Joring v. Harriss

HOUGH, Circuit Judge

(after stating the facts as above). We shall not dwell on the pleadings, though argument has been based thereon, but prefer to meet the larger question; — whether on the facts shown plaintiffs have any right, in any form of action, to any share of the profits 'of selling the cotton in Spain.

Whatever rights plaintiffs enjoy obviously arise out of the agreements they made. Those written agreements consist of the contracts with Frierson and defendants, effective on the same day, February 28, 1917, fully set forth supra, — and of nothing else.

It is assigned for error that certain oral evidence said to be explanatory or illuminative of the meaning of these writings, was-excluded. No error was committed. It is true that these documents bristle with trade words, the meaning of which is known only to those dealing in cotton. But these terms required no explanation to the parties. The testimony was offered, not to explain words, but to fix the legal relation created by the agreements between plaintiffs, defendants and/or Frierson.

On this point the written contracts (which are to be construed together) offer no ambiguity; their language is plain and simple. Therefore it is conclusively presumed that the parties meant what the words which they used mean, and no oral' evidence was permissible. What they meant, and all that they meant, must be spelled out of the plain words they wrote. It is sufficient to refer to our decisions in Watkins v. Mulkey, 225 Fed. 739, 141 C. C. A. 11; Bijur, etc., v. Eclipse, 243 Fed. 600, 156 C. C. A. 298; and Schnerb v. Holt Co. (C. C. A.) 289 Fed. 1001 (April 9, 1923), and cases cited.

The. facts presented, which were fairly summed up in defendants’ application to the War Trade Board (supra), raise two questions: (1) What was the nature and extent of plaintiffs’ interest in the subject-matter of agreement, and (2) what was the effect upon that agreement of the declaration of war on April 6th, or the Trading with the Enemy Act, effective October 6th.

As to the first point it is asserted, and may be conceded, that the written agreements show a “joint adventure.” This comparatively modern phrase means no more than a commercial enterprise by several persons jointly. Its vogue arises from a. desire to find words descriptive of a joint enterprise yet not amounting to a partnership. A distinctive characteristic of the joint adventurer is his right of suing at law for his share; he is not obliged to resort to an accounting as is a partner. The distinction is pointed out in Felbel v. Kahn, 29 App. Div. 270, 51 N. Y. Supp. 435, where a transaction fundamentally similar to the one at bar is described as a “joint adventure to share in the profits of a contemplated speculation in real estate, which were ascertainable by a simple calculation.” Consequently plaintiff’s demand for “his share” was entertained at law. These plaintiffs have pursued the same course.

Assuming now that this was a joint adventure, what did the joint adventurers respectively contribute, and what was the subject-matter of their joint action?

The plaintiffs contributed a customer, viz. the Austrians. Frierson contributed the management of the enterprise, including especially the care and custody of the cotton in Barcelona. The defendants contributed all the money, capital, or credit required for the transaction. The subject-matter of the adventure was very simple, namely the keeping and selling to certain Austrians (and to no one else) 10,000 bales of cotton.

This being the joint adventure, the crucial question is to whom did the cotton belong while it was awaiting delivery? It is plain that the joint adventurers did not jointly buy the cotton; Frierson did that. Nor did the joint adventurers jointly pay for the cotton; defendants did that. The only interest that plaintiffs had in the cotton, or in the enterprise, transaction, or adventure, was a right to share in the profits of selling to the Austrian spinners. That is to say, when the Austrian spinners could take the cotton, plaintiffs were entitled to one-half of what defendants and Frierson made over the cost of the cotton to them plus the carrying charges.

Thus we deem it apparent that never at any time did plaintiffs have any interest in or title to the cotton as cotton; Frierson had the legal title, but it was security to defendants for their advances and expenses.

As to the question of the effect on the adventure of the declaration of war and/or the Trading with the Enemy Act, we entertain no doubt. On April 6th, Austria became an ally of the enemy, and on and after October 6th, it became unlawful for any person in the United States to trade directly or indirectly for the benefit of any other per- ' son with the knowledge, or with reasonable cause to believe, that such other person was an ally of the enemy. Act, § 3a (Comp. St. 1918, Comp. St. Ann. Supp. 1919, § 3115%b)._

As was well pointed out by the trial judge, delivery after peace (although such peace plainly referred to peace between warring European powers) was not the “whole performance because it included retention of the cotton at Barcelona during the remainder of the war.” Thus, since trading by the statute (section 2 [section 3115%aa]) included “carrying on” any contract, agreement or obligation, defendants and Frierson found themselves in the position of carrying on this agreement for the benefit of certain Austrians. Therefore the Trading with the Enemy Act completely excused, and indeed forbade, performance by defendants and/or Frierson. Result is that by statute this contract came to an end as soon as defendants were refused their license or permission to complete the agreement.

We might go farther, as we are of opinion that this agreement became against public policy on April 6, 1917. The effect of the contracts made was that the money, property, and credits of certain citizens of the United States were tied up or engaged in the carrying or keeping of 10,000 bales of cotton for the ultimate benefit of an ally of an enemy.

The contract may be called executory; it was so in the usual sense of the term, but there was nothing executory about the absorption of defendants’ money and credits in the carrying of this cotton for Austrians. As was well said by Lord Sumner in Ertel v. Rio Tinto (1918) A. C. 260, at 290:

“It is incidental to the conduct of war that the sovereign should be free to bring pressure to bear on the enemy by crippling his commerce and exhausting his resources. It is incidental to the conduct of war that the resources of the sovereign’s subjects should be free to be employed lawfully in preserving and extending the resources of the realm.”

Prom this premise the learned judge deduced the conclusion that even an executory contract which prevented the resources of the citizens of a sovereignty at war from being employed in preserving and extending the resources of their own warring country was invalid as against public policy; and that doctrine and that case apply to this transaction.

If, as we now hold, the whole agreement or joint adventure came to an utter end not later than October 6, 1917, it obviously became impossible for plaintiffs to sue upon the contract, for that contract no longer existed; it had been wiped out by sovereign authority.

But if, and only if, plaintiffs were co-owners in the cotton, they would still have a right to share, in proportion to their interest, in the proceeds of that cotton whenever lawfully obtained.

But this just claim would arise, not by breach or performance of contract, but by virtue of ownership in the cotton. As we have already pointed out, plaintiffs never had any such ownership; their only interest in the joint adventure was in profits obtained from sale to certain specified persons of their procurement, to wit, the Austrian spinners.1 That interest, because of its Austrian origin and taint, was wiped out, and with it vanished all right of recovery in plaintiffs.

Judgment affirmed, with costs.