Case Name: Gay D. LANDAU, Appellant, v. ST. LOUIS PUBLIC SERVICE COMPANY, a Corporation, Respondent
Court: Supreme Court of Missouri
Jurisdiction: Missouri
Decision Date: 1954-11-08
Citations: 273 S.W.2d 255
Docket Number: No. 44463
Parties: Gay D. LANDAU, Appellant, v. ST. LOUIS PUBLIC SERVICE COMPANY, a Corporation, Respondent.
Judges: LEEDY, Acting C. J., and HOLLINGS-WORTH and ELLISON, JJ., concur.
Reporter: South Western Reporter Second Series
Volume: 273
Pages: 255–264

Head Matter:
Gay D. LANDAU, Appellant, v. ST. LOUIS PUBLIC SERVICE COMPANY, a Corporation, Respondent.
No. 44463.
Supreme Court of Missouri. En Banc.
Nov. 8, 1954.
Rehearing Denied Dec. 13, 1954.
Hullverson & Richardson, William L. Mason, Jr., St. Louis, for appellant.
Lloyd E. Boas, St. Louis, for respondent.

Opinion:
HYDE, Judge.
This action was for damages for personal injuries. Defendant's answer contained a petition for equitable relief of specific performance of an agreement alleged to have been made for compromise and settlement of the case. The court, in a separate trial of this issue, entered a decree requiring specific performance of this agreement and dismissing plaintiff's action with prejudice. On plaintiff's appeal, this decree was affirmed by the St. Louis Court of Appeals. Landau v. St. Louis Public Service Co., 267 S.W.2d 364. We transferred the case here on application of plaintiff.
The facts are adequately stated by the Court of Appeals, including quotations from the testimony, to which we make reference and adopt. It clearly appears from this statement and from the record that, when the case came up for trial, an agreement was made in the courtroom between plaintiff and defendant to settle plaintiff's case for $1,750 and costs. Plaintiff admitted in her testimony that she authorized her attorney to make this agreement after he had consulted her husband by telephone and told him the amount offered. Since plaintiff has clearly admitted this agreement was made, it is not now important that the parties did not follow the procedure stated in Fair Mercantile Co. v. Union-May-Stern Co., 359 Mo. 385, 221 S.W.2d 751, 753 (of making a record in open court by having the parties testify to the terms of the settlement) which would take the place of a written stipulation. This is true because "compromise agreements need not be in writing unless the subject matter is within the statute of frauds." 11 Am.Jur. 248, Sec. 3; see also 15 C.J.S., Compromise and Settlement, § 17, p. 734. Defendant also agrees that the agreement was as plaintiff stated it, so there can be no issue in this case as to the agreement being made and what it was. Since, as shown by the testimony of plaintiff and her attorney, as well as defendant's attorney, there is no dispute about the terms of the settlement agreement, plaintiff's contention on this appeal that there was no meeting of the minds concerning the subject matter cannot be sustained.
Likewise, plaintiff's contention that there was no jurisdiction to render the decree herein, because defendant had an adequate remedy at law, is without merit. This contention is that defendant could have had a judgment entered in favor of plaintiff and against it for $1,750, citing Allen v. Fewel, 337 Mo. 955, 87 S.W.2d 142. Of course, the parties could have done that at the time of the settlement. However, that could only have been done by agreement of the parties and that was not the agreement they made. Instead, there was to be a release signed by plaintiff and a dismissal with prejudice of plaintiff's action. Since defendant could never have had the case settled by entry of judgment for $1,750, without plaintiff's consent, this was no remedy at all under the actual facts. It was clearly a case for specific performance. See 11 Am.Jur. 283, Sec. 35; 15 C.J.S., Compromise and Settlement, § 48, p. 771; 81 C.J.S., Specific Performance, § 88, p. 604; Fair Mercantile Co. v. Union-May-Stem Co., supra. Defendant had no other adequate remedy.
The real question in this case, which was the reason for transfer, is whether there was a rescission of the settlement agreement by the parties after it was made. Plaintiff wanted to rescind it and made this desire known to defendant ; but plaintiff, of course, could not alone rescind it. The basis of plaintiff's claim of rescission is that there was rescission, to which she was 'willing to consent, by conduct of defendant amounting to a repudiation of the agreement by sending her a release to be signed by both her and her husband. This release recited that it released not only the claim on which plaintiff sued but also all other claims plaintiff might have "from the beginning of time to and including the date hereof" and also covered all claims her husband might have for the same period which would have included his action for loss of services etc. and for property damage to his automobile which plaintiff was driving when injured. Plaintiff cites cases saying that rescission may be inferred from the acts, conduct or declarations of the parties, namely: Chouteau v. Jupiter Iron Works, 94 Mo. 388, 7 S.W. 467; People's Finance Corp. v. Buckner, 344 Mo. 347, 126 S.W .2d 301; Henges Co. v. May, Mo. App., 223 S.W.2d 110. Plaintiff also cites Restatement of Contracts, Sec. 280; Williston on Contracts, Sec. 698a and Sec. 1325; Corbin on Contracts, Sec. 975 and Schwear v. Haupt, 49 Mo. 225. These authorities show that, when one promissor repudiates the contract or manifests' an intention not to perform, the duty of the other is terminated. These principles are, of course, well estáblished.
However, even if defendant's action in mailing out this form of release could be construed as the manifestation of an intention to repudiate or breach the contract, the' trouble with plaintiff's position is that -she had first breached it. "A party who has himself been guilty of the first substantial breach of contract cannot rescind the contract because of subsequent refusal or failure to perform by the other party." Williston on Contracts, Sec. 1468;' Restatement of Contracts, Sec. 397, see also Secs. 274, 315, 318; 12 Am.Jur. 894, Sec. 338; 17 CJ.S., Contracts, § 458, p. 944; Sonken-Galamba Corp. v. Butler Iron & Steel Co., 8 Cir., 119 F.2d 283; White Oak Fuel Co. v. Carter, 8 Cir., 257 F. 54; Norris v. Letchworth, 167 Mo.App. 553, 152 S.W. 421; Trippennsee v. Schmidt, Mo.App., 52 S.W.2d 197; Meyer Milling Co. v. Baker, 328 Mo. 1246, 43 S.W.2d 794. In the Meyer Milling Company case 43 S.W.2d, loc. cit. 796 we said: " 'A party, when in default, has no power to say the contract is at an end, and refuse to proceed with its execution.' "
The evidence herein clearly shows that after the settlement agreement was made on June 2, 1952, plaintiff (and her husband) decided that the amount was not enough. Plaintiff's husband told her attorney early in the morning of June 3rd that the settlement wouldn't go through because he felt like the amount wasn't sufficient. Plaintiff's attorney advised defendant's attorney of this before the stipulation and release had been prepared. Defendant's attorney testified that he had previously told the girl in his office to prepare the usual release (on a blank form) to be mailed with the stipulation of dismissal which he had dictated. This release was mailed to plaintiff's attorney that evening, postmarked 7:00 P.M. June 3rd, and was received by him the next day. The release and stipulation of dismissal was returned to defendant's attorney by plaintiff's husband in a letter dated June 10, 1952, which stated as the only reason: "As you were advised prior to the time of preparing and mailing this release and stipulation, your client's offer is unacceptable, and is rejected." (This letter is confirmation of the fact of first breach by plaintiff.) In another letter of June 24, 1952 to defendant's attorney, plaintiff's husband stated: "We have carefully reconsidered your settlement proposal and have again arrived at the conclusion that it is inadequate. Accordingly, we must again decline to accept it." We must, therefore, hold that plaintiff was not entitled to rescind the settlement agreement.
It is true that after plaintiff's repudiation and breach, defendant sent her áttorney a release that was not in accordance with the contract of settlement, made by the parties. However, neither plaintiff nor her husband ever requested defendant's attorney to change the form and •contents of the release, tendered any different release or indicated that plaintiff would complete the settlement agreement that had been made with any form of release or under any circumstances. In fact, it was very definitely indicated to defendant that plaintiff would not sign any kind of a release for the agreed amount. Certainly defendant did not at any time refuse to prepare or accept a different release. It was not asked to do so because plaintiff's real objection was to the amount agreed upon instead of to the form and contents of the release. At least defendant appears to have been mislead by the statements of plaintiff and her husband into believing that the form of the release was not what they were really objecting to. Thus it does not seem reasonable to hold that defendant breached the settlement agreement, repudiated it or refused to perform it. Furthermore, even "tender by one party to a contract of defective performance of a condition or promise is not necessarily such a manifestation of lack of intention or ability to perform as to make reasonable a change of position by the other party." Restatement of Contracts, Sec. 323. It may be further noted that there is no evidence in this case of any change of position by plaintiff or that conditions had in any way changed so as to make it inequitable to require plaintiff to perform. See Suhre v. Busch, 343 Mo. 170, 120 S.W.2d 47; Parkhurst v. Lebanon Publishing Co., 356 Mo. 934, 204 S.W.2d 241. The Parkhurst case quotes with approval 204 S.W.2d 247 the following: " 'Strict and literal performance of all the conditions of a contract is not invariably an essential prerequisite to a decree for specific performance.' " Under the circumstances of this case, we think the question of whether specific performance should be required was a matter within the sound discretion of the trial Chancellor to be determined from his view of the entire situation.
"The determination of whether specific enforcement shall be decreed and what shall be the terms of the decree rests in the sound judicial discretion of the court." Restatement of Contracts, Sec. 359. Some of the grounds upon which specific performance of a contract should be refused are: "(a) the consideration for it is grossly inadequate or its terms are otherwise unfair, or (b) its enforcement will cause unreasonable or disproportionate hardship or loss to the defendant or to third persons, or (c) it was induced by some sharp practice, misrepresentation, or mistake." Restatement of Contracts, Sec. 367. None of these apply to this case. Likewise, "specific enforcement will be refused if a condition precedent to the duty to be enforced is not and cannot be performed and is not excused, or if a condition subsequent terminating the duty has occurred." Restatement of Contracts, Sec. 374. It was always a very simple matter to prepare the form of release necessary to comply with the contract in this case; and as previously pointed out, defendant never refused to do so. The rule is further stated: "(1) Specific enforcement will not be decreed if the plaintiff has himself committed a material breach unless refusal of the decree will effectuate an unjust penalty or forfeiture. (2) Specific enforcement may properly be decreed, in spite of a minor breach or innocent misrepresentation by the plaintiff, involving no substantial failure of the exchange for the performance to be compelled." Restatement of Contracts, Sec. 375. We think that defendant's failure to prepare a proper release, under the circumstances of this case, was no more than a minor breach; or at least that the Chancellor reasonably could so find from all of the evidence before him.
Furthermore, as we stated in Cape Girardeau-Jackson Interurban Ry, Co. v. Light & Development Co. of St. Louis, 277 Mo. 579, 617, 210 S.W. 361, 372: "Ordinarily, a court of equity will not decree specific performance of a contract, without the evidence shows that the plaintiff has fully complied with his part thereof; but this is not an inflexible rule. If the evidence discloses the fact that the plaintiff has performed a part of his contract,, and that he was ready, able, and willing.to per form the remainder thereof within the time specified in the contract, but was prevented from so doing by the misconduct of the defendant, or where said-misconduct made it useless for the plaintiff to tender compliance within that time. Mitchell's Heirs v. Long, 5 Litt., Ky., 71; Minneapolis v. St. Louis Ry. Co. v. Cox, 76 Iowa 306, 41 N.W. 24; [22] Amer. & Erig. Encyclopedia Laws, p. 929 (1st Ed.). - Under such circumstances the court will decree specific performance if it be shown that he is able and willing to perform the balance of the contract at the time of the trial. In other words, if the undertaking of the plaintiff is joint and contemporaneous with that of the defendant, the failure of the former to perform after he has been notified, by the words or conduct of the defendant, that further performance would be useless, will not prevent the court from decreeing specific performance in his favor."
There is no claim in this- case that defendant was unable to perform, which is the ground for denial for specific performance in many cases. Nor was there any time limit for defendant to do some act, the time for which had passed, when time was of the essence of the contract. See Wimer v. Wagner, 323 Mo. 1156, 20 S.W.2d 650, 79 A.L.R. 1231. Even where time was made the essence of the contract, we have held that it could bé waived by conduct of the parties so that plaintiff, failing to make timely performance, might nevertheless have specific performance. Kyner v. Bryant, 353 Mo. 1212, 187 S.W.2d 202; Rogers v. Gruber, 351 Mo. 1033, 174 S.W.2d 830. There was nothing herein to show that defendant was unwilling to perform; plaintiff refused to give it any opportunity to do so when she refused to comply with the contract she had made under any circumstances. -Certainly the Chancellor could have found there was a valid excuse for failing to prepare a different release, when plaintiff had made it clear that she could not sign any release for the amount agreed upon. If it could be said there was breach by defendant, in sending a release which did nbt comply with the agreement made, we hold the Chancellor, under the circumstances of this case, could reasonably have found it to be only a minor breach "involving no substantial failure of the exchange for the performance to be compelled", because there were no indications herein that defendant was unwilling to accept the kind of a release the agreement required as soon as that matter was called to its attention. We think the Chancellor was justified in finding to the contrary, under all the circumstances of this case, and particuarly because defendant showed its willingness to change the form of the release as soon as that matter came up in the trial (which was the first time it ever really came up) and did strike out all allegations concerning plaintiff's husband. We think it would be most inequitable to impose a forfeiture of defendant's rights under the settlement, and deny it specific performance, merely because defendant prepared an improper form of release and did not correct it when never asked to do so. Undoubtedly, it was within the sound discretion of the trial Chancellor to grant a decree of specific performance upon the condition of preparing, furnishing, and accepting the proper release to comply with the contract, when defendant was willing and able to comply with the contract in all respects. The fact that they made the contract cannot be questioned and we must hold that the Chancellor did not abuse his discretion in requiring it to be performed.
Likewise, for the reasons above stated, it was not decisive that defendant's cross-petition for specific performance contained allegations that the agreed amount was to be paid to plaintiff and her husband and that they both refused to sign the release. In the first place, the prayer of this cross-petition only asked that plaintiff be required to sign the release. Moreover, as soon as the question of such a joint release was raised at the trial, defendant asked leave to and did strike all allegations concerning plaintiff's husband. The decree required performance only by plaintiff of the agreement she authorized her attorney to make and which the court properly found was made. However, the provision of the decree specifying the terms of the release plaintiff is required to sign is too broad and is hereby ordered modified to leave out reference to property damage (since plaintiff claims none- and her husband does) and to state only that she releases the defendant from all claims, demands or causes of action that she may have, of whatsoever kind or nature, for personal injuries on account of anything done, omitted to be done or suffered to be done by the St. Louis Public Service Company as a result of an accident occurring on the ninth day of June 1952, in the thirty hundred block of Olive; excluding claims plaintiff might have on other unrelated matters.
The decree as modified is affirmed.
LEEDY, Acting C. J., and HOLLINGS-WORTH and ELLISON, JJ., concur.
DALTON, J., dissents in separate opinion.
ANDERSON, Special Judge, not sitting.