Court Opinion

ID: 5191938
Source: CourtListenerOpinion
Date Created: 2022-01-06 15:37:28.854403+00
Date Added: 2024-06-11T08:25:56.318938
License: Public Domain

Hatch, J.
(dissenting):
That the written contract made and entered into between these parties did not express the whole of the agreement is established, not only by satisfactory proof, but by evidence clear, cogent and convincing. ■ Indeed it is undisputed. Both parties to this action insist that the verbal agreement which they made was different from that expressed in the written contract in several particulars. It is ■ •' not disputed but that the defendant was entitled to have, as collateral security for the performance by the plaintiff of his agreement, a policy of life insurance for $5,000 upon the life of the plaintiff. After the execution of the written contract the defendant demanded the fulfillment of the contract in this respect and the plaintiff immediately complied therewith, it being the clear understanding that such policy was. to bé' given, although not a syllable was mentioned con*503cerning the same in the written agreement. Probably neither party at that time had noticed this omission or any other. It is also clearly established by the proof that there was an agreement orally entered into, by which the property Of the corporation was to be responsible for the payment of the notes, and their payment was conditioned upon the prosperity of the corporation as a going business. If that did not pay then it seems to be clearly established that the notes were not to be discharged by the plaintiff as a personal obligation, but depended upon the paying capacity of the corporation. Otherwise, the language of the defendant in his letter of February 18, 1901, is utterly senseless. Therein he states, “ The condition of the Queen has no longer any bearing upon the payment of those notes as you distinctly declined to allow her to be used to pay them in accordance with ■our verbal arrangement at the time they were given. It is up to you now and the Queen does, not count.” If this does not state that the verbal arrangement which was made between the parties was to pay the notes, with either the earnings or the property of the Queen, then it must be said that language does not express what it means. This statement clearly and cogently shows that the difference between these parties as to what were the terms of the verbal contract is very slight. Both agree that the property and earnings of the Queen were to be used for the purpose of discharging the indebtedness, and that it was from that source and that alone that it was expected the payment would be made. Upon this point the plaintiff and his witness testified that the agreement was that if the Queen did not pay the notes were not to be paid, and the defendant was then to be remitted to the property of the Queen for the payment of such interest as was represented by his holdings of the stock, but that it was not understood or intended that the personal obligations given by the plaintiff should be paid by him independent of the property and earnings of the corporation. This is further confirmed by the fact that the stock which was transferred by the defendant as collateral security, was not to be disposed of by him to any other person, and it was for that reason that the stock was not indorsed by the plaintiff at the time of its delivery. These facts, when taken in connection with the testimony offered by the plaintiff, seem clearly to establish that the agreement was that the plaintiff should take the sole management and control *504of the business, conduct the same, pay the notes if the property earned sufficient for that purpose, and if it did not so earn, then the defendant was remitted to enforce or receive to the extent of his interest in the property from its proceeds without resort, to the personal obligation of the plaintiff. Doubtless the parties contemplated that the corporation would earn sufficient to pay the notes, but the contingency was also contemplated that it might not so earn, and, therefore, provision was made for relief from the obligations of the notes by the plaintiff in that event. There is little if any dispute in the testimony showing or tending to show that the parties when, they made the written agreement did not intend to embrace therein the whole of the oral agreement which had been made. On the contrary, it seems clear that after the verbal agreement, it was thought best by both parties to put it into writing. ¡Nothing appears from which it can be fairly said that the parties intended to embrace only a part in the writing. There was no sense in having a written agreement unless it was intended to embody the whole of the verbal agreement which had been made. The failure to so embody it in the written contract was evidently the omission to lay before the attorney who drew it the- entire terms of the verbal understanding. The attorney was not present when the negotiations between the parties were had. Consequently he was in ignorance of what the whole arrangement was and only received information respecting the terms so far as they were laid before him. The omission was undoubtedly due' to the failure to clearly express to the attorney the whole of the terms of the engagement, but from ■ this ought not to be inferred the intent to omit therefrom part of the verbal agreement. On the contrary, it is fair-to infer that it was the fault of memory and not of intention, which is the usual reason found present where a written agreement does not embody the whole of the verbal contract. The conduct of both parties with respect to the written contract was in good faith ; they intended to embody the whole of the agreement and failed to accomplish the purpose through omitting fully to explain it to the-attorney who drew it. But immediately thereafter the defendant insisted upon the performance of what had been omitted therefrom which affected him, and the plaintiff did the same thing when a question arose affecting his rights under the arrangement. The mis-
*505take, therefore, is clearly and satisfactorily established, and a basis was made for a reformation of the contract. (Southard v. Curley, 134 N. Y. 148; Pitcher v. Hennessey, 48 id. 415.)
Not only has the court denied this relief, but as I view the'case it has gone far beyond the plain provisions of the contract in awarding an affirmative judgment against the plaintiff. By the 3d clause of the written contract it is provided, “ That the party of the first part shall not dispose of, hypothecate or pledge said stock, or any jiortion thereof, in any manner whatsoever.” It is evident, not only from this clause of the contract, but from the evidence in the case, that the plaintiff was insistant that the stock should not go out of the hands of the defendant. They had been long together, were on friendly terms and the plaintiff was desirous that no third person should become interested in the property and he took means to secure this result. The judgment violates this provision of the contract and awards judgment to the defendant requiring the certificate to be indorsed so that the defendant may dispose of the same, although he has no judgment enforcing the note, and is, therefore, in no position to sell or dispose of the stock. By virtue of the terms of the judgment, however, which he has recovered, he may dispose of the stock without enforcing the notes and thus defeat the purpose of the written agreement.
For these reasons I think that the judgment should be reversed and a new trial granted, with costs to the appellant to abide the event.
Judgment affirmed, with costs.