Hamilton v. Salopek

PEEK, J. This is an appeal by defendant from an adverse judgment in an action for an accounting.

The sole issue involved is the right as between the parties, both of whom are licensed medical practitioners, to certain accounts receivable which had accrued during the course of their business association and remained uncollected at the termination thereof. Said association was predicated upon a written contract by virtue of which defendant was placed in charge of the office and professional equipment belonging to [105]plaintiff while the latter was away on military duty. Under the terms of said contract the defendant was to receive a specified salary or drawing account and a designated percentage of the “net office income.” During the life of the agreement the defendant regularly accounted for and paid over to plaintiff the share due the latter based upon the cash receipts. Upon the termination of the arrangement the defendant refused to account to plaintiff for any portion of the outstanding accounts receivable, and plaintiff thereupon brought this action to recover his alleged proportionate share of said accounts. The judgment of the trial court was in his favor, ordering a division of said accounts on the same basis as that provided for “net office income” in said agreement.

It is appellant’s contention that as the contract uses the phrase “net office income” in referring to the income which was to be divided between the parties, such phrase must be construed to mean the actual money received and not accounts receivable. He further contends that as payments were made each month in accordance with the terms of the contract, therefore when the agreement was terminated plaintiff “had already been paid everything that had been collected” during the course of the contract and he was entitled to nothing further.

It is a fundamental rule of interpretation that a contract must be construed as a whole with the intention of the parties to be ascertained from the entire instrument and not from detached portions thereof. As stated in the case of Hunt v. Union Bank & T. Co., 210 Cal. 108, 115 [291 P. 184], “. . . each contract, of necessity, must be construed according to its meaning, and no rigid rules of construction can be applied that will do violence to the intention of the parties. The problem is not what the separate parts of the contract may mean, but rather what the contract means as a whole. The separate parts have little weight when compared with the contract in its entirety. ’ ’