McMurphy v. Garland

47 N.H. 316
CourtSupreme Court of New Hampshire
DecidedJune 15, 1867
StatusPublished
Cited by1 cases

This text of 47 N.H. 316 (McMurphy v. Garland) is published on Counsel Stack Legal Research, covering Supreme Court of New Hampshire primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
McMurphy v. Garland, 47 N.H. 316 (N.H. 1867).

Opinion

Bellows, J.

The first question is, what is the true construction of defendants’ promise to pay over the proceeds of the wood and timber as fast as the same should be sold and paid for ? Is it the net proceeds after deducting the cost of cutting, hauling, and selling, or is it the gross proceeds without such deduction?

It appears that the plaintiff on his part covenanted that defendants might cut, carry away and dispose of all the wood and timber on a certain lot of land, provided they paid over to plaintiff the proceeds of the same as fast as sold and paid for with plaintiff’s approval; and defendants agreed to pay over such proceeds to the amount of §6000, and interest annually, from Oct. 19, 1863. The transaction apparently was a sale by the plaintiff to the defendants of a large lot of wood and timber standing upon a certain lot of land, with permission to cut and sell it, paying the proceeds of it to the plaintiff as fast as received, to the amount of §6000 ; and it was evidently contemplated by the parties that defendants would cut and carry the wood and timber to market and sell it. They might, it is true, sell it, with plaintiff’s approval, while standing upon the land, and then the price received would be the smn to be paid ; but in endeavoring to ascertain the sense in which the parties used the term "proceeds,” it is fair to assume that the parties contemplated the cutting of the wood and timber and a sale in market.

That being the case, the term "proceeds of the wood and timber” is broad enough to include the gross amount of sales, and unless controlled by the apparent intention of the parties to be collected from the whole instrument, we think this would be the true interpretation, although it must be admitted that the terms are not so explicit or free from ambiguity as to remove from the mind all doubt as to that interpretation. Had it been the purpose, however, of the parties to require the payment [320]*320only of the net proceeds of the wood and timber after deducting the cost of getting it to market, it would have been most natural to have used some such qualifying terms, and the want of them leaves it fairly open to the inference that no such qualification was intended, especially when a sale in market was contemplated, and a payment of the proceeds when the wood and timber was sold and paid for agreed upon.

It is urged by defendants’ counsel that it would be oppressive to require them to pay the gross proceeds of the wood and timber without retaining anything for the expenses of the operation, and therefore such a construction ought to be avoided if it may be, and it is very true that the circumstances of the defendants might be such as to make it very injudicious to enter into such a contract; how that was in this particular case we neither know, nor can know, the only inquiry being what is the fair construction of the language used. Upon the face of the contract there is nothing unreasonable in this view of defendants’ stipulations. They had bought the wood and timber of the plaintiff, and were to pay him a large sum for it; and we see nothing unreasonable in their agreeing to pay him the first gross proceeds of the wood and timber to the amount of $6000, if they could command the means to take it to market, any more than to agree to advance to him a part of the price before cutting any of the wood and timber. Indeed, we can easily imagine there might be some embarrassments of a serious nature arising out of a contract to pay only the net proceeds after deducting the expenses, such as determining the amount of those expenses, including, perhaps, the cost of manufacturing lumber, involving the necessity of keeping careful accounts, losses from bad debts, commissions for making sales, and the like; and, besides, the payments to the plaintiff might be postponed until all the expenses upon the entire quantity had been reembursed. Upon the grounds taken by the defendants’ counsel this would .be so, and it might well be supposed that a prudent man would hesitate to enter into an arrangement involving such difficulties.

On the other hand, the payment of the gross proceeds of the sales would be attended with no such embarrassments, and would naturally be recommended to the parties as the most simple and efficient means of preserving the plaintiff’s security, and when the $6000 was paid the remainder of the wood and timber would be free from incumbrance.

In Caine v. Horsfall & al., 1 Exch. 519, the plaintiff was in the employment of the defendants as captain and supercargo in the African trade, and the question was upon the construction of defendants’ letter to the plaintiff, in winch they say, "your commissions are £6 per cwt. on the net proceeds of your homeward cargo, after deducting the usual charges as arranged by the African association, on £4 per ton from the gross sales of the oil when taken from the quay, and £4 15s when warehoused; no commissions allowed on watered oil.” It was decided that the term "net proceeds” in mercantile language means the sum actually received after making all deductions, and that the commission was payable only on the sums actually realized after deducting bad debts as well as other charges. In reaching this conclusion much stress was placed upon the word "net,” indeed, the case turned upon it; the court, [321]*321as it was, entertaining some doubts whether a commission should not be allowed on the whole without deduction for bad debts.

In the case before us, there is nothing to qualify or restrict the term "proceeds,” and as it is evident that the wood and timber were to be cut and taken to market, and when sold and paid for, the proceeds to be paid to the plaintiff, we are of the opinion that he was entitled to the whole without deductions for cost of cutting, manufacturing, and taking to market.

We have examined the case of the Briggs Iron Co. v. Richardson, 4 Allen 371, cited for defendants. That was a sale of the wood and timber on the Gove lot for $3000, of which $500 was paid at the time by an endorsed note, and the rest by the notes of the vendee, and it was stipulated in substance that the vendee should not remove any wood or timber from the lot beyond the value of $500, but that all wood and timber so cut beyond that amount should remain the property of the vendor until paid for.

In substance it was an agreement that having paid $500, he might remove wood and timber to that amount, but no more, until paid for, although it is to be inferred that he was at liberty to cut more. The purpose, obviously, was to allow the vendee to take away the wood and timber so fast as he paid for it, and there is nothing to show that the value was to be estimated otherwise than as it was when sold, that is, standing. In this respect, it differs from the case before us, and does not govern it.

The remaining question is, whether the evidence offered of a subsequent parol agreement to the effect that plaintiff was to receive the proceeds of the wood and timber after deducting the cost of cutting, hauling and loading it, ought to have been received.

Upon this point it will be remembered that the contract was under seal; that as now construed the defendants covenanted to pay to plaintiff' the gross proceeds of the wood and timber, and that the offer was to prove a subsequent parol agreement that there should be paid only the net proceeds, after deducting the expenses.

In respect to a specialty, the general doctrine is well established that such a contract can be discharged or modified only by an instrument of as high a nature.

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Bluebook (online)
47 N.H. 316, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mcmurphy-v-garland-nh-1867.