Bourn v. Dowdell

GAROUTTE, J. This action was brought on a promissory note calling for the payment of $36,000. Prior payments had been made thereon; but the amount of these payments is not material. Defendants, by way of cross-complaint, set out certain agreements, claiming thereby full satisfaction of the note, and also a judgment against plaintiff in th'e sum of $4,000. The views of the trial court coincided with defendants’ claims, and, as a result, judgment went against plaintiff for that amount. An appeal is prosecuted from the judgment and order denying the motion for a new. trial. The questions involved in this case are purely matters of fact, and largely dependent upon the construction to be. given three certain agreements entered into in writing by plaintiff and defendants. The findings of fact made by the trial court have support in the evidence, and will be taken as true in the consideration of the questions here presented.

Defendants were lessees of plaintiff’s wine cellar, and, upon a settlement between the parties, it was found that they owed plaintiff for cash advances, rental, etc., $36,077. At this time, November 26, 1892, defendants gave plaintiff their promissory note for that amount and such note is the one here sued upon. Contemporaneous with the execution' of the note, a collateral agreement was entered into by the parties, whereby defendants pledged 520,000 gallons of wine, then in defendants’ cellar, to secure the payment of the aforesaid note. Previous to this time, to wit, September 21, 1892, these same parties had entered into another written agreement appertaining to the advances to be made by plaintiff, and the purchase of grapes and the manufacture of wine and brandy by defendants. This agreement, among other things, provided that, in addition to a certain rate of interest to be paid by defendants upon advances made, plaintiff was to have the option of an additional two per cent per annum, or one-third of the net profits of the venture. This agreement further declared in detail how these profits were to be determined. Upon November 28th, two days after the making of the second agreement and the promissory note, defendants desiring still further advances, to be used in carrying on the business of the manufacture of wine and brandy, the parties'entered into a third agreement in writing. By this agreement plaintiff promised to make additional advances to defendants, not to exceed $35,000; and, among other matters, we find the follow[822]ing recitals and covenants set forth in that agreement: “Whereas, certain contracts and agreements were heretofore made and entered into between the same parties, said contracts and agreements bearing date September 20, 1892, and September 21, 1892; and whereas, under said contracts, the sum of $36,077.08 was determined and found due W. B. Bourn on the 21st of November, 1892, exclusive of his share of profits; and whereas, said sum was paid Bourn by Dowdell and Son by a certain promissory note dated November 21, 1892, payable on or before March 21, 1893, and secured by about 520,-000 gallons of wine; and whereas, Dowdell and Son are desirous of obtaining additional sums of money from Bourn to be used in the vitieultural operations, as expressed in the agreement dated September 21, 1892: Now, therefore, in consideration of the covenants herein contained, it is mutually agreed that any and all profits that may arise or accrue from the vitieultural operations of Dowdell and Son shall be divided as follows: $4,000 is hereby determined as Dowdell and Son’s share before said Bourn shall be entitled to any profit. After Dowdell and Son have received or derived profits to said amount of $4,000, Bourn shall have and receive as his share of the profits all sums up to but not exceeding the sum of $6,50.0.....All profits shall be estimated as determined and expressed in the agreement dated September 21, 1892. .... It is mutually agreed that W. B. Bourn shall have the privilege at any time hereafter of selling all the wine belonging to or hypothecated by Dowdell and Son, at a price not less than thirteen cents per gallon, at St. Helena,- . . . . but, before he shall make any sales, he shall notify Dowdell and Son in writing of his intention to do so.....For the security of all moneys owing or that may become owing to Bourn, or for future advances, Dowdell and Son have executed and delivered the notes herein mentioned; and, as security for all the sums due or to become due by virtue of this or any agreement, Dowdell and Son hereby deliver to W. B. Bourn all wines made at Graystone during the vintage of 1892, being about 520,000.....It is mutually agreed that the wine and brandy may be sold by Bourn at any price after March 1, 1893, provided Bourn guarantees a profit to Dow-den and Son of $4,000; and, if the wine and brandy is not sold, all agreements in reference to settlement will be made