Cassidy v. Metcalf

• Citation: 1 Mo.App. 593
• Parties: WILLIAM CASSIDY, Respondent, v. JAMES METCALF et al., Appellants.
• Decision Date: 10 April 1876
• Court: Missouri Court of Appeals

1 Mo.App. 593

WILLIAM CASSIDY, Respondent,

v.JAMES METCALF et al., Appellants.

St. Louis Court of Appeals, Missouri.

Apr. 10, 1876.

1. By an agreement, in writing, C. sold to M. his one-fourth interest in the firm of J., C. & Co. Afterwards M. sought to recover at law, on the contract, the interest so purchased; whereupon C. filed a bill in equity to restrain M. from prosecuting his action, and asking that the contract be so reformed as to show that M. purchased a one-fourth interest interest in the good-will of J., C. & Co. Held, 1. That a one-fourth interest in the good-will of a commission business is not the subject of sale. 2. The good-will of a business is indivisible, and when one of four partners retires from a firm, the good-will, in its entirety, remains with the old partners. 3. A court of equity will not execute a contract for the sale of a good-will, nor will it enjoin proceedings at law under such an agreement.

2. Equity will not reform a contract on account of a mistake of law.

3. Where a party seeks to reform a contract so as to make him sell his good-will in a firm, he will not be heard if his conduct shows either that he did not intend to sell his good-will, or, having sold it, that he fraudulently or wrongfully seeks to deprive the purchaser of it. He who seeks the interference of a court of equity must not come tainted with inequity.

APPEAL from St. Louis Circuit Court.

Decree reversed and bill dismissed.

Thomas A. Russell and A. J. Smith, for appellants, cited: Smith v. Powell, 14 Law Rep. 90; Reny v. Martin, 4 Johns. 597; Durant v. Bocant, Beas. 201; Burt v. Powell, 28 Cal. 632; Hoover v. Reilly, 2 Abb. (U. S.) 471; Nelson et al. v. Davis, 40 Ind. 366; 44 Ind. 395; 46 Ind. 427; 49 Ind. 434; Wood v. Price, 46 Ill. 439; 9 Ala. 662; 15 Ala. 149; 25 Ala. 694; 27 Ala. 296; 29 Ala. 233; 14 Ill. 286; 18 Ill. 492; 53 Ill. 456; Sims v. Lyle, 4 Wash. 320; Winter-mute v. Snyder, 2 Green (N. J.) Ch. 490; Broadwell v. Dame, 6 Ill. 600; Adams' Eq. 189, 191; 1 Story Eq. Jur., secs. 113, 121, 127, 151; Lyons v. Richmond, 2 Johns. Ch. 51, 60; Vin. Abr. tit. ch. N, Com. Dig. 3 F. 8; Hunt v. Rousmaniers, 1 Pet. 1; Murray v. Shotwell, 1 Johns. Ch. 512; Stores v. Baker, 1 Johns. Ch. 166; Arthur v. Arthur, 10 Barb. 9; Hall v. Reed, 2 Barb. 500; Gilbert v. Gilbert, 9 Barb.; McElderry v. Shipley, 2 Mo. 25; Leavitt v. Palmer, 3 N. Y. 19; Stoddard v. Hart, 23 N. Y. 556; Gamer v. Bird, 57 Barb. 277; Thompson Scale Mfg. Co. v. Osgood, 26 Conn. 16; Morris v. Labarra, 58 Me. 26; Champlin v. Laytin, 18 Wend. 407; Harney v. Charles, 45 Mo. 157; Bingham v. Bingham, 1 Ves. 126; Lansdowne v. Lansdowne, Mos. 364; McAninch v. Longhlin, 13 Penn. 371; Wysche v. Green, 11 Geo. (Miss.) 159; Smith v. Jordan, 13 Minn. 271; Lyman v. United Ins. Co., 17 Johns. 372; Wemple v. Stewart, 22 Barb. 154; Glass v. Hurlburt, 102 Mass. 24; Stone v. Godfrey, 18 Jur. 162; Phibbs v. Cooper, Law Rep. H. L. 149; McCurdy v. Brithill, 5 Mon. 232; Lawrence v. Baubien, 2 Bailey (S. C.), 623; Daniel v. Mitchell, 1 Story, 172; Towns v. Smith, 1 Woodb. & M. 115; Carpenter v. Providence Ins. Co., 5 How. 185; Higbie v. Hopkins, 1 Wash. 230; Union Bank, of Georgetown, v. Geary, 5 Pet. 69; Hughes v. Blake, 1 Mas. 514; 3 Gill. & J. (Md.) 425; 1 Paige (N. C.) Ch. 239; 2 Gill. & J. (Md.) 208; 3 Wend. 532; 2 Johns. Ch. 92; 9 Cranch, 153; 3 Bland (Md.), 567; Winch v. Winchester, 1 V. & B. 378; Rich v. Jackson, 4 Bro. C. C. 515; Maybank v. Brook, 1 Bro. C. C. 84; Irnham v. Child, 1 Bro. C. C. 92; Lord Portmore v. Morris, 2 Bro. C. C. 219; Hare v. Sher-wood, 3 Bro. C. C. 168; Jordon v. Sawkins, 3 Bro. C. C. 388; Costlake v. Till, 1 Russ. 376; Baxter v. Connelly, 1 J. & W. 580; Bozen v. Farlow, 1 Meriv. 459; Pars. on Part. 262, and note v; Shackle v. Baker, 14 Ves. 468; Story on Part. 170.

Ellis & Sullivan and Hitchcock, Lubke & Player, for respondent, cited: 1 Story Eq. Jur., secs. 152, 153, 156, 159; Story Eq. Jur., secs. 115, 116, 164, b, sec. 138, e; Bispham's Eq., sec. 190, note 4; Leitensdorfer v. Delphy, 15 Mo. 161; Tesson v. Atlantic Ins. Co., 40 Mo. 33; Hook v. Craighead, 32 Mo. 405; Hunt v. Ronsmaniere's Admr., 1 Pet. 13; Smith v. Jordan, 13 Minn. 271; Lyman v. United Ins. Co., 17 Johns. 372; Gillespie v. Moon, 2 Johns. Ch. 595; Wemple v. Stewart, 22 Barb. 158; Keith v. Globe Ins. Co., 52 Ill. 518; Sewing Machine Co. v. Langworthy, 18 Wis. 444; McCurdy v. Breathitt, 5 Mon. 234; Courtney v. Falley, 1 Heisk. (Tenn.) 715; Henkle v. Royal Assurance Co., 1 Ves. 317; Townsend v. Stangroom, 6 Ves. 331; Shelbourne v. Inchequin, 1 Bro. C. C. 340; Coles v. Paige, 10 Paige (N. Y.) Ch. 534; Lawrence v. Barbein, 2 Bailey (S. C.), 651; Bradford v. Union Bank, 13 How. 66; Sugden on Vend. (7th ed.) 146, 159; Andrews v. Essex Fire & Marine Ins. Co., 6 Mas. 6; Adams' Eq. 171; Keisselbrock v. Livingston, 4 Johns. Ch. 144; Wood-bury Savings Bank v. Charter Oak Ins. Co., 31 Conn. 517; Longhurst v. Star Ins. Co., 19 Iowa, 364; Jordan v. Stevens, 51 Me. 78; Freeman v. Curtis, 51 Me. 140; Botsford v. McLean, 45 Barb. 478; Burdet v. Simms, 3 J. J. Mar. (Ky.) 190; Young v. Coleman, 43 Mo. 179; Delaware Ins. Co. v. Hogan, 2 Wash. 4; Ledyard v. Hartford Ins. Co., 24 Wis. 496; White v. Williams, 48 Barb. 222; Wilson v. Strayhorn, 26 Ark. 28; Adams v. Stevens, 49 Me. 362; Brown v. Lamphear, 35 Vt. 252; 1 Story Eq. Jur., sec. 138, k; Farrar v. Patton, 20 Mo. 84; Dickerson v. Chrisman, 28 Mo. 140; Townsend v. Hawkins, 45 Mo. 289; 1 Story Eq. Jur., sec. 1522, a; Strong v. Stewart, 4 Johns. Ch. 167; Babcock v. Wyman, 19 How. 299; Wilson v. Drumrite, 21 Mo. 329; Tibeau v. Tibeau, 22 Mo. 81.

BAKEWELL, J., delivered the opinion of the court.

This is a bill in equity to reform a written contract on the ground of mistake; also, asking an injunction to restrain appellants from prosecuting their action at law, instituted to recover $12,000 damages for the alleged breach of said contract. A temporary injunction went, restraining the action at law. Defendants moved the court to dissolve the injunction and dismiss plaintiff's bill, and this motion was heard on the issues made by the pleadings. Both petition and answer are verified by affidavit. In their joint answer defendants deny every material allegation of the bill, and aver that the contract fully sets forth the intention of the parties.

On trial the court made a decree reforming the contract, as prayed, and making the injunction perpetual. A motion for a new trial having been overruled, and all exceptions being duly saved, the cause is brought to this court by appeal.

It is insisted by appellant that the Circuit Court erred in admitting testimony touching conversations and negotiations prior to the execution of the written instrument, and that the decree is unwarranted in law and unsupported by the evidence.

The contract to be reformed is as follows:

“ St. Louis, August 7, 1873.

Article of agreement entered into this day by and between W. L. Cassidy, of the firm of Irons, Cassidy & Co., St. Louis, Mo., party of the first part, and W. F. Moore and James Metcalf, of Brunswick, Chariton county, Mo., party of the second part. The party of the first part agrees to sell to the party of the second part his interest (one-fourth) in the firm of Irons, Cassidy & Co., a livestock firm doing business in the city of St. Louis, State of Missouri; the party of the second part agreeing to pay the party of the first part three thousand dollars cash, and the remainder in a negotiable note, or young stock that they have on their farms near Brunswick, Mo.; possession to be given on 1st day of September, 1873; the party of the first part to receive for the one-fourth interest five thousand dollars, to be paid as above described. Given under our hands this day.

[Signed,]

W. L. CASSIDY.

METCALF & MOORE.”

The allegation of plaintiff's bill is that the contract ought to read, “one-fourth interest in the good-will of the firm of Irons, Cassidy & Co.,” the words, “good will of the,” having been left out by mutual mistake.

It appears from the evidence that, at the date of this agreement, respondent was one of the four members of the firm of Irons, Cassidy & Co., doing a very large live-stock commission business in Missouri, Kansas, and Nebraska. The net profits of the business for 1872 were about $40,000, the expenses about $8,000, and this business was done upon a joint capital of from $20,000 to $25,000. The actual assets of the firm at the time of the agreement were, however, worth something like $35,000, consisting partly of cash, and partly of accounts and bills receivable. Cassidy did not exactly know how much these accounts and bills were worth, but kept the general run of the matters-- nearly enough to judge that his one-fourth interest in them was worth somewhere between $8,000 and $12,000. He wished to retire from the business because of a slight difficulty with his old partners, and, also, as he said, on account of his health, though it does not appear that there was anything the matter with him. He had tried to sell out, unsuccessfully, the person with whom he was in negotiation not acceding to his terms. He then wrote to Moore, of Metcalf & Moore, farmers and stock dealers near Brunswick, Chariton county, Missouri, proposing to sell out to them. Moore, after consulting Metcalf, came down at once, with some stock they had for sale, and entered into negotiations with Cassidy. Cassidy showed him the books, or a portion of the books, showing the profits for the preceding year, which Moore understood only from Cassidy's explanation, not being a book-keeper; and Moore and Metcalf, after seeing the three other members of the old firm, and ascertaining that they were willing to accept them in Cassidy's place, agreed to step into Cassidy's shoes, in the old firm, for $5,000 to be paid to Cassidy, $3,000 cash, and the balance in young stock, or notes. Metcalf & Moore accordingly sold out their stock on their farms in Chariton county, and removed to St. Louis with...