Stratton v. Cartmell

• Decision Date: 01 May 1945
• Docket Number: 1047
• Parties: HAROLD B. STRATTON v. JAMES R. CARTMELL
• Court: Vermont Supreme Court

42 A.2d 419

114 Vt. 191

HAROLD B. STRATTON v. JAMES R. CARTMELL

No. 1047

Supreme Court of Vermont

May 1, 1945

February Term, 1945.

Construction of Written Instruments.

1. Among the rules for the construction of written instruments to ascertain the intention of the parties are the following:

(a) The intention of the parties, when ascertained from the entire instrument, prevails over technical terms or their formal arrangement.

(b) It is the duty of the court, if possible, to construe the instrument so as to give effect to every part, and form from the parts a harmonious whole.

(c) While the language of a written instrument governs in determining its effect and operation, in construing such language the nature and condition of the subject matter, the purposes sought to be accomplished, and the circumstances in which the parties contract, tending to throw light on their apparent intention at the time the instrument was executed may be considered.

(d) Doubtful language in a contract should be construed most strongly against the party who framed and wrote it.

(e) But if the language of the instrument is clear and unambiguous its intent cannot be altered by evidence of extraneous circumstances; and in such situation the instrument is to be interpreted by its own language, and the understanding of the parties must be deemed to be that which their own written instrument declares.

2. Resort to the practical construction of a written instrument shown by the conduct of the parties as a means of interpreting the instrument is permissible only when the meaning of the instrument is doubtful.

3. Doubtful findings are to be so read as to support the judgment, if they reasonably may be.

ACTION OF CONTRACT to recover commission. Trial by court, Rutland County Court, March Term, 1944, Black, J., presiding. Judgment for the plaintiff.

Judgment reversed, and judgment for the plaintiff for $ 407.84, with interest thereon from date of the judgment below, and costs below, less the defendant's costs in this Court.

Wayne C. Bosworth for the defendant.

Fenton Wing & Morse for the plaintiff.

Present MOULTON, C. J., SHERBURNE, BUTTLES, STURTEVANT and JEFFORDS, JJ.

OPINION

SHERBURNE

This is a suit to recover a commission upon the sale of a locker plant. From the facts found it appears that at all times material the plaintiff was the branch manager of defendant's store in Rutland. In March, 1941, the plaintiff received a letter, Exhibit 1, from the defendant addressed to him and signed by the defendant, the body of which reads as follows:

"Confirming our agreement in regard to the basis on which our branch managers are to work from March 1st, 1941, on is as follows:

"Manager is to be paid on a commission of 12% on all his personal sales, together with a 2% override on all sales made by salesmen who are on a commission basis.

"All sales must carry at least a 10% net profit for this commission to be paid.

"The drawing account must be kept within the commission limitation.

"All of the above is based on the monthly operation. Other conditions of this agreement will be made later."

We quote findings 5, 6, 7, 8, 9, and 10 so far as material:

"(5). On or about May 17, 1943, the plaintiff brought about and was instrumental in bringing about the sale of the Fair Haven Locker Plant so- called, and such sale was the plaintiff's personal sale.'

"(6). The selling price of the Fair Haven Locker Plant was Thirteen thousand, seven hundred and seventy-seven dollars and ninety-five cents ($ 13,777.95).

"(7). The cost to the defendant of the Fair Haven Locker Plant was Eleven thousand, four hundred and twenty-one dollars and twenty-five cents ($ 11,421.25).

"(8). Plaintiff's services relative to the sale of the Fair Haven Locker Plant were rendered by him to the defendant in pursuance of and in reliance on Plaintiff's Exhibit No. 1.

"(9). Plaintiff's Exhibit No. 5 is a statement of Federal Income Tax for 1943 withheld by the defendant from wages of the plaintiff and the income tax therein stated to have been withheld includes an income tax based on a 12% commission to the plaintiff on the selling price of the Fair Haven Locker Plant.

"(10). At the time of the trial the defendant had received from the owners of the Fair Haven Locker Plant one promissory note in the amount of $ 3,000.00, and a second note in the amount of $ 2,000.00. The balance of the sales price referred to in paragraph No. 5 has not been paid the defendant and stands on open account."

It was conceded that the defendant was entitled to have the sum of $ 806.74 deducted from any commission the plaintiff might be entitled to receive. Judgment was entered upon the findings of fact and the concession for the plaintiff to recover $ 846.61. This sum was arrived at by allowing a commission of 12% upon the selling price of the locker plant and deducting therefrom $ 806.74. The only exception is to the judgment. Under this exception the defendant claims that the lower court misconstrued the terms of Exhibit 1 relative to the amount of commission, and that on the facts found the suit is premature.

There are certain well established rules for the construction of written instruments to ascertain the intention of the parties which are applicable to this case. I. The intention of the parties, when ascertained from the entire instrument, prevails over technical terms or their formal arrangement. Kennedy, Admr. v. Rutter, Admr., 110 Vt. 332, 338, 6 A.2d 17, and cases cited. II. It is the duty of the court, if possible, to construe the instrument so as to give effect to every part, and form from the parts a harmonious whole. Freeguard v. Bingham, 108 Vt. 404, 406, 187 A. 801; Vermont Shade Roller Co. v. Burlington Traction Co., 102 Vt. 489, 502, 150 A. 138 and cases cited. III. While the language of a written instrument governs in determining its effect and operation, in construing such language the nature and condition of the subject matter, the purposes sought to be accomplished, and the circumstances in which the parties contract tending to throw light on their apparent intention at the time the instrument was executed, may be considered. Freeguard v. Bingham, supra; Vermont Shade Roller Co. v. Burlington Traction Co., supra, and cases cited; Vermont Kaolin Corp. v. Lyons, 101 Vt. 367, 376, 143 A. 639, and cases cited. Stated a little differently, when the intent of the parties upon the face of the instrument is doubtful, or the language used will admit of more than one interpretation, the court will look at the situation and motives of the parties, the subject matter of the contract, and the object to be attained by it; and will receive parol evidence to this end. Kinnear & Gager Mfg. Co. v. Miner, 88 Vt. 324, 326, 92 A. 459; Bacon v. Dodge, 62 Vt. 460, 20 A. 197; Wing v. Cooper, 37 Vt. 169, 178; Lowry v. Adams22 Vt. 160, 165. IV. Doubtful language in a contract should be construed most strongly against the party who framed and wrote it. Manchester Marble Co. v. Rutland Ry. Co., 100 Vt. 232, 242, 136 A. 394, 51 A.L.R. 628; 12 Am Jur, Contracts, para. 252. V. But if the language of the instrument is clear and unambiguous its intent cannot be altered by evidence of extraneous circumstances; and in such situation the instrument is to be interpreted by its own language, and the understanding of the parties must be deemed to be that which their own written instrument declares. Vermont Marble Co. v. Eastman, 91 Vt. 425, 444, 445, 101 A. 151; Greene v. Helme, 94 Vt. 392, 396, 111 A. 557; Wood v. James, 93 Vt. 36, 39, 106 A. 566; Freeguard v. Bingham, supra.

The plaintiff claims that the letter, Exhibit 1, is ambiguous. He thinks that he is entitled to his full 12% commission even though the defendant does not get his 10% profit after it is paid. If we assume that the locker plant had been sold at a price of exactly 10% over cost he still insists that he would have been entitled to his 12% commission, even though the defendant after such commission was paid would have lost a little over 3% on the deal. The defendant claims that the letter is unambiguous. He insists that it means, where the sale as here is for a sum that will not yield a 10% profit to him and also allow for a 12% commission to the plaintiff, that the plaintiff is only entitled to the difference between the cost plus 10% net profit and the sale price. He even argues that his 10% profit is equivalent to a 10% commission on the selling price.

Although this letter could well have been more carefully framed the purpose and intent are obvious. The necessary inference is that the defendant has several branch stores and branch managers. All of these branch managers are to be compensated upon a uniform commission basis. As to whether they are to receive the full commission of 12% upon their personal sales depends upon the construction of the sentence "All sales must carry at least a 10% net profit for this commission to be paid."

"Net profit" is usually applied to a...