Nichols v. Seaks

• Decision Date: 06 January 1941
• Docket Number: No. 12.,12.
• Citation: Nichols v. Seaks, 296 Mich. 154, 295 N.W. 596 (Mich. 1941)
• Parties: NICHOLS v. SEAKS.
• Court: Michigan Supreme Court

296 Mich. 154

295 N.W. 596

NICHOLS

v.SEAKS.

No. 12.

Supreme Court of Michigan.

Jan. 6, 1941.

Suit by John C. Nichols against William L. Seaks for an accounting and for injunctive relief. From an adverse decree, plaintiff appeals.

Decree reversed, and cause remanded, with directions.Appeal from Superior Court of Grand Rapids, in Chancery; Thaddeus B. Taylor, Judge.

Argued before the Entire Bench

Annis & Cooper and McCobb & Heaney, all of Grand Rapids, for appellant.

Smedley & Stribley, of Muskegon (Linsey, Shivel, Phelps & Vander Wal, of Grand Rapids, of counsel), for appellee.

BUTZEL, Justice.

Plaintiff and appellant sought an accounting and injunctive relief. He claims that he and defendant entered into a written undated contract in January, 1937, in which plaintiff agreed to make available to defendant a ‘program for the sale of annuity and other insurance contracts in connection with the establishment by employers of Pension Trust Plans,’ and to assist defendant in contacting clients and in any other matters of detail necessary to consummate a plan for a particular client, etc.; that defendant agreed not to use the plan or to attempt to use it without disclosing to plaintiff the name of the prospective purchaser, and not to approach any prospects, directly or indirectly, except in conjunction with plaintiff or without his written consent; that commissions, after deducting expenses, were to be divided equally; that a particular firm of attorneys was to handle all tax and legal problems, and that defendant was not to divulge any of the knowledge or information obtained in connection with the contract to anyone without plaintiff's written consent. The contract also provided that because of the difficulty in computing damages, defendant was to pay the sum of $25,000 as liquidated damages in the event of a breach.

Plaintiff's use of a photostatic copy as secondary evidence of the contract was explained by other testimony from which he asked the trial court to conclude that defendant had unauthorizedly abstracted the original instrument from plaintiff's office files. Five independent similar contracts, each providing for $25,000 liquidated damages, were entered into by plaintiff with other parties. Defendant at first denied ever executing a written contract, but claimed that an oral ‘joint partnership arrangement’ was made in the spring of 1937; he later identified as his own a photostatic copy of a signature which plaintiff claimed was attached to a written contract similar to that given to another party and a photostatic copy of which was also introduced. Defendant further claimed that he was induced to enter into the oral agreement by plaintiff's fraudulent misrepresentations, that the plan submitted by plaintiff was unworkable and that he had to make a trip east to the insurance company's home office and work out with his attorney a ‘new and complete pension plan and trust’ that was acceptable to the insurance carriers and to his clients. Defendant further asserted that the general scheme plaintiff had was common knowledge in the field and had been available in tax services and publications since April 1, 1937. Defendant also claimed that he paid plaintiff $400 for a complete release from all liability. The claimed release was in the following form:

‘June 11, 1937.

‘I will give you full release in any claim whatsoever of any part of commission and renewals as belonging to me in accordance with the terms of our contract, if you deliver to me $500.00 in cash by 5 P.M. Friday, June 11, 1937.

‘Signed John C. Nichols

‘Accepted by

‘William L. Seaks

‘June 11, 1937.’

The money was not promptly paid as stipulated in the terms of the offer, but by August 31, 1937, plaintiff had accepted a final payment which made a total of $400. Defendant's check for $100 on August 21, 1937, recited on its face that it was for ‘payt. in full on pension trust contract arrangement.’ The record contains also a check of June 22, 1937, for $194, which bears the following notation: ‘Payt. as per contract arrangement.’ Plaintiff denied that the $100 check contained the recital of full payment at the time he received it, and denied that the instrument set forth above was intended to be a general release, but insisted that it was only to settle plaintiff's share of the commission on one of defendant's sales. Plaintiff admits that he received the $100 in full settlement of the commission for the first insurance contract defendant wrote with the cooperation of the plaintiff.

The trial court found that defendant did sign a contract in writing in January, 1937, whereby plaintiff agreed to reveal his insurance pension trust plan, and defendant agreed to share his commissions; that plaintiff proposed in writing on June 11, 1937, to accept $500 in full for any claims against defendant under the contract, and that this was not accepted immediately, but that on August 31st, defendant made a final payment of $100, making a total of $400 which plaintiff accepted. The trial court mentioned plaintiff's claim that this $400 was intended to be limited to the commission on one sale only, but the court made no finding as to this claim. The finding further states that the contract is ‘ambiguous and uncertain,’ for the plan could be ascertained only by testimony, and that the plan was no secret conception unknown to others or which could not be used by any other individual engaged in the sale of life insurance. Therefore, the trial court concludes, ‘the contract was of no force or effect from its inception.’ Accordingly, the bill was found to be without merit and dismissal was decreed.

The conclusion of the trial court are erroneous in certain respects and incomplete as to others. Destruction of contract because of indefiniteness is not favored. Waites v. Miller, 244 Mich. 267, 221 N.W. 171;Shelton v. Wilson, 274 Mich. 433, 264 N.W. 854;Restatement, Contracts, § 32: ‘In interpreting doubtful agreements a court will, if possible, attach a sufficiently definite meaning to a bargain of parties who evidently intended to enter into a binding contract and ambiguous words in an obligation should be interpreted most strongly against the party who used them.’ 1 Williston on Contracts, § 37, p. 100.

The letter of the contract is sufficiently clear and definite to manifest the mutual assent of the contracting parties. Plaintiff agreed to explain his plan to defendant and to make available certain sales data; he promised to assist in presenting the plan to clients, if such aid were requested, and to help in the computation of figures; he agreed to arrange conferences with his attorneys, accountants, and tax and other public authorities when necessary in the consummation of a plan. Defendant's obligations, affirmative and negative, are sufficiently clear to show the mutual undertakings. As the promises and performances to be rendered by each party are set forth with reasonable certainty, the agreement does not fail for indefiniteness. Restatement, Contracts, § 32; 1 Williston on Contracts, § 37. So long as the essentials are defined by the parties themselves, the law supplies the missing details by construction. See Waites v. Miller, 244 Mich. 267, 221 N.W. 171;Siegel v. Sharrard, 276 Mich. 668, 268 N.W. 775; 1 Williston on Contracts, § 37 et seq.; Restatement, Contracts, § 32. The fact that part of the subject matter of the agreement the pension trust plan, is not set forth does not militate against, a conclusion that the minds had met, even though there must be resort to testimony dehors the instrument to reveal what was the plan to which their writing had reference. The subject matter of which the instrument speaks may be identified by evidence aliunde without infringing the rule which precludes contradiction or variance of the writing by parole. Columbus Sewer Pipe Co. v. Ganser, 58 Mich. 385, 25 N.W. 377,55 Am.Rep. 697;Borden v. Fletcher's Estate, 131 Mich. 220, 91 N.W. 145;O'Dell v. Day, 214 Mich. 566, 183 N.W. 17;Juif v. State Highway Commissioner, 287 Mich. 35, ...