Patton v. Goodson

• Decision Date: 06 November 1944
• Docket Number: No. 20498.,20498.
• Parties: LEONARD P. PATTON, APPELLANT, v. R.L. GOODSON, RESPONDENT.
• Court: Missouri Court of Appeals

183 S.W.2d 333

LEONARD P. PATTON, APPELLANT, v. R.L. GOODSON, RESPONDENT.

No. 20498.

Kansas City Court of Appeals. Missouri.

November 6, 1944.

Appeal from the Circuit Court of Macon County. — Hon. Harry J. Libby, Judge.

AFFIRMED.

Nat M. Lacy for appellant.

(1) The respondent is estopped to claim a credit for $820 back salary in the accounting of the partnership affairs. Johnson v. Peckham, 120 S.W. (2d) 786, 120, A.L.R. 720; Annotation 724. (2) The general rule that the utmost good faith is required of partners in their relationship with each other and that, since each is the confidential agent of the other, each has a right to know all that the others know; and each is required to make full disclosure of all materials facts within his knowledge in anyway, relating to partnership affairs, is held almost universally to apply in the case of one partner to another. Pomeroy v. Benton, 57 Mo. 531; Burgess v. Deierling, 112 Mo. App. 383, 388; Brooks v. Martin & Wall, 70, 17 L. Ed. 732; Johnson v. Peckham, 120 S.W. (2d) 786; 120 A.L.R. 720, 722. (3) The existence of strained relations between the partners work no exception to the rule stated above. Johnson v. Peckham, supra; Minhard v. Salmon, 249 N.Y. 458, 164 N.E. 545, 546, 62 A.L.R. 1; Gilbert v. Anderson, 73 N.J. Eq. 243, 66 Atl. 926. (4) The appellant was denied an accounting by the court. Robert v. Davis, 142 S.W. (2d) 1111, 1116; Buffington v. Green, 221 Mo. App. 695, 285 S.W. 531. (5) The motion in arrest of judgment should have been sustained because upon the record the judgment was erroneous. The tender made was not sufficient because the costs to the time the tender was made were not included therein. All of which appears from the record proper, because no tender is pleaded prior to that made by the answer. And the court erroneously awarded all costs against Appellant by the judgment and decree. R.S. 1939, sec. 1425; Kenney v. Ry., 39 Mo. App. 302; Atkins v. Ost, 112 Mo. App. 256; Wolf v. Ins. Co., 204 Mo. App. 401; Dairy Co. v. Dairy Co., 96 Mo. App. 495; Linn County v. Bank, 175 Mo. 539, 75 S.W. 393; Mahan v. Waters, 60 Mo. 167. In any event the appellant should have had judgment for the $69.22 and costs to the time of tender, which respondent testified he owed defendant. The judgment was against the evidence and the law thereunder. Wolf v. Insurance Company, supra.

George N. Davis, Charles W. Shelton and Wm. VanCleve for respondent.

(1) The evidence in this case is not sufficient to establish either an estoppel against the defendant precluding him from claiming his full salary nor a waiver on his part of the payment of his back salary. If the facts be known by both parties or if they have equal means of ascertaining them there can be no estoppel. Grafeman Dairy Company v. The Northwestern Bank, 290 Mo. 311, 235 S.W. 435; Rhoades v. Rhoades, 119 S.W. (2d) 247; Wall Inv. Co. v. Scumacher, 125 S.W. (2d) 838; Roth v. Hoffman, 111 S.W. (2d) 988; Fisher v. Ely & Walker Dry Goods Co., 46 S.W. (2d) 902; Nat. Match Co. v. Empire Storage & Ice Co., 227 Mo. App. 1115, 58 S.W. (2d) 797. Acts, conduct, or nonaction, to be construed as "waivers," must be manifestly consistent with, and indicative of, intention to waive or to relinquish right, so that no other reasonable explanation is possible. Concrete Engineering Co. v. Grande Bldg. Co., 230 Mo. App. 443, 86 S.W. (2d) 595; Wilkinson v. Lieberman, 327 Mo. 420, 37 S.W. (2d) 533; State of Mo. ex rel. and to Use of Abeille Fire Ins. Co. of Paris v. Sevier, 55 S. Ct. 99, 293 U.S. 585, 79 L. Ed. 680; Charter Oak Inv. Co. v. Felker, 60 S.W. (2d) 655. (2) The rule as stated in the appellant's brief under the above heading is correct, but there is no evidence of any failure to make full disclosure of any material fact which is not known to both parties of this action; consequently the rule does not apply. (3, 4) This is not a suit for an accounting at all, but a suit for breach of contract. Koontz v. Whittaker, 111 S.W. (2d) 197; Day v. Stafford, 128 Mo. App. 438, 104 S.W. 433.

DEW, J.

This is an action in equity for accounting. It is based on transactions between partners and on a contract for dissolution of the partnership and for sale of appellant's interest therein to his partner, the respondent. The trial court found against the plaintiff (appellant) and for the defendant (respondent), dismissing the petition, and assessed the costs to appellant.

Appellant, by his amended petition, alleged in substance, that prior to January 8, 1940, he and respondent were engaged in merchandise business in Macon, Missouri, as partners, and in the conduct of said business, certain indebtedness on notes and open accounts had become due them and certain outstanding obligations of the firm for goods and merchandise existed; that on said date said partners, for the purpose of dissolving their firm and closing up the affairs thereof, entered into an agreement by which the appellant agreed to sell his one-half interest in the merchandise and fixtures of the store known as the Quality Hardware Store, to respondent; that they agreed thereby on an inventory basis of $5903.30, less outstanding obligations, the appellant to receive from respondent $50 in cash therefor, and within ten days an additional sum of $1850; that the $50 and $1850 cash payments were made and received as agreed. He further alleged the agreement to be that the outstanding obligations of the firm amounted to $1147.66, which was to be deducted from the agreed inventory aforesaid, the remainder to be divided equally, and deducting the $1900 from the quotient so obtained, the balance, $477.86, to be due the appellant; which latter sum, together with a like amount due the respondent, was to be held in escrow by respondent as a separate fund ot secure their liability on the payment of certain notes, which they had endorsed and transferred to a finance company, and that when such notes were duly paid, the said partners were to be released of liability thereon, and the $477.86, belonging to appellant should then be paid to him.

The petition also alleged the agreement to be that in consideration of the sale and delivery of appellant's one-half interest in the firm, assets, and business to the respondent, the latter would pay to appellant one-half of all cash on hand in bank as of January 8, 1940, and all accounts receivable would be divided equally between them as collected. The petition alleged that appellant had accordingly surrendered his interest in the property aforesaid to the respondent, but that the respondent had collected large sums of money on the bills receivable and had failed to account to the appellant for the $477.86 held by respondent, as aforesaid, although due and owing to the appellant, and had not accounted to appellant for one-half of the bank account of the firm.

The petition further alleged that all the books and papers since January 8, 1940, had been in the hands of the respondent; had been in his charge while the firm was in business; that the appellant was not advised of the amounts of the accounts receivable, nor the amounts collected thereon, nor the bank balance, and that an accounting is necessary for the purpose of ascertaining the amount due the appellant, arising out of the agreements and transactions above set forth. Appellant alleged that he was without adequate remedy at law; that there is a balance due him under said agreement and prayed for an accounting between the parties to determine the amount due and for judgment for the appellant for breach of said contract in whatever sum the accounting may show to be due appellant, and for general relief.

Respondent's answer to the first amended petition was a general denial, and for further answer, admitted the partnership had existed long prior to January 8, 1940; stated that during all the time said firm was in existence appellant was a traveling salesman and devoted his time to such employment, while the respondent was engaged during all of that time as manager of the partnership business and retail store in Macon, Missouri, and as clerk and bookkeeper thereof, devoting his entire time to said business; that it was expressly agreed between the partners that respondent should receive for his services in the management and supervision of said business a salary of $125 per month; that said salary was regularly paid to respondent during the entire course of said business except $820, which is an outstanding obligation of the partnership to be taken into account on final accounting; that in the conduct of said business, certain indebtedness became due to the parties on notes and open accounts, and that they had contracted certain debts for merchandise and for expenses in conducting said business, including the balance due the respondent, on account of his employment as manager and supervisor of said business.

The respondent further, by his answer, admitted that the partnership was dissolved on January 8, 1940, whereby respondent purchased all the right, title, and interest of the appellant in said firm, and alleged that in so doing the parties entered into the following contract:

"Contract

"This contract, made and entered into on January 8, 1940 by and between Leonard P. Patton, party of the first part, and R.L. Goodson, party of the second part.

"Party of the first agrees to sell his undivided one-half interest in the Quality Hardware Store, Macon, Missouri, on the following terms:

"On inventory of $5,903.38 less outstanding obligations shall be considered his one-half interest of store.

"Party of the Second Part agrees to pay, $50 cash in hand at once, receipt of which is hereby acknowledged, and $1,850 within ten days from date of this contract.

"Both parties of this contract agree to divide all cash on hand and in bank, as of today equally, also to divide all accounts receivable equally as collected.

"Both parties of this contract agree that any balance due party of the...