Court Opinion

ID: 8000659
Source: CourtListenerOpinion
Date Created: 2022-09-09 01:49:00.054068+00
Date Added: 2024-06-11T16:35:42.660195
License: Public Domain

Ewing, Judge,
delivered the opinion of the court.
The instrument which is the foundation of this suit is as follows: “ I hereby obligate myself to insure to James Mc-Pike ten per cent, per annum profit upon the amount of capital invested by him in the trade of merchandise to be managed by me at Louisiana, Missouri. March 18, 1846. [Signed] Hyman E. Block.” Upon the instrument is this endorsement: “ William Kerr; for the annual interest alone.” This is an action by the plaintiff, as assignee of James McPike, against Kerr’s executor, to recover one thousand and ten dollars, the annual interest claimed to be due on the capital invested by James McPike as a partner of Block in the mercantile business. The question is whether this undertaking of Kerr is in its legal effect a direct and absolute promise to pay the annual interest, or whether it is conditional and the liability it creates contingent. This question will be determined by ascertaining the nature of Block’s obligation. The engagement of Block, the principal, was to insure to McPike, his partner, ten per cent, per annum profit upon the amount of capital invested by him. By this instrument he intended to secure himself against the ordinary risks of the enterprise to the extent at least of the stipulated profit; but it is evident that he did not intend to restrict himself to that sum if the profits of the business exceeded it. If greater than ten per cent., he would be entitled to them; if less, the deficiency is secured by the obligation of Block and Kerr. The language of the instrument, the nature of the transaction, and the relation the parties sustained to each other as partners, make it manifest that Block was to be liable in the event only that the profits of the business should be less than ten per cent, per annum. The terms of the instrument are peculiarly expressive of *83sucb intention, and are inappropriate to convey a different meaning. Whatever the extent of Block’s liability may be beyond the stipulated profit, if any, Kerr’s undertaking is expressly restricted to that, and the liability of both is that far commensurate by virtue of the instrument, and may be enforced when it is shown that it has not been realized from the business. '
The liability of the surety is generally measured by that of the principal, and will not be construed to be greater unless it is expressly assumed. It is not to be extended by implication. If Block is only contingently liable, Kerr’s liability is also contingent, and both, in this respect, stand upon the same ground as to the ten per cent, profit. Kerr’s engagement must be interpreted in connection with Block’s; and, upon looking at the writing executed by the latter, we understand what is meant by the endorsement. The words “ annual interest” there employed evidently mean the per cent, profit which the other side of the paper calls for; and is not an obligation to pay ten per cent, annually on the capital, irrespective of the conditions which, as already observed, its terms clearly import. Thus viewing the undertaking and liability of Kerr, the petition fails to show any cause of action against him. What the profits of the partnership were is nowhere averred in tfie petition. Eor aught that appears, they may have been equal to or exceeded the sum stipulated for in the instrument of writing sued on; and, if so, no liability is incurred by the defendant, as Kerr’s executor, to pay any thing. If there is a deficiency it must be alleged and proved. The petition being therefore defective, the judgment will be affirmed, without reference to the instruction given by the court, which we think erroneous in maintaining that' notice of Block’s. default was necessary. As we regard the transaction, such notice was not necessary; but, as for the reason stated there could have been no recovery on the petition, the judgment will be affirmed;
Judge Napton concurring. Judge Scott absent.