McPhee v. Young

13 Colo. 80 | Colo. | 1889

Lead Opinion

Pattison, C.

Consideration in detail of the numerous errors assigned upon the record in this case seems unnecessary. The issue between the parties is clearly and well defined. If the written instruments which have been recited are capable of being understood, all of the questions which have been discussed by counsel, with a single exception, can be eliminated from the case.

It is conceded that the three contracts referred to are to be taken as parts of the. same transaction, and construed together. To arrive at and settle the rights of the parties under the order and acceptance upon which the action was brought, it is necessary — First, to ascertain the relations which existed between Simpson & Oo. and McPhee & McGinnity, and their mutual rights, liabilities and obligations, under the original contract for the erection of the house, after the assignment of that instrument; second, to determine the interest which remained vested in Simpson & Co. in the contract after the assignment; and third, to inquire what rights were transferred to Young & Savin by the order made by William Simpson, and wdiat liability was assumed by McPhee & McGinnity by its acceptance.

The several instruments may be properly considered in the order in which they were made. The terms of the agreement between Simpson & Co. and Mrs. Clegg are clear and easily understood. That agreement was made March 21, 1882. By its terms Simpson & Co. undertook to erect and complete a dwelling-house, in accordance with plans and specifications which had been agreed upon, on or before the 18th day of June next ensuing, for the sum of $4,040. This sum was to be paid as the work progressed. If Simpson & Co. completed the house, they were entitled to receive the entire contract price. Performance of the contract was a condition precedent to payment. This contract was not performed by Simpson & Co. Within a week after it was made it was assigned by them to appellants.

The first serious question in this case arises upon the construction of the agreement accompanying this assignment. This question will now be considered.

In the construction of a written instrument the first point is to ascertain what the parties themselves meant and understood. 2 Pars. Cont. 494. The purpose of the interpretation and construction of a contract is to give effect to the intention of the parties. Their intention must first be sought in the instrument itself. The language used by the parties is the best evidence of their intention. This is elementary. It is equally clear that to understand the meaning of the parties the contract is to be considered in its entirety. ‘ Every contract ought to be so construed that no clause, sentence or word shall be superfluous, void or insignificant.” 1 Add. Cont. 285.

Eead in the light of these principles, what does the contract of assignment mean? The language of the instrument is as follows: “For and in consideration of McPhee & McGhnnity furnishing to me all of the lumber, sash and doors for Mrs. Gf. H. Clegg’s dwelling, * * * amounting to about $700 as-per bill, and they assuming the following subcontract bills as follows [subcontract bills], we hereby transfer to them our contract on said house, they paying the above bills, and we agreeing to attend to and build said house, in consideration of them paying to us the balance of our contract price with Mr. and Mrs. G. H. Clegg after bills are paid.”

To ascertain the meaning of this agreement it is essential first to discover and define the mutual promises of the parties, and then to ascertain the consideration moving from each to the other to sustain them.

It is plain that Simpson & Co. undertook to transfer to the appellants their contract for the erection of the house. It was undoubtedly their intention to vest in McPhee & McGinnity the right to receive the full sum of $4,040 upon their performance of the agreement. The consideration of that transfer was the furnishing of the materials mentioned, and the assumption by McPhee & McGinnity of all the bills which had been incurred, and their agreement to pay the same. This disposed of $2,872 of the contract price. In addition to transferring the contract, Simpson & Co. further agreed to “attend to and build said house.” It is contended by counsel for appellants, with much reason, that this was a separate and distinct agreement on their part, the consideration of which was the payment of the balance of the contract price by McPhee & McGinnity, after paying the bills incurred by them in the completion of the house, or, in the language of the agreement, “the balance of the contract price * * * after bills are paid. ” By this construction of the contract Simpson & Co. would be entitled to the net profits of the undertaking, and nothing more.

Thus far only the instrument itself has been considered. If, however, the intent and meaning of the parties is not clearly disclosed by the language of the contract, then competent evidence bearing upon the construction given to the instrument by the parties themselves, by their acts and conduct in its performance, may be considered. 1 Greenl. Ev. §§ 277, 288; 1 Add. Cont. 293; Goddard v. Foster, 17 Wall. 123, 142; Coal Co. v. Tierney, 5 Colo. 583; Haldeman v. Chambers, 19 Tex. 1; Emery v. Webster, 42 Me. 204.

In Knight v. Worsted Co. 2 Cush. 271, the rule is stated as follows: “Parol evidence, though.not admissible to add to or vary the terms of a written contract, is admissible to prove facts and circumstances as to the relations of the parties, and the nature, quality and condition of the property which is the subject of the contract, and also the acts of the parties at and subsequent thereto, for the purpose of showing their understanding of its terms.”

The acts and conduct of the parties, as shown by the evidence of both McPhee and William Simpson, tended to show that their understanding of the agreement was in perfect accord with the construction contended for by appellants.

It appears that, immediately after the execution of the assignment, the appellants undertook the performance of the contract, and that William Simpson was employed to superintend the work; that his brother John acted as time-keeper; that appellants purchased all materials, employed all labor, and in fact did everything which was essential to the building and completion of the house. This evidence tended to show that the undertaking of Simpson & Co. “to attend to and build the house” meant that they were to superintend the work and nothing more; and that they were to receive, not all the contract price remaining after payment of the sums mentioned in the instrument, but the balance after all bills were paid, or, in other words, the “net profits or proceeds.” Under such construction of the contract all that Simpson could transfer to appellees was his interest in the contract, as measured by the “net profits or proceeds ” after its full performance.

But we must not overlook the rights of appellees. When one party is allowed to produce evidence aliunde to aid in determining the meaning of a written agreement susceptible of different constructions, the other party must be allowed the like privilege. It is therefore improper tliat we should further discuss the effect of the testimony admitted on the trial, and which, though properly admitted, was in effect afterwards excluded by the action of the court in directing a verdict. It may be that by such action of the court appellees were misled as to the necessity or propriety of offering like evidence. It follows that, to entitle appellees to recover, it will be necessary for them to allege and prove that there were net profits arising from the construction of the house, unless by competent evidence a different construction of the contract shall be established.

It is not alleged in the complaint that any profits were realized upon the construction of the building. It is simply stated that, after payment of the specific sums mentioned in the assignment, and the amount due to Simpson for labor, there remained a certain sum, to ten-fourteenths of -which appellees were entitled under the order. These allegations are in no sense tantamount to an allegation that net profits were realized.

There is nothing in the answer which could be interpreted to be an admission that there were net profits. On the contrary, it was expressly denied that any net profits were realized. For these reasons the instruction of the court directing a verdict was error.

The judgment is reversed and the cause remanded for a new trial, with leave to the parties to amend their pleadings in accordance with this opinion.

Reed and Richmond, 00., concur.

Pee Oueiam.

For the reasons stated in the foregoing

opinion of Commissioner Pattison the judgment is reversed and the cause remanded for a new trial, with leave to amend the pleadings.

Reversed.

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Dissenting Opinion

Chief Justice Helm.

I think the judgment of the superior court should be affirmed, and therefore dissent from the conclusions reached by the commission and adopted by the other members of the court.