O'Ferrall v. De Luxe Sign Co.

IIexee, J., delivered the opinion of the Court. In this action on the common counts, and on the alleged award of an arbitrator, the plaintiff seeks to recover the amount which he claims to have been owing to his assignor for financial and other services' rendered in a sign business to which the corporate defendants succeeded, and the liabilities of which the corporation and its codefendant organizers are supposed to have assumed. The assignor, who, for convenience, will he called the plaintiff, was connected with the business from September 1st, 1926, to March 6th, 1928. For a time he received stated weekly compensation, but this was changed to a commission of ten per cent, on the funds provided by him for the financial needs of the business, which was conducted by a partnership composed of Wesley A. Grant and George J. Jolliffe, two of tin; defendants, trading as the De Luxe Sign Company.

On March 6th, 1928, the plaintiff was notified that his services would no longer be required in the business, and that the amount due him on account of his advancements and commissions was to be ascertained as the basis of a settlement with him in view of his retirement and -of the fact that a new financial interest was being enlisted in the enterprise. That interest consisted of financial and personal assistance provided by the defendant W. Brewer Joyce, who joined with Grant and Jolliffe in the incorpora ⁵⁴⁶ tion of the business, on March 31st, 1928, under the same name which the pre-existing partnership had borne. In the interval between the 6th and 31st of March, an accountant employed by Mr. Joyce examined the books of the firm, for the period prior to March 6th, and presented the results of his investigation at a meeting, on March 31st, at which Mr. Lawrence, the plaintiff, Mr. O’Ferrall, his attorney, Mr. Grant, Mr. Jolliffe, and Mr. Stockbridge, attorney for Mr. Joyce, were present. The statement submitted by the accountant, relating to the period before March 6th, was supplemented by one which he and the plaintiff prepared, at the meeting,- to cover the intervening time to March 31st.

It is agreed that the account books of the firm were unsatisfactory, and the amounts reported at the meeting as being due the plaintiff were evidently regarded as tentative. The results of the conference were stated in a letter dated March 31st from Mr. Stockbridge to Mr. O-’Fexrall, materially as follows: “On behalf of certain clients, I am writing you as attorney for A. Gower Lawrence, to confirm the transaction made by us today. “We ha-ve formed a corporation known as ‘De Luxe Sign Company, Inc.,’ and taken over the business heretofore conducted by Wesley A. Grant and George J. Jolliffe under the same name. Mr. Lawrence has assigned to this corporation all accounts receivable, and other claims he might have against the firm called ‘De Luxe Sign Company.’ He has also delivered to me for cancellation, notes of Grant and Jolliffe, which are all the notes obtained from them by him, aggregating approximately $1,700.00. “The corporation will pay to Mr. Lawrence the amount due to him by the firm, which consists of $2,015.19, representing the amount due, exclusive of commissions, on March 6th, 1928; the sum of $1,500.00 in settlement of all claims for commissions and confipensation of any kind; a sum believed to be $391.73, representing the cash adjustment arising from transactions of the firm from March 6, 1928, to March 30, 1928.. These sunns, other than the commission item, ⁵⁴⁷ are to be verified by the corporation between this date and April 10th, 1928. “Of the amount so to be paid, $1,500.00 is paid today; balance to be paid by tbe corporation on or before April lOtb, 1928. “Mr. Lawrence is to sign and deliver to me tbe attached letter to the Baltimore Trust Company.” The attached letter to the Baltimore Trust C.ompany, subsequently signed by the plaintiff, requested the trust company to give the bearer of the letter any desired information with respect to the plaintiff’s checking and loan accounts as “agent”, his banking transactions for the firm having been carried on under that designation.

Bv ao assignment, exer\ # . ' *• ' ; cuted by the plaintiff individually, he transferred to the De Luxe Sign Company, Incorporated, all the accounts receivable of the firm which he held as collateral security for his advancements. In his capacity as “agent” he separately assigned to the corporation all accounts receivable at any time transferred to him hy the firm, and all other claims which he might have against the De Luxe Sign Company, except in regard to his former interest in certain machinery. The subsequent investigation of the plaintiff’s accounts with the partnership led to the conclusion on his part that the amount due him was much more, and on the part of the defendants that it was considerably less, than the total of the figures stated in the letter of March 31st, from which we have quoted. There' was apparently no effort- on either side to complete the further examination of the accounts within flie feu day period specified in the letter.

On April 17th the plaintiff received a check from the corporation for $1,300. About a month later Mr. O’Eerrall sent to 'Mr. Stockbridge an itemized statement prepared by the plaintiff, showing a balance due him of $2,430.34 after all prior payments had been credited. This was followed, on May 24th, by a letter from Mr. O’Eerrall transmitting to Mr. Stockbridge a statement showing an additional indebtedness of $683.11, which the plaintiff claimed to be due. On July 6th Mr. Stock- ⁵⁴⁸ bridge sent to Mr. O’Eerrall for the plaintiff a check of the De Luxe Sign Company for $231.77, which its accountant reported to be the balance due the plaintiff on account of the settlement, the plaintiff being allowed to accept and use the check without prejudice.

That payment was $875.15 less than the amount which would have been owing to him at that time if the figures tentatively stated in the letter of March 31st had been correct. A dispute between the parties as to the amount rightfully payable to the plaintiff was the occasion of further discussion and correspondence, which continued for two months, and culminated on September 10th in a written agreement between the plaintiff and Messrs. Grant and Jolliffe that Mr. Wilmer E. Black, a certified accountant, should “make an inspection of the accounts” between the plaintiff and the De Luxe Sign Company, and that “all the parties to the transaction shall be finally concluded by Mr. Black’s determination.” It was stipulated that Mr. Black should “examine the accounts to be furnished by tho undersigned and any vouchers or evidence as to any disputed items, and also the books of the company, and any and all other books or sources of information that he may deem desirable.” Mr. Black’s son, Robert Black, also a certified accountant, was substituted for his father, as the arbitrator, by oral agreement of the parties on September 15th. The arbitrator proceeded with his investigation, and, on February 28th, 1929, submitted an oral report, which is the subject of controversy as to its purpose and effect.

It is asserted by the plaintiff that the report was a decision in favor of the substantial correctness of his claim for a balance of $2,-879.53, while the defendants contend that the arbitration was never completed and that it produced no final award. The trial in the court below resulted in a verdict and judgment for the defendants, and the plaintiff has 'appealed. The main question presented by the exceptions in the record is whether the trial court properly ruled that the plaintiff’s right of recovery was limited by the letter of March 31st, 1928, and could not in any event exceed the unpaid but disputed balance of the amounts therein stated. That restric ⁵⁴⁹ tion was imposed by the granting of the defendants’ ninth prayer and by an explanatory statement of the court in the presence of the jury.

The prayer instructed the jury that if they should find that on March 31st, “1929”, (1928), the defendants agreed with the plaintiff to pay him certain sums of money mentioned in the letter of that date, and should “further find Unit the amounts inferred to in said letter were to be verified by the defendant corporation and an adjustment thereon but in no event to exceed the amounts above referred to”, and should “further find that the defendants have paid to the plaintiff the said sums of money less an adjustment in the amount of $875.12, which the defendants claim the plaintiff is not entitled to receive”, and if the jury should find “that the plaintiff is not entitled to receive from the defendants the aforesaid sum of $875.12”, and if they should further find “that the defendants never agreed 1o pay the plaintiff the sum of money now claimed to be due him or any part thereof,” then the verdict of the jury should be for the defendants. When asked by counsel for the plaintiff as to the effect of the instruction in limiting the plaintiff’s recovery to $875.12, the court said: “If that is what it says, that is what I want to be understood as intending to say, that I think the limit on the recovery of the plaintiff is set forth in that hitter of March 31st. That he cannot go Beyond the amount that was in there. That anything that has happened on credits or payments since that time, that modifies that amount, of course, is what the jury has got to determine * * *.

As I remember it, * * * that agreement said the amount due was $2,015.19 plus $391.73. I understand that the $1,500 is really out of the whole case. How the question is $2,015.19 plus $391.73, less any payments that have been made on account, or any credits that should have been allowed that were not allowed from an investigation of the account since that date.” The defendants’ ninth prayer, hv its own terms, would have permitted the jury to construe the agreement embodied in the letter of March 31st, 1928. and to determine whether ⁵⁵⁰ it intended that the plaintiff’s claim should in no event exceed the amounts mentioned in the letter, but the oral explanation by the court, which is the