Morrison v. Baechtold

Pearce, J., delivered the opinion of the Court. This is an action of assumpsit brought by the appellees against the appellants. The declaration contains three counts, the first being for goods sold and delivered, and the second for work done and materials provided. The third is a special count, alleging, 1st, that in pursuance of an agreement in writing, plaintiffs sold and delivered to defendants ten dyanmos of designated power, in consideration of which défendants agreed to pay plaintiffs $5,250, and also to deliver to plaintiffs twenty-four second-hand dynamos described in said agreement; 2nd, that plaintiffs also sold and delivered to defendants one hundred and eighty arc lamps of designated power, the reasonable value and agreed price of which, after allowing the reasonable value of certain second-hand lamps delivered by defendants to plaintiffs as part payment therefor, was $1,890 ; and 3rd, that the reasonable value and agreed price of said dynamos and lamps, after allowing the value of the second-hand dynamos and lamps delivered by defendants to plaintiffs, was $7,230, and that only $1,000 had been paid on account in money, leaving due a balance of $6,230. ³²¹ The defendants pleaded to the first and second counts, never indebted as alleged, and to all the counts, never promised as alleged, and the case was tried before the Court, without a jury, resulting in a verdict for the plaintiffs and judgment thereon for $5,895.

At the close of all the testimony, the plaintiffs submitted nine motions to strike out testimony, of which two were granted and seven were refused, and the plaintiffs also offered twenty-seven prayers, of which sixteen were granted and eleven were refused. The defendants submitted thirteen motions to strike out testimony, of which three were granted and ten were refused, and also offered six prayers all of which were refused. A single exception was taken by the defendants to the action of the Court in granting the plaintiffs motions and prayers, and in refusing the prayers and motions of the defendants. There are two principal questions in the case, viz: 1st.

Is the contract entire and indivisible, or is it separate and apportionable ? 2nd. Are the defendants in either event personally liable on the contract? In granting the plaintiffs first prayer the Court held that the contract was not entire, but that there were two separate contracts, one for dynamos, and one for lamps. And in granting the plaintiffs second prayer the Court held that the contracts sued on were the individual obligations ot the defendants.

The defendants fourth prayer, which was refused, asked the Court, if it found that at the time of making the contract the plaintiffs knew the defendants were not acting in making it in their individual capacity, but as agents of the Northern Electric Company, to rule that the defendants were not personally bound by the contract, and that the plaintiffs could not recover either upon the special count or the common counts.. The consideration of these prayers will require somewhat full reference to the testimony upon which they are based. The proposition of plaintiffs was made September 7th, 1897, ³²² and the contract was concluded September 24th, 1897. The United States Electric Light and Power Company had been in the hands of receivers, and its property and assets were sold in July, 1897, by the receivers to one Hanes, a broker, who represented James F. Morrison, who in turn represented the Northern Electric Company.

Charles M. Armstrong, as one of the receivers of the U. S. Electric Light and Power Co., had been operating it for nearly a year. The sale was ratified August 10th, and on the same day the receivers conveyed the property to Hanes, and on the same day also Hanes conveyed it to Edward Stabler, Jr., as security for a loan procured through him from a guaranty company to complete the payment of the purchase-money. On October 1st, 1897, Stabler conveyed the property to Morrison, and on the same day Morrison conveyed it to the Northern Electric Co. The equipment of the U. S. Electric Light and Power Co. was out of date, both machines and lamps being old style. The testimony, all of which was admitted subject to exception, showed that defendants told Bonney, the plaintiffs agent {through whom the proposition of September 7th was submitted), at the works of the U. S. Electric Light and Power Co. about August 26th, 1897, that the company must be ■equipped with new apparatus in time to take on the increased ¡business of the fall, and that Bonney said the plaintiffs “could ■deliver the whole outfit within thirty days after receipt of order.” The minutes of the Northern Electric Co. show that on September 24th, 1897, the same day this contract was made, Morrison was elected General Manager and Armstrong, Secretary and Treasurer of the Company and that these officers were authorized to contract jointly in behalf of the company for ■construction equipment, and supplies.

The negotiations had been opened by a letter from Bonney as agent of plaintiffs August 23rd, 1897, to “C. M. Armstrong, agent of U. S. Electric Light and Power Co.,” stating that they had learned of the change of ownership of the plant, and offering to submit ■estimates for a new apparatus. This letter was followed by a number of letters and telegrams, all addressed in the same ³²³ way, and on September 2nd, Armstrong wrote suggesting that he send prices and adding, “if you prefer to see our people in person, and should desire to come on, wire day and hour you will arrive.” Bonney accordingly came to Baltimore and was told by Morrison they wanted “a complete harmonious apparatus”; an electric lighting plant to consisit of ten dynamos and four hundred lamps”; and they discussed together “the Fort Wayne apparatus as a standard.” This is not contradicted by Bonney. Morrison also testifies that he told Bon - ney all about the Northern Electric Co. and that he had secured its charter to operate under, but this is denied by Bonney. On October 3rd, two days after the conveyance o the property to the Northern Electric Co., Morrison wrote the plaintiffs in reference to sketch of lamps submitted, and signed his letter “The Northern Electric Co., by James F. Morrison, General Manager,” and from that date all of defendants letters were in the name of that company either by Morrison, General Manager, or by Armstrong, Secretary and Treasurer.

The plaintiffs acknowleged all these letters, complied with instructions given therein by the company; sometimes parried and excused delays in shipments, and sometimes confessed the justice of complaints made by the company but never disputed or even questioned the right of the company to speak and act, as it always did speak and act, as the real party to the contract. The contract itself provided that all the old apparatus taken in part payment should be delivered to the plaintiffs at the works of the U. S. Electric Light and Power Co. and they were so delivered; the works and old apparatus being then as plaintiffs knew, the property of the Northern Electric Co.; and the payment of one thousand dollars which was made on account was by check of the Northern Electric Co. Now upon the face of the papers constituting the contract, and the testimony summarized above, was the contract entire or separable, and were the defendants personally liable on the contract ? The definition of the word apparatus given in Webster’s ³²⁴ Dictionary is, “ a full collection or set of implements for a given duty, experimental or operative ” and this definition, is implied in the derivation of the word. These implements or agencies may be numerous and various in character, but are all united in a common function.

The contract recognizes the use of the word apparatus in the sense above indicated, by the guarantee “that the dynamos they propose furnishing, will operate the number of lamps as above specified, at the regular speed, horse power, and amperage stamped upon the dynamos.” This requires a mutual correspondence and adaptability between the dynamos and the lamps, and indissolubly connects them as parts of a whole. The contract consists of three papers : ist. Plaintiffs’ proposition of September 7th ; 2nd. Defendants’ letter of September 24th, proposing a modification of the proposition as the basis of acceptance, and 3rd, plaintiffs’ reply accepting the modification and closing the negotiation upon that basis.

It was entirely proper and natural that plaintiffs should, in their proposition, state separately the price of dynamos and lamps in order that defendants might better judge of the fairness and reasonableness of the aggregate price of the apparatus, but it would-be unreasonable, merely because separate prices were thus named, to stamp the contract as separable, and the Court properly admitted parol testimony in order to place the Court, in determining this question, in the position of the parties to the contract. This testimony shows that the plaintiffs examined the plant of the U. S. Electric Light and Power Co. at their works, and the lamps then in use in their business, and, after examining it, agreed to furnish an apparatus for that business, to consist of ten dynamos and four hundred lamps, and to take in part payment the whole of the old apparatus. They bought a second-hand1 plant, and they sold a new plant to replace the old. We think the intention of the parties is apparent that the new dynamos and the new lamps should constitute a res integra.

That this should be determined, not alone from the language of the instrument constituting the contract, but from the facts and circumstances attending its making, is not only consonant with good sense, ³²⁵ but is in accord with the rule of evidence stated by text writers and approved in our own decisions. “Whether a contract is entire or separable, like most other questions of construction, depends upon the intention of the parties, and this must be discovered in each case by considering the language employed and the subject-matter of the contract.” 2nd Parsons on Contracts, 697; Brantly's Law of Contract, 216. “ Parol evidence may be admitted to ascertain and make certain the parties and subject-matter of an agreement, to apply the contract to its subject, and to remove latent ambiguities. In such case it is not used to contradict or vary the written instrument, but to aid, uphold and enforce it as it stands.” Rice v. Forsyth, 41 Md. 402 . An instructive application of the above rule in an analogous case is found in Dugan v. Anderson, 36 Md. 585 . Dugan had contracted with Anderson to employ him as clerk at a certain salary until March, 1871, and then to receive him as a partner in business for one year certain, on a one-third interest.

Anderson entered on the service as clerk, but was discharged before March, 1871, though he offered himself ready to continue as clerk till the time appointed and then to become a partner. In a suit by him for breach of contract, he was allowed to recover for breach of the whole agreement, though his suit was brought before March, 1871. In the course of the opinion, Judge Miller said: “ In determining this question, Courts must be