Towers v. Doroshaw

5 Misc. 2d 241, 159 N.Y.S.2d 367, 1957 N.Y. Misc. LEXIS 3542
CourtNew York Supreme Court
DecidedFebruary 6, 1957
StatusPublished
Cited by5 cases

This text of 5 Misc. 2d 241 (Towers v. Doroshaw) is published on Counsel Stack Legal Research, covering New York Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Towers v. Doroshaw, 5 Misc. 2d 241, 159 N.Y.S.2d 367, 1957 N.Y. Misc. LEXIS 3542 (N.Y. Super. Ct. 1957).

Opinion

Frank Del Vecchio, J.

This is an action to recover compensation for services alleged to have been rendered by plaintiff prior and incidental to the merger of the corporate defendants.

The complaint alleges seven causes of action asking for various forms of relief all incidental to and arising out of conversations between the plaintiff Towers and the defendant Doroshaw.

As to the status of the parties at the times here in question: plaintiff Albert Towers was an industrial engineer and sales counsel, with his place of business at Seneca Falls, New York. Defendant Jennis Doroshaw was engaged in the investment business and was active in all of the defendant corporations [243]*243with the exception of Thompson-Starrett Company, Inc. Doroshaw Corporation and E. & S. New York Securities Corporation (defendants) are the former and present names of a single enterprise of which Jennis Doroshaw was president and director and with his wife owned the controlling interest. Defendant Delaware Eoberts & Schaefer Company was a corporation of which Jennis Doroshaw was president and director, the stock in which was under option held by E. & S. New York Securities Corporation. Defendant Eoberts & Schaefer Company was an Illinois building and construction firm, the stock in which was wholly owned by defendant Delaware Eoberts & Schaefer Company. Defendant Julius E. Van Eaalte was president and chairman of the board of defendant Thompson-Starrett Company, Inc., which corporation commenced a series of mergers in October, 1954 resulting in its ultimate consolidation with each of the other corporate defendants.

The sole issue presented is whether plaintiff Albert Towers performed any services prior to the mergers which entitled him to compensation from one or more of the defendants. Plaintiff admitted on examination that he never met any officer or director of defendants Doroshaw Corporation, B. & S. New York Securities Corporation, Eoberts & Schaefer Company or Delaware Eoberts & Schaefer Company other than the individual defendant Jennis Doroshaw. Nor has he offered a written contract as the basis for this action. It is his claim that certain conduct of himself and Doroshaw commencing May 16, 1953 has created in him a right to recover a portion of the benefits accruing from the corporate mergers, on the theory of oral contract, quantum meruit, or trusteeship ex maleficio.

The question which is critical to this litigation is what transpired between Towers and Doroshaw at meetings between them in May, 1953. The testimony of both parties establishes that they met for the first time at the latter’s room in Hotel Syracuse on May 16,1953, the defendant Doroshaw having come to Syracuse to investigate one or more local businesses, including the Hanson Clutch Company, with a view toward possible acquisition by him. The meeting between the parties resulted from the suggestion of one Norman Williams, a mutual acquaintance and business consultant, who had described plaintiff to Doroshaw as a business broker with whom the latter might find something in common. After general discussion of Doroshaw’s activities and of his possible interest in Hanson Clutch, he informed plaintiff that he had recently acquired Eoberts & Schaefer Company, a building and construction business. The participants give different versions of what occurred thereafter.

[244]*244According to plaintiff: Doroshaw stated that the company last mentioned had a large profit bnt a bad tax base, whereupon plaintiff suggested that Doroshaw acquire a business also in the construction field having a loss carry-over and a favorable tax base. In response to Doroshaw’s question where such a firm could be found, plaintiff stated that he knew of such a concern and in fact had been negotiating for its acquisition by another corporation in which he was interested. Doroshaw then stated that he “ would like to hear more ”, to which plaintiff responded that he would be glad to give information but that he wanted to be compensated either by going in on the deal or by payment from the individual defendant. Doroshaw replied that if the thing were of interest and he went ahead he would take care of plaintiff so that he would be satisfied but that he could not make any arrangements then as to compensation or whether plaintiff would be taken in because he did not know the name of the company and did not know whether the thing was “ doable ”. Plaintiff said that he would take Doroshaw’s word and would disclose in confidence the name of the corporation, and Doroshaw stated that he would hold it in the strictest confidence. Nothing further was said with regard to plaintiff’s compensation nor did he specify that he was a ‘ ‘ finder ’ ’ or that he expected a finder’s fee. Upon being told that defendant Thompson-Starrett Co., Inc., was the firm to which plaintiff had referred, Doroshaw said that the name had never been submitted to him before and, after learning of its loss carry-over, requested plaintiff to furnish him with statements and material about Thompson-Starrett which plaintiff had acquired in the course of his previous negotiations with the firm. Plaintiff promised to do so and to meet Doroshaw in the latter’s New York office on the following Tuesday, May 19.

On that date plaintiff appeared at defendant’s office and gave the latter recently published' balance sheets of ThompsonStarrett along with memoranda and other data which he had on the company. Then followed a discussion of the financial statements and of certain changes in the Thompson-Starrett operation which plaintiff and his associates deemed advisable. The following is plaintiff’s verbatim testimony: “ Doroshaw said, ‘ Now in approaching this thing, I would suggest that you go to the Thompson-Starrett people and say to them that you have someone that you thought might be interested in the situation, providing a deal on the proper basis could be worked out ’, so that the invitation for the approach would run from ThompsonStarrett to Doroshaw, instead of from Doroshaw to ThompsonStarrett, and I agreed with him that that was a good way of [245]*245approaching the situation, and I told him that I would proceed to see what could be done, and that is about all that happened at that meeting. ’ ’

Plaintiff stated that he had “ an impression ” of a third meeting with the individual defendant about a week later but was unable to recollect what occurred at that time. He admitted, however, that, aside from that possible meeting, he never saw Doroshaw personally again.

Plaintiff did testify that there was some correspondence with the individual defendant and identified originals or copies of the letters between the parties which were received in evidence. Since the court regards this correspondence as significant in determining what each had in mind concerning the respective obligations of the parties, it will be briefly summarized at this point: On May 20, 1953 — the day following the parties’ New York meeting — Doroshaw wrote to plaintiff advising that he had gone over the figures in the Hanson matter, in which he was interested, and requested the latter to obtain certain, specific additional information relative thereto.

On May 22 plaintiff wrote Doroshaw that he had been unable to get back ” to him the previous day, enclosed data on Hanson Clutch and advised that he was obtaining the requested information thereon. The letter contained the following paragraphs :

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Bluebook (online)
5 Misc. 2d 241, 159 N.Y.S.2d 367, 1957 N.Y. Misc. LEXIS 3542, Counsel Stack Legal Research, https://law.counselstack.com/opinion/towers-v-doroshaw-nysupct-1957.