Middendorf, Williams & Co., Inc. v. Alexander Milburn Co.

• Court: Maryland Supreme Court
• Writing for the Court: PATTISON, J.
• Citation: Middendorf, Williams & Co., Inc. v. Alexander Milburn Co., 107 A. 7, 134 Md. 385 (Md. 1919)
• Decision Date: 23 April 1919
• Docket Number: 20.
• Parties: MIDDENDORF, WILLIAMS & CO., Inc., v. ALEXANDER MILBURN CO.

107 A. 7

134 Md. 385

MIDDENDORF, WILLIAMS & CO., Inc., v. ALEXANDER MILBURN CO.

No. 20.

Court of Appeals of Maryland

April 23, 1919

Appeal from Superior Court of Baltimore City; Walter I. Dawkins Judge.

Action by the Alexander Milburn Company, a corporation, against Middendorf, Williams & Co., a corporation. From judgment for plaintiff, defendant appeals. Reversed, and new trial ordered.

Argued before BOYD, C.J., and BRISCOE, BURKE, THOMAS, PATTISON URNER, and CONSTABLE, JJ.

Enos S Stockbridge and Vernon Cook, both of Baltimore, for appellant.

J. Kemp Bartlett, of Baltimore (J. Kemp Bartlett, Jr., of Baltimore on the brief), for appellee.

PATTISON J.

The appeal in this case is from a judgment recovered in the superior court of Baltimore by the appellee, the Alexander Milburn Company, a corporation engaged in the business of manufacturing searchlights used by contractors and others and generators for producing oxygen and acetylene gases for welding purposes, against the appellant, a brokerage corporation. Both plaintiff and defendant are located and doing business in the city of Baltimore.

The declaration upon which the suit was brought contains the usual common counts and one special count. A demurrer to the special count was overruled, and the pleas of never promised and never indebted as alleged were filed to the declaration.

In the course of the trial 28 exceptions were taken to the rulings of the court. Twenty-seven of these were upon the admission or rejection of evidence and one upon the prayers.

We will first dispose of the demurrer to the special count of the declaration. It is claimed by the appellants that said count does not state a good cause of action in that it is "too vague, indefinite, and uncertain to amount to a legally binding contract."

"Courts very reluctantly reject an agreement regularly and fairly made as unintelligible or insensible. It will be sustained if the meaning of the parties can be ascertained, either from the express terms of the instrument or by fair implication." Elliott on Contracts, vol. 1, § 170.

"The law does not favor, but leans against, the destruction of contracts because of uncertainty. Therefore the courts will, if possible, so construe the contract as to carry into effect the reasonable intention of the parties if that can be ascertained." 6 R. C. L. p. 645.

The rule of law upon this subject is nowhere better stated or more clearly defined than in Thomson v. Gortner, 73 Md. 482, 21 A. 373, where it is said:

"The law is too well settled to admit of doubt that, in order to constitute a valid verbal or written agreement, the parties must express themselves in such terms that it can be ascertained to a reasonable degree of certainty what they mean. And if an agreement be so vague and indefinite that it is not possible to collect from it the full intention of the parties, it is void; for neither the court nor the jury can make an agreement for the parties. Such a contract can neither be enforced in equity nor sued upon at law."

See Delashmutt, Ex'r, v. Thomas, 45 Md. 140; Gelston & Meyenberg v. Sigmund, 27 Md. 334; Myers v. Forbes, 24 Md. 598; and Howard et al. v. Carpenter, 11 Md. 259.

The rule of law by which the courts are to be governed in these cases is well and clearly established, but the difficulty is in applying it to the facts of each particular case.

By the agreement set out in the declaration the defendant was to set in motion the facilities available to it for the sale of $46,000 of 7 per cent. preferred stock of the plaintiff corporation and that it would make a bona fide effort to sell said stock, utilizing all the facilities available to it, giving to the plaintiff the benefit of the financial standing, the financial connections, and the experience of the defendant in financing enterprises and selling stock and other securities, for which service it was to receive as and for its compensation the sum of $5,000. This obligation, however, was assumed by the defendant upon the condition that the plaintiff corporation should promptly cause its charter to be amended by increasing its capital stock from $62,000 to $200,000 and by providing for the issuance of $46,000 of 7 per cent. preferred stock, with convertible privileges, and amend its by-laws by providing for two additional directors.

In addition to these requirements it was to acquire ownership of certain domestic, Canadian, and foreign letters patent and patent rights then owned by Alexander F. Jenkins, president of the plaintiff corporation, and it was also to enter into a contract of employment with said Jenkins for a period of three years.

The declaration alleges that such amendments to the charter and by-laws were promptly made, that said letters patent and patent rights were promptly acquired by purchase, and that a contract of employment was entered into with said Jenkins, pursuant to said agreement. When this had been done, the defendant was notified of the same by the plaintiff and was called upon "to set in motion the defendant's facilities for selling said stock," but "the defendant refused and does still refuse to make any effort whatever to sell said stock and has refused and still refuses to perform its part of said agreement, notwithstanding repeated demands made upon it by the plaintiff."

The declaration further alleges "that the aforesaid issue of 7 per cent. preferred stock, with convertible privileges, would have been sold at and for the value of said shares if the defendant had performed its part of said agreement."

It is then alleged that the plaintiff in performing its part of said agreement "incurred and paid a large amount of expense and assumed obligations it would not otherwise have incurred, paid, or assumed; that, incurring and paying such expense and assuming such obligations, the plaintiff suffered and sustained a loss which it would not have suffered or sustained but for the undertaking on the part of the defendant to do and perform the acts and things hereinbefore recited to be done and performed on the part of the defendant and the defendant's breach of said undertaking."

There should, we think, be no difficulty in ascertaining the meaning of the parties as expressed by the agreement. The defendant, as alleged in the declaration, was at the time of making said agreement and prior thereto established in the private banking and brokerage business, possessing extensive facilities and financial connections for the financing of enterprises similar to that in which the plaintiff was at the time engaged.

The defendant was not to purchase the stock mentioned, nor did it guarantee its sale, but it was to set in motion all of its available facilities and use all its financial connections, as well as its knowledge acquired by long experience, in a reasonable and bona fide effort to sell said stock. That such was the meaning of the parties to the agreement can be ascertained to a reasonable degree of certainty from its express terms as set out in the declaration.

The agreement does not state with particularity everything that the defendant was to do, or name every facility that was to be employed by it, or state the length of time it was to continue its efforts in an attempt to sell the stock, nor was it essential to its validity that it should have so stated.

The agreement states with sufficient definiteness not only what the plaintiff was to do, but also what was to be done by the defendant. It was not only to offer the stock for sale, but in connection with that offer it was to set in motion all its available facilities, and was to use its financial associations or connections helpful to it in the sale of the stock.

The agreement embraces more than a mere offer to render personal services. It includes within its provisions the use of what in this case may be considered valuable assets of the defendant that would largely aid in the accomplishment of the object for which such services were to be rendered.

The declaration alleges that the defendant refused and failed to do those things that it had agreed to do, and that, had it done so, the stock would have been sold at and for the par value of its shares. Upon the allegations contained in the declaration the defendant is, in our opinion, liable to the plaintiff for all damages suffered by it that were the direct and natural result of an unjustifiable refusal and failure by the defendant to perform its part of the agreement, or for special damages sustained by it, under special circumstances, under the rule hereinafter stated.

We have carefully examined the cases cited by the defendant as bearing upon this branch of the case, but we do not regard them as analogous to the case before us. The demurrer was properly overruled.

The court granted the prayer of the plaintiff and the fourth, fifth, seventh, eighth, and eleventh prayers of the defendant, but refused its first, second, third, sixth, ninth, and tenth prayers.

The jury were instructed by the plaintiff's prayer:

That, if they found the defendant had agreed with the plaintiff to offer for sale its preferred stock mentioned in the evidence, "and that the defendant refused to make any effort to sell said shares of stock, then the verdict of the jury should be for the plaintiff, and if the jury shall find from the evidence that defendant required that the plaintiff, as a condition precedent to the offering of the plaintiff's preferred stock for sale, that the plaintiff should purchase certain patent rights mentioned in the evidence, and should cause its charter and by-laws to be amended, and if the jury shall find from the evidence that the plaintiff purchased such patent rights and caused its charter and by-laws to be amended, and shall

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