Case Name: HAYDON et al., Appellants, v. ST. LOUIS & SAN FRANCISCO RAILROAD COMPANY, Respondent
Court: St. Louis Court of Appeals
Jurisdiction: Missouri
Decision Date: 1906-02-27
Citations: 117 Mo. App. 76
Docket Number: 
Parties: HAYDON et al., Appellants, v. ST. LOUIS & SAN FRANCISCO RAILROAD COMPANY, Respondent.
Judges: 
Reporter: Missouri Appeal Reports
Volume: 117
Pages: 76–114

Head Matter:
HAYDON et al., Appellants, v. ST. LOUIS & SAN FRANCISCO RAILROAD COMPANY, Respondent.
St. Louis Court of Appeals,
February 27, 1906.
(Opinion by Bland, P. J.)
1. PRACTICE: Stating Cause of Action: Objection to the Introduction of Evidence. Where a petition asking for equitable relief fails to show hy affirmative averments that plaintiff is entitled to the relief prayed for and has no adequate remedy at law, an objection on that ground to the introduction of any evidence should be sustained.
2. RESCISSION: Statu Quo: Equity. The rule that a party desiring the rescission of a contract shall place the other party to the contract in statu quo, before bringing suit, applies to actions at law which are based upon the theory that the contract is already rescinded, but not to suits in equity brought for the purpose of rescinding.
3. -: -: Offer to Restore. Plaintiff, having suits pending against the defendant, a railroad company, for damages on account of the construction and operation of a switch in the street adjacent the plaintiff’s property, entered into a contract of settlement with the defendant, whereby the latter paid the plaintiff a certain sum in full for all damages and paid the costs accrued, and the plaintiff by deed conveyed defendant the right to use the switch. In a subsequent action brought by plaintiff to rescind the contract of settlement on account of violation of its terms by defendant, the plaintiff prayed also for damages and offered to give credit on the amount of damages awarded for the sum paid in settlement of the former suits, and the petition, containing a general prayer for equitable relief, was sufficient to support a judgment without containing a formal offer tb put the defendant in statu quo.
4. -: Breach of Covenant: Adequate Remedy at Law. The breach of a covenant in a contract which does not go to the whole consideration of the contract will not authorize a rescission because there is an adequate remedy at law in damages for the breach.
5. -: -: -. The plaintiff and defendant, a railroad company, entered into a contract whereby the plaintiff granted the defendant, in consideration of a sum of money paid by it, the right to operate a switch on the street adjacent plaintiff’s property, with the proviso that it was with the “distinct understanding” that the switch should not be used to stand or store cars thereon. The latter provision did not go to the whole consideration and was not a dependent covenant; an action to rescind the contract on account of the breach of that covenant would not lie, because there was an adequate remedy at law for damages.
(On motion for Rehearing, Opinion by Schnurmacher, S. J.)
6. -: Dependent and Independent Covenants. Where conditions in a contract are mutual and dependent, a breach by one party will ordinarily entitle the other party to a rescission, but breach of a covenant which- did not affect the consideration upon which the contract was based, when there was a remedy by action in damages, did not warrant a rescission.
7. -;--Where plaintiff and defendant entered a contract whereby the plaintiff granted the defendant, a railroad company, the right to operate a switch in the street adjacent plaintiff’s property, stipulating that it was 'with the “distinct understanding” that the switch should not be used to stand cars thereon, the stipulation was but an explanation showing to what the contract applied, and was not the consideration of the contract, though the plaintiff would not have entered the contract without it, and plaintiff could not maintain an action to rescind for breach of that stipulation.
(Dissenting Opinion by Nortoni, J.)
8. -: Statu Quo: Offer to Restore. Plaintiff, having suits pending against defendant, a railroad company, for damages on account of the maintenance and operation of a switch by the latter in the street adjacent the plaintiff’s property, entered into an agreement with the defendant whereby the defendant paid plaintiff a sum of money and the cost accrued in settlement of all damages, and tbs plaintiff by deed granted defendant tbe right to maintain and use the switch. In a subsequent action brought by plaintiff to rescind the contract of settlement, on account of violation of the contract by defendant, wherein plaintiff prayed for general equitable relief, which the court could grant on equitable terms, it was not necessary in the bill to formally offer repayment of the costs of the former suit which defendant had paid.
9. -: Dependent Covenants. The contract further stipulated that it was entered into with the “distinct understanding” that . the switch should not be used to stand cars on, but should be „ kept open. This covenant by its terms went to the entire consideration, was dependent and without it the contract would not have been made, and an action to rescind would lie for its violation.
Appeal from Greene Circuit Court. — Son. Jamies T. Seville, Judge.
Affirmed and certified to supreme court.
W. A. Gardner and Guy D. Kirby for appellants.
(1) A proceeding for a rescission of a contract is a different thing from one which is based upon a rescission. In a proceeding as for a rescission, a party may offer in his complaint to restore, unless he shows he is entitled to retain what he has received. And when a party seeking the aid of a court of equity to rescind a contract, offers to conform to such orders of the court as may be deemed just and equitable, his bill is not demurrable for a want of an offer to restore the consideration. Paquin v. Miliken, 163 Mo. 104, 63 S. W. 417, 1092; Lincoln Trust Co. v. Nathan, 175 Mo. 32, 74 S. W. 1007; Baier v. Berberich, 6 M'o. App. 537; Gould v. Bank, 86 N. Y. 80; Skuee v. Shuee, 100 Ind. 447; Allerton v. Allerton, 50 N. Y. 670. (2) The right to' rescind a contract arises when the acts and conduct of one of the parties thereto' evinces an intention not to be further bound by its terms, or if his acts amount to a rescission, had he power to rescind. Freeth v. Burr, L. R. 9 C. P., 208; Mercy Steel & Iron Oo. v. Naylor, 9 Mo. App. 442; Railroad v. Richards, 30 L. R. A. 33. (3) To determine whether the failure to execute an engagement will authorize the rescission of a contract, it is only necessary to consider whether it he such, that the contract would not have been made without it. Lucy v. Bundy, 9 N. H. 298; Moreau v. Charoni, 8 Rob. (La.) 157. Parol evidence is admissible to show contract would not have been made unless both parts had been agreed upon. Graves v. Scott, 80 Penn. St. 83.
L. F. Parker and Woodruff & Mann for respondent.
The petition does not state facts sufficient to constitute a cause of action in equity, and there is no equity in the bill or petition, (a) Because failure of consideration and breach of a contract, after his execution, are clearly no grounds for rescission. Paquin v. Milliken, 163 Mo, 79, 63 S. W. 417, 1092. (b) Because the petition shows upon its face that the entire controversy was heretofore settled, and $600 was paid as a consideration for the settlement, and defendant, also> under the terms of said settlement, paid the court costs of two suits then pending, and the petition further shows that no part of said $600 has been tendered back to defendant, neither has the amount paid as costs by defendant been repaid to it; and hence, for these reasons, plaintiffs are not entitled to recover in an action to rescind said contract. Robinson v. Siple, 129 Mo. 208, 31 S. W. 788; Smith v. Kander, 85 Mo. App. 33; Culbertson v. Young, 86 Mo. App. 277; Winter v. Gable Ob., 73 Mo. App. 173-202; Alexander v. Railway, 54 Mo. App. 66; Girard v. Oar Wheel Oo., 123 Mo, 358-383, 27 S. W. 648; Och v. Railway, 130 Mo. 27, 31 S. W. 962; Retzer v. Dold Packing Oo., 58 Mo. App. 264. (c) The rule that one is not bound to restore to' the other party to a contract that which he has received under it when the other party is indebted to him in a large amount; that in such case the sum compromised upon is at least due, and need not be returned, can have no application in a case where all liability is denied, as in this case. Gould v. Bank, 86 N. Y. '75. (d) Because if the contract set out in the petition or bill is one that can be sued upon by plaintiffs for the breach thereof, it must be by an action at law; plaintiffs have a plain, adequate and complete remedy at law for the breach thereof. Benton Co. v. Morgan, 163 Mo. 661, 64 S. W. 119; Planet Poop. & Finan. Co. v. Railroad, 115 Mo. 619, 22 S. W. 616; Verdin v. St. Louis, 131 Mo. 26-105, 33 S. W. 480, 36 S. W. 52; Merriam v. Railroad, 136 Mo. 145, 41 S. W. 1041; Bank v. Packing Co., 136 Mo. 59-93; Lackland v. Railroad, 31 Mr. 180; Swenson v. City of Lexington,. 69 Mo. 157; Cross v. Railway, 77 Mo. 318; Rude v. St. Louis, 93 Mo. 408, 6 S. W. 257; Sheehy v. Cable Co., 94 Mo. 574, 7 S. W. 579; Gaus, etc., Mfg. Co. v. Railway, 113 Mo1. 308, 20 S. W. 658; Spencer v. Railway, 120 Mo. 154, 23 S. W. 126; DeGeofroy v. Bridge Co., 179 Mo. 698, 79 S. W. 386; Tate v. Railroad, 64 Mo. 149; Meyers v. St. Louis, 8 Mo. App. 266; Martin v. Railway, 47 Mo. App. 452; Stephenson v. Railway, 68 Mo. App. 64; Farrar v. Electric Railway Co:, 101 Mo. App. 140, 74 S. W. 500.

Opinion:
BLAND, P. J.
Omitting caption, the petition is as follows:
"Your petitioners for their third amended petition respectfully represent unto this honorable court that on the first day of September, 1899, they entered into a contract with the St. Louis '& San Francisco Railroad Company, a corporation organized under the laws of Missouri, in words and figures as follows:
" Margaret C. Haydon and W. J. Haydon, her husband, plaintiffs, v. The City of Springfield and John F. Meyer & Sons, defendants.
" 'Margaret C. Haydon and W. J. Haydon, her husband, plaintiffs, v. The St. Louis & San Francisco' Railroad Company and John F. Meyer and Sons, defendants.
"'Whereas, in the first above-entitled cause plaintiffs, on December '3, 1898, obtained judgment against said defendants, the city and Meyer & Sons, in the circuit court of Greene county, Missouri, for the sum of $100 and costs, for damages as set forth in said judgment, and from said decision defendants therein took their appeal to the St. Louis Court of Appeals on or about December 23, 1898, the transcript not having yet been sent to said appellate court.
" 'And whereas in said second entitled cause, plaintiffs instituted their suit against said St. Louis & San Francisco' Railroad Company and said John F. Meyer & Sons' Milling Company in said circuit court of Greene county, Missouri, at the May term thereof, 1899, and said cause coming up for hearing on June 1, 1899, of said term, defendants filed application for change of venue therein and same granted to Webster county, Missouri, the transcript still in the office of circuit clerk of Greene county, and
" 'Whereas, depositions have since been taken by plaintiffs in said cause pending upon change of venue to Webster county and
" 'Whereas, all the litigation in said cause has arisen on account of the location by defendant railroad company and Meyer & Sons, of a railroad switch in front of plaintiff's property in Springfield, Missouri, described as follows:
" 'Beginning on the north side of Phelps avenue and east side of Peach alley at a point where said alley and street intersect; thence north on east side of Peach alley sixty-eight feet, thence east one hundred and eight feet, thence south sixty-eight feet; thence west on the north side of Phelps avenue to' beginning, and also commencing twenty-three feet east of east line of above described real estate on north side of Phelps avenue; thence north sixty-eight feet; east twenty-three feet, south sixty-eight feet; west twenty-three feet to beginning, for damages accruing to said property and for injunction relief on account thereof.
" 'Now as a fair and complete settlement of all questions connected therewith, and full payment for all damages, past, present and prospective for the location and operation of said switch in front of plaintiffs' property, defendants, the railroad company and John F. Meyer & Sons, agree to pay the.plaintiffs the sum of six hundred dollars as satisfaction in fnll for all damages aforesaid, and also to pay all costs and expenses attending said litigations and save said plaintiffs harmless on account thereof, and free from all costs necessary to be incurred for the final dismissal and settlement of said suits, and on account of said $600 paid to plaintiffs, receipt of which is hereby acknowledged and payment of costs as aforesaid, said plaintiffs grant and convey to defendants full power and authority to use said switch freely in front of their said property for railroad and milling purposes, but with the distinct understanding, that neither the milling company nor railroad company shall be permitted to use said switch in front of plaintiff's property to stand cars thereon, but that the switch in front of their said property shall be kept open and .free from cars except when in actual use as aforesaid.
" 'This stipulation executed in duplicate, shall be a complete and full settlement of all questions connected and growing out of the establishment and operation of said switch as aforesaid.
" 'Given under our hands this first day of September, 1899.
" 'St. Louis & San Francisco Railroad Company,
" 'By J. T. Woodruff, Attorney.
«'M. C. and W. J. Haydon, Plaintiffs,
" 'By G. W. S. Rathbun, Attorney.'
"Your petitioners allege that they have performed all on their part required by the terms of the above contract.
"Your petitioners further represent that in pursuance of said agreement, defendant paid to the plaintiffs the sum of six hundred dollars and the costs incurred in the above-mentioned litigation.
"Your petitioners further allege that by the agreement above mentioned, the plaintiffs granted to the defendant railroad company the power and authority to use said switch in front of said property upon the express condition (without which, said agreement would not have been made) that it would not use said switch to stand or store cars thereon, and that said switch was to be kept free and open from cars. But the plaintiffs allege that the defendant railroad company, wholly disregarding its obligation in this behalf, continued to stand and store its cars on said track in front of plaintiffs' said property.
"Your petitioners further allege that in pursuance of said agreement as a part thereof, they did, about the time said above-mentioned agreement was made, to-wit, on the thirteenth day of September, 1899, execute and deliver to defendant, a quitclaim deed, granting them the right to maintain and use said switch track'in front of said premises, but not granting the right to store or stand cars thereon in front of said premises. But the plaintiffs say that no other consideration was given to or received by the plaintiffs for said deed than that given for the above-mentioned agreement and the plaintiffs say that no other rights were intended to be granted by said deed than those expressed by said above-mentioned contract, but that the rights and privileges granted by said deed were upon the same conditions as stated by said agreement.
"That is to say that said company was not to stand its cars in front of said property.
"Your petitioners further state, to-wit: About two years prior to the making of said agreement said railroad company had wrongfully and unlawfully built a switch and had been unlawfully standing its cars thereon in front of said premises and had thereby caused a depreciation of the rental of said property, and your petitioners had been damaged by the wrongful acts of defendant at the time of the making of the said agreement, to-wit: In the sum of fifteen hundred dollars and that the payment by said railroad company of the said sum of six hundred dollars was on account of the damages your petitioners had suffered by the wrongful acts of said company prior to the making of said agreement and was made with the distinct understanding that said cars of said defendant were not to be stood in front of said premises.
"Your, petitioners therefore ask that the said sum of six hundred dollars be regarded as part payment of so much as was really due by said railroad company to the plaintiffs at the time of the making of the said agreement,' as your petitioners will fully show upon the trial of the issues herein was much more than said sum of six hundred dollars and petitioners offer to> accept and do on their part, whatever equity requires in the premises.
"Your petitioners further state that they have been damaged by the wrongful acts of said defendant company in building the switch as aforesaid and keeping its cars standing in front of said premises from the time their tracks were laid as aforesaid, to the first day of November; A. D, 1902, the sum of three thousand dollars depreciation in the rental value thereof.
"Your petitioners further state that the placing of said cars in front of the premises aforesaid without the permission, of the plaintiffs, was a wanton and willful disregard of the duty of the defendants to the damage of the plaintiffs in the sum of one thousand dollars for which they ask judgment.
"Your petitioners further say that they have been damaged by the wrongful acts of the defendant in the total sum of four thousand dollars.
"Your petitioners therefore pray this honorable court that it cancel and annul said agreement and deed and set the same aside and hold them for naught, that the said defendant may be required to pay the damages which have accrued to the plaintiffs because of the depreciation in the rental value of said premises, because of the building of said switch, and standing cars on said switch, in front of said premises, from the date of the laying of said tracks to the first day of November, 1902, as aforesaid, less six hundred dollars paid as aforesaid, and such punitive damages as this court may see fit to inflict upon the defendant because of the premises and such other and further relief as may be deemed just and equitable."
The answer admits that defendant is a railroad corporation but denies every other allegation of the petition.
The cause coming on for trial, plaintiffs offered W. J. Haydon as a witness in their behalf. Defendant objected to the introduction of any evidence for the following reasons:
"First, because said petition states no- facts sufficient to constitute a cause of action in equity, and there is no equity in the bill or petition. . . .
"Third, because the contract sued upon, or attempted to> be sued upon, in equity, contains no affirmative provision authorizing a suit on same, and that plaintiffs' cause of action, if any, is an action sounding in tort- and not one in equity.
"Fourth, because if the contract set out in the petition or bill is one that can be sued upon for the breach thereo'f by plaintiff, it must be sued by law, and the plaintiffs have a plain, adequate remedy at law for the breach thereof.
"Fifth, because said petition or bill states no grounds for equitable relief, in that it shows upon its face that the entire controversy was heretofore settled, and six hundred dollars was paid thereunder, and defendant also paid the costs of suits then pending and therefore pending, and no part of said six hundred dollars has been tendered back, neither has the amount paid as costs been repaid, hence for these reasons plaintiffs are not entitled to recover in an action to rescind the contract.
"Sixth, because the facts pleaded in the petition do not show grounds for rescinding the contract, but does contain facts which show affirmatively that the plaintiffs are not entitled to rescind the contract."
The court sustained the objection and plaintiffs took a nonsuit with leave to move to set the same aside. The motion to set aside the nonsuit was overruled by the court, and plaintiffs appealed.
It is the settled law that a petition asking for equitable relief must affirmatively show by a statement of facts that plaintiff is entitled to the equitable relief prayed for and that he has no adequate remedy at law or that he has a choice of remedies. Such allegations of facts are necessary to confer equitable jurisdiction, and if they are not found in the petition, advantage may be talcen of their omission by the adverse party at any stage of the proceedings, or the court may of its own motion raise the objection. [Benton County v. Morgan, 163 Mo. 661, 64 S. W. 119.] Hence, the objections interposed by defendant did not come too late. They were in the nature of a special demurrer .to the petition and will be considered from that standpoint.
A summary of the allegations of the petition shows that plaintiffs owned property in the city of Springfield, Missouri, fronting on Phelps avenue; that the defendant company unlawfully laid railroad switches in the avenue in front of plaintiffs' property, whereby plaintiff was greatly damaged; that plaintiffs brought two suits, one against the city of Springfield and Meyer & Sons, and the other against the St. Louis & San Francisco Railroad Company and Meyer & Sons concerning the switches and to recover damages caused by their laying and use; that in one of the suits they recovered a small judgment from which an appeal was taken but not prosecuted; that the other suit was pending when, on September 1, 1898, the plaintiffs and the defendants settled both suits and agreed on the amount of damages plaintiffs ha'd sustained by reason of the laying and use of the switches, and that they would in the future sustain by reason of the maintenance and use of the switches; that the damages so agreed on ($600) were paid plaintiffs and the suits were dismissed at defendant's cost; that plaintiffs executed a quitclaim deed to defendant to their interest in Phelps avenue (whatever that interest may have been) and defendant agreed not to use the switches in front of the plaintiffs' property by standing cars thereon, that their use should be confined exclusively to the moving of cars over them. It Is further alleged that defendant has violated and continues to violate this clause of the contract by standing cars upon the switches in front of plaintiffs' property, causing great and daily accumulating damages to plaintiffs; that at the time plaintiffs accepted the damages agreed upon they had sustained actual damages in the sum of fifteen hundred dollars, a large portion of which they waived in consideration of the stipulation that defendant would not stand or suffer cars to stand on the switches in front of plaintiffs' property in the future.
The petition asks for the rescission of the contract and that plaintiffs recover all the damages which have' accrued to them from the date of the laying of the switches down to the day of the commencement of the :SUÍt.
Plaintiffs failed to return or offer to return the six hundred dollars paid under the terms of the contract of September 1, 1898. They seek to avoid the force of this omission by expressing their willingness for the sum to be deducted from the total amount of damages that may, on the. final hearing, be adjudged to' them.
The answer is a general denial, and if the contract of September 1, 1898, is cancelled, then there is nothing in the case showing or tending to' show that defendant admits it has damaged plaintiffs in any sum whatever by the construction and use of the switches.
Plaintiffs rely upon the case of Girard v. St. Louis Car Wheel Company, 123 Mo. 358, 27 S. W. 648, as authority for the position that it is not necessary to return or offer to return what they had received on the contract as a condition precedent to their right to have the contract cancelled, and that they may allege the receipt of the money in their bill and consent that it may be set off against the amount of damages they claim to have sustained. The Girard case was an action for damages for personal injuries and defendant company pleaded a written release in consideration of the payment of a certain sum as compensation for the injury complained of. The reply confessed the execution of the release, but alleged that it was obtained by fraud and asked for its cancellation. The plaintiff did not return or offer to return what he'had been paid. No objection was made by defendant on account of this omission and the record showed that the benefits received were accounted for in the judgment. On this showing it was held that the omission in the reply to' tender back the benefits was non-prejudicial error. In the discussion of the necessity of the tender of the benefits received, Barclay, J., at page 372, said:
"It has been often held in other jurisdictions, that a tender of money (received by virtue of a release of similar tenor to that in question here) need not be made-before bringing suit, where the release was obtained by fraud; but that it is sufficient to offer its return, and to- account for it by the judgment. [Duvall v. Mowry (1860), 6 R. I. 479; Smith v. Salomon (1877), 7 Daly 216; Butler v. Railroad (1891), 88 Ga. 594; Kley v. Healy (1891), 127 N. Y. 555; Sheanon v. Ins. Co. (1892), 83 Wis. 507; Kirchner v. Sewing Machine Co. (1892), 135 N. Y. 182; Railroad v. Acuff (1892), 92 Tenn. 26, 20 S. W. 348.]"