Barbour v. Poncelor

• Citation: 83 So. 130,203 Ala. 386
• Decision Date: 30 June 1919
• Docket Number: 6 Div. 908
• Parties: BARBOUR v. PONCELOR.
• Court: Alabama Supreme Court

83 So. 130

203 Ala. 386

BARBOUR v. PONCELOR.

6 Div. 908

Supreme Court of Alabama

June 30, 1919

On Rehearing, October 23, 1919

Appeal from Circuit Court, Jefferson County; C.B. Smith, Judge.

Action by Ben F. Barbour against D.J. Poncelor in deceit and breach of contract. Because of adverse rulings on the pleading plaintiff took a nonsuit and appeals. Affirmed.

Gardner J., dissenting.

The contract directed to be set out is as follows:

Articles of agreement and contract by and between D.J Poncelor of Birmingham, Ala., party of the first part, and Ben F. Barbour, of Birmingham, Ala., party of the second part, witnesseth:

That D.J. Poncelor is the owner of 125 shares of the capital stock of the Rye-Ola Company, which stock is of the par value of $100.00. And the said D.J. Poncelor holds the office of secretary and treasurer at a salary of $100.00 per month, and all claims for salary is hereby released.

And whereas, party of the second part desires to purchase said stock.

Now therefore, I, D.J. Poncelor, do hereby agree to sell said stock to Ben F. Barbour, and resign the office of secretary and treasurer, for the following considerations:

(1) The said Rye-Ola Company is to execute and deliver a bill of sale to D.J. Poncelor of all of the machinery, fixtures utensils of every kind and description, boiler, tanks, office furniture and fixtures, mule, wagon, harness, safe, chairs, desks, and tables, in fact said bill of sale is to convey free and clear of all liens or encumbrance of every kind or description, every one and all of the machinery, utensils, and fixtures that are now being used in and about the manufacture of Rye-Ola syrup, is to be ratified either at a meeting of the stockholders of the Rye-Ola Company, or the consent of all of the stockholders of the Rye-Ola Company must be indorsed upon original bill of sale, granting and stipulating that the property set forth and sold to D.J. Poncelor, was hereby ratified and confirmed by all of the stockholders of the Rye-Ola Company unanimously. And said bill of sale is to convey all of said property to D.J. Poncelor as his individual property in fee simple, subject to the right to use the said above described property in conjunction with the building for which they are to pay the rent as usual, under the lease of, to wit, $85.00 per month in advance, and which said lease expires on March 31st, 1918; but if the Rye-Ola Company or its assigns desire to cancel said lease on the 31st day of December, 1917, they shall have the right to do so on notifying said D.J. Poncelor, 30 days in advance.

(2) The said Ben F. Barbour is to pay or cause to be paid and delivered to D.J. Poncelor one certain note for $1,000.00, dated on or about, to wit, the 2d day of May, 1917, and due in 60 days, and payable to the American Trust & Savings Bank, upon which note the said D.J. Poncelor is indorser.

(3) It is also further stipulated and agreed that the said D.J. Poncelor shall release all of his right, title and interest in and to the capital stock of the Movol Company.

(4) The said Ben F. Barbour is to pay D.J. Poncelor the sum of $1,000.00 evidenced by his promissory note, due in eight months, with interest at 6 per cent. from date.

(5) And it is further stipulated, understood and agreed to, and it is a part of the consideration of the transfer of this stock to Ben F. Barbour, that D.J. Poncelor shall never be liable directly or indirectly for any claim of any sort or description, growing out of, or arising out of the sale of any of the stock of the Rye-Ola Company to said Ben F. Barbour. And this stipulation applies to the sale of the first 125 shares, as well as to the sale of the remaining 125 shares contemplated in this contract and agreement.

Witness our hands this 22d day of May 1917.

[Signed] D.J. Poncelor.

Ben F. Barbour.

Defendant's pleas asserted section 5 of the contract and a performance by the defendant of all the stipulations and agreements on his part in the transfer of said stock and of the putting the same into the hands and possession of the plaintiff, who thereafter affirmed, asserted, and retained the ownership thereof.

The plaintiff filed replication asserting:

(1) That at the time of the making and signing of the contract of May 22, 1917, plaintiff did not know that the Rye-Ola Company did not have exclusive ownership of said formula.

(2) Plaintiff did not know at the time of signing of the contract of May 22, 1917, that the defendant did not own the shares of stock referred to in the original complaint.

(3) Plaintiff did not know of the falsity of the representations or said breaches of contract as to the earning power of the corporation.

(4) Combines the allegations of replications 1, 2, and 3 with the additional averment that no facts were brought to the attention of the plaintiff which would put him on notice of the deceit which had been practiced at said time.

(5) No knowledge or notice of the deceit practiced by defendant on plaintiff or of said breaches of agreement.

(6) Want of knowledge on part of plaintiff of the facts and knowledge of defendant of such facts and the intentional concealment of such facts from plaintiff, and that plaintiff would not have executed the contract had he had knowledge.

The other replications assert the same defenses in varying phraseology.

Weatherly, Deedmeyer & Birch, of Bitmingham, for appellant.

Weakley & Rice, of Birmingham, for appellee.

McCLELLAN J.

The plaintiff (appellant) stated his case in several counts claiming damages for deceit practiced upon him by the defendant (appellee) in the sale to plaintiff of certain shares of capital stock in a corporation on November 28, 1916, and in one count declaring upon the breach of this contract of sale. The defendant set up a written release of liability of the causes of action declared on, given, it is averred, on May 22, 1917, by the plaintiff to the defendant for a valuable consideration and purporting to conclude in most general, comprehensive terms, against the defendant's liability resulting in any way from the respective sales of the two blocks of capital stock of the corporation. The plaintiff's demurrers to special pleas, in addition to the general issue, asserting this defense were overruled. The plaintiff replied, along with a general traverse, in a number of replications; to which the defendant's demurrers were sustained. Because of these adverse rulings, the plaintiff suffered a nonsuit.

It is to be borne in mind that the cause of action declared on in this complaint is rested upon the contract consummated on November 28, 1916, not the contract made on May 22, 1917, in which the second block of 125 shares was sold by the defendant to the plaintiff. The defendant's pleas invoked the effect of the fifth paragraph of the contract executed on May 22, 1917. This paragraph reads:

"(5) And it is further stipulated, understood and agreed to, and it is a part of the consideration of the transfer of this stock to Ben F. Barbour, that D.J. Poncelor shall never be liable directly or indirectly for any claim of any sort or description, growing out of, or arising out of the sale of any of the stock of the Rye-Ola Company to said Ben F. Barbour. And this stipulation applies to the sale of the first 125 shares, as well as to the sale of the remaining 125 shares contemplated in this contract and agreement."

The report of the appeal will set forth the contract in which this clause appears.

The interpretation or construction of the contract in which the quoted matter occurs was a function of the court; the judicial purpose and duty being to ascertain the lawful intention of the parties as therein expressed and to give effect to that intention. Murphy v. Black, 41 So 877, 878; ^[1] Jordan v. McDonnell, 151 Ala. 279, 282, 44 So. 101; 34 Cyc. p. 1075. The provisions of the contract reproduced above operated as a release of the defendant, the seller, from all liability, "directly or indirectly, for any claim of any sort or description growing out of or arising out of the" sales of both blocks of stock to the plaintiff. Unless avoided, this release, most comprehensively expressed, affected to exonerate the defendant from any consequences that might result from those sales to the injury or damage of the plaintiff who gave the release for a valuable consideration. That the terms employed in the release feature of the contract were sufficiently comprehensive to include the consequences that might or would result from the deceit or fraud or breach declared on in this complaint, cannot, we think, be a matter of doubt. For the expression of the purpose manifest upon the face of this release, broader terms could not have been chosen. The effect and operation of the unequivocal terms thus employed--unqualified by anything else appearing in the writing--cannot be restricted to claims known to both the parties or to the releasor only, even though a claim or claims existed in favor of the releasor in consequence of the releasee's fraudulent acts or omission in respect of the sales of the two blocks of stock, of which wrongful acts or omissions the releasor was wholly ignorant until after this release was given; and parol evidence would be inadmissible to so restrict the release as to avert its application according to its terms. 34 Cyc. p. 1092; Kirchner v. New Home Sewing Machine Co., 135 N.Y. 182, 187, 188, 31 N.E. 1104; Sherburne v. Goodwin, 44 N.H. 271, 276; Slayton' v. Hemken, 91 Hun, 582, 36 N.Y.Supp. 249, 251; Pierson v. Hooker, 3 Johns. (N.Y.) 68, 3 Am.Dec. 467, cited by this court in Thomason v. Dill, 30 Ala. 444, 454, 455, in support of the familiar rule that a written contract, free from ambiguity, is conclusive upon the parties, precluding, in the absence of...