Opinion
No. 27918.
December 19, 1950.
APPEAL FROM THE ST. LOUIS CIRCUIT COURT, JAMES F. NANGLE, J.
Flynn Parker, Francis C. Flynn and Norman C. Parker, all of St. Louis, for appellant.
Walter L. Roos, Henry C. M. Lamkin, St. Louis, Cobbs, Logan, Armstrong, Teasdale Roos, St. Louis, of counsel, for respondent.
This is an action for an accounting between two former partners in which both seek to determine the amount of money and property due them individually by reason of their articles of partnership and a subsequent contract of dissolution. Involved in the suit is the construction of a paragraph of the partnership agreement. The trial court was persuaded to accept the plaintiff's version of the disputed paragraph and from a judgment in the total sum of $1,889.89 defendant prosecutes this appeal.
In May of 1945 the plaintiff established a business and operated it under the name of Bruce Greaves Company. He was engaged, as a manufacturer's agent, in selling, to industrial concerns, equipment designed for temperature, pressure and flow control. He represented five manufacturers of such equipment and received from them commissions on devices and installations that he sold. The commissions received were not payable, however, until the manufacturer had made delivery or installation, as the case might require, and had been paid by the customer to whom the sale had been made. A shortage of materials existed and this resulted in a considerable lapse of time between the sale and the collection of the commission. In 1946, the plaintiff found that he had more business than he could properly handle without assistance and he began looking for some one to enter the business with him.
He had heard that defendant desired to make a business connection and discussed with him the formation of a partnership. After that the defendant had a contract of partnership drawn up by a lawyer and brought it to the plaintiff. They discussed this written agreement as drafted and made some changes. It was executed by both of them as of February 1, 1946, and the defendant paid to the plaintiff the sum of $2500.
They continued together in business for about a year and nine months but disagreements had arisen between them and they decided to dissolve the partnership. On November 29, 1947, they entered into a contract of dissolution which provided, among other things, for an equal division of the assets, after deducting the necessary expenses to complete orders on hand. Since they were not in accord as to the meaning of a paragraph in the original partnership agreement, the contract of dissolution contained a clause requiring that a suit for accounting should be filed for the purpose of determining the meaning of the paragraph in controversy. This present action was brought pursuant to the dissolution agreement, and in addition to the requested construction the court was asked to determine whether certain items were properly chargeable as deductible expenses of the partnership.
The paragraph of the partnership agreement which is in question here is as follows: "Bruce Greaves hereby sells to Joseph Huber one-half undivided interest in said business for which said Joseph Huber agrees to pay the sum of $2,500.00, subject to increase or reduction as hereinafter provided. Prior to the date of this agreement, Bruce Greaves had made sales for which the commissions had not been received. It is the intent that the amount of money paid by Joseph Huber equal 50% of these commissions, and when said commissions are received, they will be shared equally by the partners in accordance with the terms of this agreement. The parties hereto will make a final accounting with respect to said commissions not later than 18 months from the date hereof. The sum so paid shall not become part of the capital of the firm."
It is contended by the plaintiff that this is ambiguous and that by its terms the parties intended that the defendant should pay the plaintiff, for the half interest he acquired, the full amount of the commissions that had been earned by the plaintiff prior to the effective date of the partnership. The defendant contends that the meaning of the paragraph is clear and that the purchase price he was required to pay was one-half of the commissions that had been earned by the plaintiff. He maintains that he was to pay $2500 cash and that this amount was subject to adjustment upward or downward, so that the total price paid by him would equal one-half of the plaintiff's previously earned commissions.
The total amount of $4,114.70 was collected by the partnership on commissions earned by the plaintiff prior to February 1, 1946. Under the plaintiff's version of the quoted paragraph the defendant owes him the difference between $4,114.70 and $2500, or $1,614.70. Under the construction urged by the defendant the purchase price as fixed by the agreement is one-half of the $4,114.70 or $2,057.35, and the plaintiff owes him the difference between this amount and the $2500 that he originally paid. This would be $442.65. The trial court followed the plaintiff's theory of construction and decreed that the defendant should pay the plaintiff $1,614.70 on this item.
There are three sums in dispute which are claimed by the plaintiff as expenses arising out of the partnership. Two of these consist of refunded commissions to the manufacturers represented by the partnership. These refunds were made by the plaintiff, without consulting the defendant, after he had been notified by the manufacturer that the sale upon which the commission had been paid had been rescinded and the merchandise returned. One of these commission refunds amounted to $108 and it came about by reason of the Shell Oil Company returning to the manufacturer some guages that it had purchased through the partnership. Another such refund amounting to $82.91 was made by the plaintiff when the Hussmann-Ligonier Company returned to the manufacturer some unsatisfactory flow raters. The third item had to do with some special equipment made by one of the manufacturers represented by the partners. This equipment was made up for the Missouri Portland Cement Company but proved unsatisfactory. The manufacturer declined to accept the return of the equipment as it had been specially made and in order to satisfy the buyer the plaintiff refunded $400 of the purchase price. On these three items, totaling $590.91, the trial court found for the plaintiff.
In addition to this $590.91 there was an admitted expense of $27.50 for warehouse charges. This increased the total claimed by the plaintiff as partnership expenses to to the sum of $618.41, but there was a credit against this sum of two commissions not previously accounted for, totaling $68.03. After deducting this amount from the $618.41 it left a total of charges claimed on these items of $550.38, and the chancellor decreed that the defendant should pay half of this amount, or $275.19. This was in addition to the $1,614.70 on the first item, and the total judgment entered was the sum of these two, or $1,889.89.
Parol evidence was received by the court relative to what the parties intended the contract to express, and it is asserted by the defendant that the court erred in this respect. Extrinsic or parol evidence cannot be introduced to add to, change or vary in any way the terms of a written contract in the absence of fraud, accident or mistake. Such evidence is only admissible under other circumstances when the contract is ambiguous. This rule is based upon the fact that contracts are reduced to writing to avoid uncertainty and a written record of the agreement is more accurate than the recollection or memory of those contracting. Stein v. Reising, 359 Mo. 804, 224 S.W.2d 80; Bank of Mountain View v. Winebrenner, 355 Mo. 79, 195 S.W.2d 486; Hudler v. Muller, Mo. Sup., 55 S.W.2d 419; State ex rel. W. L. Morrison Investment Co. v. Trimble, 301 Mo. 146, 256 S.W. 171; National Cylinder Gas Co. v. G. H. Packwood Mfg. Co., Mo.App., 208 S.W.2d 825.
The language of a contract is ambiguous when it permits of more than one interpretation or a word, within it, has a scope of meaning not definitely confined or ordinarily understood. Huddleston v. Huddleston, Mo.App., 11 S.W.2d 1065; Larson v. Crescent Planning Mill Co., Mo.App., 218 S.W.2d 814; Burman v. Vezeau, 231 Mo.App. 1109, 85 S.W.2d 217. Since the contract under consideration employs words of common usage they must be construed in their ordinary meaning, and if these words, as they are used, leave but one clear construction of the contract, it is not ambiguous.
With this in mind we move to a consideration of the paragraph here questioned. The first sentence states: "Bruce Greaves hereby sells to Joseph Huber one-half undivided interest in said business for which said Joseph Huber agrees to pay the sum of $2,500, subject to increase or reduction as hereinafter provided." There cannot be any doubt about what this sentence means for it plainly fixes the initial sum of $2500 as the amount that Huber is to pay for a half interest in Greaves' business and states that this amount is subject to increase or decrease in accordance with the provisions following.
The next sentence states as a fact that, "Prior to the date of this agreement, Bruce Greaves had made sales for which the commissions had not been received." There is nothing equivocal about this and it is only inserted to make the following sentence understandable. This sentence is, "It is the intent that the amount of money paid by Joseph Huber equal 50% of these commissions, and when said commissions are received, they will be shared equally by the partners in accordance with the terms of this agreement." What can this mean except that Huber is to pay a sum equal to one-half of the commissions and to share equally with Greaves in the commissions as they are collected? The balance of the paragraph fixes the time when the adjustment on the amount to be paid by Huber should be made and reserves to Greaves as his own the sum paid by Huber.
The plaintiff contends that he was to net $2500 over and above his share of the commissions and the only way this can be accomplished is for Huber to pay him an amount equal to the total of the commissions. It is maintained that unless the contract is so construed Greaves will profit nothing on the sale of the half interest in his business. It is asserted that if Huber is required to pay only 50% of the amount of the commissions, he acquired a half interest in a business without any cost to him as he shared half of the commissions as they were received. That may be the case, but it is also true that it took a period of eighteen months to collect the commissions due and the plaintiff was paid $2500 at the signing of the contract.
If the plaintiff was improvident in entering into the agreement and could have reasonably demanded a larger sum for the interest that he sold, that is no concern of the court. As stated in 17 C.J.S., Contracts, § 296, p. 702: "It is not the province of the court to alter a contract by construction or to make a new contract for the parties; its duty is confined to the interpretation of the one which they have made for themselves, and, in the absence of any ground for denying enforcement, to enforcing or giving effect to the contract as made, that is, to enforce or give effect to the contract as made without regard to its wisdom or folly, * * *". Little Rock Surgical Co. v. Bowers, 227 Mo.App. 744, 42 S.W.2d 367; Rickey v. New York Life Ins. Co., 229 Mo.App. 1226, 71 S.W.2d 88.
If we were to employ the most tortured construction of the sentence we could not construe 50% to mean 100% and since the contract is not ambiguous the court erred in admitting parol evidence as to the intention of the parties. Had such evidence been admissible it would be of little value for the plaintiff and his wife related their ideas as to what was agreed upon and the defendant testified as to his idea of the understanding. Most of the testimony consisted of mere conclusions of the witnesses.
The paragraph provided that Huber should pay $2500 and that this sum should be subject to increase or decrease so that it equaled one-half of the commissions earned prior to the agreement. These commissions finally computed amounted to $4,114.70. One-half of this amount is $2,057.35, and in order to reduce the $2500 to that sum it must be found that there is owing to the defendant $442.65 on this item in dispute.
The defendant also claims that the court erred in allowing as expenses of the partnership the refunded commissions and the sum paid in adjustment of the claim for unsatisfactory machinery sold to the Missouri Portland Cement Company. The plaintiff states that this point was not properly preserved for appellate review, citing us to five cases touching upon the requisites of objections to evidence and motions for a new trial. Except for one of the cases cited, all of them are jury cases and the other, Berry v. Rood, 209 Mo. 662, 108 S.W. 22, has to do with a reference case in equity and deals with exceptions to a referee's report. These cases are not in point. Laws of 1943, p. 353, Section 847.114, Mo.R.S.A., provides that in cases tried by the court the sufficiency of the evidence to support the judgment may be raised on appeal whether or not that question was raised in the trial court. The present rule of the Supreme Court of Missouri, 3.23, and the rule that preceded the present one both contain the same provision that the statute carries. We are obliged to consider the appellant's point for the essence of his complaint is that the evidence does not support the court's decree.
The court in passing upon the refunds and the adjustment made, accepted the last statement offered in evidence by the plaintiff, which is as follows:
"Final Statement — J. Huber (Plaintiff's Ex. R)
"Shell Oil Co. Helicoid Credit Issued $432.00 Comm. 108.00 Hussman-Ligonier F " " 552.70 " 82.91 Mo. Portland Cement B.G. Co. " " 400.00 " 400.00 ------- --590.91 "Fischer Porter Commissions 13.50 Hammel-Dahl 54.53 -----
68.03 -------- --522.88 "Warehouse expense on material held pending split "15 June 1948 4.75 12 July 1948 4.75 7 Aug. 1948 4.75 11 Sept. 1948 4.75 2 Oct. 1948 4.75 2 Nov. 1948 3.75 ------ 27.50 27.50 -------- --550.38 "Net Amount J. Huber Owes $275.19"
The defendant claims that the expenses shown, with the exception of the warehouse charges, are not properly deductible because he was not consulted about them. They appear from the evidence to have been obligations of the partnership and therefore expenses which should have been paid. In view of this we fail to see how the defendant was freed of his proportionate share simply because he was not consulted before payment was made. Therefore, the court properly held that the defendant should be charged with half of the sums set out in the statement.
Complaint is also leveled at another group of items listed and allowed as partnership expenses in a previous statement. Two of these items are stationery purchased and pencils bearing the name of Bruce Greaves Company purchased to be used as Christmas gifts to customers. Neither of these articles would be of any value to the defendant because both bore the name of Bruce Greaves Company and the dissolution agreement provided that the plaintiff had the sole right to continue to use the name. We have no evidence as to their value or the number of pencils or the amount of stationery on hand. It would therefore be impossible to decree a division of them in kind or their cash equivalent. They were bought while the parties were in partnership and constituted an obligation properly chargeable to both parties.
Two pumps of the value of $26.06 were shown in an inventory to be in the defendant's possession. This was denied by the defendant and plaintiff offered no evidence to prove that the pumps were in defendant's possession. The dissolution agreement provided for an equal division of the stock inventoried, and since the whereabouts of the pumps in question seem unknown to either party the defendant should be charged for only half of their value, or $13.03.
Another charge made by the plaintiff against the defendant was the payment of $5 commission to a secretary that worked for them. Plaintiff paid this but maintained that it is properly chargeable to the defendant because he promised to pay the secretary, without consulting the plaintiff, a commission on a certain sale that she made. It is a trivial matter but the five dollars is certainly a partnership obligation and not a personal debt as the plaintiff contends, so only $2.50 should have been charged to the defendant. The $13.03 and the $2.50, totaling $15.53, should be deducted from the $275.19 previously held properly chargeable to the defendant. This would leave that amount $259.66.
On the first item, concerning the purchase price of the interest in the business, plaintiff is indebted to the defendant, as stated, in the sum of $442.65, and on the other items the defendant is indebted to the plaintiff in the sum of $259.66. The difference favors the defendant in the sum of $182.99, for which amount he should have judgment.
It is therefore the recommendation of the Commissioner that the judgment be reversed and the cause remanded with directions to enter judgment for the defendant in the sum of $182.99.
The foregoing opinion of WOLFE, C., is adopted as the opinion of the court.
The judgment of the circuit court is accordingly reversed and the cause remanded with directions as recommended by the Commissioner.
ANDERSON, P. J., and McCULLEN and BENNICK, JJ., concur.