Opinion
May Term, 1896.
Thomas J. Falls, for the appellants.
Payson Merrill, for the respondents.
The single question here, as it was upon the trial below, is as to whether the French and German firms agreed to divide the losses resulting from their dealings with Sylvester, Bell Co. on capital and merchandise account, or on merchandise account alone. From the letters which preceded the one of April twenty-eighth, and the agreement of May sixth, it is evident that in the effort to reach an adjustment the plaintiffs took the position that the capital having been wiped out, the parties should share equally between them the loss on merchandise account, while the German house was insisting that the division of losses should include both accounts, capital and merchandise. That both receded from these positions is rendered reasonably certain from the correspondence, which makes it clear that the German house was willing to eliminate the consideration of the capital account provided certain concessions were made to them for their agreement to bear one-half the loss on the merchandise account, and it was the counter propositions that finally resulted in the agreement of May sixth, which is clear and explicit and fixes definitely the understanding that what they agreed to was a division of the loss on the merchandise account. The language of the agreement is susceptible of no other meaning; and were it not for the letter of April twenty-eighth, which as between the parties in New York was supposed to contain a plain provision relating solely to the merchandise account, there would be no subject for discussion. The absence in that letter of any such definite statement, and the language employed in stating the basis of settlement, that plaintiffs "relinquish $15,000 to our credit at the time of ultimate settlement, and that for the balance of the loss we each of us share one-half," have given rise to all this controversy, the appellants insisting that the word "loss" as here used has reference to both merchandise and capital account, and that the agreement entered into was the result of a mistake of the parties in assuming that the letter contained a provision eliminating the capital and confining the loss to the merchandise account alone.
In the light of the preceding correspondence, we think that the subject to which the word "loss" referred is reasonably certain. A brief reference thereto will show, as said, that while from the very outset the plaintiffs insisted upon an equal division of losses on merchandise account, the German house endeavored to bring in the capital account; that this latter suggestion was rejected by plaintiffs, and that thereafter the parties were negotiating on the basis of a letter dated March 28, 1892, written by plaintiffs, which contained a proposition for an equal division of the loss on merchandise account.
And further, we do not agree with the appellants' contention that the agreement of May sixth was unjust and unreasonable. The capital of both parties had been invested with full knowledge that it was subject to the hazards of the business. The German house hazarded the larger amount, and were to be compensated by receiving a larger share of the profits. The merchandise indebtedness, on the other hand, was incurred in the expectation that it would be repaid, thus making it simply a debt, Assent to such agreement prevented the possibility of Sylvester, Bell Co.'s making an assignment, and thereby, or in some other way, preferring the plaintiffs, which they had a right and were seemingly disposed to do, and it also secured to the German house the payment of two notes aggregating over $11,000, and a loan of 120,000 francs, besides an allowance of $15,000 out of moneys which, in the way of commissions, the plaintiffs had earned, and which, as a consideration for the agreement, they were to pay to the German house. Whether the agreement gives one or the other a greater advantage is not a controlling consideration, our duty being to determine what was the contract between the parties.
In addition to the aid which we receive from the prior correspondence, we have in the subsequent agreement of June 2, 1892, a practical interpretation of the contract by the parties after its execution, and it being therein recognized that the capital was lost, and that their agreement was to share loss on merchandise account, they undertook to equalize it, not only by the provision for the payment of $15,000 by plaintiffs in cash, but by Wysong Co.'s reserving in their release to Sylvester, Bell Co. $35,000, which, taken together, equal in amount the difference between the loss of the German house and that of the French house on capital account. With the support thus obtained from the correspondence and the acts of the parties, we must conclude, as did the learned judge, that there was no such mutual mistake as would require a court of equity to disregard the plain language of the agreement of May sixth, which placed upon the parties thereto the obligation of dividing between them the loss on merchandise account.
Assuming then that the obligation on the part of the appellants was to share the merchandise losses, they insist that this action was prematurely brought because the letter of April 28, 1892, contemplated a sharing of losses at the time of the ultimate settlement or liquidation of Sylvester, Bell Co.'s affairs, and that, as that time had not arrived when this action was brought, it was premature. The testimony, however, shows that the liquidation had been substantially completed when the action was brought, and at the time of the trial was entirely completed, and this, under the rule that prevails in equity, as distinguished from the rule applicable at law, destroys the force of their contention, it being sufficient in equity if a ground of relief exists at the time of the trial.
Equally untenable is the claim that the plaintiffs cannot recover, because on January 1, 1893, the time stipulated in the agreement of May 6, 1892, they did not pay the $15,000 to appellants. There is no valid reason why they should have paid that amount in cash on that date, when it is apparent that after giving appellants credit for that amount, there would still be a large balance due the plaintiffs. Besides the sum in question was credited to them, and this was equivalent to payment. Moreover, this provision was an independent stipulation, and not an absolute condition, and even though the appellants might have sued and recovered the amount, it was not a bar to the maintainence of this suit for an accounting.
The other questions presented and the exceptions taken we have examined, but find no reason for interfering with the judgment, which should be affirmed, with costs.
VAN BRUNT, P.J., RUMSEY, WILLIAMS and INGRAHAM, JJ., concurred.
Judgment affirmed, with costs.