Willman v. Beheler

• Citation: 499 S.W.2d 770
• Decision Date: 14 May 1973
• Docket Number: No. 57352,No. 2,57352,2
• Parties: Charles R. WILLMAN, Appellant-Respondent, v. Edward M. BEHELER, Respondent-Appellant
• Court: United States State Supreme Court of Missouri

Page 770

499 S.W.2d 770

Charles R. WILLMAN, Appellant-Respondent, v. Edward M. BEHELER, Respondent-Appellant.

No. 57352.

Supreme Court of Missouri, Division No. 2.

May 14, 1973.

Motion to Modify Opinion Sustained and Modified June 11, 1973.

R. A. Brown, St. Joseph, for appellant-respondent.

O. W. Watkins, Jr., St. Joseph, for respondent-appellant.

HOUSER, Commissioner.

Suit in equity filed by Dr. Charles R. Willman to enjoin his former partner, Dr. Edward M. Beheler, from practicing medicine in St. Joseph, based upon a restrictive covenant, Article XXII of the partnership contract, which provided: 'In the event Dr. Beheler leaves the partnership voluntarily or involuntarily, Dr. Beheler agrees that he will not practice medicine for a period of five (5) years from the date of his leaving the partnership within a radius of twenty (20) miles from the corporate limits of St. Joseph, Missouri * * *.' Dr. Beheler filed a counterclaim for $40,000, allegedly due him for his percentage of the partnership assets and accounts receivable, under Article XVIII of the partnership contract.

Following trial by the court, without the aid of a jury, judgment was entered for defendant Beheler on plaintiff Willman's petition and against defendant Beheler on the latter's counterclaim, except that the court awarded Beheler $2,915.04, the amount Beheler was found to have paid for his interest in the partnership assets, and awarded Beheler the accounts receivable remaining uncollected as of the date of judgment. After filing unavailing motions for new trial both parties appealed. More than $30,000 is in dispute and, the notice of appeal having been filed prior to January 1, 1972, this Court has jurisdiction. Mo.Const. Art. V, §§ 3, 31, V.A.M.S.

Willman, an established surgeon practicing in St. Joseph, desiring to have a younger associate, contacted Beheler, who was completing his postgraduate medical training. On April 10, 1965 they entered into a one-year contract of employment. Willman advised Beheler prior to employment that a partnership would develop if the employment relationship proved satisfactory. A partnership agreement for the practice of medicine was entered into on December 1, 1966.

Article II provided that the partnership should continue 'until dissolved by mutual agreement or operation of law; either partner may terminate his interest in this partnership by the giving of a written notice to the other partner at least thirty (30) days in advance of the intended termination date.'

Article XVIII, captioned 'Leaving Partnership,' provided:

'In the event a partner voluntarily leaves the partnership, he will be paid his percentage of the book value of all partnership assets, excluding the accounts receivable. The accounts receivable shall be frozen as of the date of the partner's leaving the partnership, and underlined with red pencil, and said leaving partner's share of said accounts receivable shall be based on his percentage of the net profits as set out in Article XV of this agreement, less any necessary collection expenses. Said leaving partner shall receive said percentage of said accounts receivable for a period of _ _ months from the date said partner leaves the partnership. After the expiration of the _ _ month period, all uncollected accounts receivable shall become the property of the remaining partner.'

The agreement provided for division of profits at the following percentages for the first, second and third years, Willman to take the higher percentage in each instance: 65--35; 60--40; 55--45. After July 1, 1968 the partners were to share 50--50.

The partners were not compatible. There was tension in the office. Willman complained of lack of communication and consultation between the partners; failure of Beheler to cooperate in matters of patient care, trading weekends, office administration, etc. Willman was not satisfied with the way the partnership was working out and finally, on July 2, 1968, Willman handed Beheler the following letter: 'After much thought and consideration and at the advice of Professional Management, I have decided to exercise the option of the contract with thirty days notice of termination of partnership.' Beheler then wrote Willman, calling for compliance with Article XVIII. Beheler remained in St. Joseph and has continued to practice medicine there.

On the Petition

Appellant Willman contends that the court erred in refusing to enforce the restrictive covenant; that Beheler left the partnership involuntarily and was bound by his covenant prohibiting him from practicing in that event.

Beheler contends that Willman had no right to expel him; that the contract contemplates that if one partner leaves the other remains; that Willman was the 'leaving' partner and Beheler the 'remaining' partner; that since Beheler did not leave he did not leave involuntarily; that the parties did not intend to permit an 'expulsion' Of Beheler without good cause and that Willman did not have good cause to expel him; that Willman could not 'terminate' the partnership without suing for dissolution under § 358.320 RSMo 1969, V.A.M.S.; that Article XXII is void as against public policy and constitutes an unreasonable restraint of trade.

Extensive extrinsic evidence was admitted at the trial relating to negotiations, communications and conversations between Willman, Beheler, Professional Management, Inc. and a lawyer touching the meaning of the words 'leaves the partnership * * * involuntarily.' as used in Article XXII. We deem these words to be plain, clear, unambiguous and unequivocal and not in need of construction arising out of extrinsic evidence bearing upon the intention of the parties. 'If the terms of a contract are clear and unambiguous the contract will be enforced or given effect in accordance with its terms, and without resort to construction to determine the intention of the parties. State ex rel. National Life Insurance Co. v. Allen, 301 Mo. 631, 256 S.W. 737. In such case the construction of the parties, if at variance with the written terms, will not be followed, Campbell v. Webb, 356 Mo. 466, 202 S.W.2d 35, but the contract will be construed as written. J. E. Blank, Inc. v. Lennox Land Co., 351 Mo. 932, 174 S.W.2d 862. 'When the language of a contract is plain, there can be no construction because there is nothing to construe.' Mickleberry's Food Products Co. v. Haeussermann, Mo.Sup., 247 S.W.2d 731, loc. cit. 738.' Leggett v. Missouri State Life Ins. Co., 342 S.W.2d 833, 851(11, 12) (Mo. banc 1960). In construing this unambiguous partnership agreement we seek to ascertain the intent of the parties by giving to the language used its natural, ordinary, and common sense meaning, looking to the entire contract, and considering the object, nature and purpose of the agreement. Wilshire Const. Co. v. Union Electric Co., 463 S.W.2d 903 (Mo.1971). We also observe the rule that this contractual writing is to be construed in the light of the law existing at the time it was entered into. State ex rel. Smith v. City of Springfield, 375 S.W.2d 84, 91(3) (Mo. banc 1964). So considered, we conclude that the court erred in rendering judgment for Beheler and against Willman on the petition; that Article XXII is not void as against public policy; that Beheler left the partnership involuntarily; that Willman could 'terminate' (actually, could dissolve by withdrawing from) the partnership and be entitled to enforcement of Article XXII without making a showing of good cause based on Beheler's misconduct, and that Willman could 'terminate' the partnership without suing for dissolution under § 358.320 RSMo 1969, V.A.M.S.

In a partnership without a definite term either partner may dissolve the partnership by his act alone in accordance with his own will and pleasure. 60 Am.Jur.2d Partnership § 175. No fixed term for the duration of the partnership was agreed upon. Either partner could at any time 'terminate his interest' in the partnership without the consent of the other, Bevins v. Harris, 380 S.W.2d 345, 352(7) (Mo.1964); Schneider v. Newmark, 359 Mo. 955, 224 S.W.2d 968, 970(1) (1949), by giving the 30-day written notice. By Willman's act of giving the 30-day written notice provided for in Article II Willman thereby withdrew from the partnership--voluntarily 'left' the partnership within the meaning of Article XVIII as of his own 'termination' date, August 2, 1968, Cox v. Jones, 412 S.W.2d 143, 151 (Mo.1966)--and dissolved the partnership. Willman's notice did not terminate the partnership, which would continue until the affairs of the partnership were would up. ('In common parlance 'termination' is sometimes used to indicate a change in the status of a partnership when 'dissolution' would be legally correct.' Landau v. Laughren, 357 S.W.2d 74, 82(6) (Mo.1962); 68 C.J.S. Partnership § 330, fns. 44, 45.) Willman's letter of July 2, 1968 dissolved this partnership; there was no necessity to sue for dissolution under § 358.320 RSMo 1969, V.A.M.S. While there was no specific provision in the partnership agreement in terms authorizing either to expel or oust the other, there was inherent in the agreement the ever-present possibility that either partner might achieve that result by giving the 30-day notice (except, of course, in case of illness or disability of a partner, in which event under Article XVII the partnership could not be dissolved sooner than 6 months from the date of commencement of illness or disability).

In Beheler's brief an effort is made to reconstruct the partnership agreement in terms of 'departing' partner and 'remaining' partner; to rewrite Article XVIII to provide for payment by remaining partner to departing partner of his percentage of book value of partnership assets within 60 days after termination; to omit 'voluntarily or involuntarily' from and add 'before he is an equal partner' to Article XXII after the words 'leaves the partnership,' etc. on the ground that this is...