Haynes v. Allen

482 S.W.2d 85, 1972 Mo. App. LEXIS 819
CourtMissouri Court of Appeals
DecidedMay 23, 1972
Docket34239
StatusPublished
Cited by18 cases

This text of 482 S.W.2d 85 (Haynes v. Allen) is published on Counsel Stack Legal Research, covering Missouri Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Haynes v. Allen, 482 S.W.2d 85, 1972 Mo. App. LEXIS 819 (Mo. Ct. App. 1972).

Opinion

WEIER, Judge.

Dissolution of a partnership and its consequences is the area of concern in this case. From a judgment limiting plaintiff’s recovery to $7,484.83, plaintiff has appealed, contending generally that the trial court misinterpreted the partnership agreement with regard to liquidation and distribution of assets. If plaintiff prevails with his interpretation of the contract, then, by stipulation of the parties made at trial, plaintiff would be entitled to a total of $27,100.43. In addition, plaintiff contends that he is entitled to pre-judgment interest on the full amount commencing January 1, 1967, the date of dissolution.

Dr. James W. Haynes, the plaintiff, is a medical doctor whose specialty has been pathology. In 1955, he was employed by Allen Medical Laboratories, a partnership composed of physicians who engaged in the practice of medicine and, particularly, in the operation of clinical pathological laboratories. Within six months after initial employment he became a partner. Upon admission as a partner, he paid nothing for his interest in the existing laboratory equipment, the accounts receivable, supplies and the established practice, except the sum of $2,500.00, which was stated in the partnership agreement to be his contribution as partnership capital. Under the terms of the agreement, all medical and surgical instruments, laboratory equipment, stock, medicines and medical books which the parties had previously accumulated while associated together, were delivered over to the partnership and thereupon became partnership property. Additional supplies and equipment were subsequently purchased over the years out of partnership funds and they also became partnership property.

In June of 1966, at a partnership meeting, Dr. Haynes became involved in an animated conversation with one of the partners over the productivity of one of the laboratories as it affected partnership income. He left the meeting abruptly and failed to return to any further meetings. *87 Three were held thereafter. According to Dr. Haynes, he was never notified in advance as to their time or place. The last meeting was on December 14, 1966. A notice was sent to Dr. Haynes at his home, by mail. A cryptic message of one line, it read: “There will be a meeting of the Partnership at my home Wednesday December 14, 1966, at 7:30 P.M. Hollis N. Allen, M.D.” This letter was dated December 12, 1966 — two days before the meeting. At this meeting all of the partners except Dr. Haynes attended. All those present agreed to dissolve the partnership and expel Dr. Haynes. One of the partners, Dr. William L. Drake, Jr., was delegated the task of notifying Dr. Haynes that he was to be “separated” from the partnership. This notice, signed December 31, 1966, was served on January 2, 1967.

The partnership agreement contained a clause, Article VII, which spelled out in detail the methods to be used to ascertain the value of a partner’s interest upon retirement or death. Upon payment of the amount therein determined, the partnership business could be perpetuated in the remaining partners, or in those who desired to continue with its operation. The article that followed, Article VIII, because of its importance in the determination of this lawsuit, is set out verbatim:

“ARTICLE VIII
Dissolution
1. Unless dissolved by the retirement or death of a partner, the partnership shall continue until dissolved by agreement of the partners. Upon any such voluntary dissolution by agreement, the affiars (sic) of the partnership shall be liquidated (except that the accounts receivable and laboratory equipment belonging to the partnership shall vest free and clear of any and all claims or charges in the majority group of full partners who are interested in maintaining the laboratory, but in case of a tie, then to the group having the greatest total number of years of seniority in the partnership). Any partner whose last name is “Allen” shall have the right to the continued use of the name of this partnership. The assets of the partnership (excluding the accounts receivable and laboratory equipment) shall first be used to pay or provide for all debts of the partnership, taking into consideration any sums remaining due the estate of any partner who may have died. The remaining assets (excluding the accounts receivable and laboratory equipment) shall be divided according to the proportionate interests of the partners on the basis of their respective pro rata proportion of the income as existed immediately prior to dissolution.”

On appeal, Dr. Haynes contends the unambiguous meaning of this clause of the partnership agreement is that all partners must agree to dissolve the partnership before its terms are applicable. Further, that where, as here, the agreement is silent in regard to the consequences of dissolution by less than all the partners, the Uniform Partnership Law (Chapter 358, RSMo 1969, V.A.M.S.) applies and determines the rights of the parties. The other partners likewise maintain the partnership agreement is clear and unambiguous, but their interpretation differs from that of plaintiff. And so, on the one hand, plaintiff asserts that the word “agreement” means unanimous agreement, or agreement of all the partners. But, on the other hand, defendants declare the word means consent of a majority of the partners.

To invoke the formula for distribution set forth in Article VIII, the key words are “upon voluntary dissolution by agreement.” “Agreement” is defined: “A coming or knitting together of minds; a coming together in opinion or determination; the coming together in accord of two minds on a given proposition; in law a concord of understanding and intention between two or more parties with respect to the effect upon their relative rights and *88 duties, of certain past or future facts or performances; the consent of two or more persons concurring respecting the transmission of some property, right, or benefits, with the view of contracting an obligation, a mutual obligation.” Black’s Law Dictionary, 4th Ed., page 89. It is clear that “agreement” in the above phrase or in the phrase “Agreement of the partners”, found in the first line of Article VIII, implies mutuality of consent and forecloses the interpretation of defendants that it means consent or agreement by a number less than all of the partners. Fish v. Fish, Mo.App., 307 S.W.2d 46, 50[4],

The court below, in its memorandum opinion, gave as its reason for interpreting the phrases to call for something less than total accord and thus require distribution under its provisions, the failure of the article to require dissolution by “unanimous” agreement. By the same token, however, we note that the clause did not in plain terms provide for dissolution by “a majority” of the partners. Further, the trial court, to support its interpretation, cited the provisions in Article VIII vesting accounts receivable and laboratory equipment in the majority group of partners, and even in the group having the greatest number of years of seniority in the event of a tie, as being incongruous with an interpretation that “agreement” called for the consent of all.

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Cite This Page — Counsel Stack

Bluebook (online)
482 S.W.2d 85, 1972 Mo. App. LEXIS 819, Counsel Stack Legal Research, https://law.counselstack.com/opinion/haynes-v-allen-moctapp-1972.