Case Name: HATTIE E. LAING et al., Respondent, v. JOHN R. HOLMES, Appellant
Court: Kansas City Court of Appeals
Jurisdiction: Missouri
Decision Date: 1902-03-03
Citations: 93 Mo. App. 231
Docket Number: 
Parties: HATTIE E. LAING et al., Respondent, v. JOHN R. HOLMES, Appellant.
Judges: All concur.
Reporter: Missouri Appeal Reports
Volume: 93
Pages: 231–234

Head Matter:
HATTIE E. LAING et al., Respondent, v. JOHN R. HOLMES, Appellant.
Kansas City Court of Appeals,
March 3, 1902.
1. Contracts: CONSTRUCTION: CONTEMPORANEOUS INTERPRETATION: MINING LEASE. Where contracts are of a doubt- . ful meaning, the construction given by the parties will be adopted by the courts; and so a mining lease requiring the lessee to pay five hundred dollars additional out of the first six months’ profits, is, on the correspondence between the parties, held to mean the first six months the mine made a profit.
2. -: --: METHOD OE COMPUTING PROFITS. Where a mining lease provided for the payment of five hundred dollars additional out of the first six months’ profits, in computing such profits the expenses at a period prior to the commencement of the said six months can not be deducted from the earnings of that period.
Appeal from Jasper Circuit Court. — Son. J. D. Perkins, Judge.
Affirmed.
Galen & A. E. Spencer for appellant.
(1) “Eive hundred dollars out of first six months’ profits of this lease,” means out of profits for first six months. This is the plain and ordinary meaning of the words, and the court should give the words such meaning. Rubey v. Mining Co., 21 Mo. App. 159; Weil v. Schwartz, 21 Mo. App. 372; Lovelace v. Traveler’s & Co., 126 Mo. 101; Goode v. City, 113 Mo. 257. (2) If an ambiguous expression appears in a contract, the effect to be ascribed to it.must, if possible, be a reasonable one. Hanna v. Land Co., 126 Mo. 1. (3) Plain tiff presented and relied on this agreement. In the absence of other means of interpretation, the construction should be against the party using the agreement. Beach Mod. Law of Contracts, secs. 726, 882. (4) In computing profits from the lease, defendant should have been allowed first to reimburse himself for all prior expenses. This is the plain, ordinary and accepted meaning of profits. Defendant should have been allowed compensation for the value of his time and services in developing and superintending the operations on the lease. The evidence showed this to be necessary and valuable. Hall v. Vermont, etc., Railroad, 28 Vt. 401; Reg. v. Gloucester, 5 Q. B. 862, 48 E. C. L. 862.
O. H. Montgomery for respondent.
(1) In the construction of ambiguous contracts the court will look not merely to the words employed, but the subject-matter, the surrounding circumstances, and the contemporaneous interpretation of the parties themselves. Williams v. Railroad, 153 Mo. 487; Carter v. Poster, 145 Mo. 383; Wet-more v. Crouch, 150 Mo. 671. (2) The whole transaction was that defendant agreed to pay plaintiffs $2,000 bonus for the lease. He paid $1,500 and owed $500 more, not a part of $500. The word “first” was put in to hurry the payment, not to reduce the amount or to defeat its payment altogether. The plaintiffs tried to prove the whole transaction, but the court ruled it out. This was error in favor of defendant of which he can not complain, but it prevented plaintiffs recovering what was their due. Carney v. Chillicothe Water & Light Co., 76 Mo. App. 532; Del Bondio v. Jacob Dold Packing Co., 79 Mo. App. 465.

Opinion:
ELLISON, J.
— This is an action to recover five hundred dollars, claimed to be due under a mining lease made by plaintiff to defendant. The judgment in the trial court was for plaintiff for $164.20, and defendant appealed.
The lease provided that defendant should pay plaintiff as rent or royalty, fifteen per cent of the market value of all ores mined and sold during the preceding week "and $500 additional out of the first six months' profits of this lease." The suit is for the $500, specified, and the point for decision is the construction of the clause quoted. The defendant contended in the trial court that the clause meant the profits of the first six months of the lease, beginning with its date, and as there were no profits during that time, nothing was due. Plaintiff's view was that the true intent and meaning was the profits of the first six months in which profits were made. The clause is quite ambiguous, not only in the opposing points of view just stated, but in many other respects which have been suggested by counsel. Fortunately, however, the parties themselves have interpreted its meaning, and that was properly the construction adopted by the trial court. When contracts are written in such a way as to be of doubtful meaning, the construction given by the parties will be adopted by the courts. Sedalia Brewing Co. v. Sedalia Water Works, 34 Mo. App. 49; Williams v. Railway, 153 Mo. 487; Carter v. Foster, 145 Mo. 383; Wetmore v. Crouch, 150 Mo. 671.
Some days after the expiration of the first six months of the lease, written demand was made on defendant for the $500 named in the lease. He answered this in a letter of November 26, 1898, saying that he "had made no profits yet. However, I think it will pay all right before long, and I will gladly pay when the profits come" (italics ours). From this it is evident that the contract was not understood as confining the profits to what might be made the first six months of the lease.
As to the mode of ascertaining the profits, the contract fixed a period of six months when profits were earned, and the profits were to be ascertained by result of such period. Defendant had ho right to claim that expenses at a period prior to that were to be deducted from the earnings of that period, and the court properly confined expenses to the period which measured the profits.
The judgment was manifestly for the right party, and is accordingly affirmed.
All concur.