Ellis v. Harrison

Barclay, J. — There are two appeals in this cause. That of the plaintiff will be first considered. It concerns the correctness of the findings and judgment in favor of defendant, Mr. Harrison, upon the first three counts in the petition. These causes of action are founded on debts, in the shape of notes, which existed in favor of plaintiff from his son, Mr. Ellis, Jr., at the time when the latter and defendant, Mr. Harrison, formed the firm of Harrison & Ellis, February 1, 1885. By the partnership articles, of the date last mentioned, it may be conceded that the new firm assumed the “ mercantile debts ” of the then “jobbing business” of Mr. Ellis, Jr., and that thereby Mr. Harrison became liable (as a partner in Harrison & Ellis) for debts so assumed. •If the plaintiff’s demand, stated in the three counts mentioned, was a “mercantile debt,” within the true intent and meaning of the contract containing that expression, then the plaintiff could maintain an action thereon. In Missouri a person, for whose benefit an express promise is made, in a valid contract between others, may maintain an action upon it in his own name. — 277 — Meyer v. Lowell (1869), 44 Mo. 328 ; Rogers v. Gosnell (1873), 51 Mo. 466 ; Fitzgerald v. Barker (1879), 70 Mo. 685; s. c. (1884), 85 Mo. 14. This proposition is now too firmly settled as part of the law of this state to require re-examination. Whether it is logically deducible from common-law principles (as has been sometimes doubted) it would serve no useful purpose now to consider. It has been accepted here, as in most of the American states, because it is supposed to furnish a useful rule in practice, tending to simplify litigation. By following it, one action often effects the same results that two would be required' to accomplish without it. Moreover, by our code of procedure, it is provided that every action shall be prosecuted in the name of the real party in interest, with certain exceptions, one of which is that the trustee of an express trust may sue in his own name. The statute then declares that such a trustee “shall be construed tó include a person with whom, or in whose name, a contract is made for the benefit of another.” R. S. 1889, secs. 1990, 1991. Reading these sections together, it would seem to be clearly implied that the beneficiary in such a contract is to be regarded as a real party in interest, and that, as such, he may sue thereon in his own name ; while, on the other hand, the contracting party (as trustee of an express trust, within the statutory definition) may likewise maintain an action on the same contract. Snyder v. Express Co. (1883), 77 Mo. 523. The right of the beneficiary of such a promise, though not a direct party to it, to sue upon it, has occasionally been approved by English judges, though it is not conceded by them generally, at least not to the same extent, in actions at law, that such right has been recognized in this country in recent years. With us it cannot fairly be considered longer an opén question in view of the many precedents already made, from which there seems no sufficient reason now to depart. — 278 — II. But at the time the partnership agreement was made between Mr. Harrison and Mr. Ellis, Jr., were the notes, owing by the latter to his father, the plaintiff, “mercantile debts” of the “jobbing business?” The answer to this decisive question involves several considerations. Whatever right of action a third party to such an engagement may acquire by virtue of its terms against either of the directly contracting parties, it is clear that, on principle, such right cannot be broader than the party to the contract (through whom the right of action is derived) would have in event of its breach. To state this in another form, the right of action by any outside beneficiary, for whose advantage a contract is made between two other persons, is entirely subordinate to the terms of that contract, as made. Such beneficiary cannot acquire a better standing to enforce the agreement than that occupied by the contracting parties themselves. Crowe v. Lewin (1884), 95 N. Y. 423; Wheat v. Rice (1884), 97 N. Y. 296. The plaintiff’s rights in the case before us flow from the agreement between Mr. Harrison and Mr. Ellis, Jr., and are confined within the scope of that agreement, interpreted according to the rules of law. If the parties, when it was made, understood and intended the expression “mercantile debts” (as used therein) to exclude the notes in question, the plaintiff cannot enlarge its meaning for them. They were the contracting parties. It is their contract to be enforced, and plaintiff has no such relation to the subject as permits him to assert the contract different from what they mutually agreed it should be. This brings us naturally to consider some of the exceptions to rulings upon the evidence bearing on this point. The trial court, it appears, admitted testimony of the acts and declarations of Messrs. Harrison & Ellis, Jr., between themselves, and the original entries in their firm books, at and about the time of the beginning — 279 — of their partnership, to show what construction they then placed upon the phrase “mercantile debts.” The object of interpretation always is, or should be, to reach the actual intention of the parties. We mean, of course, that intention as expressed in the writing they employ to portray it, and consistent with the latter. When the subject-matter to which such a writing refers is not entirely definite and clear, it is permissible, and obviously just, to receive in evidence a description of the circumstances of its execution that the court may be placed, as near as may be, in the situation of the contracting parties with a view the better to adjudge in what sense the language used was probably intended by them. Swett v. Shumway (1869), 102 Mass. 365; Keller v. Webb (1878), 125 Mass. 88. Furthermore, the construction placed by the parties themselves upon the words “mercantile debts,” as shown by the opening entries in the books of the firm of Harrison & Ellis, was properly admissible in evidence. In case of doubt as to the significance of such a term, the contemporaneous practice of the parties to the agreement regarding it (before any controversy arises) sheds light upon their probable meaning in its use. Here, all the circumstances of the agreement and the construction by the parties at the time point to the conclusion that the plaintiff’s claims (which the three counts of his petition recite) were not intended to be comprehended by the words “mercantile debts” of the “present jobbing business” of Thos. Ellis, Jr. At all events, a conclusion to the contrary could not fairly be pronounced as one of law. It was, at least, a question of fact on the evidence as to the- mutual .intention of the parties in that regard. Plaintiff opened up his case with testimony to show that the notes mentioned were “mercantile debts.” By the declarations of law which the learned trial judge gave, at plaintiff’s instance, the question, whether or not they were such, was directly submitted for a finding of — 280 — fact, which the court thereafter made. Having assumed that position at the trial, the plaintiff cannot properly now be heard to say that the trial court should have pronounced the plaintiff ’ s demands ‘ ‘ mercantile debts, ’ ’ as a matter of law. We find no error to the prejudice of plaintiff in the proceedings upon the three counts mentioned. III. There remains for consideration the appeal by defendant Harrison. The judgment against the latter is for $411.66, on the fourth count, and there may hence be some question of the jurisdiction of this court to determine that appeal. But under the constitutional provisions governing this subject we are of opinion that where, as here, the plaintiff has appealed from a judgment, obviously involving (as to him) some $8,000, this court has jurisdiction to adjudicate, incidentally, a pending appeal to this court, in which a part of the same judgment, favorable to plaintiff, is sought to be reversed by a defendant. Plaintiff seeks to have the judgment set aside as to three of the causes of action, and the finding as to the fourth maintained. The entire judgment is thus brought here for review,, In such a state of the case we think the constitution does not contemplate successive hearings in the cause, first of one appeal in this court, and then of the other by one of the courts of appeals. Compare United States v. Mosby (1889), 133 U. S. 273. So we proceed to consider the merits of the appeal by the defendant. IY. This action was begun by attachment May 4, 1885. The draft which forms the basis of the fourth count of plaintiff’s petition bears date April 14, 1885, payable sixty days thereafter. It did not, therefore, mature until some time after the beginning of this pro-. ceeding. Defendant Harrison contends that the judgment on the fourth count cannot be sustained in view of these facts. The bill described was negotiable. Upon plaintiff’s acceptance he became, on the face of it, the principal — 281 — debtor, and, as such, liable to the holder for value to whom the firm of Harrison & Ellis had sold it for the purpose of realizing proceeds. The liability of plaintiff upon the paper was fixed; but, as his acceptance was for the accommodation of Harrison & Ellis, the latter were bound to make good to the plaintiff any payment he might make upon it. When this action was begun, therefore, plaintiff was liable by its terms to a third party, the holder at that time. Until plaintiff took it up and thereby sustained some loss by reason of his acceptance, he had no demand against Harrison & Ellis on account of the same. Had they met the paper at maturity (as they were bound to do as between plaintiff and themselves) no liability to plaintiff on their part would have arisen in the premises; for, until plaintiff paid something on account thereof, such an acceptance amounted merely to a loan of plaintiff’s credit to Harrison & Ellis, and could not be regarded as a loan of money. Under the laws of this state, an attachment will lie in many instances to enforce an existing demand, though not yet due (R. S. 1889, sec. 522); but our statute on this subject has never been held to sanction such a proceeding upon such facts as are disclosed in this case. Hearne v. Keath (1876), 63 Mo. 84; Read v. Ware (1847), 2 La. Ann. 498. Defendant objected at every stage to the proceedings on the fourth count, substantially on the ground above noted. We think the court should have sustained the objection. No other assignments of error appear to require remark. The judgment is reversed and also the finding for plaintiff, as against defendant Harrison on the fourth count of the petition. The findings on the first three counts are affirmed, and the cause is remanded to the circuit court for such further proceedings as may be in harmony with this opinion. Sherwood, O. J., Black and Brace, JJ., concur.