50 F. 764 | U.S. Circuit Court for the District of Western Missouri | 1892
This is an action by plaintiffs, a firm doing business at the city of Chicago under the name of Davis & Rankin, to recover a balance due on the following contract.:
“CONTRACT AND SPECIFICATIONS FOR COMBINED JBlTTTER AND OlTEESE ]?aotoky of Centrifugal Power and Machinery.
“We, Davis & Rankin, party of the first part, hereby agree with tiie undersigned subscribers hereto, party of the second part, to build, erect, complete, and equip for said party of the second part a combined butter and cheese factory, at or near Greenfield, Dade county, Missouri, as follows, to wit: Said building shall be constructed and finished in substantial accordance with the specifications hereon, in a thorough and workmanlike manner. The engine, boiler, and all other machineiy and fixtures shall be properly set up, and shall be in good running order, before the party of the second part shall be required to pay for said factory. The parties of the second part do hereby agree to furnish at their own expense suitable land for said building, together with sufficient water on said lot for the use of the business, and they shall be credited therefor, as a payment on this contract, the sum of two hundred dollars, ($200.00;) and it is further understood that, in caso the said second party shall fail to furnish said land and water within ten days after the execution of this contract, then the said Davis & Rankin, at their option, may furnish the said land and water. Davis & Rankin further agree to provide and keep hired at the expense of the stockholders an experienced butter and cheese maker for one year, if desired. The above building is to have a capacity for handling 16,000 to 20,000 pounds of milk per day. Said Davis & Rankin agree to erect said butter and cheese factory as sot forth by the above specifications for sixty-eight hundred and fifty ($6,850) dollars payable in cash, or note as follows: One third cash when factory is completed; one third in secured notes, due sixty days after factory is completed; one third in secured notes, due sixty days after factory is completed. Rotes to draw 8 per cent, interest from date. We, the subscribers, agree to pay the above amount for said butter and cheese factory when completed according to said specifications. Said building to be completed in ninety days or thereabout after the above amount ($6,850) is subscribed. As soon as (he above amount of ($6,850) is subscribed, or in a reasonable time thereafter, the said subscribers agree to incorporate under the laws of the state, as therein provided, fixing the aggregate amount of the stock at not less than $6,850.00, to be divided into shares of $100 eacii, said share or shares as above stated to be issued to the subscribers hereto in proportion to their paid-up interest herein. It is hereby-understood that Davis & Rankin will not be responsible for any pledge or promise made by their agents or representatives that do not appear in this contract, and made a part thereof either in printing or writing. For a faith*766 ful performance of our respective parts of tlie contract we bind ourselves, our heirs, executors, administrators, and assigns.
“Executed this, the third day of August, 1889.
“Names oE Subscribers. No. of Shares. Amount of Stock, after Incorporation.”
The aggregate of the sums subscribed was about $7,000. Over $4,000 of this subscription' was paid to the plaintiffs, and on the failure to pay the balance of the $6,850 this suit was brought.
The answers admit the execution of the contract, and its completion and performance by the plaintiffs according to the specifications, and its acceptance by the defendants, who still hold and are operating the plant, asi a voluntary association, without having incorporated as the contract contemplated. They interpose as a special defense: First, that the contract is only several, and that both by its terms and the understanding of the parties thereto the subscribers were to be bound only to the extent, of the sums subscribed by them, which sums varied from one to three hundred dollars. And, second, that the contract when signed by them had in it a blank space between the words, “sixty-eight hundred and fifty dollars, payable in cash,” and the words following, “We, the subscribers, hereto agree to pay the above amount,” etc.; and the following-words: “Or note as follows: One third cash -when factory is completed, one third in secured notes due sixty days after factory is completed, one third in secured notes due four months after factory is completed, notes to draw 8fo interest from date,” — are alleged to have been inserted in this blank space after the execution of the contract. And, third, that plaintiffs, by their declaration's and acts, treated the contract as several, and not as a joint obligation. And, fourth, that the defendants afterwards, for a valuable consideration, executed a release to the defendants from their joint obligation to pay the whole of the contract price on condition of their paying the single amount of their respective subscriptions. And the defendants Jacobs & Co. plead further that at the time of making their subscription they wrote after the “$800,” subscribed by them, the words, “only responsible for 3 shares.” The replication took issue on the new matters thus pleaded. By stipulation of parties a jury was waived, and the case submitted to the court for trial.
The first question of prime importance is as to the purport of the contract. Does it impose a joint and. several obligation on the subscribers to pay the whole contract price, or are they bound only severally to the extent of the sums respectively subscribed by them? To answer this question is only to read the contract. It declares in the opening paragraph that it is an agreement of “Davis & Rankin, parties of the first part, * * * with the undersigned subscribers hereto, parties of the second part.” Then: “The parties of the second part do hereby agree to furnish at their own expense suitable land for such building, together with sufficient water on said lot' for the use of the business, and they shall be credited therefor, as a payment on this contract, the sum of $200.” This provision clearly shows that it was a joint undertaking.
Phillips thus succinctly states the rule:
“It is a general rule that extrinsic evidence cannot be admitted to contradict, add to, subtract from, or vary a written instrument.” 2 Phil. Ev. (Edw. Ed.) 637.
Nor is it competent for either of the parties to prove aliunde how a written contract was understood by either of the parties in an action at law in the absence of vitiating fraud. Bunce v. Beck, 43 Mo. 266; Bigelow v. Collamore, 5 Cush. 226: Harper v. Gilbert, Id. 417; Gould v. Lead Co., 9 Cush. 338-345; Michael v. Insurance Co., 17 Mo. App. 23; Burress v. Blair, 61 Mo. 133. The observation of Judge Taylor in Smith v. Williams, 1 Murph. 430, is quite applicable:
“The first reflection that occurs to the mind upon the statement of the question, independent of any technical rules, is that the parties, by making a written memorial of their transaction, have impliedly agreed that, in the event of any future misunderstanding, that writing shall bo referred to as the proof of their act and intention; that such obligations as arise from the paper by just construction or legal intendment shall be valid and compulsory on them, but that they will not subject themselves to any stipulations beyond the contract, because, if they meant to be bound by any such, they might liave added them to the writing, and thus have given them a clearness, a force and direction, which they could not have by being trusted to the memory of a witness.”
No statements made by agents while soliciting parties to sign the contract as to how they understood its provisions, or even had they gone
Strenuous effort was made at the trial by defendants to show that by the subsequent acts and declarations of plaintiffs’ agents, while trying to collect the subscription, in taking notes from individual subscribers for the amount of their subscriptions and the like, they placed upon the contract their own interpretation, that it was not designed to hold the subscribers for a sum greater than the amount of stock subscribed. Such evidence would be competent if suited to the case. Where the contract in question employs words or terms of doubtful or ambiguous meaning and application, the meaning and application given them by the parties to the contract and acted on by them should prevail over any technical, grammatical, or logical interpretation of the words and phrases. But where the contract is free from ambiguity, and “its meaning is clear in the eye of the law,” such evidence is clearly incompetent. Railroad Co. v. Trimble, 10 Wall. 367; Michael v. Insurance Co., 17 Mo. App. 23; Chrisman v. Hodges, 75 Mo. 413; Miller v. Dunlap, 22 Mo. App. 97. Rightfully understood, there was no legal or moral incompatibility in the claim of plaintiffs that these defendants are bound for the unpaid balance of the debt, and their efforts to collect the individual subscriptions by taking notes or otherwise as best they could. The circumstances attending the organization of such an enterprise.contemplate that its success depends upon the subscription of enough stock to pay for the plant, without which no single subscriber would enter into it. It interests the
As to the alteration of the contract. It is important to ascertain the facts pertaining to this issue before discussing the law, as it will eliminate some of the propositions contended for by counsel. Without reviewing in detail this evidence, the conclusion reached on the whole evidence and attendant circumstances is that, when the contract was signed by the first four subscribers, L. W. Shafer, Jacobs & Co., Harper & Co., and John A. Davis, the words alleged'in the answer to have been written in the blank space were not then written therein, (the other parts of the contract being on printed form;) but they were inserted before the other parties signed it. I base this conclusion upon the fair and reasonable deduction from Mr. Davis’ testimony. lie undertook to assist plaintiffs’ agent in securing the names, and went around witli him to solicit and influence subscribers. He testified that at once they encountered the objection to the provision in the contract for a cash payment, and he stated to the agent that in the condition of the peoplo (generally fanners) to whom they must look, cash payments would be an obstacle, and provision should be made for time, etc.; and it was a fact quite noticeable to the court at the trial that many of the unadvised defendants on the witness stand testified about something being said by the agent as to part cash and time on the balance, while denying that it was in the contract. And Mr. Jacobs stated on cross-examination that the writing was not in the contract when he signed it, and that he first noticed it in there after throe or four had signed it. Superadded to which, is this potential fact: For what conceivable reason, consistent with business sense and the instinct of self-interest, could plaintiffs or their agent have inserted such a clause after the parties had signed the contract? As it then stood they were obligated to pay in cash on the
“ A man shall not be allowed to approbate and reprobate. If he approbate, lie shall do all in his power to confirm the instrument which he approbates. * * * ir a man approbate his obligation, lie is confined to his adopting the instrument as a whole, and abandoning everything inconsistent with it.”
See Evans v. Foreman, 60 Mo. 449; Bibb v. Means, 61 Mo. 289; Guffey v. O'Reiley, 88 Mo. 429; Austin v. Loring, 63 Mo. 22, 23; Green v. Railroad Co., 82 Mo. 653-659; Brown v. Wright, 25 Mo. App. 54; Imboden v. Insurance Co., 31 Mo. App. 321; Mayor v. Sonneborn, 113 N.
There is amply sufficient in the pleadings to present this issue. The petition avers and the answers admit the acceptance of the work. And it is specifically pleaded in the reply that said alteration in the contract was “there at the time defendants accepted the said creamery, took the deed to said property, and assumed the control of the same, and that the same was well known to the defendants.” It is the legal effect of the facts pleaded, rather than the designation given them by the pleader, on which the law administers relief. Greenwood v. Insurance Co., 27 Mo. App. 417; Olden v. Hendrick, 100 Mo. 534, 13 S. W. Rep. 821.
There is no inconsistency in fact or law between plaintiffs’ denial of making the alleged alteration in the contract, and then alleging that defendants by their conduct and acts had waived or ratified the act, or had created an estoppel. The contrary rule is a relic of barbarism in practice, by which justice was subordinated to form. Nelson v. Brodhack, 44 Mo. 598; Patrick v. Gaslight Co., 17 Mo. App. 462; McCormick v. Kaye, 41 Mo. App. 263. The observation of Sheewood, J., in Bank v. Armstrong, 62 Mo. 65, is to be understood with reference to the state of facts under consideration. The reply only tendered the issue of no alteration, without pleading any fact which would constitute a waiver or estoppel.
As to the release pleaded in the answers, it is only necessary to state the facts to show that it is without merit. After the plaintiffs had kept and performed the contract on their part, the duty and obligation devolved on defendants to pay the contract price. They declined to do so, however, unless plaintiffs would yield to their contention that the undertaking was that each subscriber was bound only to the extent of the stock subscribed, and unless the plaintiffs would also waive their right to file a mechanic’s lien. Even had the agent been authorized thereto, the release would be inoperative. It is not predicated of any new, valuable consideration, and as such it is a mere nudum pac-tum. When a contract “has become executed wholly or in part by the passage of a consideration it cannot be discharged by a simple agreement, but only by performance of its terms, by a release under seal, or by an accord and satisfaction.” Foster v. Dawber, 6 Exch. 839; 3 Amer. & Eng. Enc. Law, p. 890, § 56. “It is an old rule of the common law that the payment of a sum less than that which is due cannot operate as a satisfaction of the debt.” Id. p. 895, § 67. The facts of this case do not bring this release within the bounds of the rule respecting the compromise of doubtful claims or the settlement of rights in a disputable contract. Aside from this, the agent, Burr, had no authority from plaintiffs to execute such a paper. By the contract itself it is stipulated “that Davis & Rankin will not be responsible for any pledge or promise made by their agents or representatives that do not appear in this contract, and made a part thereof, either in printing or writing.” Parties are presumed to know the law. A collecting agent possesses only lim
The only remaining issue is the defense interposed by Jacobs & Co., as to the allegation of'the memorandum placed opposite their name on the subscription list. I credit the testimony of Air. Jacobs, to the effect, that at the time of the execution of the instrument the words “only responsible for 3 shares” were written in pencil just after the figures “300,” which represented the value of the shares subscribed by them. Such memorandum or addendum belongs to the “four corners” of the instrument, and is as much an integral part of it as if it had been inserted in the body of the contract. “If such memoranda are at the foot or on the hack of a note or other instrument when executed, they constitute a part of the contract.” Bay v. Shrader, 50 Miss. 330; Warrington v. Early, 2 El. & Bl. 763; Wait v. Pomeroy, 20 Mich. 425; Wheelock v. Freeman, 13 Pick. 165; Railroad Co. v. Atkison, 17 Mo. App. 494; Railroad Co. v. Levy, Id. 504, 505; Burchfield v. Moore, 25 Eng. Law & Eq. 123. These words, then, are to bo construed as if they had been inserted immediately after the chief clause obligating the parties of the second part to pay the contract price of ⅜6,850. What, then, would be their legal import? For what purpose were they employed, except to qualify the extent to which Jacobs & Co. proposed by their signature to be bound? It would be strained and ovortechnical to say that as