Petitioners Brief — Rau Construction Co. v. Phillips Petroleum Co.

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BRIEF IN SUPPORT OF PETITION FOR WRIT

OF CERTIORARI.

Vs

OPINION BELOW.

The opinion directing reversal is reported 130 F. 2d

499, and appears at R. 1987.

II.

JURISDICTION.

The jurisdictional statement, p. 11 herein, is adopted

by reference.

III.

STATEMENT OF THE CASE.

The “Summary and Statement of the Matters In-

volved,” pages 1 to 11 herein, is adopted by reference.

IV.

SPECIFICATIONS OF ERROR.

The decision and opinion on appeal erred in each and

every respect stated in “Reasons Relied on for Allow-

ance of the Writ,” pages 18 to 24 herein, which, for

brevity. are adopted by reference as fully as if here printed

at length.

V.

SUMMARY OF ARGUMENT.

1. Trial Findings were denied a judicial review. The

governing law was not applied in a diversity of citizen-

ship case.

2. Denial of the equitable rules governing assump-

sit contravenes decisions of this Court.

3. Duress of property was established under Mis-

souri and Texas law.

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4. Deceit in matters solely known to one party is

fraud under Missouri law, though opinions, a state of

mind or expectations are stated.

5. Contracts relieving liability for fraud in advance

are void under Missouri law.

6. Fraud avoids contracts which would not have

been made if it was not employed.

7. There was no waiver of fraud, compromise or

accord and no estoppel denied recovery of reasonable value.

8. There was either a breach or abandonment of

contract. Either, or fraud, duress, uncertainty of subject

matter or want of mutuality denied the “contract” as a

defense, in an assumpsit action.

9. Certainty of subject matter of contracts is re-

quired under Missouri law. The minds of the parties

must meet on the same thing, in the same sense, at the

same time, or there is no valid contract.

10. Mutuality of obligation does not precede the ex-

istence of represented conditions, which are integral to

the subject matter of a contract.

11. There was no mutuality in the contract. Per-

formance under compulsion of construction work of dif-

ferent nature, conditions and unit sizes was not perform-

ance of the falsely represented project.

12. The invalid agreement to pay for changes in con-

crete forms caused by a change in the plans was not

properly construed nor rightfully enforced on appeal.

ARGUMENT.

1. The opinion erred in failing to consider or to ju-

dicially review lawful trial Findings and (b) equal pro-

tection of laws was denied by failing to declare or apply

the governing state law in a diversity of citizenship case.

Cases cited in Statement of Jurisdiction, p. 11, and the

cases decided by the same Court at the same Term, cited

p. 11 herein, are adopted by reference.

2. The denial, on appeal, of the equitable rules gov-

erning assumpsit, deprived Petitioner of substantive

rights.

ie

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Petitioner paid a high premium, for which Phillips

benefited, when it waived damages for delay (Finding

23, R. 1916) and damages for fraud, and sued only for

the bare value of work performed, to assure mere certain

recovery in assumpsit. That error contravenes the deci-

sions of this Court, which also support the right of af-

firmance,

Guerini Stone Co. v. P. J. Carlin Const. Co., 248 U. S.

334, 343, 63 L. Ed. 275, 284. Stone v. White, 301 U. S.

532, 534, 81 L. Ed. 1265, 1267. Phillips & Colby Construction

Co. v. Seymour, 91 U. S. 646, 23 L. Ed. 341. The action is

equally recognized in Missouri and Texas. 84 A. L. R.

946, and a review of common law authorities in 95 A. L. R.

990. Gillioz v. State Highway Commission, 153 S. W. 2d

18, 22, Subds. 3, 4 (Mo. Sup.).

3. That Findings 20 and 24 established duress of

property, under both Texas and Missouri law, is estab-

lished by:

Brown v. Worthington, 142 S. W. 1082, 1. c. 1084,

Subds. 1, 2, 162 Mo. App. 508.

Goodrum v. State, 158 S. W. 2d 81, 1. c. 85, Subds.

1-5 (Tex.), a construction case.

Coercion by economic pressure is recognized here in:

United States v. Butler, 297 U. S. 1, l. ec. 71, 80

L. Ed. 477, 1. c. 490, and in

United States v. Bethlehem Steel Corp., 315 U. S.

289, 86 L. Ed. (Adv.) 521, 1. c. 540-543.

The doctrine discussed in Mr. Justice Frankfurter’s

dissenting opinion in that case is recognized by the ma-

jority, although held inapplicable to the United States un-

der the facts.

That the question is one of mixed law and fact to be

determined by the court is held in Schaefer v. Fulton

Iron Works, 158 S. W. 2d 452, 1. c. 455, Subds. 1-3 (Mo.

App.).

4. Controlling Missouri cases rule that false repre-

sentations of fact solely within the knowledge of one

party, although relating to a state of mind, an existing

TRAE Se ae Re AS

Bite. -

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purpose or to opinions or expectations, are fraud. These

cases are ignored by the opinion:

Metropolitan Paving Co. v. Brown-Crummer Inv.

Co., 274 S. W. 815, 309 Mo. 638 (En Banc)

(excerpt printed at length, R. 2025, 2026).

Collins v. Lindsay, 25 S. W. 2d 84, 1. c. 90 (Mo.

Sup.).

Luikart v. Miller, 48 S. W. 2d 867, 1. c. 868, 869

(Mo. Sup.), which also rules that an evil in-

tent may be implied from a reckless disre-

gard of another’s interests.

Judd v. Walker, 114 S. W. 979, Subds. 5-6, 215 Mo.

312.

National Theatre Supply Co. v. Rigney, 130 S. W.

2d 258 (Mo. App.).

5. Like Missouri cases rule that contract provisions

purporting to relieve from liability in advance for author-

ized fraud are invalid and against public policy:

Rabenau v. Harrell, 278 Mo. 247, 213 S. W. 92,

l. c. 93, 94, Subd. 7.

Rice AS Lammers, 65 S. W. 2d 151, Subds. 3-5 (Mo.

pp.)-

Horwitz v. Schaper, 119 S. W. 2d 474, 1. c. 480,

482 (Mo. App.).

Progressive Finance Co. v. Stempel, 95 S. W. 2d

834, 836 (Mo. App.), Subds. 4-6.

6. Like cases declaring that fraud avoids all con-

tracts where it is shown that if it had not been employed,

the contract would not have been made, are:

Taggart v. School District, 96 S. W. 2d 335, 337,

339 Mo. 223.

Armstrong v. Winfrey, 61 Mo. 354, 357.

7. That there was no waiver of fraud or compromise

growing out of the June memorandum is declared in

State ex rel. Cary v. Trimble, 43 S. W. 2d 1050, 1. c.

1054. At Record 2035 an excerpt from this case is printed

at length, from which it clearly appears plaintiff did not

even “receive a drink of cold water” by reason of the June

memorandum. See also Osler v. Joplin Life Ins. Co.,

(Mo.) 164 S. W. 2d 295, Subd. 7. That there was no

accord by receipt of checks for amounts concededly due

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is held by a long line of Missouri cases, cited in Anno-

tation 112 A. L. R. 1224, 1236, 1238, 1239, 1240. Texas

and Oklahoma cases cited therein announce the same rule.

The first Missouri case cited in Opinion (R. 1993) rules

that there is no accord where claims are left open by

agreement, but it was not followed on appeal.

8. That there was either a breach or abandonment

of the “contract” is clearly established by the controlling

cases. Spitscaufsky v. State Highway Commission, (Mo.

Sup.) 159 S. W. 2d 647, 651, Subds. 2, 4, rules that it

is a breach of the implied covenants of any construction

contract to interfere with orderly progress of the work by

failing to supply plans, etc. Material changes or capri-

cious conduct are held to support a quantum meruit claim,

1. c. 653, 657. Fuhler v. Gohman & Levine Const. Co.,

142 S. W. 2d 482, 1. c. 484, Subds. 1, 2, rules that

substantial deviations effect an abandonment of a con-

struction contract.

‘ 9. That certainty of the subject matter of a contract

is requisite for its validity under Missouri law is de-

clared in: State ex rel. v. Hughes, 152 S. W. 2d 193,

1. c, 196, Col. 1, and Subds. 4-7, 1. c. 198 (Mo. Sup.);

McClintock v. Skelly Oil Co., 114 S. W. 2d 181, 1. c. 189

Subds. 6-12, 232 Mo. App. 1204; Wright v. Fuel Oil Co.,

114 S. W. 2d 959, 1. c. 961, 962, 342 Mo. 173; Rexford

v. Philippi, 84 S. W. 2d 628, 1. c. 631, Subds. 3, 4, 337 Mo.

389.

That innocent misrepresentations will defeat a meet-

ing of minds is declared in 17 C. J. S. 502, Sec. 147.

That a contract void for uncertainty of subject mat-

ter is not validated by part performance or payment is

declared in Jesse v. Roloff, 74 S. W. 2d 890, 1. c. 893

(Mo. App.), and in the Missouri cases cited in 17 C. J. S.

762, Sec. 325, n. 37; page 366, n. 78; page 367, n. 92;

page 369, n. 1; page 455, n. 85.

10. Cases declaring that where the subject matter

of a contract is not ascertainable at its inception, an un-

dertaking that it shall possess certain qualities when as-

certained is a condition, the performance of which is pre-

cedent to any obligation thereunder, are: Pope v. Allis,

115 U. S. 363, 1. c. 371, 29 L. Ed. 393, 1. ¢. 398; Redlands

Orange G. Assn. v. Gorman, 161 Mo. 203, 61 S. W. 820.

l. c. 821, 2d Col.; Fitzgerald v. Barker, 85 Mo. 13, 1. c. 22;

on

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Dale’ v. Pierson-Brewen, 142 S. W. 745, 1. c. 747, 160 Mo.

App. 314; Grigsby v. Stapleton, 94 Mo. 423, 7 S. W. 421,

423.

11. That there was no mutuality of obligation in

the contract is held in Spitscaufsky v. State Highway

Commission, 159 S. W. 2d 647, 654, subd. 5, 656, subds.

10, 12, and John P. Mills v. Bell, 37 S. W. 2d 680, 1. c.

684 (Mo. App.). That performance of a project of differ-

ent nature, conditions and unit sizes did not supply mu-

tuality is held in DeLange v. Ogden, (Tex.) 106 S. W.

2d 385, 391, Subd. 10.

12. The decision on appeal erred in reversing $35,-

597.18, allowed on implied contract for loss of use and pay-

ment for concrete forms and form panels, caused by

changes made in the plans. The trial court (although the

June memorandum was invalid for fraud and duress),

properly construed the language and arrived at the same

result, whether it was valid or invalid. He properly fol-

lowed the lex fori. Wentzel v. Lake Lotawana Dev. Co.,

48 S. W. 2d 185, Subds. 4, 12, to 15 and 33.

Conclusion.

It is respectfully submitted that the questions of sub-

stance and of grave importance in the public interests,

with the inexplicable denial of lawful rights, contrary

to the accepted course of judicial proceedings, demand the

intervention of this court, despite its recognized heavy

burdens.

Maurice J. O’SULLIVAN,

700 Gloyd Building,

Kansas City, Missouri,

Attorney for Petitioner

and Appellee Below.