Opinion
No. 3704.
Decided January 6, 1948.
An exception to a finding as to the surrounding circumstances in construing a contract presents only a question of the weight of the evidence to support the finding of the Trial Court.
BILL IN EQUITY, praying that the defendant Blain be ordered to transfer and sell to the plaintiff Irwin as of March 7, 1946, 150 shares of stock in Blain Irwin, Inc. now Irwin Motors, Inc. upon receipt of $15,000 from the plaintiff and that the defendant company be restrained from transferring this stock to anyone except the plaintiff. The dispute arises out of an agreement made between the parties on December 28, 1945, the material portions of which read as follows:
"1. The said A. C. Blain agrees to sell to George A. Irwin said shares of stock, either in whole or in part, whenever requested to do so' by the said George A. Irwin.
"2. The amount to be paid said A. C. Blain by the said George A. Irwin for said stock is One Hundred ($100.00) Dollars per share. Upon the tender of the said One Hundred ($100.00) Dollars per share, the said A. C. Blain will transfer to the said George A. Irwin the number of shares of stock purchased.
"3. The said George A. Irwin hereby agrees that so long as the said A. C. Blain is the owner of the stock herein referred to, in whole or in part, the said A. C. Blain shall receive two (2) per cent of the net profits, after taxation, of the Blain Irwin, Inc. for every One Thousand ($1,000.00) Dollars worth of the stock which the said A. C. Blain owns, this amount to be paid to the said A. C. Blain in the form of dividends on his said stock; and that the combined salaries of said George A. Irwin and his wife Mary D. Irwin will not exceed six thousand dollars ($6,000) annually.
"4. In computing the net profits after taxation for the purpose of the above Clause 3, the amount of interest and principal paid by the Corporation in any year on its note to the Indian Head National Bank for Thirty-five Thousand ($35,000) Dollars shall not be taken into consideration before determining said net profits.
In determining the net profits of the business after taxation as above mentioned, December 31 of each year shall be considered as the ending period of the year, and the purchase of the stock by George A. Irwin from A. C. Blain shall be made as soon as the net profits after taxation have been determined, but not later than the 15th of March of the year following the ending period. . . .
"6. The said George A. Irwin agrees to purchase said stock from the said A. C. Blain within a period of ten (10) years from the date hereof."
The defendant Blain's claim is that the agreement had to run one year, or until December 31, 1946, before the plaintiff was entitled to purchase the stock. He contends that since there could be no reckoning of net profits under paragraph four of the agreement until the end of the first year of operation this portion of the agreement limits the plaintiff's right to purchase. The plaintiff maintains that the agreement as a whole, with special reference to clauses one, two and six which place no such limit upon the plaintiff's rights, must be construed to mean that he has the right to purchase at any time upon tender of the $15,000 which was made on April 17, 1946, and that the net profits could be reckoned thereafter and paid to the defendant. The Court found that the plaintiff was excused from making the tender earlier due to the absence from the state of the defendant, and this finding the defendant does not dispute.
The defendant Blain seasonably excepted to the Court's failure to find facts and to make rulings of law as requested by him and to the decree of specific performance in favor of the plaintiff. This decree provided in substance that the transfer should be made as of April 17, 1946, upon payment of $15,000 by the plaintiff to the defendant, and that the defendant should also receive as dividends 2 per cent of the net profits of the concern for the calendar year 1946, for that portion of the year from January 2, 1946, to March 11, 1946, the net profits to be computed in accordance with the terms of the agreement.
Further facts appear in the opinion. A bill of exceptions was allowed by Wheeler, J.
H. Thornton Lorimer and Thomas F. Donovan (Mr. Lorimer orally), for the plaintiff.
Leahy Denault (Mr. Leahy orally), for the defendant.
The decree of the Court made in accordance with clearly findable facts must be affirmed.
During the trial much evidence bearing on the circumstances which surrounded the making of the contract, including the intention of the parties as expressed to each other, was introduced by both sides without objection.
"The basic idea that a contract is to be interpreted in the light of the surrounding circumstances has been applied in this jurisdiction from early times." Pettee v. Chapter, 86 N.H. 419, 424, 425, and cases cited. See also, Occhipinti v. Weiner, 91 N.H. 388, 389. The finding of the surrounding circumstances presents only a question of fact. Pettee v. Chapter, supra, 427. See also Rogers v. Company, 91 N.H. 398, 400; Bee v. Company, 94 N.H. 478.
There was ample evidence to sustain the Court's findings. The plaintiff testified that the parties intended that he be allowed to purchase the stock at any time, but if he delayed the defendant was to receive 2 per cent of the net profits on the stock while he held it, to be determined in accordance with the provisions of paragraphs three and four of the agreement. The plaintiff also testified to circumstances which warranted the Court's finding that the defendant must have known that the plaintiff was desirous of purchasing the stock at the earliest possible moment that he was able to do so, and that the agreement was intended so to provide. Notwithstanding some statements which might be construed as conflicting and the defendant's contradiction of this testimony no reason appears why the Court was not at liberty to believe the plaintiff's version of the transaction. The contract itself furnishes strong support for the plaintiff's theory in that paragraphs one, two and six give him unqualified right to purchase the stock at any time within ten years and are not inconsistent with paragraphs three and four, since the latter may properly be held to apply only in the event of a delay in purchasing by the plaintiff. Here again the Court has found upon sufficient evidence that the main purpose of the agreement, so far as it affected the defendant, was one of security. In case of delay the transfer of stock is to be made upon tender of the $15,000 and the defendant's share of the net profits paid to him as soon thereafter as they can be reckoned under the terms of the contract. The decree has so provided. In substance, the interpretation placed upon the contract by the Trial Court in the light of his clear and comprehensive findings appears to be a reasonable one consistent with the purposes of the agreement, while the construction contended for by the defendant would produce a contrary result.
Common sense and the weight of authority combine to furnish support for the conclusion reached. Restatement, Contracts: N.H. Anno. s. 236, comments (a) (b). 17 C.J.S. 726, s. 309.
The defendant's requests for findings of fact and rulings of have been carefully examined. Both are disposed of on the ground that they are inconsistent with the facts and rulings of law of the Trial Court which are herein upheld.
It appears there was no error in the decree entered by the Superior Court.
Exceptions overruled.
All concurred.