Western Railway Equipment Co. v. Missouri Malleable Iron Co.

Mr. Presiding Justice Bigelow delivered the opinion of the court. The principal question presented for determination is, whether appellee is entitled to royalties or commissions on goods shipped on appellant’s orders after May 1, 1898, and for ninety days after Marshall left the employ of appellee, which was May 15, 1898. The answer depends upon the effect to be given to the later contract, which by its terms was made to relate back and to speak from May 1, 1898. A later contract may be substituted for and made to completely displace a former contract. Bishop on Contracts, Secs. 68, 174. There need be no express waiver of the old contract to constitute a discharge of it by a substituted agreement. Clark on Contracts, 611, 612. It is true the contract of May 16, 1898, does not in express terms abrogate the contract of April 1, 1896, but we are of the opinion that by necessary implication, such is the effect of it. The clause of the latter contract in regard to “ all castings now on hand,” which was sought to be explaiped by parol proof on the part of appellant, is too clear to need explanation, and the parol evidence offered by appellee and admitted by the court, that the old contract of 1896 should be permitted “ to work itself out,” should not have been allowed to go to the jury, over appellant’s objection to it; the ruling of the court in admitting it was error, and the exception to the ruling was well taken. There were no special pleas interposed, but by stipulation of the parties, all special matters of defense were provable under the general issue. It would have been a good special plea in bar to have averred that the old contract had been superseded by a later one, and this was the reason why the court admitted the later contract in evidence when offered by appellant. When the contract was admitted it became the duty of the court to construe it; and while no instruction asked by appellant specifically informed the jury that the later contract was, by its terms, a bar to any claim under the first contract, that had accrued after May 1, 1898, yet appellant’s motion for a new trial alleged that the verdict was contrary to the law and the evidence, and that was sufficient to raise the question as to the effect of the later contract on the first contract, on which the suit was brought. If “all castings.now on hand,” meant castings made after May 1, 1898, it is not easily seen why the contract should further provide that orders should be filled from the oldest stock on hand, admitting that the age of the stock-should be counted from the 16th rather than from the 1st of May. It does not appear that any castings had been made between the two dates. Why was the later contract made to relate back to May 1st, unless the parties to it understood that all royalties or commissions that had accrued under the contract of April 1, 1896, had been substantially paid, and that the new contract was to govern the intermediate space of time between May 1 and 16, 1898, as well as the future ? Why was the later contract, which seems to have been executed May 16th, made to relate back to May 1st, unless the parties knew and had in mind that up to that time, all royalties or commissions had been substantially paid, and that the contract was to govern the intermediate space of time as well as the future ? This view of the matter makes it unnecessary to determine whether royalties or commissions could in any event be collected, except for the time that Marshall or some other salesman was in the employ of appellee. The mutual promises in the new contract are a good consideration for that contract, and they are also a good consideration for the abandonment of claims for royalties or commissions earned between May 1 and May 15,1898, when Marshall left appellee’s employ. The contract of May 16, 1898, by its terms covers all matters referred to in the contract of April 28, 1896, and as we understand the matters in dispute between the parties, as evidenced by their deliberate acts in writing, the contract of May 16, 1898, completely superseded the first contract; and as the matter of royalties or commissions is not mentioned in the last contract, no claim for them can be enforced. Stow v. Russell, 36 Ill. 18. Much stress is laid on the fact that the prices for manufacturing under the old contract, were higher than under the new one; and that on all goods previously made, and shipped during May, June, July, and up to August 15,1898, appellant paid the prices provided in the first contract. Appellee claims, with some plausibility, that such payments were constructions put upon the later contract by the parties to it, showing that as long as the old goods were on hand, the old contract governed. While the interpretation by the parties to a contract as evidenced by their acts, will, in cases of doubt, be resorted to for the purpose of arriving at the true intention of the parties to it, this rule is never allowed to govern when the effect would be to overthrow the plain terms of the contract. Bishop on Contracts, Sec. 412. The argument advanced, claims more than is warranted by the evidence, as appellant never by its acts showed it understood the contract of 1896 was in force as to commissions, since it constantly refused to pay commissions after May 1, 1898. For the error of the court in admitting evidence to go to the jury on the part of appellee, that the first contract remained in force after the date when the last contract took effect, and for the error in overruling plaintiff’s motion for a new trial, because the Verdict oí the jury was contrary to the law, the judgment is reversed and the cause remanded.