Scott v. Southwest Geease & Oil Co.

205 P.2d 914, 167 Kan. 171
Supreme Court of Kansas·Decided May 7, 1949·No. No. 37,314·Published·Cited by 9 cases

Opinion

The opinion of the court was delivered by

Wedell, J.:

This was an action for the specific performance of an oral contract. Plaintiff prevailed and defendant, The Southwest Grease and Oil Company, a corporation, appeals. The general nature of the transaction and plaintiff’s theory of his action may be briefly stated as follows:

The defendant corporation is located in Wichita and is engaged in the sale of oil and greases; it desired to manufacture and sell an hydraulic lubricant to Ford dealers; it discovered a man by the name of Jack Reed had a special lubricant of a particular character which was in great demand and that Reed was doing an extensive business in that field; defendant was unable to make sales to numerous prospective customers for the reason they insisted upon using only the lubricant sold by Reed; plaintiff, Hatcher E. Scott, was an intimate personal friend of Reed; defendant through its president, Harold A. Mayor, consulted the plaintiff late in 1939, or the early part of 1940, and expressed to plaintiff the desire to have Reed brought into defendant’s business; the defendant through its president, contracted orally to compensate plaintiff in the form of a specified commission for every gallon of the lubricant defendant sold if he, plaintiff, succeeded in persuading Reed to quit his own business and to come into defendant’s employment; the commission was to commence whenever Reed accepted such employment; plaintiff performed'his part of the agreement; Reed entered defendant’s employment in the year 1940; Reed’s formula for the lubricant was adopted by defendant and the lubricant was sold in extensive quantities and with substantial profits; Mayor insisted the commission agreed upon to be paid to plaintiff was not to b.e made known to Reed; plaintiff was paid the agreed compensation regularly on a quarterly basis in March, June, September and December of each year until and including the month of March, 1945; in 1945 defendant breached the contract and informed plaintiff his commission would be discontinued.

Other details are covered by the findings made by the trial court which tried the action without a jury.

It was defendant’s principal contention the contract relied upon by plaintiff was not made but that plaintiff was employed only as a [173]*173correspondent and advertising manager for defendant without any-stated duration.

There was sharp conflict in much of the testimony. The trial court resolved all issues of fact in favor of the plaintiff. It made findings of fact and conclusions of law which are appended to this opinion and made a part hereof. There is ample evidence in the record to support the findings of fact and they can, therefore, not be disturbed.

The findings of fact and conclusions of law were incorporated into and made a part of the journal entry of judgment. The findings of fact and conclusions of law were made on February 1, 1948. A money judgment was rendered against the defendant corporation for amounts found due at installment payment periods except as to one period for which the accounting was not complete. The court retained jurisdiction for the purpose of determining any question of accounting that might arise subsequent to the judgment.

A general demurrer of the individual defendant, Harold A. Mayor, to plaintiff’s evidence was sustained and the general demurrer of the defendant corporation was overruled. The latter defendant alone appeals. We shall continue to refer to the parties on .appeal as plaintiff and defendant.

We shall not burden the opinion with a narrative of the conflicting testimony. On demurrer we are, of course, concerned only with plaintiff’s evidence which is favorable to him.

Applying this rule a review of the testimony offered on behalf of plaintiff compels us to conclude: Defendant was exceedingly anxious to obtain the services of Reed and to benefit by his extensive connections, reputation and good will in the lubrication trade; its president saw fit to contact the plaintiff, an intimate friend of Reed, and to obtain plaintiff’s services for the purpose of inducing Reed to leave his own business and to join the defendant company; an oral contract was entered into by and between plaintiff and the defendant through its president, Mayor, whereby defendant agreed to compensate plaintiff for his services in accordance with the findings of the trial court; plaintiff was paid by defendant in accordance with the agreement beginning in 1940 and ending in 1945 when defendant breached the contract; the quarterly payments to plaintiff by the defendant in accordance with the commission agreed upon confirmed the contract made by its president if the contract was not previously valid and binding on the defendant; the contract benefited the de[174]*174fendant; the contract required defendant to pay the commission to plaintiff so long as the product was sold by defendant; defendant had benefited substantially by increased trade and profits due to plaintiff’s performance of his agreement to persuade Reed to join defendant’s business; defendant would continue to profit as a result of plaintiff’s performance; it was not inequitable to require defendant to compensate plaintiff in accordance with its agreement so long as it sold the product.

The record in this case discloses not only that Mayor was president of the defendant corporation but that he was in fact and in reality its active business manager. In the absence of any showing of lack of authority it cannot be said that Mayor was not acting within the apparent scope of his authority. (Petroleum Co. v. Gas & Fuel Co., 112 Kan. 73, 76, 209 Pac. 826.) The payment to plaintiff of the commissions for a period of years by the corporation constituted ratification of the contract. Furthermore, having accepted the benefits of plaintiff’s performance of the contract the defendant cannot repudiate its obligations thereunder. (El Dorado Nat’l Bank v. Coca-Cola Bottling Co., 129 Kan. 272, 282 Pac. 579.)

With respect to the equities of the transaction it also should be observed defendant makes no contention plaintiff was guilty of any fraud or overreaching. It constitutes no defense to specific performance that plaintiff will reap a substantial income if defendant complies with its agreement. Defendant has profited substantially and stands to continue to do so as a result of plaintiff’s performance.

The compensation agreed upon did not require defendant to pay plaintiff a fixed and inequitable amount irrespective of the value of his services to defendant. The extent of plaintiff’s total compensation, under the agreement, rested entirely on the amount of lubricant sold. The success of the venture determined its value to both plaintiff and defendant. Such a contract will not be defeated on the ground it is inequitable. (Alexander v. Capital Paint Co., 136 Md. 658, 111 A. 140.) In that case it was aptly said:

“The appellee wanted the introduction, it was willing and expected to pay for it, and if instead of paying a definite sum for something which might prove to be of no value to it, it preferred to make the compensation contingent upon success and proportioned to the benefit it might derive from it, there was no reason why it could not do so.” (p. 668.)

Unless the consideration is so greatly disproportionate to value as to offend against fair dealing equitable relief will not be denied. [175]*175(Greenwood v. Greenwood, 96 Kan. 591, 595, 152 Pac. 657.) See, also, Dent v. Morgan, 148 Kan.

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Scott v. Southwest Geease & Oil Co., 205 P.2d 914, 167 Kan. 171 (kan 1949).

205 P.2d 914 (Scott v. Southwest Geease & Oil Co.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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