Thompson v. Saco Water Power Co.

Endicott, J. By this contract the plaintiff entered the employment of the defendants for five years, and was to receive an annual salary of $1800, and one half the annual profits, unless the same should exceed $6400, in which case he was to receive one third of the excess. The contract carefully recites what items of expenditure shall be charged to the business each year in determining the profits. The sum total of these items is to be deducted from the amount received as the price of machinery and other articles actually sold, and the excess is to be taken as profits. [164] and as the sum upon which the plaintiff’s compensation for the year is to be determined. The annual account thus settled was conclusive between the parties of all matters included in it, but in case the agreement should be terminated within the five years, such settlement was not to restrain or affect the adjustment of all claims arising out of such earlier termination. This earlier termination referred to is, by another clause of the contract, within the power of the defendants, the plaintiff having no right to terminate, and being bound for the full term. This clause provides that if the defendants decide during the term at any time to discontinue the business, to sell or appropriate the premises to another use, or in case the plaintiff fails to perform his duties under the contract, then the defendants may terminate it. If they so decide within three years from its commencement, and the plaintiff has received under it less than $4000 a year, then the defendants shall pay him the amount requisite to make his yearly compensation $4000 to the date of such termination. If they terminate after three years, then he shall have $5000 a year. But if he has already under the contract received an amount equal to such yearly compensation, he shall have.no claim against the company because of such termination. If the contract is terminated by the plaintiff’s death, then the defendants shall pay to his personal representatives a sum sufficient to make up a yearly compensation of $4000. These are the main features of the contract. Two clauses are especially relied upon by the plaintiff, as changing materially the general provisions above recited: First, “ Provided the agreement shall be terminated as hereafter specially provided,” “ the foregoing provision shall not restrain or affect the allowance and adjustment of all claims arising out of such earlier termination.” Second, “ And at the expiration or earlier termination of this agreement, as hereafter provided, the value and cost of all raw materials or unfinished machinery then on hand shall be computed and ascertained according to the provisions of the present agreement.” [165] The contract, originally for the terra of five years from June 1, 1857, was extended at its expiration for five years from June 1, 1862. The annual accounts appear to have been settled to June 1, 1866. The defendants decided to sell and did sell the property, and on December 18, 1866, so notified the plaintiff. The plaintiff claims that he is entitled, under the contract, to an account of the profits from June 1 to December 18,1866, and to be paid what is due him under such account. To recover what he thus claims to be due this_ action is brought. The defendants contend that he is not entitled to any account, or to any profits for that fractional portion of the year. Unless the two clauses relied on by the plaintiff modify and control the other provisions of the contract, this action cannot be maintained. 1. It was evidently the general purpose of the agreement to pay the plaintiff, in addition to his salary, a certain proportion of the annual profits. This proportion was to be computed, at the end of each contract year, upon the excess of funds accruing from actual sales, after the payment of the expenses of the year. These annual settlements were final and conclusive, but if the defendants terminated the contract, they were bound to pay the plaintiff such additional sum for each year’s services as would make the sum of four thousand or five thousand dollars per annum, if that sum had not already been received by the plaintiff from his annual settlements. In other words, the annual settlements were conclusive, except when, on terminating the contract, payments might have to be made to the plaintiff to bring his compensation up to the stated sum per annum, in which case such annual accounts could be opened to ascertain what compensation he had already received. We think this to be the true construction of the first clause relied upon by the plaintiff, and that it in no wise bears upon the question at issue, whether the plaintiff is entitled to the profits of a fractional part of a year. 2. The other clause relied on presents a question of more difficulty. It simply provides (for what purpose does not in terms appear) for the taking an account of the value of the raw material and unfinished machinery on hand at the expiration or earlier [166] termination of the contract. Nothing is said about profits or any rights of the plaintiff .arising out of such appraisal. Taking the words in their strict meaning, the case presents nothing to which the provision seems to apply. No raw material or unfinished machinery was on hand December 18, when the defendant terminated the contract. Everything had then been sold, and there was nothing on hand, the value of which could be ascertained. The plaintiff does not claim that there can or should be such appraisal, but that he is entitled, under this clause, to have an account of the profits from June 1 to December 18, made up in the manner provided in the contract. We do not think that such is the interpretation of this clause, or that such a right can be inferred from it. Such interpretation would materially affect and substantially nullify the provision that the compensation of the plaintiff is to be determined by annual accounts during the continuance of the contract. It would also conflict directly with the provisions fixing the rights of the parties, upon the earlier termination of the contract by the defendants. These provisions contemplate in such event the assurance to the plaintiff of a round sum per annum, and no more. They preclude the idea, that there is to be any accounting, or any regard paid to accounts or profits, except so far as it is necessary to open settled annual accounts to ascertain what the plaintiff has already received ; and no allusion is made to any appraisal of stock on hand. A similar provision is made if the contract terminates by the death of the plaintiff; then there is to be no accounting, but the round sum of $4000 per annum is assured to be paid his personal representatives. To whatever contingency, therefore, arising under the contract, this clause may apply, it does not apply to the estimating of profits for the fraction of a year, and cannot be held by implication to change the rate of compensation upon termination, for which the contract elsewhere makes express and careful provision. If the parties had intended any other than annual accounts, the contract should have provided in more distinct terms for making them for fractional portions of a year. [167] The plaintiff ia not entitled to a share of the profits claimed, and by the terms of the report the entry must be Plaintiff nonsuit.