Storck v. Pascoe

• Decision Date: 18 October 1955
• Docket Number: No. 48659,48659
• Citation: 72 N.W.2d 467,247 Iowa 54
• Parties: G. H. STORCK, Appellee, v. W. N. PASCOE, Appellant.
• Court: Iowa Supreme Court

Page 467

72 N.W.2d 467

247 Iowa 54

G. H. STORCK, Appellee, v. W. N. PASCOE, Appellant.

No. 48659.

Supreme Court of Iowa.

Oct. 18, 1955.

Uhlenhopp & Cady, Hampton, and Verne A. Mettler, Mason City, for appellant.

Leming & Hobson, Hampton, for appellee.

LARSON, Justice.

This is an action in equity in two counts brought by the plaintiff George Storck against his former partner, W. N. Pascoe, asking confirmation of certain oral contracts and damages for their breach. Count I related to the alleged breach of contract to purchase plaintiff's partnership interest, and Count II related to the alleged breach of contract to lease a building. The Sheffield Auto and Implement Company of Sheffield, Iowa, was owned and operated by the plaintiff with a 60% interest, and the defendant with a 40% interest. The property involved consisted of repair parts, equipment and supplies, housed in a building owned by plaintiff and for which the partnership paid him $100 per month rent. The earnings from the auto sales and repair business were divided 60% to plaintiff and 40% to defendant, as plaintiff had furnished the capital and defendant provided the management. For some time prior to September 26, 1953, negotiations were carried on between the partners whereby defendant would purchase plaintiff's interest, and an inventory was taken of the parts, equipment and supplies, which showed their reasonable value at $7,400. On September 26th plaintiff made an offer to sell and defendant made a counteroffer to buy. Defendant then offered to split the difference; plaintiff accepted and left the premises. Defendant then proceeded at his own expense to remodel, clean up the business office, and make other changes. During the same period of time the parties were negotiating on a building rental agreement. Matters in dispute, relating to the amount of the agreed consideration and whether or not the contract was later abandoned or rescinded, are hereafter set forth in the opinion.

It was defendant's contention that no oral agreements had been effected, but if such were found to be the case, that these contracts had been repudiated and rescinded by both parties, and since the partnership had been dissolved, the defendant had later disposed of only his 40% interest therein to others. The trial court found for the plaintiff on Count I and rendered judgment thereon in the sum of $3,600. In addition, the court found plaintiff had failed to prove the allegations in Count II, but awarded judgment for $40 to plaintiff for the use of the garage building from October 1, 1953, until defendant vacated the premises October 12, 1953. From a total judgment and decree against defendant in the sum of $3,640, together with interest and costs, defendant appeals. He relies upon the following propositions for reversal: (1) that the trial court erred in finding from the evidence that the rescission of the contract by the appellant Pascoe was ineffective, if an agreement in fact had been reached by the parties; (2) that the trial court erred in finding that a contract of sale had been made between the parties, in view of the record evidence; and (3) that the trial court erred in permitting a recovery on a contract at variance with the contract pleaded by the plaintiff, and the contract which plaintiff's evidence sought to prove.

I. This being an equity case, we are required to try it de novo and on its merits as it may appear from the whole record before us. Economy Hog & Cattle Powder Co. v. Honett, 222 Iowa 894, 270 N.W. 842. The questions presented are purely ones of fact. There is little or no dispute as to the applicable law. It is true, in equity we as an appellate court are not bound by the trial court's findings, but we have said many times we will in a proper case give weight to its findings. This is especially true as to the credibility of the witnesses before it and is most applicable herein. Taggart v. Burgin, 185 Iowa 937, 171 N.W. 113; Worthington v. Worthington, 238 Iowa 1044, 29 N.W.2d 186, and cases cited therein; Murray v. Murray, 244 Iowa 548, 553, 57 N.W.2d 234, 237, and cases cited therein; Wilson v. Wilson, Iowa, 68 N.W.2d 904.

II. With this well-established rule in mind, we have carefully examined the disputed record evidence. In support of the trial court's findings on the question of whether or not a contract of sale had been completed, plaintiff points to testimony offered by him as follows:

'We sat down and figured together in the office. My first proposition was to sell my interest for $4,400, and he countered with a proposition of $3,750 and $150 a month rent. He said he should only pay $3,750 as some of the parts were obsolete. I said, 'I'll take you up on it.' * * * He said that the $3,750 would be paid the first of October. This conversation was on September 25, 1953. Just the two of us were present. Following that conversation I was not back in the business at all. Mr. Pascoe took possession of my interest in the property that day. I have done business in Sheffield since that time and have seen that there were cars going in and out of there. * * * A little later I had a conversation with Mr. Pascoe and he said that he didn't have the money right then but that he would pay me at a little later date. * * * At the time that this $3,750 agreement was made, Pascoe said that he would take over the outstanding bills and he was to have the accounts receivable, which amounted to between $800 and $1,000. Since that time I have not collected any of those accounts receivable. He has. We had a conversation regarding the automobiles on hand at the time of our agreement of sale. I was to take one used one, and he would take the new ones. (This part of the transaction was carried out.) * * * After October 1st he employed a mechanic by the name of Mr. Huff. The partnership bank account of less than $50 was transferred to Pascoe. (Pascoe later closed out this account the following December.) * * * Mr. Pascoe had a key to the place and kept it. So far as I know he still has it. * * * Last Saturday night I was in the garage building and examined it to determine what parts and fixtures were left.'

Plaintiff also testified he kept a key to the building, not an unusual landlord practice. He further testified that sometime in December, and after Pascoe had told him that he wasn't going to pay anything, plaintiff did run an ad in the paper to sell his interest in the business, and to sell the garage building. He said: 'I had a talk with Mr. Clouse regarding the sale of the garage business. That conversation was by telephone while I was at my home. He said that he had a couple of fellows interested in buying the garage and I told him I couldn't sell because I had already sold to Mr. Pascoe. He said he wanted me to come up to see him so I did. I thought maybe he had a buyer for my other business. I talked to him at his office in Mason City. This was sometime in December. This was after Mr. Pascoe told me that he wasn't going to pay anything. Clouse told me he had two men who were interested in it and he said that if I would buy out Pascoe's share that they would settle. I told him that they should buy from Pascoe because he had bought it from me. I never heard any more from him.'

Plaintiff further stated a Mr. Hinch came out to see him and they had a conversation. 'He came out one Sunday afternoon--He said he had bought Pascoe's 40% out. I said, 'I don't know what you did, but I know I sold my interest, my 60% interest to Pascoe.' He did not ask me for a key to the building or permission to get into the building. I found out sometime later that he took a load of the stuff from the building, that he had bought some of the stuff from Pascoe. That was the first that I knew about it. During the time that Pascoe and I operated the business as a partnership, neither of us would go out and buy a car independently using out own money. We always bought it through the business. If the business was short of money we put money in. We both put money in. After September 26th I never asserted any control over this property. Mr. Pascoe was actually in possession of it. The property was delivered to Mr. Pascoe. When the deal was closed it was his to do with as he pleased.'

Later plaintiff said he was up to Mr. Hinch's place in Mason City and 'saw a lot of the property that originally belonged to the Sheffield Auto & Implement Company. All of the steel bins were there.' This item incidentally was a large part of the equipment figure. Plaintiff also stated: 'I know of my own knowledge that Mr. Huff went to work at the garage on September 26, 1953. He has told me that he would never work for me.'

Defendant on the other hand testified that after some prior negotiations, plaintiff asked $4,000 for his 60% share, and that he offered $3,200; that on September 26th defendant went in to see plaintiff and said: 'I told him I would split with him' and 'He said he'd take it.' Thereafter plaintiff left the premises and defendant did not see him again during the next two weeks. Defendant then, promptly and without consulting the plaintiff, fired the mechanic Louis Baker who had been working for the partnership. Baker, a disinterested witness, said defendant told him 'he bought it out and was taking over the shop.' On the same day, at defendant's request, Mr. Huff, who had said he would not work for the plaintiff, took over the shop and did, repair work using the shop tools, equipment, parts and supplies. Defendant had also suggested that Huff buy the shop equipment and named him a figure. Huff's testimony disclosed he was a somewhat interested party to these transactions, and we will refer later to his testimony.

The record discloses that a couple of weeks after the September meeting defendant told plaintiff's wife, at the store where she worked, to tell her husband to come down for his money; also that thereafter no accounting, as was usually had each month was...