A contract between the parties as to the sale of, and payment
for, a ranch and cattle, interpreted as to the mode of payment
provided for.
Where a defendant, on a trial, introduces, under the objection
of the plaintiff, parol evidence of what occurred in negotiations
between the parties prior to the making of a contract between them
with a view to the construction of the contract, he cannot, on a
writ of error to review a judgment against him, allege as error the
admission of such evidence.
The case is stated in the opinion.
MR. JUSTICE BLATCHFORD delivered the opinion of the Court.
This is an action at law, brought in the Superior Court of Cook
County, Illinois, by Milton H. Bennett and Robert L. Dunman against
Edward M. McGillin and removed by the defendant into the Circuit
Court of the United States for the Northern District of Illinois.
The suit was brought to recover the sum of $108,150, with interest
at six percent per annum from the 15th of July, 1885. The defendant
pleaded the general issue and sundry special pleas. The plaintiffs
demurred to the latter, the demurrer was sustained, and leave to
amend the pleas was denied. There was also a plea of set-off, to
which there was a replication, joining issue, and there was a
similiter to the plea of the general issue. On the written waiver
of a jury, the case was tried before the court, which found the
issues for the plaintiffs, and also made special findings
Page 132 U. S. 446
and assessed the damages of the plaintiffs at $115,580.55, for
which amount, with costs, judgment was entered in their favor. To
review that judgment, the defendant has brought a writ of
error.
The suit was founded on a written instrument dated April 16,
1885, a copy of which, as set out in the first count of the
plaintiff's declaration, is contained in the margin.
*
Page 132 U. S. 447
There is a bill of exceptions which contains all the evidence
offered on the trial by either party, and the special findings
Page 132 U. S. 448
made by the court. The material parts of those findings are as
follows: the parties executed the contract sued on. At the date of
its execution, the defendant paid to the plaintiffs $25,000, and
also delivered to them his promissory notes of that date for
$75,000, due and payable July 25, 1885, with interest at eight
percent per annum. Those notes were thereafter, and before
maturity, transferred for value, and were, after the commencement
of this suit, paid in full by the defendant to the legal holders
thereof.
On and prior to July 14, 1885, the plaintiffs delivered to the
defendant, and he accepted, the ranch and ranch outfit as called
for and described in the contract, and he took possession of the
same, and at the same time they delivered to him 4,854 head of the
cattle called for by the contract, which were accepted by him, and
were the only cattle delivered by them to him on the contract.
There was a deficiency of 7,646 cattle in the number called for by
the contract. This deficiency at the rate of $25 per head, amounted
to $191,150, which the defendant was entitled to have credited upon
the $400,000 which he was, by the contract, to pay to the
plaintiffs for the ranch, ranch outfit, and cattle. The failure of
the plaintiffs to deliver the full number of cattle called or by
the contract was by reason of heavy losses of cattle sustained by
them, from cold and starvation, during the winter of 1884 and the
spring of 1885, whereby their herd was reduced from about the
number called for by the contract to the number actually delivered.
When they made the contract, they in
Page 132 U. S. 449
good faith believed that they had, and should be able to deliver
to the defendant, the full number of 12,500 head, and were not
aware of the losses until they attempted to round up or collect
their cattle at about the time the delivery was to be made. Neither
the defendant nor his agents or employees had any information that
the plaintiffs would not be able to deliver the 12,500 head of
cattle until notified by the latter, on the 14th of July, 1885,
that they had delivered all the cattle belonging to the ranch, and
could not deliver any more. Before the 1st of July, 1885, the
defendant had caused a deed to be made out and signed and
acknowledged by himself and his wife conveying to the plaintiffs
the 84 acres of land in Cook County, Illinois, mentioned in the
contract, but there was an apparent encumbrance upon the land as
shown by the record of land titles in Cook County by a trust deed
dated June 28, 1878, to one Manning, as trustee, to secure the
payment of $40,000 from the defendant to one Sawyer, and that trust
deed was not released and discharged until December 5, 1885; but in
fact the indebtedness secured thereby had been fully paid on or
before July 1, 1885. On the 15th of July, 1885, the plaintiffs did
not transfer or offer to transfer to the defendant the two leases
mentioned in the contract, and the parties agreed to meet at Kansas
City, Missouri, within a few days after the said 15th of July, and
then endeavor to adjust and settle all differences between them in
regard to the contract. They did so meet in Kansas City on the 17th
of July, and the defendant then offered to convey to the plaintiffs
the 84 acres of land in Cook County, on their paying to him $59,
150, which conveyance the plaintiffs refused to accept on those
terms. Thereupon the defendant, to avoid litigation and as a
compromise, as he said, offered to convey to the plaintiffs
fifty-four acres of the Cook County land, in full payment of the
balance due from him to them for the ranch and cattle. The
plaintiffs refused to accept such offer, but the defendant did not
tender any deed, either of the whole or of any part of the land.
After such delivery of the ranch, ranch property, and cattle to the
defendant, the plaintiffs insisted that there was due to them from
him $108,850, which should be divided
Page 132 U. S. 450
into two equal amounts and secured by the notes of the
defendant, one payable on July 1, 1886, and the other on November
1, 1886, with interest on each note at the rate of eight percent
per annum. The plaintiffs also insisted that the sum of $191,150,
to be credited to the defendant on the $400,000 purchase price to
be paid for the ranch and cattle, should be applied as a credit to
extinguish the payment to be made in the Cook County land, but the
defendant refused to give the notes for $108,850, as demanded by
the plaintiffs, and insisted that there was no cash payment or
money due from him to them. The defendant declined to settle unless
the plaintiffs would take in settlement the Cook County land.
Thereupon the defendant, by way of compromise, offered to the
plaintiffs that if they would repay to him the $25,000 cash paid by
him, and would return to him his notes for $75,000, given under the
contract, he would surrender to them the possession of all property
delivered, throw up the contract, and stand the loss of all moneys,
amounting to about $5,000, expended by him on the ranch. The
plaintiffs declined this offer, stating that they had used the
money and parted with the notes, and that the acceptance of the
offer was entirely beyond their control. At the meeting in Kansas
City, the plaintiffs advised the defendant of the amount which they
had advanced for rent on the leases named in the contract
subsequently to July 15, 1885, and which was to be refunded by the
defendant, and thereafter the latter paid said rental, and the
plaintiffs duly transferred the leases to him. In the preliminary
negotiations between the parties which resulted in the contract,
the defendant insisted that he would not purchase the ranch and
cattle at the price of $400,000 unless the plaintiffs would take
his Cook County land at the sum of $168,000, and the plaintiffs
insisted that they would not sell for $400,000, unless they could
receive about $250,000 in money, being willing to take the balance
of such purchase price in the eighty-four acres of Cook County
land. Before the contract was entered into, and while the
negotiations for it were going on, the plaintiff Bennett visited
Chicago and examined the Cook County land. On these findings of
fact, the court found against the defendant,
Page 132 U. S. 451
and he made a motion to set aside such finding, and for a new
trial. The motion was denied and the defendant excepted. He then
moved in arrest of judgment, but the motion was denied, and he
excepted. The court then rendered judgment upon the findings in
favor of the plaintiffs and against the defendant, and the latter
excepted. There is no exception by the defendant to any ruling of
the court in the course of the trial, and the only question open
for consideration is whether the judgment is supported by the
special findings.
The opinion of the circuit court, held by Judge Blodgett,
accompanying its findings and forming part of the record, is
reported as
Bennett v. McGillan, 28 F. 411. The opinion
states that the controversy in the case is as to whether the
plaintiffs were bound to accept the Cook County land at the price
of $168,000 and make up in cash the deficiency in that price, or
whether the plaintiffs could insist that the credit for the
$191,150 shortage on the cattle should be applied first to
extinguish the payment of $168,000 to be made in Cook County land,
and then upon the amount to be secured by the $132,000 of notes to
fall due in July and November, 1886, thus leaving a balance of
$108,150 due to the plaintiffs, and that the suit to recover that
balance was brought on the ground that, the defendant having
refused to give his notes, such balance became at once a money
demand.
The court took the view that when the actual count of the cattle
showed a shortage of 7,646 head in the number necessary to make up
the 12,500, the defendant might properly have refused to accept the
property and have put the plaintiffs in default on their part of
the contract, but that he elected to accept what the plaintiffs had
to deliver, and must be held to have assented thereby to such
readjustment of the terms of the contract as was made necessary by
the changed facts; that the contract gave to the defendant the
option of paying $168,000 of the purchase money by conveying the
Cook County land; that if the defendant declined to make the
conveyance, or was unable to give a good title, the $168,000 would
at once become a money payment, payable in cash on the 15th of
July,
Page 132 U. S. 452
1885, and that if the plaintiffs delivered the whole number of
12,500 cattle, they would be entitled to the two notes of $66,000
each and also to a deed of the Cook County land, or to the $168,000
in cash in case the defendant should refuse or be unable to make a
deed.
The court was therefore of opinion that the $168,000 was to be
treated as a present or cash payment; that the deficiency in
cattle, of $191,150, being 7,646 head at $25 per head, which was to
be credited to the defendant should be appropriated in liquidation
of the cash payment of $168,000, such credit being thus applied to
the cash payment which the defendant would be called upon to make
in case he should be unable to make the title at the time called
for; that the $168,000 to be liquidated by the land was a present
payment, whether made in money or land; that if, by the terms of
the contract, the defendant was entitled to a credit equal to or
exceeding the $168,000, that credit should be applied thereon,
rather than upon the deferred payments to be evidenced by notes,
because the $168,000 was a payment down, to be made on the 15th of
July, 1885; that therefore as $100,000 had been paid in cash on the
$400,000 purchase price, leaving $300,000 due, a credit thereon of
the $191,150 deficiency in cattle left due to the plaintiffs
$108,850, for which amount the court held that the defendant should
have given his notes, payable in July and November, 1886, with
interest at eight percent per annum, and that, as he declined to
give such notes or any notes, such balance became a present demand,
for which the plaintiffs could sue. It therefore ordered judgment
for the plaintiffs for $108,850, with interest at six percent from
July 15, 1885.
Although, as appears by the bill of exceptions, the defendant at
the trial introduced evidence, under the objections and exceptions
of the plaintiffs, of the circumstances attending the execution of
the contract, of the relative situation of the parties, and of the
negotiations, correspondence, and interviews between them and their
agents leading up to its execution to enable the court better to
understand and construe the contract, the defendant now seriously
alleges as error the admission of such parol evidence. The point is
not tenable.
Page 132 U. S. 453
It appears from the findings of fact that the court considered
the evidence so introduced by the defendant, and he cannot now
object to it.
We are of opinion that the conclusion of law of the circuit
court from the findings of fact was correct. Of course the credit
of $191,150 for the 7,646 head of cattle deficient at $25 per head
was not intended by the contract to be applied on the cash payment
of $25,000, made April 16, 1885, or on the payment of $75,000
provided for by the promissory notes made April 16, 1885, and due
July 25, 1885. The question of a shortage in the number of cattle
was not to be determined, and was not determined, before the 15th
of July, 1885, and the contract does not provide for repaying any
part of the $100,000. Therefore the credit of $191,150 could be
applied only on the $300,000 remaining unpaid on the 15th of July,
1885. On that day, the payment of $168,000 was to be made. By the
contract, if there was an excess of cattle over 12,500 head, the
payment to be made by the defendant on that day would be more than
$168,000 (exclusive of the $132,000 payable in 1886), but that
excess was to be paid in cash. If there was a shortage in the
number of cattle and a credit to be made to the defendant therefor
on the $400,000 purchase price, the amount of that credit was to be
made on the 15th of July, 1885, the same day the $168,000 was to be
paid. It is clear, therefore, that the amount of the excess was to
be added to that payment or the amount of the credit was to be
deducted therefrom. The payment to be made on the 15th of July,
1885, would be greater or less than the $168,000 as the number of
cattle exceeded or fell short of 12,500 head. The $108,850 became
due July 15, 1885, and the defendant, according to the terms of the
contract, ought then to have given his notes therefor, payable,
one-half July 1, 1886, and one-half November 1, 1886. He refused to
give such notes. As the payments to be made July 1, 1886, and
November 1, 1886, were not due on July 15, 1885, and a vendors'
lien was expressly reserved in respect of those payments, there is
no solution of the problem except to deduct from the $191,150
deficiency in cattle the $168,000 payment to be made in land
Page 132 U. S. 454
or money July 15, 1885, leaving $23,150, and to deduct that from
the $132,000 payable in 1886, leaving $108,850 due to the
plaintiffs, with interest from July 15, 1885, for which sum
judgment was had. On the facts found, showing that the defendant
was not prepared or able to deliver to the plaintiffs, on the 15th
of July, 1885, a deed for the eighty-four acres of land in Cook
County, Illinois, the $168,000 became on that day a cash
payment.
The judgment of the circuit court is
Affirmed.
*
"Know all men by these presents that we, Milton H. Bennett and
Robert L. Dunman, composing the firm of Bennett and Dunman, for and
in consideration of the sum of four hundred thousand dollars, to be
paid as hereinafter provided, have this day sold, and do by these
presents sell, transfer, assign, and convey, unto Edward M.
McGillin, of Cleveland, State of Ohio, the following described
personal property, to-wit:"
"All our ranch, cattle, horses, wagons, mules, hogs, and ranch
outfit, located in the Indian Territory at or near the junction of
the Arkansas and Cimaron Rivers, and more particularly described as
follows, to-wit: twelve thousand and five hundred head of cattle,
to be counted, and averaging in age and sex about as follows: three
thousand head of three, four, and five year old steers; three
thousand head of two-year olds, mixed; five thousand head of
one-year olds, mixed, and fifteen hundred head of cows and bulls,
calves born in 1885 not to be counted, all of said cattle being
branded in one or more of the following brands, to-wit: [Here
follow the brands]; one hundred and twenty-five head of horses,
branded in one or more of the above-described brands, and all the
mules, wagons, harness, hogs, and ranch outfit located on their
said ranch, and used in connection therewith, and all their right,
title, and interest in and to the above-described brands; also all
their right, title, and interest in and to a certain lease for one
hundred and twenty-eight thousand acres of land, known as the
'Cherokee Lease,' dated October, 1883, and running five years from
date thereof at a yearly rental of two and one-half cents per acre;
also, all their right, title, and interest in and to a certain
lease for one hundred and twenty-seven thousand and two hundred and
sixty-five acres of land, known as the 'Pawnee Lease,' dated June
1, 1884, and running five years from date thereof at a yearly
rental of three cents per acre, and if the Cherokee Stock
Association shall get their lease extended, we guaranty an
extension of said lease on same terms and at the same prices
secured by other members of said association; also three good ranch
houses, three good corrals, corn-cribs, stables, blacksmith shop,
and everything used in operating said ranch; also, twenty-two and
one-half miles of wire fence, Glidden wire, four strands, and
nearly all black walnut post, and one horse pasture, two miles
square, near ranch headquarters, to be fenced and completed, to
have and to hold the said property above described unto him, the
said Edward M. McGillin, his heirs and assigns, forever."
"We agree to deliver possession of all the above-described
property to the said Edward M. McGillin on the ranch on or before
the 15th day of July, 1885, we to pay all ranch expenses, taxes,
and rental on lease up to date of delivery, the said Edward M.
McGillin to refund to us all money paid by us on leases beyond date
of delivery. Should the number of cattle delivered by us to the
said Edward M. McGillin exceed twelve thousand and five hundred
head, the said Edward M. McGillin is to pay us in cash the sum of
twenty-five dollars per head for such excess, in addition to the
other consideration herein provided for, and should said number
fall short of twelve thousand five hundred head we are to credit
the said Edward M. McGillin on the amount herein provided, to be
paid at the rate of twenty-five dollars per head for such
deficit."
"The consideration of four hundred thousand dollars above
specified is to be paid by the said Edward M. McGillin, as follows,
to-wit: the sum of twenty-five thousand dollars paid cash in hand,
the receipt whereof is hereby acknowledged, the sum of seventy-five
thousand dollars to be paid July 25, 1885, for which the said
Edward M. McGillin is to execute his negotiable promissory notes of
even date herewith, payable to us or our order at the Fourth
National Bank of New York city on said 25th day of July, 1885, with
eight percent interest from date; sixty-six thousand dollars to be
paid July 1, 1886; sixty-six thousand dollars to be paid November
1, 1886, for which said two last-named amounts the said Edward M.
McGillin is to execute his several negotiable promissory notes
bearing date on July 15, 1885, and payable to us or our order at
the Fourth National Bank of New York City on said 1st day of July,
1886, and 1st day of November, 1886, with eight percent interest
per annum from date of said notes. The remaining one hundred and
sixty-eight thousand dollars is to be paid by the said Edward M.
McGillin on the 15th day of July, 1885, as follows, to-wit: on said
15th day of July, 1885, the said Edward M. McGillin is to convey to
us, the said Milton H. Bennett and Robert L. Dunman, by deed of
general warranty, free and clear from all encumbrances, taxes, and
liens of every kind and character, eighty-four acres of land lying
and situate in the County of Cook and State of Illinois, more
particularly described as being in certain blocks of Crosby's and
others' subdivision of the south half of section five, township
thirty-seven N., R. thirteen, lying west of the Chicago, Rock
Island and Pacific Railway; we, the said Milton H. Bennett and
Robert L. Dunman, hereby covenanting that the property herein sold
and conveyed to the said Edward M. McGillin is free and clear from
all encumbrance, and that we will warrant and defend the title to
the said cattle, horses, and stock unto the said Edward M.
McGillin, his heirs and assigns, forever; we, the said Milton H.
Bennett and Robert L. Dunman, hereby expressly reserving a vendor's
lien on all the property herein sold and conveyed for the security
and payment of the two amounts of sixty-six thousand dollars each
herein provided to be paid, respectively, on the 1st day of July,
1886, and the 1st day of November, 1886, hereby expressly reserving
the right, power, and authority to advertise and sell any or all of
said property by giving thirty days' notice of the time and place
of such sale in some daily newspaper published in the City of
Kansas, Jackson County, Missouri, if said sums, together with all
the interest due thereon, are not paid when due, according to the
terms and tenor of the notes to be executed by the said Edward M.
McGillin therefor."
"In testimony whereof, witness our hands and seals this 16th day
of April, 1885."
"MILTON H. BENNETT [Seal]"
"ROBERT L. DUNMAN [Seal]"
"I accept the above conveyance, and am bound by the terms and
conditions thereof. Witness my hand and seal."
"EDWARD M. MCGILLIN [Seal]"