94 Mass. 354 | Mass. | 1866
The decision of this case depends upon the construction to be given to the written contract made by the parties in December 1859, by which the plaintiff agreed to devote his whole energies to the business of the defendants during three years from the 1st of January 1860, and to receive, in lieu of salary, five per cent, of the net profits of the lower department of their business. It is admitted that this contract did not make the plaintiff a copartner with the defendants ; and that he served them faithfully for three years according to the contract, and is entitled to the compensation therein agreed upon. The court has not found it necessary, in interpreting this contract, to consider any facts which are not admitted by both parties.
The defendants, at the time of making the contract and during the three years mentioned therein, were a mercantile firm in Boston, carrying on a very large business in importing, buying, selling and dealing in foreign and domestic dry goods. Their ousiness was divided into two distinct departments, one called the woollen department, which embraced their transactions in woollen goods, and the other the lower or general department, which included all the rest of their business; and a separate account was kept of the profits and losses of each department, The defendants were accustomed to take semi-annual accounts of stock on the first days of January and July, in which they estimated the stock on hand at cost.
The compensation for his services, which he agrees to receive, is declared to be “ in lieu of salary, for the term of three years from January 1st 1860; ” and is to be “ five per cent, of the net profits of the lower department in the business of” the defendants. These “ net profits ” consist of the money received from sales of goods, deducting their cost and expenses. They are further defined as “ the final results of the entire business of” the defendants, “ after deducting the profits of the woollen department.” The mode prescribed for ascertaining the profits of the woollen department shows that the results and profits in whicÉ the plaintiff is to share are to be fixed at the end of the three years; for in ascertaining the net profits of the woollen department, (which is to be done at the end of every half year, or “ season,’’ as it is called in the contract,) the amount to be deducted for expenses is to be in the proportion which the amount of sales in that department bears to the amount of sales in the general department; and this must necessarily be computed on the amount of sales already made, and not on the sales to be made at any indefinite future time. The interest of any party (such as the plaintiff has) in any branch of the defendants’ business, in lieu of salary, is to “ be deemed a matter of expense, and enter into and be charged to the expense account.” It is
The mode suggested by the plaintiff, for estimating his share of the profits in goods unsold on the 1st of January 1863, is either to make an estimate of their actual value on that day, or to take the amount at which they are afterwards sold. But an estimate of their value on that day is not provided for in the contract, nor in fact made by the defendants in the ordinary management of their business, and would be no measure of the profits actually made upon sales. And to give the plaintiff an interest in the profits of sales made after that day would be to extend his interest beyond the term of three years to which by the contract it is limited, and after he had ceased to render the services for which his interest in the business was a compensation.
The plaintiff, under this contract, shares in the gains of al" business brought to a close within the three years, whenever
The plaintiff is therefore entitled to recover five per cent, on the net profits of the business of the firm during the three years mentioned in his contract; to be estimated by deducting, from the amount of sales made during that time, the cost of the goods so sold, and expenses, including losses on debts for such sales; and the value of any such debts remaining uncollected at the end of the three years is to be ascertained by a master unless the parties agree. Decree accordingly.