Selz v. Buel

Mr. Justice Mulkey delivered the opinion of the Court: There are but two questions presented by this record which, in our judgment, require special notice. One arises upon an exception to the master’s report, and the other upon the directions of the court to the master with respect to the manner of taking the account. The master, in stating the account, refused to charge to the expense account interest paid by the Chicago house on temporary loans, and upon an exception taken by the appellants the master’s ruling was sustained by the Superior Court, and this is assigned for error. It is first to be observed, that while the agreement between the parties is unusually full and specific in its details with respect to the manner of conducting the business and keeping the accounts between the two houses, we find no provision in it which in terms authorizes such a charge, so that if warranted at all, it must be upon general business principles, or by some local or special usage, of which both contracting parties must appear to have been cognizant, and may therefore be presumed to have contracted with reference to it. The only evidence which can be regarded as looking in this direction, is that which tends to show appellants had previously been in the habit of keeping their books in this manner ; but this, of itself, is not sufficient to establish a -local or particular usage which would be binding upon appellee, especially as there is nothing to show he had any knowledge of their previous method of doing business. The absence of any specific provision in the agreement upon this subject is the more significant in view of the fact the contract does expressly provide for charging interest under certain contingencies. It is therefore reasonable to presume that if the parties had intended that interest should be charged under circumstances other than those specified in the agreement, they would have said so. But they have not done this, and we are not authorized to do it for them. Nor are we aware of any general usage or custom, having the force of law, which, under the agreement in question, would authorize charging to the expense account interest on temporary loans, as was attempted to be done in this case, hence we are of* opinion the master properly rejected these charges in stating the account. Under the agreement it was clearly the duty of the appellants to furnish the capital necessary to carry on the business contemplated by the contract, and whether they had it in ready means, or would be compelled to borrow the whole or a part of it, and if so, whether the loans would be for long or short periods, or whether the rates of interest would be high or low, were matters about which appellee, in a legal sense, had not the slightest interest or concern. ■ It is further contended by the appellants, that in ascertaining the amount of net profits made by the Chicago house, the compensation to be paid appellee for his services is to be estimated as part of the expenses of the concern. We do not think this was the understanding of the parties, and when considered in the light of ordinary practical business experience, we are of opinion the terms of the agreement do not admit of such a construction. It is true, by resorting to some of the more difficult processes of mathematics, or even of higher arithmetic, unused and unknown in common business transactions, effect might be given to the contract in the manner suggested by appellants; but a very small proportion of business men would be able to do so. The effect of this construction of the agreement would be to compel appellee to pay one-fil'th of his own salary after his share of the profits reaches $7500 per annum, while under the contract, as we understand it, he“ is to pay no part of it. Moreover, while the agreement declares that a particular calculation shall be made for the purpose of ascertaining the amount of appellee’s compensation, the construction contended for requires the amount of compensation actually paid to be taken as a factor in a calculation, the only object of which is to ascertain what that amount is,—or, differently put, it requires the compensation to be first paid, and then directs a computation to be made to ascertain the amount of it. The contract in effect is, that appellee shall have, as compensation for his services, an amount equal to one-fifth of the net profits, let the sum be great or small, and if less than $7500 annually, the appellants, by a distinct and separate provision of the contract, bind themselves to make up the deficit. This latter provision does not at all affect the construction that is to be given to the other parts of the agreement. Supposing it had been omitted altogether, the contract then would have simply required appellants to pay appellee, as compensation, a sum equal to one-fifth of the net profits, whatever they might be, and it would certainly be difficult to distinguish a contract of this kind from a simple undertaking to pay one-fifth of the net profits. If we strike out from the contract the words, “a sum which shall he equal to, ” it would then read: “At the end of each year of said period the gross profits of the business conducted at the Chicago store of said firm shall be ascertained, and from the sum of said gross profits shall be deducted the total expenses and losses incurred in such year in said business, and * * * one-fifth part of the residue shall be said compensation,” etc. If the contract read in this manner, we presume there would be no pretense for the claim that appellee’s compensation should be treated as a part of the expenses in ascertaining its amount, and yet on principle we are unable to perceive why the insertion of those words would require a different construction. That form of expression was probably used with a view of negativing the idea that appellee’s compensation was payable only o.ut of a particular fund,— namely, out of the profits, as such. A promise to pay a sum of money equal to $1000, is in law simply an undertaking to pay $1000. The same legal consequences attach to either form of expression. The decree of the Superior Court being in conformity with the view we have taken of the questions discussed, the judgment of the Appellate Court will be affirmed. Judgment affirmed.