In Lamb (p 431), the Court of Appeals stated the rule as follows: "when the sense in which the words of a written instrument are used, or the sense in which the promisor had reason to believe the promisee understood them, is determinable from the relation of the parties, facts apart from it, and the surrounding circumstances, it must be found and fixed by the jury".Summary of this case from Belknap v. Dean Witter Co., Inc.
Argued March 14, 1913
Decided May 20, 1913
Frederick Hulse and Martin A. Schenck for appellant.
Nelson S. Spencer for respondent.
The plaintiff, a domestic corporation, seeks to recover from the defendant, a foreign corporation, the amount the plaintiff paid in discharge of judgments recovered against it by Ray Tompkins. At the commencement of the action in which the judgments were recovered the plaintiff gave The Norcross Brothers Company, the appellant here, notice and opportunity to defend the action and of its claim to indemnity from it against any judgment Tompkins might recover. The Norcross Brothers Company did not assume the defense. Tompkins secured a judgment which was affirmed in the Appellate Division ( Tompkins v. Lamb, 121 App. Div. 366) and in this court ( Tompkins v. Lamb, 195 N.Y. 518). The plaintiff paid the judgments and brought this action to recover the amounts. The trial court, under the request to go to the jury and exception to its denial on the part of the defendant, directed a verdict in favor of the plaintiff. The Appellate Division has affirmed the judgment rendered upon the verdict. We think the trial court erred.
Tompkins recovered his judgment against the plaintiff here upon the ground that it violated the contract between them which provided that it would for a named sum furnish and erect, at a designated place, a monument and a headstone "to be executed in best white Westerly granite." The monument and headstone actually furnished and erected by the plaintiff were made by the defendant here from granite quarried at Troy, New Hampshire. Tompkins asserted, after they were erected, that the contract contemplated and required that the granite should be quarried at Westerly, Rhode Island, rejected them and brought his action. J. R. Lamb defending the action claimed that the expression "best white Westerly granite" might mean granite from the vicinity of Westerly, Rhode Island, or from the quarries of The Norcross Brothers Company in Massachusetts or New Hampshire. The jury decided that the contract obligated J. R. Lamb to furnish and erect the monument and headstone made from granite quarried at Westerly, Rhode Island.
The defendant here manufactured the monument and headstone for the plaintiff. In case the duty, as between the parties here, rested primarily upon the defendant to make them from granite quarried at Westerly, Rhode Island, so that it was under the obligation to the plaintiff that plaintiff was under to Tompkins, it is, under the notice and opportunity to defend the Tompkins action, barred by the judgment in that action from contesting here the violation of the contract between it and the plaintiff and the damages recoverable by the plaintiff. The principle is well settled that, by notice and opportunity to defend an action, the party notified becomes a party thereto, so as to be concluded in any subsequent litigation between the same parties as to all questions determined in the action and material in the subsequent litigation. ( Carleton v. Lombard, Ayres Co., 149 N.Y. 137; Oceanic Steam Navigation Co. v. Compania Transatlantica Espanola, 134 N.Y. 461; S.C., 144 N.Y. 663; Robbins v. Chicago City, 4 Wall. 657.) A scrutiny of the record in the Tompkins action, in evidence in this case, does not reveal a relation, contractual or other, between these parties, which placed upon the defendant the duty to cut the articles from granite quarried at Westerly, Rhode Island. It discloses that the facts through which the plaintiff demands the indemnity from the defendant were not litigated in the Tompkins action. They may, therefore, be litigated in this action through evidence additional to the record. ( Fulton County Gas El. Co. v. Hudson River Telephone Co., 200 N.Y. 287.) The evidence produced at the trial in addition to the record in the Tompkins action consisted almost exclusively of the correspondence between the parties.
It remains to determine whether or not the evidence proved, as a matter of law, that the defendant was obligated to deliver to plaintiff the articles cut from granite quarried at Westerly, Rhode Island. The obligation, if it existed, was contractual and is to be found in the letters which passed between the parties, and the additional evidence. The letters are many and cover a period of several months. They are peculiar to this action and a detailed statement and critical analysis of their contents would not be useful. For the decision of this appeal and the purposes of a new trial in the action, it is sufficient to state that they permit different inferences and fair-minded and reasonable men may disagree as to their meaning and effect and the real contract between the parties. They are within the rule that when the sense in which the words of a written instrument are used, or the sense in which the promisor had reason to believe the promisee understood them, is determinable from the relation of the parties, facts apart from it, and the surrounding circumstances, it must be found and fixed by the jury. ( Kenyon v. Knights Templar M.M. Aid Assn., 122 N.Y. 247; Trustees of Town of East Hampton v. Vail, 151 N.Y. 463; Matter of Totten, 179 N.Y. 112.) Hence submission to the jury was required.
The judgment should be reversed, and a new trial ordered, with costs to abide the event.
CULLEN, Ch. J., GRAY, WERNER, HISCOCK and CUDDEBACK, JJ., concur; MILLER, J., not sitting.
Judgment reversed, etc.