Linton v. Unexcelled Fireworks Co. — 37 N.Y. St. Rep. 173

Majority

p. 173

Charles B. Linton, Pl’ff, v. The Unexcelled Fireworks Co., Def’t.

(Supreme Court, General Term, Second Department,

Filed February 9, 1891.)

Headnote

1. Contract—Reformation—Mistake.

Where the original agreement was plain and the writing which was intended to evidence it failed to do so, the rules as to mistake and mutual mistake have no application, but the agreement actually made prevails.

3. Same.

_ Plaintiff was employed by defendant at a specified salary, and in addition thereto the net earnings on thirty shares of stock, which were to be delivered to him when the earnings reached their par value. Thereafter a paper was drawn to evidence the agreement, in which the word ‘ ‘ dividends ” was used in place of “ net earnings,” but it was understood that the paper was to change nothing. The dividends were less than the net ■earnings. Held, that the original agreement must prevail; and that plaintiff was entitled to stock on the basis of the net earnings.

Cross appeals from judgment entered after trial at special term, dismissing the complaint, and also dismissing the counter■claim of defendant.

Action to reform or set aside a written agreement between the parties and to enforce a prior oral agreement for the employment of plaintiff, by which he was to take a portion of his compensation in stock, and to recover a balance of stock claimed to be due "to him.

Defendant counterclaimed for stock alleged to have been delivered to plaintiff in excess of what was due under the contract.

W. J. Gaynor, for pl’ff; Hatch & Warren, for def’t.

The material facts in this case are not the subject of dispute. The plaintiff, on the 14th of July, 1884, ■entered into the employment of the defendant. The term was in■definite. The money salary per year was to be $2,000, and in ■addition the net earnings on thirty shares of the capital stock of the defendant These earnings were to be credited to the plaintiff

p. 174

until the earnings should aggregate the par value of the shares, $3,000, when the stock was to be issued to plaintiff. The parties continued under this agreement for three years without any change of its terms. There was a new agreement made to replace it from the 4th of July, 1887. The parties differ in respect to the time when a certain paper intended to evidence the oral agreement was made. It was made and it is quite immaterial when, and it was made solely to evidence the oral agreement.

Mr. Johnson, who drew the agreement, states the time of execution to have been in January, 1886. The plaintiff says it was given in September, 1887, after the agreement had expired by three years’ execution and its replacement by a new agreement. Whenever signed it was dated back to the commencement of that employment. This agreement introduced the word dividends in the place of net earnings. A certificate for twenty-one shares of the stock was given for net earnings of the company in September, 1887, and it is an important fact that the dividends were less than the earnings. The parties both agree that the paper was to change nothing. Mr. Johnson states the oral contract to have been that the stock was to rest on profits “ earned as declared in dividends.” The plaintiff states that the contract as to the stock was to rest on net earnings. Either by mistake or design the word dividends only was used as the basis for stock in the writing. This writing changed nothing and was designed to solely evidence the oral agreement If it failed to do it the agreement really made, and not the mistaken evidence of it, prevails. The authorities cited as to mistake and as to mutual mistake have no place in a case like this where the original agreement was plain and the writing which intended to evidence it failed to do so.

The twenty-one shares of stock were properly issued for a. period ending December, 1886. It is not denied but that the earning for the remainder of the three years was four and a half shares. The present contract entitles the plaintiff to this. It represents the earnings of the company from January, 1887, to July, 1887, when the contract was wholly and entirely terminated by the parties.

If the plaintiff is right in his appeal the defendant is wrong in his claim that four and a half shares of the stock delivered should be returned.

The judgment dismissing the complaint should be reversed and judgment rendered that the plaintiff recover the four and a half shares, with costs.

The judgment against the defendant’s counterclaim should be affirmed, with costs.

Dykman and Pratt, JJ., concur.