Meredith v. Holmes

• Decision Date: 01 March 1904
• Citation: 105 Mo. App. 343,80 S.W. 61
• Court: Missouri Court of Appeals
• Parties: MEREDITH v. HOLMES.<SMALL><SUP>*</SUP></SMALL>

80 S.W. 61

105 Mo. App. 343

MEREDITH v. HOLMES.^*

St. Louis Court of Appeals. Missouri.

March 1, 1904.

CONTRACTS — WRITTEN CONTRACT—PAROL EVIDENCE —MISTAKE—BURDEN OF PROOF— EVIDENCE—SUFFICIENCY.

1. One seeking to have a written contract corrected on the ground of mistake has the burden of overthrowing by convincing evidence the prima facie presumption that the contract exhibits the agreement of the parties, and of showing that the mistake was mutual.

2. In a suit for the correction of a written contract on the ground of mistake, consisting of a failure to incorporate one of the terms of the contract, evidence considered, and held to sustain a judgment for defendant.

Appeal from St. Louis Circuit Court; H. D. Wood, Judge.

Action by Charles A. Meredith against James S. Holmes to reform a written contract. Judgment for defendant, and complainant appeals. Affirmed.

A. M. Sullivan and Klein & Hough, for appellant. Taylor, Harlan & Powers, for respondent.

Statement.

BLAND, P. J.

The petition is in two counts. The first is to reform a written contract on the ground of mutual mistake. The second is to recover on the contract after its reformation. Without reformation, the second count states no cause of action. The contract, as executed, is as follows:

"I, Dr. C. A. Meredith, agree to dispose of my Star Carriage Mfg. Co.'s stock, par value $2,000, and notes due from said company amounting to not less than $1,600, for the following consideration, viz.:

"That J. S. Holmes shall deliver to me within thirty days a $20,000 policy of life insurance issued by the Metropolitan Life Insurance Company, known as a fifteen-year endowment gold bond, that said J. S. Holmes shall deliver to me said policy, together with a receipt for $1,497.40 as first year's premium, also that J. S. Holmes shall give to Dr. Meredith two notes (without interest), one for $350 to be paid September 27, 1899, and one for $1,250, to be paid one year from date of above policy.

"It is understood and agreed that no obligation exists by virtue of this agreement unless said Metropolitan Life Insurance Company issues the above-described policy, and unless Dr. Meredith can deliver the stock and notes as above described.

"It is also understood and agreed that said J. S. Holmes assumes all responsibility for the stock and notes belonging to Dr. Meredith after the transfer is legally effected, and all other financial obligations to the Star Carriage Manufacturing Co. up to this date, said assumption to take effect on the delivery of above-described policy and the handing over to J. S. Holmes of the stock and notes above described.

                                          "C. A. Meredith
                

"Approved. J. S. Holmes."

The petition asks that the last clause of the contract be reformed so as to read as follows:

"It is also understood and agreed that said J. S. Holmes assumes all responsibility for the stock and notes belonging to Dr. Meredith after the transfer is legally effected, and all other financial obligations of C. A. Meredith for or on account of the Star Carriage Manufacturing Company up to this date, said assumption to take effect on the delivery of the above-described policy and the handing over to J. S. Holmes of the stock and note above described."

The evidence shows that the Star Carriage Manufacturing Company was a corporation operating a plant for manufacturing and repairing carriages in the city of St. Louis, and owned some city lots upon which it had a shed. The par value of the capital stock of the corporation was $100. The plaintiff in July, 1899, owned 20 shares, and the defendant 25 shares, of the stock. Plaintiff, defendant, H. M. Pierce, and Otto C. Schaefer constituted the board of directors. The corporation owed plaintiff over $1,600 for money he had advanced it. It also owed the Franklin Bank a note of $4,000, indorsed by plaintiff, Pierce, and Schaefer, and secured by a deed of trust upon its real estate, shown to be worth from $4,000 to $4,500. It also owed a note of $300 to Mrs. Lang, wife of the secretary of the company, indorsed by plaintiff and defendant. The annual statement of the previous year's business of the company, made June 30, 1899, showed that the company had made no money; and the plaintiff became dissatisfied with its management, and was desirous of disposing of his stock and withdrawing from the company. With a view to getting out of the concern, he approached defendant, and made him a proposition to sell out to him. Holmes suggested to plaintiff that he take a 15 or 20 year 5 per cent. gold bond policy for $20,000 in the Metropolitan Life Insurance Company of New York, of which company Holmes was manager. On July 30th plaintiff made the following proposition by letter to defendant: "July 30th, 1899. John Holmes, Esq., City—Mr. Friend Holmes: I have examined your prospectus of the $20,000 fifteen year gold bond endowment policy, and as you suggest I will make you the following proposition. I will transfer, or cause to be transferred, to you all my stock, $2,000, all my papers against the company, and about $1,700 for the following consideration: You to give me abovementioned policy, with the receipt for the first year's premium, $1,250 note for one year, $350 in cash, and one new storm buggy `A' grade, you to assume responsibility for the stocks and papers and all my responsibility relative to the company. If accepted I feel as though it will be rather expensive to me, but I am so thoroughly disgusted with the present management and do not care to be a party to a change, would rather know that I was out entirely. Please let me know your pleasure in the matter to-morrow. Respectfully, C. A. Meredith." The defendant replied as follows: "St. Louis, Mo., July 31, 1899. My dear Doctor: Sorry I could not see you to-day. I leave to-night for St. Joe and expect to be back Wednesday a. m. May be able to make some arrangement with you altho' I cannot accept your proposition. With kindest regards, I remain, Very sincerely yours, J. S. Holmes." A few days after this, plaintiff called at defendant's office, and the terms of the contract were discussed, resulting in a request from defendant that plaintiff write out a memorandum of what he wanted, whereupon plaintiff, as he testified, wrote out the following memorandum in pencil: "I have this day sold to Mr. J. S. Holmes all my stock, notes and accounts in and against the Star Carriage Manufacturing Company for $20,000, fifteen pay gold bond policy, paid for one year, $1,250, six per cent. note, payable before second premium falls due, $350 within 40 days, and one new storm buggy finished and completed; to be relieved from all obligations relative to Star Company." Plaintiff testified that, after he wrote out this memorandum, the defendant then wrote out the contract in detail. His testimony is as follows: "Q. Then Mr. Holmes wrote up a paper in pencil or pen and ink? A. Yes, sir. Q. And he told the stenographer to make a copy? A. Yes, sir. Q. And then did the stenographer bring back this paper? A. Yes, sir; and a copy. Q. A duplicate of it? A. A duplicate of it. Q. Now, when he first brought it did it have everything on it that is there now, or was there something added to it? A. Our names were added, nothing else. Q. Well, now at what time did you call his attention to the fact that it did not include the assumption of your liabilities? A. Well, in writing the contract, when it came down to that last clause, `It is also understood and agreed that said J. S. Holmes assumes all responsibility for the stock and notes belonging to Dr. Meredith after the transfer is legally effected,' I suggested to him at this juncture that— Q. Well, now, wait a minute. Now he had written that in the paper, had he? A. Yes, sir; and I suggested to him at this juncture that it did not cover my indorsements, and he says, `and all other financial obligations to the Star Carriage Manufacturing Company.' Q. And did he write that down? A. Yes, sir; he wrote it down. Q. On that paper? A. On that paper. Q. And then the stenographer produced this paper, did he? A. Yes, sir. Q. Now, then, when the stenographer brought this paper, what was done? A. Mr. Holmes read aloud one of them, and then we signed them. Q. That is, you signed them, and he marked them `Approved,' and signed his name. A. Yes, sir; we compared them one with the other to see if it was right. By the Court: Now let me understand that. Q. After this pencil memorandum had been made by you of what the terms of the contract were to be, then the paper marked `Exhibit No. 3' was handed to the stenographer? A. No; no, sir. Q. Oh, Mr. Holmes then sat down and wrote up another memorandum, did he? A. Well, he wrote it out in detail, you know; that...