Cox v. Jones
| Decision Date | 12 December 1966 |
| Docket Number | No. 51882,No. 2,51882,2 |
| Citation | 412 S.W.2d 143 |
| Parties | William L. COX and Florence R. Cox, Respondents, v. Charles E. JONES and Myrle H. Jones, Appellants, Phillip E. King, Alan F. Wherritt, Trustee, Defendants, Ted E. Dyer and Virginia Lee Dyer, Intervenors, Respondents. Charles E. JONES and Myrle H. Jones, Appellants, v. Sydney O. SCHROEDER and Margaret L. Schroeder, William L. Cox and Florence Cox, Fred Koenigsberg and Erma F. Koenigsberg, Ted E. Dyer and Virginia Lee Dyer, Arthur Kincaid, Trustee, and Alan F. Wherritt, Trustee, Respondents |
| Court | Missouri Supreme Court |
Thomas M. Sullivan, Downey, Sullivan & McCormick, Kansas City, for appellants.
Paul C. Dugan, Kansas City, for plaintiffs-respondents.
Conn Withers, Liberty, for respondents-intervenors.
This is principally a suit for dissolution of a partnership between two physicians and for accounting. The basic issue is that of which physician was the 'withdrawing partner' so as to make applicable a provision of paragraph 11 of the written agreement (dated April 1, 1962) below set forth.
We have appellate jurisdiction by reason of Dr. Jones' claim from Dr. Cox of $19,962.51; and also by reason of intervenors' (Dentist, Dr. Dyer, and wife) claim to contractual restrictive rights and pre-emptive rights concerning title to a medical building and parking lot where the parties practiced their professions in Liberty, Missouri. Appellant also had filed a suit in partition of his claimed interest in the real estate, which suit was consolidated herein, which partition claim was denied by the trial court.
The trial court concluded that Dr. Jones by his acts and conduct and by his announcement of withdrawal made on or about August 25, 1963, terminated the partnership on October 1, 1963, and became the withdrawing partner within the meaning of the partnership agreement; that Dr. Cox is the owner of the partnership accounts receivable in existence on October 1, 1963, and the collection therefrom; that Drs. Cox and Jones each have an undivided one-half interest in the accounts receivable from October 1, 1963 to February 15, 1964; that Dr. Cox is entitled to rents collected for partnership assets (rented to one Dr. Phillip E. King) subsequent to February 15, 1964; that Dr. Cox is indebted to Dr. Jones for a $900 error in computing the value of his interest in the parking lot purchased by the partnership; that Dr. Cox is obligated to purchase Dr. Jones' capital investment at book value ($6,370.22) in cash or over a 5-year period in equal monthly installments with 5% interest per annum; that Dr. Jones and wife have no interest in partnership assets; that Dr. Jones is entitled to recover from Dr. Cox amounts paid by him from personal funds on a Koenigsberg note and a Schroeder note (mortgagees) subsequent to February 15, 1964; that Dr. Cox is entitled to recover from Dr. Jones the unpaid balance of Dr. Jones' notes (originally $1,970.20 and $3,272.71, representing one half of the equity value of furniture, fixtures and cash, and one half of the real estate equity values, furnished by Dr. Cox at the outset of the partnership). It was further concluded that further accounting would be required to determine the balances due on the Koenigsberg and Schroeder notes, the status of accounts receivable between April 1, 1962 and October 1, 1963, and those arising under the 'de facto' partnership from October 1, 1963 to February 15, 1964; the status of receipts and disbursements on the medical building and adjacent property from February 15, 1964 to the present time; and payments, offsets and credits, if any, on notes executed by Dr. Jones to Dr. Cox.
With respect to intervenors, Dr. Dyer and wife, the trial court found and declared they were entitled to enforce a recorded contract (pre-emptive agreement and option) to acquire the undivided 35% real estate interest of the partner (and wife) found to be the withdrawing partner (Dr. Jones), said pre-emptive right to be executed by Dyers within 30 days after this judgment becomes final, at a purchase price of $8,374.42, less depreciation from October 1, 1963. The judgment entered was declared to be a final order for purposes of appeal.
Dr. Cox began his practice of medicine in Liberty, Missouri, as an associate of Dr. Sydney O. Schroeder, M.D., at a salary of $500 per month. At that time Dr. Dyer had his dental offices in the medical building, owning with his wife, an undivided 30% thereof. On December 31, 1956, Drs. Schroeder and Cox made a written partnership agreement pursuant to which one half of Dr. Schroeder's interest in the building was conveyed to Dr. Cox and wife. This partnership was dissolved by written agreement on June 30, 1960, and Dr. Cox acquired by note for $10,235.50 Dr. Schroeder's one half of the then accounts receivable at about 55% of total value. Thereafter, Dr. Cox practiced his profession alone, except for two months when he had an associate, and for six months when another physician shared office space.
Then on July 17, 1961, Dr. Jones, who had completed his residency at St. Luke's Hospital, Kansas City, Missouri, came to Liberty as an associate to Dr. Cox at $1,000 per month. The employment contract recited that it at its completion a partnership. That agreement was consummated on April 1, 1962, in writing. At that time, Dr. Cox (and wife) had a record title to an undivided 35% of the medical building. Dr. Schroeder owned 35%, and Dr. Dyer owned 30%. The agreement between Dr. Cox and Dr. Jones recited that the Coxes owned 7/10, but actually the 35% interest conveyed to Dr. Jones and wife came from Dr. Schroeder. The agreement between Drs. Cox and Jones provided that Jones was to pay $1,470.21 for the one-half interest in personal property and equipment, and $3,272.71 for the Cox equity (35%) in the real estate, both figured at book value (cost less depreciation). There was also added to the note $500 advanced by Dr. Cox as Dr. Jones' one half of a starting bank account. The note bore interest at 4% per annum and was payable in monthly installments, chargeable against the withdrawal account of Dr. Jones. Dr. Cox also paid Dr. Jones $336.87 for one half of the book value of equipment which Dr. Jones brought with him.
At the time Dr. Jones became a partner, Dr. Cox' medical practice included some obstetrics, pediatrics and internal medicine, minor surgery and assisting in general or major surgery as well as a 15 or 20 per cent allergy practice. Dr. Jones undertook general practice with no allergy practice.
On May 28, 1962, Dr. Cox had a coronary thrombosis for which he was hospitalized to June 16 or 17, 1962. He then returned home for a period of convalescence, returned to part-time practice (10:00 a.m. to 2:00 p.m.) on August 16, 1962 until September 1, 1962, at which time he resumed full-time practice. During the illness and convalescence, Dr. Jones took care of all the practice, but starting in July, 1962, a modification in the partnership agreement was made in that Dr. Cox received $1,400 per month and Dr. Jones received the balance. On returning to full-time practice the then percentage of net profits was resumed: 60% to Dr. Cox; 40% to Dr. Jones, which continued to December, 1962. At that time a written amendment was made so that each partner thereafter was to receive 50% of the profits rather than wait until April 1, 1964, as provided in the original agreement.
After January 1, 1963, the relations between the partners seemed pretty good up to March 21, 1963, when Dr. Jones offered certain amendments or changes in the partnership agreement, but to which the parties were not able to agree. Dr. Jones wanted the doctor who took less days off per year to be compensated therefor; to delete the provision for note payments to be charged against his withdrawal account; a different provision for disability; decrease of office personnel when one partner was out for any reason; and to delete the forfeiture provision above alluded to if Dr. Cox terminated the partnership before April 1, 1964. Thereafter Dr. Jones complained about Dr. Cox taking too much time off and devoting too much time to his allergy practice (of which he did more than before his coronary attack).
On Sunday afternoon, August 25, 1963, Dr. Jones informed Dr. Cox orally that he was going to leave Liberty after September 30--that is, he was going to be gone October 1, 1963, to Kansas to practice medicine. The reason given was that he liked the Kansas school system better and Mrs. Jones did not like Liberty. Dr. Cox told Dr. Jones that he would have to tell Mrs. Reed (the office receptionist) so she would know how to book patients--not to book any more patients. (Mrs. Reed testified that Dr. Jones told her not to schedule any more obstetric patients for him after October 1, 1963, that he was leaving.) Dr. Cox then went to San Francisco and returned August 30, 1963, at which time he talked with interns or residents at General Hospital who would be available for joining a general practice in Liberty. When he returned to Liberty he learned that Dr. Jones was not leaving as of October 1, 1963, but had patients scheduled for that month, about which Dr. Cox asked Dr. Jones who replied that he was not going to be leaving then, he had changed his mind.
Dr. Cox thereafter pressed Dr. Jones at every opportunity, asking 'When are you going to leave?' Dr. Jones would not give him an answer. Dr. Cox testified that 'Then we continued our practice of medicine.' Dr. Cox could not get a definite date as to when Dr. Jones was going to remove himself from Liberty, so he decided that he should remove himself 'since he (Jones) had already dissolved the partnership.' On November 9, 1963,...
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Willman v. Beheler
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