Court Opinion

ID: 6849853
Source: CourtListenerOpinion
Date Created: 2022-07-23 20:34:31.595503+00
Date Added: 2024-06-11T16:05:03.070945
License: Public Domain

CHASE, Circuit Judge
(dissenting in part).
While I agree that the judgment in this ease should be reversed, I do not agree that the error which requires reversal goes to the plaintiff’s cause of action under its second and third counts. It goes only to the amount of damages recoverable.
The parties signed their written contract November 1st. That contract is plain. It *764nas been wholly performed. It now is of no consequence except to aid as a part of the background in determining what the supplemental agreement of November 2d means. In this supplemental agreement, which is really nothing but a tabulation, except in respect to the item called “net current assets,” the parties divided into classes the assets behind the stock the plaintiff purchased and allotted to each class a value. The sum of these values equaled the agreed purchase price of the stock. Clearly, as a tabulation, it made little difference then whether the values assigned were accurate or not, for the trade had already been made and the price to be paid agreed upon. Except as to something which they chose to call net current assets, what the plaintiff would get was certain enough, and what values were assigned in the supplemental agreement to those certain things merely gave Mr. Ford the opportunity to see on paper, at least, why his representatives had-made the purchase at the price to which they had agreed. So far there was no supplemental agreement.
But, as to the $100,000 which had been allotted to what was called net current assets, the writing of November 2d went to the dignity of a supplemental agreement. It is now impossible, as the opinion of the majority shows, to determine exactly what the parties meant by net current assets. My brothers have pointed out what may have been meant and how the parties may have figured and discounted to their agreement. I do not think that is now important. Perhaps they added the values allotted to the other items, subtracted the total from the purchase price, and found that $100,000 was left to be accounted for. What really matters is that they agreed that, in addition to all other assets behind the stock bought, there should be what they called “net current assets,” and the defendants agreed that they should be worth at least $100,000. The plaintiff promised to pay the excess value if they turned out to be worth more, and the defendants promised to refund the difference if they were worth less. The parties spoke in terms of value in money rather than in quantity and kind. The defendants promised, not to pay an unlimited amount to make this value the equivalent of $100,000, although the plaintiff promised to pay in full for any over run in value, but to refund the difference; that is, having treated this item separately and warranted its value, the defendants agreed to refund, but to the extent of that warranted value only, so much as would be necessary to give the plaintiff $100,000 in value in net current assets behind the stock in addition to the other items enumerated but not value warranted. Having spoken in terms of value, these parties should now be taken to have meant what the words they chose to use normally mean when applied to money values and held to have meant what they said. Accordingly, net current assets should be held to mean the net value of the current assets after current liabilities have been deducted rather than the amount, merely as a book entry, of something called purrent assets after some other assets have been segregated. As the current tax liabilities, as of the time of the purchase, more than offset the value of the current assets, the $100,000 which the plaintiff paid for net current assets was paid for something which did not exist. It is entitled, therefore, to judgment on the causes of action alleged in the second and third counts; but only to such damages as will make its recovery under all counts equal to the agreed refund of $100,000.