Gold v. Ross

Putnam, J. : The main question here is the relation between two corporations, in which plaintiff and defendant were interested. Both of them were speculative enterprises. The first was the Gold-Ross Company, which never obtained any actual business. It had been intended as a building corporation. [723] Plaintiff alone bore its expenses, being rent of an office in the Woolworth Building, New York city, also advances for salaries, stationery and like outlays. Having so far been unsuccessful, plaintiff and defendant were attracted by the prospects of the business of shipbuilding and ship repairing. So in July or August, 1918, they incorporated another speculative company, called the North River Ship and Engine Corporation. Its office was in the same room in the Woolworth Building where the Gold-Ross Company had been, and it had the same employees. It had no financial basis beyond advances by plaintiff, who continued to pay its expenses and salaries. Neither company then kept books of account. In December, 1918, when these outlays for both companies were about $3,500, there was a division evidenced by defendant’s note for $1,773.10 as his half of the expenses that plaintiff had advanced. This is the note set up in the first cause of action. About May 9, 1919, Mr. Cohn came into the concern, agreeing to put in $30,000, upon the guaranties of defendant and other stockholders. Afterwards, on July 31, 1919, plaintiff, whose total advances had been $15,000, sold out to Cohn all his interest for $17,000 cash, with the provision for the exchange of releases, as set up in the answer. This summary sufficiently shows how united and intermingled had been individúal and corporate payments. On this testimony we cannot find that these two speculative ventures had been wholly disconnected. Certainly a large part of this note represented office expenses and other overhead charges of the North River Ship and Engine Corporation, the control of which Mr. Cohn purchased. In such a mixed-up affair it would have been a reproach to business men not to make this adjustment comprehend this whole subject-matter. Evidently they so intended by this provision: “ Mutual releases are to be exchanged between said Louis Gold and * * * Louis Ross, * * * as individuals, and as stockholders and directors of the North River Ship & Engine Corp. and as co-guarantors to Lester Cohn under the contract heretofore mentioned dated May 9th, 1919. ” Under the fallacious claim that the words “ as individuals ” are ambiguous, parol evidence was let in of prior conversations [724] — all of which had been merged in the contract. There is nothing double or dubious in the expression “ as individuals.” It is no more, but decidedly less, ambiguous than the term “ incompatibility ” in Gray v. Shepard (147 N. Y. 177). Respondent would justify this ruling by three decisions, two of which (Grannis v. Stevens, 216 N. Y. 583, and Higgins v. Ridgway, 153 id. 130) merely sanction the settled rule, that proof may be given that a note or contract had been conditionally delivered. The third case (Sabin v. Kendrick, 58 App. Div. 108) recognizes that conversations after a contract may explain how the parties regard or interpret its terms. The ruling here was clearly against House v. Walch (144 N. Y. 418) and Lossing v. Cushman (195 id. 386). Its effect was not to clear up or remove an ambiguity, but rather “ to import into the contract something that the parties did not put there,” and actually to nullify what they did put there. Going beyond explaining any obscure technical term, or other ambiguity, this improper testimony varies and contradicts plain and simple words chosen by the parties. (Murdock v. Gould, 193 N. Y. 369, 377.) Thus Folger, J., said: “An individual is one entity, one distinct being, a single one, and when spoken of the human kind means one man or one woman.” (People v. Doty, 80 N. Y. 225, 228.) The fact that this defendant had not signed this agreement, which was one between plaintiff and Cohn, did not change the rule. Defendant was named as one of the parties to whom individual releases should be delivered, and the evidence, in my view, justified the equitable relief set up in the amended answer, which required judgment for this defendant. I advise, therefore, that the judgment and the findings of fact numbered 4th, 6th, 7th, 8th, 9th,- 10th, 11th, 13th and 14th be reversed, and complaint dismissed, with costs to appellant. Jenks, P. J., and Mills, J., concur; Rich, J., reads for affirmance, with whom Kelly, J., concurs. •