Ulman v. Manheimer

DENISON, Circuit Judge (after stating the facts as above). [1] When we read the contract of January 10, 1907, in connection with the admitted circumstances, we think it must be construed according to plaintiff’s theory. There are considerations tending in the opposite direction, but, upon the whole, they are overbalanced. Chief among these is the fact that through this construction Manheimer finally realizes the $3,153, and perhaps further sums, contingently credited to him, but which, as events happened, he would not have been entitled to if the old arrangement had continued unchanged. Assuming, as is entirely clear, that, under the old arrangement, this credit to plaintiff of $3,153 would have been rightfully canceled when the South Carolina loss occurred, its cancellation would still seem to be rightful if the extent and character of the plaintiff’s liability had remained un [694] changed. In other words, under tire old arrangement, Manheimer would have been subject to lose this sum through the failure of one of Goodman’s sales; plaintiff’s then liability was, to that extent, joint and not. separate; and it would be natural to think that plaintiff’s liability under the new contract would be of the same joint character. However, we find that the extent of his liability was very materially changed. It was. increased perhaps many fold. It had extended only to the associates’ one-half of the profits made by the Ulman partnership upon a sale; but these accounts were being taken over by the corporation at their face value in payment of its capital stock. The old association relations were ending; they were assuming new relations to each other and to the corporation; and it was not out of place for the corporation to require, as it did, a guaranty of payment or against any loss on these accounts. Plaintiff might have been very willing to continue his agreement to give back profits that had come from a sale by any of the associates; it was a very different thing to 'ask him to guarantee the accounts. He would be familiar with the facts attending his own' sales and with the pecuniary condition of his own customers in the Western territory. He would know nothing about those in the Southern territory, except what Goodman might-have told him. It would be natural and probable that he should be willing to give a positive guaranty as to his own customers in exchange for the surrender of his liability to repay profits which he had received from Goodman’s sales. It would be unnatural and improbable that for the same consideration he should be willing to guarantee Goodman’s sales. The language of the contract is consistent with this interpretation. It had been well understood that each of the associates had his own customers in his own territory; the agreement is signed by two of the associates, plaintiff and Goodman ; and it says that: “Each, of the undersigned * * * agrees to make good to the Ulman Company * * * one-half of any loss which may be sustained by said company ón any of the accounts transferred to it for merchandise shipped by Ulman Company to our respective customers.” And again: “Each of the undersigned * * * has deposited * * * the respective shares of stock owned by each * ;;; * as security for the performance by each of his agreement ...... * to make good any of said losses for which we are respectively liable.” Not only does the use of the word “respective” and “respectively” import the idea that each associate was contracting only with reference to the losses connected with his own customers; but, unless this is> the meaning of the contract, there is no satisfactory force in the words “each of the undersigned.” It is argued that this language was adopted so as to make the contract liability several as well as joint; but this conclusion presupposes that otherwise existing merely joint liability which the word “respective” negatives. When several individuals are to share in a liability of which each has created a part, and it is desired that all should be liable, and that each should be liable for the whole, it is the customary [695] language of the law to declare that they are jointly and severally liable. When a skilled draftsman, acting for the party to which the obligation was owing, departed from this familiar formula and said, “Each of us agrees to be liable for our respective shares,” we think the conclusion inevitable that the liabilities were fractional, and not unitary. Otherwise, the word “respective” becomes not merely surplusage, but contradictory. Eor definitions and constructions of “respective” or “respective.lv,” see Alsop v. Russell, 38 Conn. 99, 103; Wolf v. Lake Erie Co., 55 Ohio St 517, 45 N. E. 708, 36 L. R. A. 812; Messer v. Jones, 88 Me. 349, 34 Atl. 177; Patrick v. Royle, 13 Q. B. 98, 112. We may concede that if these words were to be considered by themselves, without knowing the situation to1 rvliich they were applied, there might be enough of ambiguity, so that the construction we have adopted would be compelled to yield to the effect of a practical construction by the parties; but the trial court took the view that there was such an ambiguity, and submitted to the jury the effect of the practical construction which defendant alleged and plaintiff denied, and the verdict of the jury has the effect of a finding that the plaintiff was right in liis denial. The subject of interpretation through practical construction is therefore eliminated from the case; and when wo hold, as we do, that as matter of law the liability was distributive, and not in gross, all the error alleged on the subject of evidence to explain or interpret becomes immaterial. We find no prejudicial variance between the contract of guaranty of payment made with the corporation, as alleged in the petition, and the contract of guaranty against loss made with Ulman, as shown by the proofs. Ulman was, in this respect, a trustee for the corporation. There was only this one written contract between the parties, and the defendant was never misled or prejudiced in the least. [2] It is plain enough from the figures that the jury allowed all of plaintiff’s claims described in the petition, except lor the dividend which it was said belonged to plaintiff and had been received by defendant, and that this claim for dividend was rejected. Defendant now argues that the action o£ the jury in accepting defendant’s position about the dividend was, in effect, a special finding-, inconsistent with the general verdict. This claim would require examination, were it not for the fact, alleged by counsel and not disputed, that in the final argument to the jury, and after the judge had charged upon the subject of this dividend, plaintiff’s counsel became doubtful of the sufficiency of the proof to show that the defendant had ever Jn fact received it, and so- withdrew the item from the jury. This occurrence is not a part of the record of the trial, as fixed by the hill of exceptions; but it is enough to say that the rejection of the item by the jury may have been because of this or for some similar reason, and so is not necessarily inconsistent with the general verdict rendered. [3] By an amendment to the answer, defendant claimed that, even if the written contract of January 10, 1907, was only that plaintiff would make good losses on the accounts of his own customers, yet that the next year, when the dividend on his stock became payable from the corporation to plaintiff, and when, by the terms of the [696] pledge, defendant had the right to take this dividend and apply it on the notes due him, plaintiff, in consideration of defendant abandoning that right, orally agreed to assume liability for all the customers’ accounts, Goodman’s as well as his own, and to allow, the dividend to be applied by the corporation upon that joint liability. During the trial, there was some evidence tending to support this answer; but that distinct issue received little attention. At the end of the trial, defendant submitted a series of special requests, No. 2 of which was: “If the Jury should find that the parties to the writing of January 10, 1907, sued on in the within action, have themselves construed the writing as not the contract between them, but subsequently entered into an agreement, whether verbally or by conduct, different from that set forth in the contract, then I charge you will adopt and give effect to the later agreement.” This was refused. ' If it had distinctly presented the issue raised by the amended anwer, there would be force in the contention that the refusal was error, though it is not clear how this new oral agreement would have escaped the statute of frauds. However, it is not certain that the request was aimed at this defense. The same acts and words relied on to’ show the new contract were relied on also to show the practical construction of the old; both the testimony and the second request had this double aspect; the court seemed to regard this request as directed to1 the subject of practical construction and charged fully upon that subject; and neither by exception nor by a further request was the trial court advised that this request was intended to present specifically the defense of a new and independent contract. We conclude that fairness to the trial court requires that a point of this kind should be clearly and distinctly brought to1 his attention, and that error cannot be predicated solely upon the refusal of a request which covers up as much as it discloses of the contention afterwards made. The judgment is affirmed.