Johnston v. Miller

• Citation: 326 Mich. 682,40 N.W.2d 770
• Decision Date: 09 January 1950
• Docket Number: No. 45,45
• Parties: JOHNSTON v. MILLER.
• Court: Michigan Supreme Court

Page 770

40 N.W.2d 770

326 Mich. 682

JOHNSTON v. MILLER.

No. 45.

Supreme Court of Michigan.

Jan. 9, 1950.

Frank H. Miltner, Cadillac, for plaintiff and appellant.

Jack W. Korn, Cadillac, for defendant and appellee.

Before the Entire Bench.

CARR, Justice.

This case involves the interpretation of a contract between plaintiff and defendant. In the fall of 1941, plaintiff inserted an advertisement in a newspaper stating in effect that he had sheep 'to put out.' Following negotiations concerning the matter, the parties entered into the following written agreement, which appears as exhibit B to the reply filed in the case:

'October 17, 1941

'On this day and date I, Nelson Johnston let to E. E. Miller (64) Sixty-four sheep, on terms (3) years to double. And to be returned in yews [ewes] (3) three years old or not more than (5) five years old. The Bucks are to be furnished by the holder (E. E. Miller).

'E. E. Miller

'Signature of holder

Nelson Johnston

Signature of owner'

In accordance with the agreement plaintiff turned over to defendant 64 sheep. Defendant accepted the flock and proceeded to handle it. The venture did not work out profitably. At the end of the contract term less than 20 sheep survived. No claim is made, however, that the sheep died because of defendant's failure to properly care for them. Neither is there any claim that the sheep were not in good condition at the time they were turned over by the plaintiff.

Instead of adjusting their respective rights and liabilities under the contract at its expiration, the parties entered into a new agreement, in writing, in form identical with the instrument above quoted, except as to date and number of sheep. It is agreed that it was actually signed subsequently to October 17, 1944, although such date appears on it. It provided for the letting of 128 sheep, and the signatures of the parties were witnessed. As before noted, defendant at the time had less than 20 sheep of the original flock. He did not purchase others in order to raise the flock to the number stated in the later agreement, nor did plaintiff turn over more sheep to him.

On October 17, 1947, when the second contract expired, defendant had in his possession five sheep of the original number turned over to him by the plaintiff six years before, and no increase from the flock. Plaintiff claimed that under the contract he was entitled to 256 sheep of the kind set forth in the contract, that is, ewes between three and five years of age. On refusal of defendant to deliver such number of sheep the instant suit was started, plaintiff seeking recovery based on the contract dated October 17, 1944, for the fair market value of 256 sheep as of the end of the specified term. It was his claim, as set forth in the declaration, that defendant had breached the contract by not turning over the sheep. Defendant's answer denied liability.

At the conclusion of the proofs on the trial in circuit court plaintiff moved for a directed verdict in his behalf, leaving to the jury merely the question as to the amount of recovery. Said motion was based primarily on the claim that defendant, under the provisions of the contract, assumed the obligation to turn over to plaintiff, at the expiration of the term stated, twice the number of sheep specified in the agreement as let to him, such sheep to be of the age and sex specified, and that such failure resulted in liability for the fair market value of the sheep. It was further claimed that by entering into the contract on which the suit was based the parties had placed a definite construction on the first agreement, and impliedly on the second, and that defendant was estopped to insist on a different construction. The motion was denied. The trial court submitted the case to the jury and a verdict in favor of the defendant was returned. In his charge the trial judge stated in substance that the transaction between the parties amounted to a bailment, and that: 'Mr. Miller was not the insurer of that property. He took them under this agreement, and he was to return a certain number of sheep. Of course if the sheep weren't there and he couldn't raise the ewes, he couldn't return them. The contract does not provide for anything else except the return of the property at the end of three years. You will remember what I said about the matter of bailment.'

The principal question at issue on appeal is whether defendant, under the terms of the contract on which plaintiff's alleged cause of action is based, obligated himself to deliver to plaintiff, on the expiration of the term stated in the contract, 256 ewes between three and five years of age. In construing the writing we must give to the language used by the parties its ordinary significance, as far as possible. The circumstances surrounding the making of the agreement and the purpose to be accomplished thereby are entitled to consideration in arriving at the actual intent of the parties. It must be assumed that the parties meant what they said, and, in the absence of any claim to the contrary, that they understood the nature of the obligations assumed by each as expressed in the writing. The various provisions of the undertaking as executed must be construed together and force and effect given to each. Basic rules to be applied in arriving at a correct interpretation have been repeatedly recognized and declared by this court. Gee v. Olson, 320 Mich. 274, 30 N.W.2d 867; Moulton v. Lobdell-Emery Manufacturing Company, 322 Mich. 307, 33 N.W.2d 804; Laevin v. St. Vincent de Paul Society of Grand Rapids, 323 Mich. 607, 36 N.W.2d 163.

In Prowant et al. v. Sealy et al., 77 Okl. 244, 187 P. 235, it was said:

'The intention of the parties must be deduced from the entire agreement, not from any part or parts of it, and, where a contract has several stipulations, the intention of the contracting parties is not expressed by any single clause or stipulation, but by every part and provision in it, which must all be considered together, and so construed as to be consistent with every other part.' (Syllabus by the court.)

'We are not authorized to presume that the parties to the contract employed the words uselessly, but must presume that they were used designedly and for some purpose; otherwise they would not have been incorporated in the agreement. * * * The rule that effect should be given, if possible, to all parts of a contract, is generally applied by all the courts, and we cannot reject this part of the contract it the words will admit of any reasonable and practicable construction that will sustain them as an essential part of the agreement. As stated in State ex rel. Davis v. Mortensen [69 Neb. 376, 95 N.W. 831, 5 Ann.Cas. 291], supra, a construction that will completely emasculate a clause of a contract will not be adopted, if any other reasonable construction is admissible.'

The agreement in question here is abbreviated and lacks desirable certainty and particularity. Certain of its terms indicate that the parties considered that ownership of the property remained in the plaintiff, that the transaction amounted to a bailment, and that the sheep specified as turned over to defendant by plaintiff were to be returned. Plaintiff is designated as 'owner' and defendants as 'holder.' No reference is made to an increase in the flock except as it is implied in the words 'to double.' Unquestionably the parties had in mind that the flock would increased under the care of the defendant. The provision with reference to the delivery of sheep to the plaintiff, at the expiration of the term, is specific as to the age and sex thereof, indicating that the parties intended that defendant should deliver to plaintiff at the end of the three year period twice the number of sheep received.

In the original contract executed in 1941 at may be assumed that the parties had in mind that ewes in the original flock that were between the designated ages might be returned to plaintiff at the end of the period. It is obvious, however, that no sheep from the increase of the flock could be so delivered because none would be three years old at the time. Presumably the parties recognized such fact when they executed the agreement, and in consequence had in contemplation that in order for defendant to turn over to plaintiff on the 17th of October, 1944, 128 ewes between three and five years of age it would be necessary for him to procure at least a part of the animals other than from the flock, notwithstanding any increase therein. In view of the situation existing and the express terms of the writing, we cannot read into this contract a provision to the effect that plaintiff was not entitled to the delivery of sheep not included in the original flock or in the increase thereof.

The agreement on which the instant suit was based is subject to the same interpretation as is the original undertaking. Evidently the parties did not wish to adjust their respective rights and obligations in October, 1944, and therefore entered into the contract for a further term of three years. Such contract specified the number of sheep that plaintiff claims he was entitled to, under the first agreement, as being 'let' to defendant. There is some dispute in the testimony of the parties with reference to the preparation and execution of the second contract. Plaintiff as a witness in his own behalf stated in substance that he consulted defendant with reference to the terms of the new agreement, and that defendant expressly told him to insert, the figure '128' therein. Defendant denied any such conversation and claimed that the draft of the contract was forwarded to him by mail for his signature. He conceded, however, that at the time he signed the instrument he knew its terms.

Under the circumstances there is much force in the argument of counsel for plaintiff that the parties, by the execution of the second agreement, placed a definite construction on the first...