' '4' 1,; CONIl'$UO'i:'iQN 01" CONTRAOT'-JOlNT AND SEVERAL LIABILITY. " :' :::: ' . : :" ·, 1 ' ".' ., ' ,.' " _ ' , , ' :,
','
'
+
'. ,j;UAoonti'act for the bulldinlfof a creamery'and cheese factory, which purports to :
.
dd,1hh Wort. ere.· for the sum of 16,850,and the parties of the second part agree to tti"
',6, abO,',",'e03"m, 0t!tlt on the, CO,mpl,etio,'n, of the b,UUdingaCCOl'din g ,to, 'specifications; ", /loJle;t of theseooo,(1 'part, tbe subscribers, agree as soon as the above amount'is subscribed, or'iIi Ii reasonable time thereafter, to incorporate under the "JaWliIbfitbe state, fixill'g tbe aggregate amount of stock at not less than $6,850, to be , s4ares of said shares to be issued to the subScribers in pro,por'tl'lIh'tOtlleir to wh,lcli is attached a heading f9r the sub, JIIcribefs,.th'us:, "Names of SUbseribers. No. of Shares. Amount of StockafterlnWlIOS by the defelldants, as such subsoribers, for various '8hare.. ,Beta; that this wail a' contract, inter pa'l'tes. between the parties of the first paNiand!tbe subscribers of the second" pa1't;,whereby the subscribers became jointly , to thepartiell ,of thefll'jJt part for the payment of the sum of
receiYEla credit on the contract therefor of $200, and the subscribers agree to pay
own expel;lse the Ilecessary land and water for suoh building, and
, S.
.the 811hllCdbers in signing it,,,or their understanding of its terms,!lI not admissible to·vary its expressed terms. .Nor are any statements made by the lJQliciting agent of 'the' party of the first part,made'while soliciting subscribers, as to the meaning and tl:je contract, ipthe aQsenc-8 of fraud or deceit, competent evidence. PHRASEB+bTTllRPI{ETATION BY PARTIES.
, The contract being plain and unambiguous. parol e\"idence as to the intention of
.\;ROL EVIDENOE.
contract of doubtful or ambiguous meaning and application, the construction placed upon it by the parties thereto by word and,. whe,re sUch construotion has been' acted' on by the parties, "holll1i Pl'eve.il over any mere technical, gramm.atical, or logical Interpretation ; but whe<re tHe contract is free 'from ambill:uity,and its meaning is clear in the eye of the 'law,! 'Buch mode of oopptruction ' XJ:\e of t1:J,e contrll,ct,respectingtlle,organlzation of the ,SUbscribers into a corporatio'n 'ill no Wise the assumption of the subscribers of the payrnt;nt of tn'tlllum of'$6,850. That was a matterisubsequent,ittter s8se,as1io the subscrlbtheir joiX\t afterwards should ,be held and AtTEjU.. TO FORM: CaRPoRATION. '
..
5.
Whensll.id eontraetwas signed by the l1'st four subSCribers it provided for the paY¥l-eIlt ln' Ol)lIh Df sum. subscribed upon the Of the work. Afterwards,to of subsequent subscribers, the provision was interpolll:t.ed, &1liOwfag the SUbscribers to pay one third in cash, one third in 60 days, and inf months,after the CO.mpietiotl of work; the q1eferl'ed payments to bear·S from date. Betd, that where there, are Beveral parties to Jan ,instrllmelit,·sotneJof Whom have execUted it, and in the progress of the transaction it is altered as to some who have not signed it, without the knowledge of the first signers, but not in a part affecting the liability of the latter, and is then executed by the others, tQe contract is good as to the first signers, according to the terms agreed upon by them, and is good as to the subsequent signers, with the addendum obligation. Where the first signers of the contract are the committee of the property, with whom a copy of such contract, after all the subscribers have executed it, is left, and this committee afterwards accept the property from the contractors as completed according to contract, and certify that the contractors are entitled to their pay, retain and mortgage the property as that of the creamery company, held. that all the subscribers are deemed to have waived such alteration, or, at least, are estopped from asserting such alteration.
CQNTRA6{
,
6. W AlVER AND ESTOPPEL.
, DAVIS V. SHAFll:B.
763
7.,
, l'he following memorandum, placed opposite tlle name 01 one of said subscribers! "Only responsible for 3 shares, " is to be regarded ,as a part of his undertaking, ana qualifies the contract so as nbt to bind him for eI' greater sum than three shares. Its subsequent alteration without his consent would discharge him. And, having paid .the SlUl:l;subflQribed by him, he is not; e$topped by the subsequent acceptance ,of the work; such alteration. 'by the Oourt.)
MEMORANDUM.
At. Law:.'. Actiptl by Davis & Rankin against L. W. Shafer and other8 to recover money unaer a contract. Judgment for plaintifis. Mann&, Talbutt., for plaintiffs. ' Go,ode 1f,yfiLvcns, for defendants. This is an action by plaintiffs, a firzp doing business at.th() city of Chicago under the name of Davis & Rankin, to recover on the following contra.ct: "CONTBAOT AND,SPECIFICATIONS FOR COMBINED BUTTER AND CHEESE FAC;rORY OF <;JENTRIFUGAL POWER AND MACHINERY.
"We, Davis & ,Rankin, party of the first part, hereby agree with the undersigned />ubtlcribers hereto, paJ;ty of the second part, to build, erect, complete, and eql,lip. for said"partyof the second part a combined butter and cheese facDade county, Missouri, as follows, to wit: Raid tory, at 01: building shaH be 'constructed and finished in substantial accordance with the specificatidnshereon, in a thor<)llghand workmanlike manner. The engine, boiler. and, all other machinefy and fixtures shall be properly set up, and shall be in good running order,ibefore the party of the second part shall be required top,ay, for,sl,t,ipfactCilri,Y. The parties of the second part do hereby agree furlilsh o,WDr, suitable land for said building, together with sufficient waterQn ,said lot for the use of the business, and they shall be itM therefOr!, as ,Ii payment on this contract. the sum of two hundred dollars, ($200.00;)'antl it is further' understood that. in case the said second party shall, faU to fllrnish said land and water within ten days. after the execution oftbis the Said Davis & Rankin, at their option, may furnisb the said & Rankin further agree to provide and keep hiredat th!'l of the stockholdersan 'experienced butter and cheese makerfor oIi!! year,ifdesired; The above building is to have a capacity for pounds of milk per day. Said Davis & Rankin handIing16,000 to agree to erect said'butter and'cheese factory as set forth by the above specifications fOl','sixty-eight hundr.ed and fifty ($6;850) dollars payable in cash, ot'ooteas follows: One thitd cash when factory is completed; one third 1n l'lec\lred days after factory is completed; one third in secured notes, due sixty dliY,s aJterfllct?fj' is completed·. Notrs t,o draw 8 per cent. interest from date. the subscribers, agree to pay the above amount for said butter and cheese factorywhen completed to said specifications. Said buUding to be completed in ninety days or thereabout aftel" the above amount ($6;850) is sul)scribed. Assovnas the above amount of ($6,850) subscribed, in:a reasonable til)le thereafter, tihe said agree to incorporate under of the state, as therein provided, fixing the aggrethan $6,850.00, to be divided into sbares gate amount of the .stock ,at not of $100 each; sllid share or shares as above stated to be issued to the subscribers hereto in proportion to their paid-up interest herein. It is hereby ullderstoOd that Dilyis' ,& Rankin will not be responsible for any pledge or promise,made,by,:their,agents:or representatives that, do not appear in this conl?;l/.qt. PaJ,"t either in,printing 0) For a faith-
lI'EDERAL ··RlIlPOR!lEB,·"VO).
50.
fU.IPet:.r.r9.,rm.!U1.c. e Of. 0. Ilr.. r.es Nlct. t.1Ve n.. "rt.s..of1tb. tl'.' .c..a. tltr.·ll.·ct'.W.ebind aurael,,_.; our . . .. . .. . . . . Execll,te<fUua.the of Allgust., :w.'. .
' $4,000
of thIs subscppt,iPIl paId. totbe the faIlure to pax the balance Oithe this '. . ' .· Thl'! admIt the Its. and performance by the plamtIffs accorchng to tlle speCIficatIOns, anults ... operating the plant, WIthout' having .1llcorPorated as the contract cdritemplliUid·..... They' interpose as a special defense: First; that the conana the understanding tract is only several, and that botnby its of the plUtiesthereto. the' subscribers were to be bound· only to the ex'tent 01 the ·tm'fils' subscribed by therni'which sums varied from one to three hundred doUllrs, ,And, seC07l,d,;111lat-thecontractwhen signed hy themhad,init abllluk space betweerl; the words, "sixty"eighthunch'ed and fifty doHars, "pa:Ya.ble in the following, "We. pay, the abo,\'e amount," t'tc.; anu the following words: "qr.,notl;j Oll,ethird cash when factory is completell, .one third,in secured notes due. sixty days alter factory is completed, one third in secured notes du!,! four months after factory is cominterest'lrom, alleged to have been pleted, notes to 'drllw inserted. in thisl>lank space after tpe' of the ,contract. And, third, by)heir acts, the contract 8S several,8ntlllot as ajoiut And,./ourth, that the defendants afterw6rl)s, for a valuable consideration, executed a release to the defimdants from their joil1t obligation. to "pay the whole of the contract J>riceon condition of their paying the'single ainountof their respective : Jac\1bs &00. plead further that at the wrote after the "$300," subscribed by them, the words. "only responsible for 3 shares." The replication took issue onth6ne'1 matters thus pleaded. By stipulation of parties a jury was waived, and the case submitted to the court for trial. '. The first question of prime im lJortance is as to the purport of the conWid. Does it' imposelij,oint .obligation on the subscribers b)' the whole they' bound only severally to the of the by them? To answer this question is only. to read the contract... in the opeuing paragraph that it is an agreement of "Davis '& Rankin, parties oftha first hereto, parties of the part, * **withthe part." . Then: "·Thp. tll,e part do tQfurnish attheirowulilxPllnse land fQr lluch building, together with sufficiont op. said lot for. the, !lee of the business, and they shall be credited therefor, as a payment on this contract, the sum of 8200." This,pl1ovision clearly shows that it was a joint undertaking.
f'
'DAVIS' ". SRAFER.
767
The subE!cn"'bers;: tJwparlies' of thill' second part,as bne act, ,at the expense the larid and water, and as one person were to reand not each an aliquot partiproportionateto the',amotmt byhhn Then cOrnes the following clause: "We, the'subscribers,: agree to payitbe aboteamount for said .butter 'and :speeificatioDs.» There is no ambiguity, no conceivable uncertainty about i It isa' plain, explicit; -uDconditionaljlroh1iae, for-all expressed valuable <,'onsideration, to pay to Davis: & Rallkin!,c, the above amount," whilch is 86,850. It could not 'wellbemore.dirOOt and·poeitive. AndhyexpresB prmtisionofthe statUte thecontraCt,js joint'and Fleveral., 'Rev. St. Mo. § 2384. Upon what tseognizedprindple 'onaw;, then, can defendants stand :for their conten-tion that it w8at'heintEmt and understanding of the parties that the de.fendants bound oDly tothe extent of the! amount of subscription setoppesi iBelementary and' uny,ielding law that, " ..hen. ,parties 'have deliberately. put' their writing; insuen teI'lbl;;:ss import·a legal obligation, without any uncertainty-'asto,the: object' or extent of such engagement, it is conclusively ,that the 'whole engagement 01 the parties, and the extent and mallnef of:their was reduced to writing; and all oraltestimonyof a,previOus.tolloqttiu71ibetween the parties, arM conversation or declaratiooslat the completed or alterwards, as it would tend in many instances to substitute a new and .different contract for the onewhirh,wasreallyagreed upon, to the prejudice, possibly, of oueof the parties/is , 1 Green!. Ev. § 275·. Phillips thus succinctly statE'S the rule: ","!tis II. generalru1e' that extrinsic e vidence cannot' be admittell to contradict. add to., llul1tractfrQm" or vaty a written instrumen,t." 2 Phil. (Edw.E(H637. ; Noris' it competent for either of the parties to prove aliunde how a written contract wasnriderstoodby either of the parties in an action at law in theabsenee of vitiating fraud. Bunce v. Beck, 43 Mo. 266; Bigelow v,. (!otlamore,5 Cllsh. 226; Harper v. Gilbert, Id. 417; Gould VAM,d -OJ., 9 Cus:D.338-345; Michaelv.lmuranceCo.',17Mo. App. 23; Burrt188 v.' Blair, 61 Mo. 133. The observation of JUdge Taylor in Smith v. 'WiUiama. 1, 430, is quite applicable: . , i'e6f>ctioll that to the mind upon the statement of the 'question, independent of any technical rules,is that the plWties,by milking a wnttt'n mel'lOrialoftheif trallsa('t1Qo. hal1e impliedly: 8Kreed that, ill the event of anyf,ut,ure ,misunderstandinK. that writmg 54all bert'ferred, tORS .the prpofof their:act and intention; thlit Buch obligations as al'i,se fl'om the paper by just cunstruction or legal 1ntendmentshall be valid and compulsury on tllelIJ,. but wilt not subject tbl'msel ves to an)' stipulations beyolld tlNi thl'Y meant to be bound by any such. they might l1ave added them. to the writing, and thus have given them a clt'arness. a force and direction,,:which thElY could not have by being trusted to the memory of a No by agents while soliciting parties to signtbe contract as to how they understood its provisions, or even had they gone
FEDERAL REPOBTER','vol.
!lay. \that the subscnoers wG1Lltld,not: be required, 'to ,pay more -than: the!suln subscribed by each, could in this action control 'the exwritten instrument them for the payment oCa givensUn;t.: Wakl'field v. Stedmanp2Pick. 562j Hakea v.' Hotchkiss, 23Vk282j rPaddock v"Bartlett, {Iowa,)25,N. W.Rep. 907; ManufacturCo.v.Hale, (Kan.) 17 Pac. Rep.60L :'rhesubsequentprovision of th(;l' respecting the organization of the concern and its erec::tion ,into a ;business corporation under the atate law in 'DO wise affected tM liability ofthe defendants for their already expressed aSSUJ;llp. tioD ofpa:rment of the contract price ,of $6,850. 'That was a matter subsequent, inter sese, as to, the subscribers, as to how their interests and rights in and to: the joint property thus acquired should be secured, fixed, and ,It wa:s nponthe basis, am(i)ng:themselves,as, stockholdto the extenJt of the sums paid by them:,in the corporate property and its earnings. On its' organization the, would become liable forthe debtsfsubsequentlyrcontracted by it to the extent only of his unpaid stock: 'Failing to orgmize as a corporation, the promoters of the scheme--lhe subscribers-:would, inter8e, be a joint stock association, and, as to creditors of .concern, they might be held 'as partners. Martinv. Feu1aU, 79 Mo.401j Smith v. Warden; 86 Mo. 382; Pettis v. Atkins" 60 IllA54j Bigelow v. Gregory,73 Ill,197; Wells v. Gates, 18 Barb. 554. . The heading to thssubacription list appended to the contract is significant. "Amount of; stock after incorporation," shows that the subscri\?erdidnot become such after incorporation, and that the subsequent act depended upon himself,beyond the control . , of the plaintiffs. Strenuous elfortwas made at the trial by defendants toshqw that-by -the subsequenta.cts Rn«·;deolnrations of plaintiffs"agents, whiiEl trying· to collect the subscription, in taking notes from individual· subscribers for .t4eir they pla<;:ed UpOll the their own interpJ.'.etl\tioQi· f,bat.it was .llotdesignedt.q, hold t4e for' a sum gfCli't\lr . thaQthe aIIH:nmt, pf stock subllcribed. SuCh.6vidEmll6wo\llcibe cQUl,pewntifsuited: the ,case. , Where the words or terrnllLof doubtful 0,1' 'ambiguous contract .ill Ilpplication, the Plea.ning .and; given tbeliD by meaning the parties to the contract by thelQ:shQuld prevail pverany ,tf.lchuical, or of tlW words anq, phrases. But where the contract is free from ambiguity, and "its meaning is clear in the eye of the 'law," suohevidence is clearly incompetent. Railroad Co. v. Ttimble, lO Wall. 867; Michaelv.lnsurance Co., 11 Mo. App. 23; 'v.1lo'dgcs, 75 Mo. 413; Miller DV;jllrip, 22 Mo. APi>. ;Rightfully .Qn,derstood, therewll,s no legal or moJ;fili1,1compati'bility in, the claim of plaintiffs that are bound for the unpaid balan.ce ofthe debt, ·and their efforts to collect the individual subscriptions by 1'&king notes or otherwise a's best they could. ''Fheoircumstances attending the organization of such an enterprise contemplate that its success depends lupon. thesubsciiption of enough stock to pay for the plant, withol;ltdwhieh noaingle subscriber would enter into .it. It interests the I I
DAvis ,. SRAl'EB.
769
contractors, ,therefore, to obtain the requisite amount of subscription; and the llsual course of proceeding in inaugurating such enterpris'es is for the contract6ts to collect and receive such subscriptions to an amount sufficient to pay the contract price. This course accommodates the subscribers. The conduct of the subscribers,indeed, invited the plaintiffs to this course. The correspondence in evidence between the plaintiffs and their agent on the ground at Greenfield shows that up to the day when the work was completed, and the same was accepted by ants' committee as satislllCtory, no complaint was made by defendants, orany objection made to the payment of the sums subscribed by them. This correspondence, which is a part of the reB gestm, shows that when pay day came trouble came. Some paid, while the minority shirked, skulked, and refused. It was the policy, as it was to the interests of plaintiffs, who were largely engaged through the country in inaugurating like industrial enterprises, to avoid friction, delay, and litigation. The letters show that plaintiffs, from their business house in Chicago, were solicitous that their collecting agent should settle with the subscribers on any reasonable terrnswhich would obtain the money due them, and even submitted to delays and discounts. For defendants now to take shelter in these acts to escape their expressed undertaking, is to seek to take advantage of their own wrong. As to the alteration of the contract. It is important to "ascertain the facts pertaining to this issue before discussing the law, as it will eliminate some of the propositions contended for by counsel. Without reviewing in detail this evidelice, the conclusion reached on the whole evidence and attendant circumstances is that, when the contract was signed by the first four subscribers, L. W. Shafer, Jacobs & Co., Harper & Co., and John A. Davis, the words alleged in the answer to have been written in the blank space were not then written therein, (the other parts of the contract being on printed form;) but they were inserted before the other parties signed it. I base this conclusion upon the fair and reasonable deduction from Mr. Davis' testimony. He undertook to assist plaintiffs' agent in securing the names, and went around with him to solicit and influence subscribers. He testified that at once they encountered the objection to the provision in the contract for a cash payment, and he stated to the agent that in the condition of the people (generally farmers) to whom they must look, cash payments would be an obstacle, and provision should be made for time, etc.; and it was a fact quite noticeable to the court at the trial that many of the unadvised defendants on the witness stand testified about something being said by the agent as to part cash and time on the balance, while denying that it was in the contract. And Mr. Jacobs stated on cross-examination that the writing was not in the contract when he signed it, and that he first noticed it in there after three or four had signed it. Superadded to which, is this poteIitial fact: For what conceivable reason, consistent with business sense and the instinct of self-interest, could plaintiffs or their agent have inserted such a clause after the parties had signed the contract? As it then stood they were obligated to· pay in cash on the v.50F.no.9-49
<:ompletioQ cwould 1l8r8., quired 60 months i .any sub6¥.tension on, the"balAQCe. With. ()l'.,without senbercoulli'pl\Y and with. it he couldhav,e time .if desired. Nbiacil'flll,lltage apPlJ,rent,. and no, wrong to the obligors wRs:dolie absence of any ,reaBonable1motiye for. wmake said 'lllterpolation without defend,., antll':'khowledgeorAlQQeent.Furthermore, tljeevidence shows that the Elubscti:bera:committi:!dthe contract, and tbisproperty to the',management .executive of Jour of their numbet,( .three ·of vis" anQ; Ha,rper,......were the partie\!, w,hQ;sigued' the the iQ.terlineation ma.de. When the subseriptioo list·. in itapI'esent torm, was completeci, a cQPY thereof was it has ever since In 'oftbat yearthie on behalf o{ the aesociatioo,certi.that they the tract of land, Qpoll'whioh' to ":the' com buiter and cJteel!e factory, 1I and reeommanped, ,the,plaintitrs ",to .· ,toerect sai4. combined butter and'dheese.faet{ny, oW' pontractwith you." On Novembef.;!, 1889, thisCQpy of the,.opntract of fJubscription, this same committee, "for Greenfield Butter, & Cheese Factory :tMpl/,l.jntiffs,-'.'iubehalf o{ and Jor the stockGreeI1R;¢W· Butter Factory Company ·.of GreenfieJd"Mate: o.f Mtssouti," that the.plaintiffs,pontractors as aforesaid, had'feoJDpleted thesllme accQrdiog conO:ac.t and!ipecification, so .asiwe, with .our able to ascertahl. And we do 4et6b1 accept the eartlEl, aQA, NCQmmAnd that J::>.l:!,vis & Rankin, tlla'CtOJ'B, be paid .fpr same accor4iQgto tlletermsof contract with them, as $(jOn as ilprMtical ,test shall be madeshowillg .the rnllnulacture.of butter: and obellse,. and J,r36 feet. oJ additional· piping. for pump shall be fUTnished."These complied witb on the part of. the ,plailltift's,on the 18thday:of,November,1889, this committee issued. Jo I ,plaintiffIH:ln. cllrtificate, stating ,that they had WId to ours!ltisfaction, "compleoodthe dobere\:).yaccJ)p:Hhit.8$D)e" and' Davis & Rannn, cOlltrac,tors, be paMw:r same in: accordance with our contract with them I'" This com:ll1lttee for the thereupon. took possession ufibe have mortgaged it for debt. up to the. time when The only caBellupon forsettlemtlnt was that they wished to .b.ereleased uallyfromany furtb,erJiablJityon payment of reE!pective tions; Rllcl, among thell1.they paid .oyer of this sum. it would .be difficult to discover any SQund reason or ethiclil ,either the or second set of subscribers. (roJD. theirobUgationto pay. The, are clearly dividuJ!lly pQulld, their th.e first four eignefa,.J;looause interlineation was neither intended to defraud it work to them barm, nor did it secureQ,ny
771 advantages 'to; - Thecontrllct, as signed by them, plete, ,ttridOuditional,biildil1g' them to pay cash on the completion ofthe work. That right remains to them, and the only effect of the -added provision waa to give them the option Of other tetms of payn¥ebt.. No snch change, evil inteIitrand working no injury to the obligee, and spcuting no advantage to the ought, in my judgment, be deemed material. The rule of dammi/mabsque injuria ought to be applied to such case. The authorities;inthis state are otherwise. But courts have, from sheer forCe of reason ahdcommon sense, (which is the surest basis of justice,) felt constrained to temper the rigor of the rule against nlterationsto the.extentthat "where there are several parties to an indenture, sOl1le of whoni have executed it, and in the progress Of the transaction it is altered as to those who have not signed it, without the knowledge of those who have, but yet in a part not at all affecting the latter, and then is executed by the residue, it is good as to all." 1 Green!. Ev. par. 568; '1 Add.Cont. par. 389; Doe v. Binghnm, 4 Barn. & Ald. 672; Hibblcwhite v. Mc1l1orine, 6 Mees; & W. 208; Hall v. Chandle88,4Bing. 123. .so it has been held that, where a mortgag9r after it was signed by his comortgagor, without the altered a latter's knowledge or consent, by inserting therein-a description of other property, the mortgage 'was valid as to both. It was good as to tq,e first mortgagor as to the property described therein when he signed it, and it bound the second mortgagor as to the additional property as well as to the other property. Van Horn v. Bell, 11 Iowa, 465. So here the contract was complete when the first four subscribers signed It, but in the progress ()f its execution ari alteration was made to meet the requirementS of other parties, which merely extended to them the privilege of other terms of payment without affecting any existing right of the first obligors. It seems to nle that it is a fit case for the application of the maxim ubi eadem est ratio, eadem est lez. But, waiving this proposition of law, the fitcts hereinbefore l't'cited, as to the acceptance of the property upon the completion of the contract, the retention of the property and dealing with it as their own, clearly constituted a waiver and estoppel combined. Shafer, Harper, and Davis waived it when they accepted the building, machinery, and work. They ratified the contract through the executive committee, to whom the matter was intrusted by the subscribers, when they took possession of the building for the assoCiation, and they created a fatal estoppel by occupying it, treating and dealing with it as their own. As said by CHITTY, J., in He Ohesham, 31 ChI Div.473: .. A man shall not be allowed to approbate and reprobate. If he approbate. he shall do all in his powt'r to contirm the instrument which be approbates. '" '" * It a man-approbatebis obligation. he is confined to his adopting thA instrument 8S a whole, and abandoning everything Inconsistent with it.," See Evans v. heman, 60 Mo. 449; Bibb v.MeaiiB, 61 Mo;289; 'Guf Jf:lJ ... 88 Mo. 429;' AUatin v. Loring, 63 Mo. 22, 23; Greenv. Railroad 00.,' 82 Mo. 653-659; BrOW'll. v. Wright, 25 Mo. App; 54; 1mbtJdenv. 31 Mo. App. 321;Ma'!JfJr v. Sonneborn, 113 N.
to
I'EDEBAL ,lPCPORTEB,
amply sufficient the pleadings to present this issue. The and ll:dmit the acqeptance of the .work. And it is pleaded ip. the' reply that. s/lid alteration in the contract "Vas <"t1;lere at the tj.D;I,e llefe,n,dants accepted the said creatllery, took the deed to control of thesame, and that the 8fl.Jllevras w,ell known tIt tp.e defend!luts." It is the, legal. effect of ,the designation Kiven them by the pleader, on whichibe .law administElfB relief. Jheenwood v. Inmrance Co" 27 Mo. App, 417;Ol(lell v. Hendrick, 100 Mo. 534, 13 S. W. Rep.821. Therei:s no inconsistency in fact or law betweell plaintiffs' denial of tpe alleged in the contract, aud then alleging that defendantlil conduct 'and acts had waived or ratified the act, or had created The: is a relic .of barbarism in practiCe, by whichju,stice was subordinated to form. Nelson v. Brodhack, 44 Mo. 598; P(wk v. Gaslight 00., 17 ,Mo. App. 462; McCormick v. Kaye 41Mo. App. ·. , The observation of SHERWOOD, J.,in Bankv. Armstrong., 62Mo.6Q, is to be understood with reference to the state of facts ullderconsideration.. The reply ollly tendered the issue of no alwithout pleaqing .any fact which would constitute a waiver or .', .' . estoppel.. ,A,S to, the answers, it is only necessary to state the falltsJo sllOw;Jhat is merit. After the plaintiffs had kept andper;formed the contra,ct pn their Plltrt, the duty and obligation devolvedi to pay the contract price,. They qeclined to do so, wpuld yield to their contention that the was that each. was bound only to the extent of the stock subscribed, aJ;ldp.nless the plaintiffs would also waive their right· tQ file amecha,nic's, Even had the agent been authorized th,ereto, . the release woqld, ,be inoperative. It is npt predicated of any new', valua,ble consideratiop, and "as such it is a mere nudum pactum. When a contract "J;1agbeqome executed wholly· or in part by the ora consideration it cannot be discharged by a sill;lple agreement, but only by pe.rformance of itstermst by a release uo.der seal,. or by an aCQord and Dawber, 6 Exch. 839; 3 Amer. & Ene. Law, p. 890,§J;i6. "It is an old rule of the common law that the payment of a surilless thl:\u that which is due c.annot operate as a satisfaction of the debt." 1d. p. 895, § 67. The facts of this case do not bring this release within tJ;1ebounds of the rule respecting the compromise of doubtful· claams or the settlement of rights in a disputable contract. Aside from this, .the agent, Burr, had no authority from plaintiffs to executesu<lha 'paper. By the contract· itself it is stipulated "that Davis &- Rankin will responsible for,any pledge or promise nlac:i.e by their agents or represen,tatives that do not appear in this contract, and. made a part thereof, either in printing or writing." Parties are presuwed ,toknow A collecting agent possesses only limJ
E. Rep. -t,21; Walker v. 76 Ill. 18; Rapalee v. Y. 310;nuff v. Wynkoop; 74 Pa. St. aoo; &11. v. Little Rock, 34!.t-.rk.303. 'J' '.J '
J,
DAVIS fl. SHAFER.
778
ited authority. As such he has no implied power to compromise debtS or execute such a release. Corning v. Strong, 1 Cart. (Ind.) 329; Ward Evans,2 Ld. Raym. 928; Sykes v. Giles, 5 Mees. & W. 645; M1lJ.er v. Ed· mondston, 8 291; McHany v. Schenck, 88 Ill. 357; Pratt v. U. S., 3 Nott & Hutit. 106; Story, Ag. (9th Ed.) § 99; Buckwalter v. Craig, 55 Mo. 71; Greenwood v. Burnes, 50 Mo. 52. The managing committee for defendants were advised by this agent when they demanded such release that he hadueverdone such a thing, and that he would communicate with his principals. Accordingly he did write to them on the 8th day of November, 1889, in which he stated that the company had had a meet-ing and advised the subscribers not to pay until the machinery was tested, and until plaintiffs would give them something to show that they would look to each subscriber for what he subscribed and no more, and unless the plaintiffs would not file a lien on the building. To this letter plaintiffs replied on the 11th rlay of November, 1889, in which the agent was authorized to concede the defendants the release against a mechanic's lien, "as they [defendants] are amply responsible, and, if they would force us to give it to them before they would settle, it would not be worth to execute a reanything anyhow." No authority was given lease beyond the matter of the mechanic's lien. Instead of demanding to see the agent's written authority, after being advised that he would write to the plaintiffs, the committee accepted the mere parol statement of the agent. They could not thus bind the principals. Story, Ag.· § 72; Wilsonv. Railroad Co., 114 N. Y. 487, 21 N. E. Rep. 1015; Gair v. Tuttle, 49 Fed. Rep. 198, (opinion recently filed in this court.) Neither the agency nor the extent of authority can be established by proof of the imputed agent's declarations and acts. Anderson v. Volmer, 83 Mo. 406; Fougue v. Burgess, 71 Mo. 389. The only remaining issue is the defense interposed by Jacobs & Co.; as to the allegation of the memorandum placed opposite their name on the subscription list. I credit the testimony of Mr. Jacobs, to the eftect that at the time of the execution of the instrument the words "only responsible for 3 shares" were written in pencil just after the fig. ures "300,"which represented the value of the shares subscribed by them. Such memorandum or addendum belongs to the "four corners" of the instrument, and is as much an integral part of it as if it had been inserted in the body of the contract. "If such memoranda are at the foot or on the back of a note or other instrument when executed, they constitute a part of the contract." Bay v. Shrader, 50 Miss. 330; War. rington v. Early, 2 El. & BI. 763; Wait v. Pomeroy, 20 Mich. 425; Wheelock v. Freeman, 13 Pick. 165; Railroad Co. v. Atkison. 17 Mo. App. 494; Railroad Co. v. Levy, Id. 504, 505; Burchfield v. Moore, 25 Eng. Law & Eq. 123. These words, then, are to be construed as if they had been inserted immediately after the chief clause obligating the parties of the second part to pay the contract price of $6,850. What, then, would be their legal import? For what purpose were they employed, except to qualify the extent to which Jacobs & Co. proposed by their signature to be bound? It would be strained and overtechnical to say that as
puly to place a limit op. a,s they not become sucg the be to the snbje(ltmatter; !iltqer t!l, the' 'general: undertaking in the body\ «>ftht) qontract., "'.LlherJ'l .eould no motive nor sensible object in wordS asllo Hmitatiot)1alope on responsibility, asto the. no event could the, shart:holders be bound iflter for a gr,ea1ier SUm than the amount of their shares. Mr.Jaco\;ls that the contract his appreheosion was bound for the whole sum, and that he 80. s1aWq tp the agent,and wrotl:! the words. of qualification for his protection,l,lgltinst such constructi9n·.· When the plaintiffs, through their the paper withtpis memorandum, they took it as a part oftlu:: ,qontract ofJIlcobs & Co., and are bound thereby. There is 110 repugnaqcybetween' the general clause binding the subscribers to the payment of t4e .entire sum and the, limitation as to Jacobs & Co. It was acontractinterpartea, being executec,{;!luccessive1y by the parties of the second part. When handed to &00.· for signature, the transaction, tQtheln, is t<,> be, viewed as if they had interpolated the words before signing: "But as ,to Jw,mhs& Co. it is understood that they are 'bound only 19 the extentQf In respect to the alleged alteration ofthig. memOl11ndur;n, it is sufficient that the words are somewhat bh,1rred, of them to satisfy my mind that they were answer does nqt aver that plaintiffs made the defacement, nor does. the show by whom it was done. or how it occurred. If 1l1te;red by the plaintiffs, it operated to discharge Jacobs & CO.i if done while ill possession of plaintiffs, it devolved on them to explain it. The act of Jacobs & Co. in placing this qualification on their liabilityis.a suggestive answer to the, «:lontentionof counsel that it was the comDlon. unclerstanding of the at the time of the execution of the. contract that they were only to be severally bound to the ex,tent of respectively subscr:bed by them. The very fact that Jacobs & Co. ,who were the second signers of the contract, saw the sweeping terms of the obliga'tion before, and placed such memorimdum opposite'their name, was sufficient to put every subsequent signer on his It was a signboard to them. The argunlent of counsel that the subsequent signers should be deemed to have regarded this memorandum as equlllly applicable to themselves is not even plausible. Tbe very reverse is the only reasonable inference. After being thus w8!'Ded by.the precautionary action of Jllcobs & Co. in pia':liQg their names to the instrument without any qualification, the conclusion is inevitable that they swallowed the whole obligation. It follows th.at as to cieJEmdants duly served or appE'aring hereto, except as to Jacobs, & 00., .the issues are found for the plaintiffs. Judgment accordingly. 1
.tbex,
ANDERSON ·11. ErLER
ee aL
(CinmU Coon oj .AppelJ.ZI, TMrd06rcufC.Haye, 1891.)
A person who had produced maotels of a D.ew design sold two of them to · mall ufacturer, who avowed an intention to use them as copies. Beld that, although the sale .wasat the usual price, it must be cooBidered as equivalent tQ a consellt that the manufacturer might use the deBigo, and the inventQr, having BubsequeoUy obtained a patent, could not aue the manufacturer or his customers foriDfringemen'L BAlIII!. It was immaterial that the inventor Bold only upon the auertioa that he would purchase elsewherej it appearing the mantels were OD 8ale by othen. 46 Fed. Bell. 717,aftil"lIled.
L
J'OB INVBNTIONS-LICEN8B.
Appeal from the Circuit Court of the United States for the Westem niemct of Pennsylvania. In Equity. Suit byw'illiam Anderson againl5tEiler, Breitwieser & Co., for infringement of a patent. The bill waa dismissed, and complainant appeals. Affirmed. W. L. Pierce, fo.rappellant. James Aylward Develin, for appellees. Before ACHESON, Circuit Judge, and BUTLER and GREEN, District Judges. BUTLER, District Judge. The. suit is .for infringement of letters patent No. 19,872, granted to William Anderson, June 23, 1890, "for designs for The mantels sold by the respondents are after the complainant's design, and are covered by his patent. They were purchased fr()m Mershon, Brown .& Co., who made them. Several defenses are set up, them a .licetlse in Mershon, Brown & Co. j and as we think this is sustained by the proofs, we need not consider any other. It appears: that' Mershon, Brown & 01)., who are manufacturers of mantels; wishing to use this design, (not then patented) purchased from Mr. Anderson (through an agent) two of his mantels, as samples, for this purpose. The agent ex.plicitly informed him of their object in the proposed purchase, as the proofs show, and as he admits. He thus sold knowledge that the only object in purchasing was to copy and use his design, and did it without objecting to the use contemplated. The inference is therefore, we think, irresistible that he consented to this use. Whether he actually consented or not, however, the circulpstances estop his denial. His silence at the time closes his mouth. If he did not mean to consent he should have said so. Such deni.al now, and a. recovery of damages for infringement, would constitute a fraud. It is true that the sum paid for the mantels was not large; uomore than the usual price for their common use. Whether it W8S disproportioned to thevl:l1ue of the special use mentioned depends upon the question whether a monopoly in the design was then contemplated by either party. Clearly Mershon, Brown & Co. didnotcontemplate it. The18upposed the desIgn was open to the public, and Yin..