Case ID: ohio-st_31/html/0089-01.html
Source: Caselaw Access Project
Author: {"author": "\n      Boynton, J. Welch, C. J.,", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

George L. Denton and Thomas Chattle v. William F. Whitney and Vincent Whitney.
    "W. & W. and D. & C., owners in common of certain lands upon which they were engaged in manufacturing lumber, entered into a contact with S., whereby he agreed to manufacture into lumber all the timber on a certain lot for an agreed sum per thousand feet, with the right reserved to W. & W. and D. & C. to terminate the contract at any time by paying S. for the labor done, and for certain improvements placed upon the land. M. engaged to raft said lumber to market at a stipulated sum per thousand feet. Payments from time to time were made by W. & W. and D. & C. to S. and M. to apply on their respective contracts. Afterwards, on June 15,1861, W. & W. conveyed to D. & C., for a valuable consideration, all their interest in said lands, the parties, agreeing in writing that all accounts and transactions of a prior date should be settled within ninety days ; said settlement to be made upon the basis of the legal and equitable rights of the parties, and according to the facts then existing; D. & C. agreeing to fulfill and perform the existing contract with S. for the manufacture of lumber in all things yet. remaining to be done on the part of said "W. & W.—Held:
    
    1. That the agreement by D. & C. to fulfill and perform the existing contract with S. in all things yet remaining to be done "on the part of W.. & W., has exclusive reference to lumber to be manufactured in the-future.
    2. That parol evidence to show a different understanding of the parties is-incompetent.
    3. That in the “ settlement of all accounts and transactions of a prior date,” D. & 0. are entitled to credit for all sums paid on account of lumber-manufactured prior to the date of the contract.
    Error to the Superior Court of Cincinnati.
    The defendants, William E. and Vincent Whitney, held by assignment from Andrew C. Hull, a contract dated November 30, 1852, for the purchase from Erancis M. Drexel of about thirty-six hundred acres of land, in McKean county, Pennsylvania, upon which a portion of the purchase-money due Drexel was unpaid. The said Whitneys were also the owners of an undivided half of certain premises in Warren county, Pennsylvania, Richard W. Corwin owning-the other half. Corwin conveyed his half to the plaintiffs, Denton and Chattle. The defendants conveyed one-half in common of the McKean county lands to Corwin for $15,000-—$5,000 thereof remaining unpaid on June 15, 1861. Cor-win conveyed an interest in the half thus acquired to Denton and H. P. Roberts; and afterward the entire interest of Corwin, Denton, and Roberts became vested in said Denton and Chattle. While the defendants and Corwin owned the-land, they carried on the bnsiness>of manufacturing lumber from the McKean county lands; and when Denton and Roberts bought an interest of Corwin, the business was carried on by the defendants and Corwin, Denton, and. Roberts; and by the defendants and Denton and Chattle, after the latter sueceeded-to the ownership of one-half the-premises. The business commenced in 1856, and continued until June 15,1861, when the defendants sold all their remaining interest in the entire lands to the plaintiffs, Denton and Chattle. The plaintiffs were to pay Drexel the balance his due, for which he had obtained judgment. The lumber had been manufactured since 1858, from the McKean county lands, by David Sherman, under a contract between him on the one part, and the defendants, and‘Denton and Roberts on the other. By this contract, Sherman agreed to build a saw-mill on the McKean county lands, stack and saw the lumber and stick it up, for which he was to receive $5 per thousand feet. The contract, among other things, provided that said Whitneys and Roberts and Denton might, have the privilege of dissolving the contract by paying said Sherman for all labor done according to the contract, and a fair and reasonable compensation for his sawmill, and all other necessary buildings and improvements thereon. Denton and Chattle assumed the liability of Roberts under this contract. By another contract, Euoeh Marsh was to receive $3 per thousand feet for hauling, and rafting said lumber to Cincinnati.
    After reciting, in substance, the foregoing, among other things, the contract further reads as follows:
    “ And ^whereas said William F. and Vincent Whitney have advanced to David Sherman about twenty-four hundred dollars, and to Enoch Marsh about six hundred dollars, which they have agreed to transfer -to said Denton and Chattle; now, therefore, it is agreed as follows :
    
      “ The said William E. and Vincent Whitney do hereby assign and transfer to said Denton and Chattle all claims and demands which they have against Sherman and Marsh respectively. . . . And we do covenant and agree that on payment being made to said Drexel, or his legal representative, of all demands due and payable, or to become due under his said contract with said Hull, and upon which said proceedings in McKean county are founded, the said Drexel shall convey to the said Denton and Chattle, or their assigns, a good and clear title to said lands in McKeau county, and are to transfer to them all payments heretofore made to said Drexel, and authorize the same to be applied by way of deduction on payments to said Drexel under said contract with said Hull. . . .
    “All the accounts and transactions of a date prior to this, of the said Corwin, Denton, Roberts, and Chattle, with the said Whitneys, shall be settled and closed by said Denton and’Chattle, on the part of said Corwin, Roberts, Denton and Chattle, and said Whitneys, on their part, within ninety days from this date; said settlement shall be made upon the basis of the legal and ‘equitable rights, and according to the facts now existing. But in said settlement said Whitneys shall have credit for said sum of five thousand dollars, due from said Corwin, with interest thereon from the time the same became due from said Cor-win, and for said sums advanced to said Sherman and Marsh respectively, with interest thereon, and for the further sum of five hundred dollars, the consideration of said conveyance, and a balance shall be struck and paid, when ascertained by the parties appearing to be indebted to the other parties. The said Chattle and Denton agree and promise to and with said William P. and Yincent Whitney, to fulfill and perform the existing contract between them and said Sherman for the manufacture of lumber by said Sherman, in all things yet remaining to bo done on the part of said Whitneys; and the said Denton and Chattle do also agree to indemnify said Whitneys against all claims of said Corwin in the premises.
    “In witness whereof, we, the said William P. Whitney, Yincent Whitney, George L. Denton, and Thomas Chattle, have hereunto set their hands and seals, this 15th day of June, a. D. 1861.
    “ In presence of “ Wi. P. WhiTney, [seal.]
    “ W. A. Nason. “ Yincent Whitney, [seal.]
    “ Geo. L. Denton, [seal.]
    “ Thomas Chattle, [seal.] ”
    It was the uniform custom of the Whitneys and Denton. and Chattel, to divide the lumber on its arrival in Cincinnati.
    The accounts and transactions mentioned in the contract growing out of the business remaining unsettled, in 1865, the defendants in error brought an action in the Superior Court of Cincinnati for an accounting and adjustment of all matters growing out of such business relation. The defendants below, Denton and Chattle, by their answer, admitted that the accounts were unsettled, and joined in the prayer for an accounting. The case was referred to R.' H. Stone, “for trial by him as referee under the code.” It appeared, from the evidence taken before the referee, that Denton and Chattle had advanced large sums of money to Sherman and to Marsh, upon their respective contracts for lumber manufactured and transported to market prior to the date of the purchase by Denton and Chattle from the "Whitneys. The greater portion of these advances was made before that time; and the principal contention was, whether Denton and Chattle, in the settlement of the accounts between the parties, were entitled to be credited' with the sums so advanced and paid. The referee admitted parol evidence of what was said by the parties at the time the agreement was made, as well as their subsequent conduct, and found that Denton and Chattle, by the contract of June 15, 1861, as understood by the parties, were not entitled to charge up to the Whitneys one-half the amount so advanced and paid. Their claim for moneys thus advanced, amounting to over $7,000, was, therefore, rejected.
    Exceptions to the report of the referee were overruled by the court at special term and'judgment rendered thereon. The court, in general term, affirmed the judgment of the special term.
    
      C. D. Coffin, and Chas. L. Mitchell, and Thos. Q. Mitchell, for plaintiffs in error.
    
      Matthews, Ramsey $ Matthews, and Caldwell, Cojpjpoch $ Caldwell, for defendants in error.
   Boynton, J.

It is the opinion of a majority of the court, that the referee erred in rejecting the payments or advances made by Denton and Chattle, for the lumber manufactured, prior to June 15, 1861, to Sherman, and to Marsh. If unaffected by the contract of that date, the right to an allowance for such advances, by Denton and Chattle, in a settlement of the business transactions between them and the Whitneys, was perfect; and there is nothing in the contract to warrant the inference that such right was relinquished or parted with. It is not claimed, that the contract provides in express language, that Denton and Chattle, in the settlement which was to take place within ninety days from-the date of the contract, were not to have credit for all sums paid to Sherman, and to Marsh, on account of the joint adventure; but an undertaking to that effect is sought to be deduced from the following stipulation in the contract:

“ The said Chattle and Denton agree and promise to and with the said William E. and Vincent Whitney to fulfill and perform the existing contract between them and said Sherman for the manufacture of lumber by said Sherman, in all things yet remaining to be done on the part of said Whitneys.”

The meaning of this stipulation is to be ascertained from the language employed to express it, in conjunction with the context, interpreted in the light of the circumstances in which the parties were placed at the time the contract was made. The Whitneys were under a joint obligation with Denton and Chattle to pay to Sherman the sum of $5 per thousand feet, for all lumber he should manufacture from the lands described in his contract. And that liability continued to subsist after the sale to Denton and Chattle- as before;. and unless released by Sherman, would contiuue to subsist until all the timber to be manufactured was exhausted, or the contract should be terminated in the manner provided by its terms. By the transfer of their title in. the timber lauds, to Denton and Chattle, their interest in the lumber to be manufactured necessarily ceased to exist; but their liability to pay for the future manufacture still remained. Large sums would become due to Sherman for subsequent manufacture, and as their interest in the business was at an end, it was only natural to provide, that, as between them and Denton and Chattle, the latter should step into their shoes, as to all matters connected with the future performance of the Sherman contract. Denton and Chattle, therefore, agreed, in the language of the contract, “to and with said William E. and Vincent Whitney, to fulfill aud perform the existing contract betweeu them and said Sherman for the manufacture of lumber, by said Sherman, in all things yet remaining to be done on the part of said Whitneys.”

That this language was employed for the sole purpose of indemnifying and protecting the Whitneys against liability under the Sherman contract, for the future manufacture of lumber, is quite obvious from several considerations. The business of the manufacture of lumber was not the subject of negotiations. The parties did not contemplate a present adjustment of past transactions. The subject matter of transfer was land. This transfer necessarily terminated the joint adventure, in which the parties before, and up to that time, had been engaged. The minds of the parties were naturally directed to a settlement of past business relations. Hence it was provided, that “ all accounts and transactions of a date prior to this of the said Corwin, Den-ton, and Roberts and Chattle, with said Whitneys, shall be settled and closed by said Denton and Chattle on the part of said Corwin, Roberts, Denton and Chattle, and said Whitneys qn their part, within ninety days from this day: said settlement shall be made upon the basis of the legal and equitable rights and according to the facts now existing.”

All accounts and all transactions of a prior date, between the Whitneys aud Corwin, and between them and Corwin, Roberts, and Denton, and between them and Denton and Chattle, were to be settled by the Whitneys on their part, and Denton and Chattle on the part of all the other parties. The Whitneys having cut loose from the business, two things remained to be done to a complete dissolution of the joint relation. One was to settle and adjust all matters of account connected with past operations; and the other to secure the assumption by Denton and Chattle of their entire liability to Sherman, in all things pertaining to the future manufacture’of lumber. Such settlement was provided for upon the expressed basis of the legal and equitable rights of the parties, and in accordance with the facts then existing; and such assumption was provided for in the language embraced in the stipulation above quoted. Among the facts then existing was the important one, that Denton and Chattle had paid to Sherman, and to Marsh, nearly the entire amount of the rejected items. The balance they were liable for and subsequently paid. These facts were undisputed and undenied. But a place was refused them in the settlement, because of the agreement by Denton and Chattle to perform the existing contract with Sherman in all things remaining to be performed, and upon the supposition that this required Denton and Chattle to make no claim for such payments in such settlement. It is also said that the contract itself was one of the facts then existing, and that the “ agreement to settle upon the basis of legal and equitable rights, necessarily implies as an exception,' every modification of those rights made by the contract itself.” Granting that the existence of the contract is a fact to be considered, it by no means results in the construction contended for.

It still leaves to be decided, what was meant by the language obliging Denton and Chattle to fulfill and perform the existiug contract with Sherman, in “ all things yet remaining to be done on the part of said Whitneys.”

At the date of the contract there was but a small amount due to Sherman for previous manufacture of lumber. The payment in full of the amount then due him would have required but a small portion of the sum rejected and disallowed, yet the referee not only refused to credit Denton and Chattle writh this sum, but he rejected the entire amount paid to Sherman, as also that paid to Marsh, prior to the-date of the contract. He rejected not only what remained' to be done under the Sherman contract, but that which had. already been done under it. And also that which had beem paid under the Marsh contract. The principle upon which. past advances were excluded from the account, the undertaking being to fulfill the contract only as to those things-remaining to be done on the part of the Whitneys, is not easily comprehended.

It is quite as difficult to understand upon what principle- or theory of construction the advances or payments made by Denton and Chattle to Marsh for rafting lumber, prior to-June 15, 1861, were disallowed. There is not a word in the contract affording the slightest basis for the inference-that Denton and Chattle agreed to disclaim or relinquish, in the settlement to take place, the payments thus made to-Marsh. These payments, exceeding $2,000, were all excluded. All that is said in argument, in vindication of the correctness of this ruling, is, that “ as the expense of' rafting the lumber to market, after it was manufactured by Sherman, was one of the actual and natural consequences-of the transaction, and necessary to its completion, the payment to Marsh may well be considered as one of the-things then in the contemplation of the parties and ‘yet remaining to be done on the part of said Whitneys,’ in fulfillment and performance of the existing contract for the-manufacture of lumber.” That is to say, an undertaking to perform the Whitneys’ contract with Sherman, in all things by them remaining to be done, involves the duty to-pay Marsh for transporting the lumber to market, as the expense of so doing was one of the actual and natural consequences of the transaction, and necessary to its completion. This reasoning is not satisfactory. The assumption by Denton and Chattle of the obligation of the Whitneysto Sherman did not affect the relation of the parties to the-Marsh contract in the least respect whatever.

Further support of the construction contended for by the-'defendants is sought from the fact that the Whitneys assigned to Denton and Ohattle all claims and demands which they had against Sherman and Marsh; counsel adding, that “ the purpose for which the assignment of these •claims was made is evident enough, though not expressed;” that it was “ to enable Denton and Ohattle to make a final •settlement of all things yet remaining to be done under the •contract with Sherman and Marsh, whether by the Whit:neys or by Denton and Ohattle.” It wonld seem to me •much more reasonable to suppose, that the object of the transfer or assignment was to enable Denton and Ohattle to reach a settlement with Sherman and Marsh *of those vthings already done, rather than those things remaining to he performed in the future. That this was the purpose :seems clearly obvious; for, in a subsequent clause of the contract, it is expressly provided that the Whitneys, in the ¡settlement to be made, shall receive a credit for the claims .so assigned against Sherman and Marsh, a fact tending to •■show that in such settlement the relation and rights of the parties then existing, as to advances made on the contract with Sherman, and the one with Marsh, were not to be •changed, but that each had and continued the right to •charge up to the other one-half the advances by such party made in the joint business.

The inference that such was the object of the assignment becomes more obvious when it is considered that the assignment of advances made to Marsh by the Whitneys would not be of the least value to Denton and Chattle in the performance of the Sherman contract, in those things •then remaining to be performed by the Whitneys thereunder.

Finally, the contract, in terms, declared that the Whitneys should also be credited with $500, the consideration •of this conveyance.” Viewing the contract in all its parts, in the light of the relation of the parties, and the accompanying circumstances, we are led to the conclusion that there is no such ambiguity, or uncertainty in its terms, or in the meaning they express, as justifies the admission of the oral testimony received by tbe referee. Such testimony must have controlled his action in excluding the disputed items. The contract, as written, must speak for itself.

The effect of the testimony received was to add an independent stipulation to its terms, which entirely changed its legal operation. If the contract, as reduced to writing, contains what was not intended, or omits what it was intended to contain, the remedy for such mistake, in an action to enforce the contract, is not to be found in receiving the parol declarations of the parties. In such action the presumption is conclusive that the contract, as written, contains and embodies the agreement as made. The court, in special term, should have sustained the exceptions to the report of the referee for excluding the amounts paid by Denton and Chattle to Sherman and Marsh for lumber manufactured prior to the date of the contract. In refusing so to do, and in rendering a judgment on the report, it committed error, as did the court in general term in affirming its judgment.

Judgment of the general and of the special terms reversed, and cause remanded to the special term for further proceedings.

Welch, C. J.,

dissenting, said: I concur with the court below. I think this contract, to say the least, admits of the construction that Denton and Chattle released all claim for advances made to Sherman, and the parol evidence showed that, if such advances were not released, the property was sold for less than half of what it had been previously estimated at by the parties, and that in attempts at a settlement between the parties, and for a long time afterward, no claim for said advances was set up by Denton and Chattle.