a) allowed to employ third persons, firms [492] or corporations to assist them, provided that the salaries of these snch third persons should be paid by plaintiffs out of their retainer; (b) plaintiffs would be paid by defendant for all authorized travel, meals, lodging and entertainment expenses incurred in performing these services; and (c) the contract could be terminated in the event of the dissolution, bankruptcy or the receivership of defendant.

In 1958, at the time the Consulting Agreement was signed by the parties to this appeal, the plaintiffs had their offices on the seventh floor of the Midland Bank Building in Billings, Montana. Sometime in 1959, the two men separated, Mr. Lowe having his offices on the sixth floor of the Midland Bank Building and Mr. Lynn, his offices on the eighth floor of the Midland Bank Building. The various people with whom they did business were informed that the office arrangement of the partnership had been changed. The defendant took this to mean a dissolution of the partnership, and after paying the partnership $10,833.33 ceased making payments with the last payment March 31, 1959, alleging that the partnership had been dissolved and that no further payments were due to plaintiffs.

The present suit was commenced on October 28, 1960. It was alleged at that time the defendant had become obligated to pay the plaintiffs the sum of $25,833.33. At the time of the pre-trial hearing, the demand in the complaint was amended and the recovery was set at $49,166.69, for all sums due and owing under the entire agreement for its full term by reason of the previous breach of the defendant as to all payments accrued and overdue and by reason of the anticipatory breach of the defendant as to payments coming due thereafter.

The defendant’s position after pre-trial was that it admitted the execution of the Consulting Agreement with the plaintiffs, denied owing anything to the plaintiffs, and set up affirmatively that a third party, Christie, Mitchell and Mitchell, a co-partnership was the owner of said contract and entitled to all monies [493] due thereunder, but that the contract sued upon called for the payment to Lowe and Lynn, of one-half of all fees they had collected, therefore they should have been made a party to the suit; that the partnership was dissolved, therefore the contract was terminated.

The issues of fact at law set forth in the pre-trial order were:

1. The amount that the defendant had paid to the plaintiffs under the terms of the agreement,

2. Whether Christie, Mitchell and Mitchell were necessary parties to the action,

3. Whether the co-partnership referred to in the complaint had been dissolved,

4. Whether dissolution of the co-partnership excuses defendant from the performance of the agreement,

5. Whether plaintiffs had performed all of the terms and conditions of the said contract on their part to be performed so that they were entitled to maintain the action on the contract.

During the course of the trial the plaintiffs introduced two exhibits, each entitled “Consulting Agreement.” The first was the agreement upon which plaintiffs brought suit against Defendant. The second, a “Consulting Agreement” between Christie, Mitchell and Mitchell and the plaintiffs. The latter agreement was dated December 22, 1958, wherein plaintiffs on or about March 1, 1958, agreed to make themselves available as consultants and advisors, and wherein, Christie, Mitchell and Mitchell agreed that on or about March 1, 1958, under an oral agreement, they would make themselves available as consultants and advisors to plaintiffs on matters pertaining to Lowe and Lynn’s agreement with Flank Oil Co. This agreement was to run for six years, with plaintiffs agreeing to pay Christie, Mitchell and Mitchell an annual retainer of one-half of the amount received by them (Lowe and Lynn) as their annual retainer pursuant to an agreement between Lowe and Lynn and Flank Oil Company dated August 19, 1958.

In the course of the trial, Howard R. Lowe, inter alia, testi[494] fied that while Lynn had offices on another floor of the building that he maintained the files for the partnership in his office; that after March of 1959, the date of the last payment by defendant that they had done business together as a partnership; that they were obligated to remain as partners under the terms of the agreement; that at the time of the trial if any monies were paid for their work, it would be paid to Lowe and Lynn into the partnership account maintained in the Security Bank; that the partnership had last filed a partnership tax return in 1961, that at the time of the trial there was a bank account for the partnership in the Security Bank; that the partnership own some leases and minerals; that at the time of the trial they could be hired to do work as a partnership; and that all the persons requesting their services would have to do would be to say “¥e would like Lowe and Lynn to handle the job for us.” This testimony was confirmed by Mr. Lynn when he took the stand and was examined and cross-examined.

E. M. Stringer, Vice-President of the Flank Oil Company stated on direct and cross-examination that he was the Vice-President of the company; that he had ordered a cessation of payments to them, as Vice-President of the, Company, and that he had refused to pay money out for more services. He also stated that they had paid plaintiffs for a year under the contract and that they did not perform, but during cross-examination he carefully avoided answering any questions as to services that Lowe and Lynn had refused to perform under the agreement, answering to the question “Well, what service did you demand of them that they didn’t perform? A. The contract speaks for itself.

“Q. Well, can you tell me any single instance when you requested them to do something and they didn’t do it? A. They didn’t do anything.”

Under these facts the court found:

(1) that plaintiffs had duly performed all the terms and [495] conditions of the agreement on their part, that the defendant had paid the plaintiffs pursuant to the terms of that agreement some $10,833.31;

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Lowe v. Flank Oil Co., 398 P.2d 604, 144 Mont. 490, 1965 Mont. LEXIS 514 (Mo. 1965).

398 P.2d 604 (Lowe v. Flank Oil Co.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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