Case ID: mo_129/html/0224-01.html
Source: Caselaw Access Project
Author: {"author": "Sherwood, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

D. C. Hardy Implement Company, Plaintiff in Error, v. South Bend Iron Works.
    Division Two,
    June 18, 1895.
    1. Executory Contract: partnership: dissolution: repudiation. Where an executory contract is made between an individual and a partnership composed of two others, and one of the parties withdraws from the partnership, thereby dissolving it, it is for the party contracting with the firm to say whether or not the contract shall proceed to completion, it appearing that it rested upon grounds of personal trust and confidence.
    2. -: -: -: practice: pleading: estoppel. In an action upon a contract, made by an individual with a firm composed of two others, by one member of the firm to whom the contract has been assigned after the dissolution of the partnership, the defendant will not be estopped to repudiate the contract upon the ground that he recognized its existence after the dissolution, where the petition does not allege that he so recognized it after the dissolution, and after receiving notice of the same.
    
      Error to Morgan Circuit Court. — Hon. D. W. Shaoklefobd, Judge.
    Affibmed.
    Action for breach of contract; petition in two counts. Except as to matter of damages, and of malice charged in the first, the counts are substantially the same, so that it will only be necessary to give the substance of the first count, which is to the effect: That Hardy & Mason, a firm composed of plaintiff and one Chas. H. Mason, on the thirtieth of November, 1892, entered into a written contract with defendant, whereby said Hardy & Mason agreed to buy, and defendant agreed to sell and ship to them, on or before February 1, 1893, certain plows, which are described in the petition; that said machinery was to be kept for sale by said Hardy & Mason, in their business as dealers in farm implements; that by the terms of said contract said plows were to be paid for by Hardy & Mason in the sum of about $250, with certain discounts thereon, on the first of July, 1893, with ten per cent additional discount off for cash, if paid before said time; that it was further stipulated in said contract, that in case said Hardy & Mason desired to purchase other and further plows, machinery or farm implements, during the year 1893, such purchases should be made subject to the conditions of the contract, to be paid for on the twentieth of the month following such purchase, subject to ten per cent discount, if paid at maturity; that it was further stipulated in said contract that defendant would not sell said plows, machinery or farm implements, including the “Oliver Chilled Plows,” to any other person or firm at Versailles or vicinity for the year 1893; that the firm of Hardy & Mason dissolved on the first of January, 1893, and Chas. H. Mason withdrew from the firm and retired from the business; and for a valuable consideration sold, transferred and assigned to the plaintiff all' of his interest in the contract with defendant,; and that plaintiff continued the business under the name of the D. C. Hardy Implement Com pany, that after the execution of said contract by defendant, “the said firm of Hardy & Mason and this plaintiff, relying upon the fulfillment and performance of same by defendant, and at the special instance and request of defendant, and at great cost to this plaintiff, advertised defendant’s machinery.” A breach of contract is then alleged by defendant’s refusal to ship the goods, and further by its selling its implements to a rival firm of dealers in Versailles during 1893, etc., etc.
    Defendant demurred, first, generally; and, second, “Because the petition shows that the suit is brought upon a contract, alleged to have been entered into by the defendant with the firm of Hardy & Mason, and assigned by them to plaintiff, whereby defendant was to sell goods to Hardy & Mason during the year 1893, upon credit; and to give them exclusive privilege of selling defendant’s goods during said year at Versailles, Missouri, and said contract is not alleged to have been assigned to plaintiff with defendant’s consent.” On this demurrer, the petition being adjudged insufficient in law, plaintiff declined to plead further, and judgment going on the demurrer, plaintiff brought error.
    
      John A. Blevins for plaintiff in error.
    (1) It is not necessary to enable plaintiff to maintain his suit that defendant should have consented to the assignment of the contract declared on in the petition. The contract was one for the sale of personal property and the question of personal confidence or skill formed no part of the consideration for same. It could be performed by one party as well as by another. Leahy v. Dug dale's Adm’r, 27 Mo. 437; St. Louis v. Clemens, 42 Mo. 71; Love v. Van Anery, 18 Mo. App. 196; Duhse v. Mfg. Co., 63 Ind. 9; Jones v. Foster, 67 Wis. 296; Palmer v. Sawyer, 114 Mass. 1; Lansdenv. McCarthy, 45 Mo. 106; 21 Eng; Law and Equity Reports, 566; Devlin v. Mayor, 63 N. Y. 8. (2) Mason was lia'ble to defendant for the faithful performance of the contract as well after dissolution as before, and whatever arrangements may have been entered into by Hardy & Mason, as between themselves, business, engagements, obligations and contracts made prior to the dissolution had to be completed and, as to such matters, the partnership was still in existence. The defendant could insist upon the firm carrying out the contract and there is no sound reason why this obligation should not be reciprocal. Hardy could make no new contract after the dissolution binding the firm, but he could do every act in relation to any subsisting contract in the fulfillment of the same that the firm could have done, and Mason would have been equally liable with him. Bank v. Altheimer, 91 Mo. 190; Coudry v. Gilliam, 60 Mo. 92; Harris v. Odeal, 39 Mo. App. 274; Kenney v. Altvater, 77 Pa. St. 34; Collier on Part. [6 Ed.], p. 894; Parsons on Part., secs. 300, 313, and 324; 22 Am. Dec. 379; 13 Am. Rep. 562; Walcott v. Smith, 15 Gray, 536; Brown v. Hill, 27 Miss. 40; 2 Bates on Part., secs. 707 to 711; Story on Part., secs. 325 to 328; Parsons on Part., p. 394. (3) Even if Mason’s retirement from the firm should release him on the contract, it would devolve upon defendant to show that the plaintiff was rendered insolvent thereby before it would be excused in tbe premises. This could be done only by answer to the merits. (4) Defendant is estopped from repudiating the contract for the reason that it recognized it as still existing after the dissolution of the firm, by requesting plaintiff to advertise that on and after February 1, 1893, he would be able to furnish to his customers the plows and implements called for in the contract. Plaintiff was by such conduct of defendant induced to believe the contract was to be carried out by all parties and to so change his condition that it would greatly damage him for defendant to be • permitted now to ignore it. These facts are sufficiently alleged in the petition. Justice v. Lancaster, 20 Mo. App. 559; Union Savings Ass’n v. Kehler, 7 Mo. App. 158; Fairley v. Pettis, 5 Mo. App. 262; Blodgett v. Perry, 97 Mo. 271; Bigelow on Estop., p. 578.
    
      W. F. Quigley and Draffen & Williams for defendant in error.
    (1) ‘ ‘Rights arising out of contract can not be transferred if they are coupled with liabilities, or if they involve a relation of personal confidence, such that the party whose agreement conferred those rights, must have intended them to be exercised only by him in whom he actually confided.” Lansden v. McCarthy, 45 Mo. 156; Boyldn v. Campbell, 9 Mo. App. 495; Redheffer v. Leathe, 15 Mo; App. 12; Worden v. Railroad, 48 N. W. Rep. 71; Boston Ice Co. v. Potter, 123 Mass. 28; Pettibone v. Railway, 1 L. R. A. 787; Rappleye v. Racine Seeder Co., 7. L. R. A. 139. (2) The contract sued on comes within the rule announced in the above cited cases. The agreement required defendant to sell to Hardy & Mason, during the year 1893, upon credit, agricultural implements whenever ordered. It further gave to them the exclusive right to sell the defendant’s goods in the vicinity of Versailles, and bound defendant not to sell to anyone else. One of the grounds of complaint is that defendant did sell to a rival firm. The inducement, upon defendant’s part, to such a contract was manifestly the personal confidence and trust reposed by defendant in Hardy & Mason. The defendant must be presumed to have expected a benefit from said contract, in the increased sale of its goods, by reason of the business capacity and skill of Hardy & Mason, else it would not have given them the exclusive right to handle its goods at Versailles. Defendant must also have relied upon their solvency when it agreed to extend it. In such a contract as this the delectus personae was a most material matter. It was not a sale of goods to be paid for on delivery. (3) The fact that plaintiff was a member of the firm of Hardy & Mason will not enable him to maintain this suit. He claims, in his petition as assignee, and alleges the dissolution of the firm on January 1, 1893. Mason could not be held for goods ordered after notice of dissolution. The contract contemplated a continuation of the relation during the year 1893. It virtually made Hardy & Mason agents for the sale of defendant’s goods at Versailles; at any rate, the amount of sales would depend upon their business capacity to a great extent. The contract could not be assigned in part. It may well be that defendant would be willing to confide' its interests, and to sell on credit such goods as might be ordered, to Hardy & Mason, when it would be wholly unwilling to make such an agreement with one of them alone. The fact that the assignee is a former. partner will not enable him to enforce the contract, if it is of that class in which the choice of the party to be contracted with is material. Redheffer v. Leaihe, 15 Mo. App. 12-15; Lansdenv. McCarthy, 45 Mo. 106; Hobson v. Drummond, 2 Barn. & Adol. 303. (4) The petition does not allege that the defendant requested the plaintiff to advertise its goods after the dissolution of the firm, or that it made any snch request after it had notice of the assignment. There could he no ratification of the assignment without notice thereof. Boston Ice Co. v.- Potter, 123 Mass. 28. Webb v. Allington, 27 Mo. App. 559. (5) The demurrer was properly sustained to the first count for the further reason that it fails to show any legal damage for which plaintiff can recover. The petition -should aver that the plaintiff had sustained damages, such as the law recognizes and permits to be recovered. 3 Sedgwick on Damages [8 Ed.], sec. 1257. The only damages alleged in the first count are speculative and too remote. O’Neill v. Johnson, 55 N. W. Rep. 601; Hartnell v. Crumb, 90 Mo. 629.
   Sherwood, J.

Where, as here, an executory contract is made between two parties, and one of them consists of two persons composing a partnership, and one of those persons withdraws from the firm which is thereby dissolved, it belongs to the party who contracted with the firm to say whether the contract, which, as in this case, rested as it appears, on grounds of personal trust and confidence, to say whether the contract shall proceed or not to completion. In short, whether the other contractor would recognize and ratify a substituted, in lieu of the original, agreement.

Here the plows were to be placed in the custody of both Hardy & Mason, to whom a credit was to be given, and certain discount advantages afforded, and it is not to be taken for granted that because defendant was willing to enter into a contract with Hardy & Mason, that therefore it was willing to stand to the contract after Mason had withdrawn therefrom, since but for Mason’s being in the firm and remaining in the firm, defendant might have been unwilling to have trusted its implements to Hardy alone, but whether willing or unwilling, it suffices to say that this was not done. A party can not be forced to accept of a contract not of his own choosing in the first instance, and his right of choice in this regard is not impaired by any substituted agreement to which he does not yield an intelligent subsequent assent.

This precise point was thus ruled in Landsden v. McCarthy, 45 Mo. 106, where the case of Robson v. Drummond, 2 Barn. & Ad. 303, was followed. There, Sharpe, a coaehmaker, agreed to furnish Drummond a chariot for the term of five years at so much per annum, payable yearly in advance. CAt the end of three years, Sharpe assigned his contract to his secret partner, ^Robson, the partnership being unknown to Drummond, who refused to continue the contract with Robson. Thereupon action was brought in the name of Robson & Sharpe to recover the stipulated price for the unpaid portion of the term, and it was ruled the action could not be maintained. On these facts being developed, Littledale, J., said: “ I think this contract was personal, and that Sharpe having gone out of the business, it was competent to the defendant to consider the agreement at an end. He may have been induced to enter into the contract by reason of the confidence he reposed in Sharpe.” And, Loud Tenteeden, O. J., observed: “Now the defendant may have been induced to enter into this contract by reason of' the personal confidence which he reposed in Sharpe, and therefore have agreed to pay- money in advance.”

This principle of jurisprudence, finds abundant support in the authorities as appears from the cases cited by counsel for defendant. Boykin v. Campbell, 9 Mo. App. 495; Redheffer v. Leathe, 15 Mo. App. 12; Worden v. Railroad, 48 N. W. Rep. 71; Boston Ice Co. v. Potter, 123 Mass. 28; Pettibone v. Railroad, 1 L. R. A. 787; Rappleye v. Racine Seeder Co., 7 L. R. A. 139.

■ The case of Leahy v. Dugdale’s Adm’r, 27 Mo. 437, is not at all in point, because there, JDugdale, the original contractor with the Central Plank Road Company, sublet his contract to O’Leary & Neenan, who performed about half of the work, and then sublet the residue of the work to Leahy and Neenan and^also assigned to them the money and debts düéffóña Dug-dale to them O’Leary & Neenan. Leahy & Neenan finished the work. Dudgale received notice of the second assignment, and ratified it^.ánd the company accepted work and paid Dudgale who accepted pay for the whole work; and therefore it was very properly held that Dugdale’s estate could not escape payment to the second subcontractors.

No more is City of St. Louis to use v. Clemens, 42 Mo. 69, in point, because there, “the city did not object to the assignment of the contract, nor to the work as done, but recognized the plaintiffs as assignee and the person entitled to receive the tax bills.” And a similar line of remark as to inapplicability applies to other cases cited for plaintiffs.

We need not discuss whether or not Mason would continue liable to defendant for the faithful performance of his contract after dissolution of his firm. That is not in issue here. .-The only issue is that before stated, whether the defendant company was bound by a contract which had been assigned without its consent.

It has been urged that in any event defendant company is estopped from repudiating the contract for the reason that it recognized it as still existing after the dissolution of the firm, by requesting plaintiff to advertise that on arid after February 1, 1893, he •would be able.to furnish the plows, etc., called for in the contract; but there is no allegation in the petition that defendant requested plaintiff to advertise its goods after the dissolution of the firm, or after notice, oí the same. Clearly there could be no ratification of the assignment of the contract without knowledge of the dissolution, and without knowledge of the assignment after knowledge of the dissolution. Boston Ice Co. v. Potter, 123 Mass. 28; Webb v. Allington, 27 Mo. App. 559; First Nat. Bk. v. Gay, 63 Mo. loc. cit. 39.

For these reasons we affirm the judgment.

All concur.