Salmon Lake Seed Co. v. Frontier Trust Co.

• Decision Date: 25 February 1931
• Citation: 153 A. 671
• Parties: SALMON LAKE SEED CO. et al. v. FRONTIER TRUST CO.
• Court: Maine Supreme Court

153 A. 671

SALMON LAKE SEED CO. et al.

v. FRONTIER TRUST CO.

Supreme Judicial Court of Maine.

Feb. 25, 1931.

Case Reserved from Superior Court, Aroostook County.

Action by Salmon Lake Seed Company and others against Frontier Trust Company. On reservation for final decision by the Supreme Judicial Court.

Judgment for plaintiffs.

Argued before PATTANGALL, C. J., and DUNN, STURGIS, BARNES, FARRINGTON, and THAXTER, JJ.

J. Frederic Burns, of Houlton, and Donald C. O'Regan, of Caribou, for plaintiffs.

Cook, Hutchinson, Pierce & Connell, of Portland, for defendant.

DUNN, J.

The superior court judge presiding in Aroostook county reserved this case, the parties consenting, for final decision by this court, on a report of so much of the evidence as is legally admissible.

Where, as here, the certificate signed by the judge does not state to the contrary, technical questions of pleading are deemed to be waived. Pillsbury v. Brown, 82 Me. 450, 19 A. 858, 9 L. R. A. 94. The initial inquiry of the present report is whether, giving the permissible and relevant evidence the weight and consequence that would be exacted if a jury were trying the facts, the plaintiffs are entitled to recover. Tatro v. Railroad Co., 108 Me. 390, 81 A. 216; Cullinan v. Tetrault, 123 Me. 302, 122 A. 770, 31 A. L. R. 1330.

Nonperformance of a contract in writing is alleged as the cause of action. The contract, omitting signatures, reads as follows:

"This memorandum made this 6th day of May, 1929, between Salmon Lake Seed Company, a corporation, and Arthur R. Gould, hereafter called the parties of the first part, and Frontier Trust Company, a corporation, party of the second part, witnesseth: That the said parties of the first part have sold and agree to deliver to the party of the second part at such loading point on the Aroostook Valley Railroad or on the Bangor and Aroostook Railroad, south of Caribou, as the parties of the first part may elect, Four Thousand and Six Hundred barrels of Green Mountain variety, U. S. Grade No. 1 potatoes, during the digging season of 1929 in lots of not less than Two Thousand barrels each.

"In consideration of the aforesaid agreement the said Frontier Trust Company agrees that upon performance of said agreement it will forever release and discharge said Salmon Lake Seed Company from all liability upon the notes signed by the said Salmon Lake Seed Company and now held by it amounting to the principal sum of $S,500.

"The said Frontier Trust Company further agrees that in the event that it shall receive from said potatoes when sold by it a net amount, after payment of expenses incurred in handling said potatoes, in excess of the sum which may be due on said notes with interest thereon that it will pay over to the said Salmon Lake Seed Company such surplus."

The breach declared was that defendant did not sell the potatoes at the best market price, within a reasonable time after they had been delivered, and pay to the Salmon Lake Seed Company, one of the plaintiffs, the difference in money between what that company owed defendant on certain promissory notes and the net proceeds that there would have been from a sale at that time, but disposed of the potatoes for a wholly inadequate sum, and only credited the company with $66.04.

The defense is based upon the general contention and theory that nowhere, by the words and symbols employed in the statement of the contract, did defendant agree to await delivery of the potatoes before selling them, and that, even inferentially, such intent does not appear.

Opposite counsel agree that, in its first and second paragraphs, the written instrument evidence, not a present sale of potatoes for future delivery, but an executory agreement to barter potatoes for notes.

Plaintiffs' counsel contends that the third paragraph of the contract imposed on the defendant, in respect to selling the potatoes, an undertaking personal in nature, inhibiting assignment of the contract. Counsel for the defendant argue that the practical interpretation and construction of the contract by the parties thereto, as shown by their acts and declarations during its performance and before this controversy arose, is inconsistent with the ground on which plaintiffs now claim to maintain their action.

The issue turns, the briefs concede, upon the interpretation afforded the third paragraph of the contract, read, of course, in connection with the rest of the writing. Actual intention, as expressed in the writing, is the chief thing to be looked to and ascertained. The subject-matter of the contract, and the situation of the parties when the contract was made, are to be considered in determining the meaning of the language used. Words are to be understood in their common and everyday sense, and all parts of the contract construed so as to be given effect. 1 Chitty on Contracts, 103 et seq.

When the contract which covers this action was entered into, the Federal Land Bank had a mortgage on the farm of the Salmon Lake Seed Company. The unsecured liabilities of that company totaled $36,500. Defendant had asked for payment of promissory notes, one maturing in August, and the other in September, aggregating the principal sum of $8,500, from that season's potato crop. "Futures," the term which applies in Aroostook county to transactions in potatoes to be grown, or acquired, prior to delivery in the following fall, were quoted at $1.10 a barrel. Embarrassed by debts, and without available assets, plaintiff company, unless it were aided financially, could not operate its farm. Indeed, the institution of receivership proceedings seemed not unlikely.

The individual plaintiff, Mr. Arthur R. Gould, a man of pecuniary responsibility, came to the aid of the company, and the contract in suit was made.

The joint promise of the plaintiffs that, during the digging season of 1929, they would deliver to defendant a given quantity of a specified variety of potatoes in minimum lots, is expressed in not very difficult words. It is impossible to read the language without becoming convinced of the idea which it was intended to convey.

In consideration of that promise, to analyze the second paragraph of the instrument, defendant promised that it would, on performance by plaintiffs of their part of the contract, forever release and discharge the company from its notes. Otherwise stated, regardless of the market price, defendant would credit, taking interest on the notes into consideration, approximately $1.90 for every barrel of potatoes delivered by plaintiffs, or 80 cents more than the market price for futures at the time of the contract. The meaning of the words employed is not open to reasonable doubt.

One day, later in the month of the contract, the persons who had represented the respective corporations in the execution of that instrument together went to a storage house to engage space for the potatoes to occupy when they should be brought there.

Late in June, or early in July—the testimony is indefinite which—these two men met again. Said one, addressing his speech to the other, "If potatoes keep on going we will soon be able to sell the contract for enough to get the bank out whole." The one addressed replied, "I hope you will," or "I hope you can."

On July 13th, defendant agreed in writing "to sell and convey * * * (the) contract" to one F. H. Vahlsing of New York City, for $1.90 a barrel. Of this, Mr. Sands, the seed company representative, had notice by letter, but did not reply. No notice appears to have been given the other plaintiff.

Instructed by defendant to deliver the potatoes to Mr. Vahlsing, or his firm, plaintiff company proceeded accordingly. From time to time the company advised defendant as to the number of wagon loads delivered. On check-up, full delivery was two barrels short, whereon a check for $4 was sent defendant by plaintiff company. When the check was in hand, on October 29, 1929, defendant cast up...