Barnes v. American China Development Co.

Patterson, P. J.: On careful consideration of the evidence as it appears in the record in this case, I think it is established that the plaintiff was employed to negotiate with the Chinese minister at Washington the contract which is referred to as the coal concession, and that as a result of his efforts that contract (with others) was entered into, and that he would be entitled to recover the value of his service rendered in connection with that subject, were it not for the fact that he has released his claim arising ont of the performance of that service. That such release was operative to discharge that claim, now asserted in the present action, seems to me to be clear, especially when its terms are construed in connection with the surrounding circumstances in which it was executed and the documentary evidence relating to it showing plainly the purpose of its execution — 42 — and delivery. The .construction, of the release is for the court. It is a document under seal, and is an absolute relinquishment of all claims against the American China Development Company and the membership of Voluntary associations known as the China Railways and Concessions Project and the Chinese Railway Syndicate, and against certain named persons, and releases and forever discharges such corporations, associations and persons from any and alb manner of action,, actions, cause and causes of action, etc., which the 'plaintiff ever had or then had, “ upon or by reason of any matter, cause or thing whatsoever from the beginning of the world to the day of the date of these, presents, in-connection with or arising, out of the negotiation of any and all contracts and concessions for the construction of a railway in, the Empire of China for the China Railways and Concessions Project,, the American China Development Company, and the Chinese- Railway Syndicate, and the various members thereof, and the various persons in anywise interested therein, or either of them, which have been heretofore the subject of two certain, actions pending in the Supreme Court of the State of New York, County of New York, the first between Thurlow Weed Barnes, plaintiff, and Calvin S. Brice and others, defendants, and the second between Thurlow Weed Barnes, plaintiff, and Frederick P. Olcott and others, defendants.” It becomes necessary to advert to facts appearing in this record relating to this release. As heretofore stated, it is shown that the plaintiff was employed to render certain services in the, negotiation of contracts and the procurement of concessions for the -construction of a railroad in China and certain other purposes in connection therewith, the detail of which need not be fully entered into. It may be assumed that sufficient is shown to impose liability upon these defendants for the value of such services, if any liability at all now exists. The starting point of the controversy between the parties in the aspect in which it is now presented may he considered as the time at which three several contracts or agreements were entered into between the Chinese minister to the United States of America and the American China Development Company, namely, the 14th of April, 1898. As the result of antecedent negotiations on that day the -three cori tracts were executed and, as the plaintiff himself states, were in pursuance of an original plan or scheme of the per — 43 — sons interested in acquiring rights under such contracts or concessions. They are .respectively, first, what is called the Hankow-Canton contract, which undoubtedly was a concession for the construction and operation of a trunk railway line in China from the city of Hankow to the city of Canton, and thence to the sea; and in connection therewith certain provisions relating to the financing of the road were made. The second, or the so-called Hankow-Peking agreement, was not in itself a concession, but was a provisional arrangement for the reversion to the American China Development Company of a grant which had already been made by the Chinese government to Belgian capitalists, and it was stipulated that if the agreement or concession so made to the Belgians should be canceled, then the grant or concession should be given to the American China Development Company. The third, which is the subject-matter of this .action, was an agreement, which is called a concession, relating to the right to mine coal on territory adjacent to the proposed line of railway. The recital or preamble in the last agreement referred to: is. as follows: “ Whereas, by an agreement entered into this day, the American China Development Company have agreed to provide a loan for the construction of a railway from the city of Hankow to the city of Canton, China; and Whereas, coal is one of the necessary articles to be used for working the said railway after its completion, now, therefore, it is hereby resolved that as soon as the said Chinese Railway Company shall have obtained concessions from the Government to open and work coal on territory adjacent, to the said railway, they will authorize the said American China Development Company and the- said American China Development Company undertake to prospect, open and work the said coal, the said American China Development Company undertaking to provide all the funds for the carrying out of this contract,” etc. While these contracts are separate in form, they all relate to the railway concession. They were negotiated and executed concurrently and were all embraced within the original scheme of the parties associated in the railway enterprise. The coal contract or concession, so called, recites upon its face that it is made in connection with the agreement of the American China Development Company to provide a loan for the construction of. the railway from the city of Hankow to the city of Canton, China, which is a provision — 44 — contained in the railway concession, and further recites that coal is one of the necessary articles to he used for the working of the railway after its completion. This so-called coal concession is linked with the railway concession, and is an auxiliary contract and not an entirely independent .and separate contract or grant. Therefore/' considering the terms of those two- contracts, the circumstances in-which and the purposes for which they were entered into, it seems plain that the release is a general release of all persons and corpo rations named therein from all causes of action, etc., in connection with or arising out of the negotiations of all contracts and concessions for the construction of a railway in the empire of China by the Chinese Railway Company, etc. This coal concession was granted in connection with the contract for the construction of the railway, and that being so the release is general. • . The plaintiff brought this action to recover for services rendered in connection with the procurement of these contracts or some of them, as well as other contracts alleged to have been negotiated and procured by him ; but upon the trial the only question finally submitted was whether the plaintiff was entitled to- recover for obtaining the so-called coal concession as an independent thing. Among the defenses set up in the answers was the general release, which was put .in evidence. The plaintiff' undertook to show that it was inoperative and ineffectual to discharge his claim for compensation for negotiating the coal contract, and he claimed that it was not the intent of the parties in executing it to extinguish his claim for compensation for that'particular service. ' I think this is to be regarded as a release general in its terms with no limitation by way of recital or otherwise, and that to avoid it it was necessary for the plaintiff to show mutual mistake, or mistake on the part of one and fraud on the other, or fraud or duress. Or, in other words, in seeking to avoid the defense of a.general release under seal, it was necessary for the plaintiff to show such a state of facts as would have justified a court of equity in setting aside-the instrument. (Kirchner v. N. H. S. M. Co., 135 N. Y. 182.) The learned trial judge, however, sent the case to the jury upon an issue of intent of the parties in executing the document. Counsel for the defendants insisted throughout the whole trial that the construction and determination of the effect of the release was for the — 45 — court, and excepted to its being left to the jury to determine what that effect was. The court held that there was a question of intent for the jury, and left it to them to determine what such intent was with respect to the exclusion of the claim on the coal concession from the operation of the release. Of course a question of intent is a question of fact, but even if such a question did or could arise upon this record, the evidence' is overwhelming that there was no intent of the parties to whom the release was given to exclude the coal contract from the operation of that release, whatever may have been the secret thought or purpose of the plaintiff alone. It now becomes necessary to consider the evidence relating to this release. Its terms have been sufficiently stated. The first fact to be observed is that the release was given for the settlement and discontinuance of two actions which Mr. Barnes, the plaintiff, had brought against the Ameriean-China Development Company and various persons interested in the China enterprise. One of those actions, called the Brice action, was to recover for the value of services rendered by the plaintiff in negotiating and procuring and holding the contracts, concessions and agreements, specifically naming and claiming compensation for services in connection with the Hanlcoxv-Canton railway contract and the HankowPeking agreement and the coal concession. It was for services rendered in connection with all those three contracts that the action was brought. There was another action, called the Olcott action, which it is not necessary to refer to fully, because from what appears in the complaint in the action against Brice and others, it is apparent that compensation for procuring the so-called coal concession was one of the items of service for which a recovery was claimed.. After the actions were at issue overtures were made and negotiations had between the attorneys for the respective parties, appearing therein for an adjustment and settlement of the matters involved in those actions, and from the correspondence between those attorneys it is evident that what was in contemplation of all parties was the adjustment and settlement of everything involved therein. On April 6, 1900, the attorney for the plaintiff wrote to the attorneys for some of the defendants a letter, in which it was stated that it was essential to Mr. Barnes’ plans to know whether the cases were to Toe settled or not. He — 46 — says: “It- is essential that we should know whether the matters involved in these litigations are to be-settled by adjustment now, or-whether we shall have to make our arrangements for other disposition of them.” And further, “ I have seen Mr. Barnes since I last saw you. I am in a position now where I can talk definitely on the question of a settlement, and I imagine it should'require but very little time to bring us to a conclusion whether we are to settle or not.” Here was- an invitation by the attorney for the plaintiff to the attorneys for the defendants to settle the matters involved in those litigations. On April nineteenth, the attorneys for the Chinese Syndicate offered to the attorney for the plaintiff the sum of $12,000 in settlement. On April 20, 1900, the attorney for the plaintiff wrote the attorneys for the defendants that he had received their communication stating a figure which they would be willing to pay “ for an adjustment of the pending actions involving claims of my client,” and declining the proposition of $12,000, and also stating, “ I stand ready to do what I have, at your suggestion, said I would, viz., adjust the matters in difference upon a reasonable basis.” Again, on May 26, 1900, the plaintiff’s attorney wrote to the defendants’ attorneys that he expected to hear from them as to the' suggestion that he had submitted upon terms which Mr. Barnes was willing to adjust the litigations. On May 29, 1900, the plaintiff’s attorney wrote to the defendants’ attorneys as follows : “ Be good enough to let me know what will be required of Mr. Barnes, in the event of his accepting your suggestion as to settlement, and-when, if he accepts,-the -matter can be closed.” The defendants’ attorneys, in answer thereto, stated “ that if Mr. Barnes accepts Mr. Cary’s suggestion, viz., a settlement in full on the basis of $15,000, we should expect ageneral release, a surrender of all documents indicating any interest in the affairs of the China Syndicate, together with consents-that the above actions be discontinued without costs.” On June 5, 1900!, forms of release and transfer, also orders of discontinuance of the actions were sent by the defendants’ attorneys to the plaintiff’s attorney. Now it is perfectly clear that what was in the contemplation of the parties was the settlement of everything that was involved in the two actions that have been mentioned. The sum of $15,000 was paid, and the attorney for the plaintiff wrote to the attorneys — 47 — for the defendants and to the managing committee of the parties interested in the concessions under date of June 6,1900, as follows: “ Ton are authorized hereby to give to my attorneys, Messrs. Hardy & Shellabarger, check for the amount agreed upon in settlement of the above actions.” There would be no difficulty whatever in disposing of this question of intention from this correspondence. Here is the overwhelming evidence that, as matter of fact, it was the intention of these parties to settle and quiet forever any claim of the plaintiff arising out of the matters embraced in these two actions, but on the day (June 8, 1900) the release- was actually executed the attorney for the' plaintiff wrote to one of the attorneys for some of the defendants that Mr. Barnes was unwilling to execute a release which would cover any claim he might have against the members of the syndicate personally. “He thinks the arrangement made was for a release of all his claims growing out of negotiating the railway concessions.” Thereupon there was inserted in the instrument a provision relating to the relinquishment and discharge of claims arising out of any cause or thing in connection with or arising out of the negotiation of any and all contracts or concessions for the construction of a railway in the empire of China and for the China Railways and Concessions Project. In all this there was nothing whatever to apprise the defendants that there was a reservation of any claim embraced in the two actions. The only reservation that was intended to be made, according to the last letter of the plaintiff’s attorney, was of personal claims against the members of the Chinese -Railway Syndicate and in connection with that reservation of such personal claims the statement is made that the arrangement is for the release of claims growing out of the railway concessions. All these concessions were for the railway. The only thing reserved was such personal claims as Mr. Barnes had (and he may have had them) against individuals in connection with this China enterprise. This evidence cannot be; so distorted as to make it appear that when the defendants were settling and adjusting all the matters in controversy in those two actions, they intentionally reserved from the effect of that release a claim which a jury has found amounts to nearly $400,000. In the suit against Brice and others the plaintiff demanded nearly $1,000,000, and he settled all that was in dispute for the s.urn of $1.5,000. — 48 — Even- assuming that the plaintiff did retain a claim for compensation for procuring the coal concession, there is no such evidence in this record of the value of the service as would entitle the plaintiff to recover, this enormous amount. There is no testimony or other evidence, except his own, and on that subject of value he must necessarily have testified as an expert, and his examination indicates, an attempt to qualify him tO' testify in that, capacity. The effect of his- testimony was to state an opinion and the elements entering into the formation of that opinion are absolutely wanting: There is nothing but a guess. His compensation would be graduated by the value of the concession to his constituents. There is no evidence whatever of such value. All of the. contracts seem to have been negotiated within two months’ time by the plaintiff. The contract set forth in the action against Olcott and others furnishes no evidence of the valúe of the services of the plaintiff in procuring the coal concession. The judgment should be' reversed and a new trial ordered, with costs to the appellants to abide the. event. Scott, J., concurred; .McLaughlin and Houghton, JJ., dissented.