Lummis & Co. v. Devine

Opinion by Oblady, J., On May 12,1891, the plaintiff corporation passed a resolution to fix the compensation to be paid to the defendant, viz: “ Resolved, that JohnF. Devine, as secretary of the corporation and general clerk, shall receive for his services ten per cent, of the net profits of the company with fifteen dollars per week, the same to continue until March 1, 1892; Resolved that the ten per cent, of the profits shall be held to also mean ten per cent, of the net running losses.” During the five succeeding years, the business was conducted at a profit, and the defendant received the weekly payment and ten per cent of the net profits, but, during the year ending March 1, 1897, the business netted a loss of $5,055.14 and the corporation seeks in this action to recover from the defendant ten per cent of that amount, under the second clause of the resolution. The appellant urges that it should be interpreted so as to read, that the receipt of ten per cent of the profits shall be held also to mean a liability to pay ten per cent of the net running losses, and the appellee contends that the reference to losses is meaningless and void for uncertainty. The resolution was passed without comment or explanation and the burden is on the plaintiff to maintain his contention. We are not aided by any evidence on the part of the plaintiff to administer the contract according to the very intention and understanding of the parties at the time it was passed; but the defendant’s evidence shows that during the year in which the losses occurred, and after they were known by the corporate officers, the salary of the secretary was paid at regular intervals as if the provision in the second clause in regard to the losses was surplusage, and that no demand was made on him for this proportion until after he had severed his official relation with the corporation. If this officer is to be held liable, to a limitless amount, for losses resulting from mismanagement of officials or employees over whom he had no control; the insolvency of creditors he did not know; the waste or destruction of property he could not prevent, it should be plainly nominated in the writing or else the conduct of the parties, when acting under it, should be free from doubt as to [352] their intention at the time the resolution was passed and at the time the losses occurred. We do not say that the losses in this case resulted from the suggested causes, but the effect is the same if they were so induced. The language used requires some explanation to make it intelligible, and the management of the business controverts the appellant’s construction. When a writing is plain and free from ambiguity, it will not be construed by the acts and admissions of the parties in reference to it, yet, where the intention is obscure or doubtful, no evidence is more reliable or entitled to greater consideration, as manifesting what that intension was, than the acts and conduct of the parties themselves : Coleman v. Grubb, 23 Pa. 393 ; Wright v. Gas Co., 2 Pa. Superior Ct. 219; Plogg v. Bailey, 5 Pa. Superior Ct. .426. In the absence of explanatory evidence the subsequent conduct of the parties does not leave the second clause of the resolution so free from uncertainty as to make the defendant liable, and the judgment is affirmed.