they may express their agreement in one or more writings and, in such circumstances, the several documents are to be interpreted together, each one contributing (to the extent of its worth) to the ascertainment of the true intent of the parties." International Milling Co. v. Hachmeister, Inc., 380 Pa. 407, 417-18, 110 A.2d 186, 191 (1955) (citation omitted).
These rules apply even though the parties to the separate writings may not be the same as long as the writings pertain to the same transaction and interpretation is aided by reading them together. See 4 S. Williston, Contracts, § 628 (3d ed. 1961). In the instant case the parties to the two agreements are not the same. The Partnership Agreement was entered between Morrison-Knudsen and Intma and the Sales Representative Agreement was between Morrison-Knudsen and Hans Von Lange and his son, Richard Von Lange. The reason Intma was not a party to the Sales Representative Agreement was because the parties sought to avoid having Intma's many creditors attach any of the commissions earned under the agreement. We find it unnecessary to pierce the corporate veil in order to arrive at the conclusion that the parties are identical as it is clear that the two agreements are interrelated and that only by interpreting the two together can the true intent of the parties be understood.
The Sales Representative Agreement provided for a term of three years, as did the Partnership Agreement, and they both contained provisions for the event of either expiration of the term or termination. The Sales Representative Agreement does not provide for any method of termination. However, the Partnership Agreement provides that Morrison-Knudson could terminate the partnership at the end of any fiscal year upon giving Intma ninety-days notice. As noted in the findings of fact, Morrison-Knudsen actually provided Intma with notice that it intended to terminate the partnership at the end of 1974 and it was only due to Hans Von Lange's efforts that Morrison-Knudsen agreed to a six-month extension. Therefore, by applying the termination provisions of the Partnership Agreement and the subsequent extension agreement to the interrelated Sales Representative Agreement, it is clear that the Sales Representative Agreement terminated at the same date as the partnership arrangement.
The application of the termination clause of the Partnership Agreement to the interrelated Sales Representative Agreement is the most reasonable interpretation and the one that leads to the clearest ascertainment of the intent of the parties. A case which illustrates a similar interpretation of two interrelated instruments is International Union of United Brewery v. Duke and Company, Inc., 373 F. Supp. 778 (W.D.Pa.1974). That case involved a collective bargaining agreement which obligated the company to establish and maintain a pension plan for its workers and a pension trust agreement which set forth the terms and conditions of the plan and provided for termination of the plan. The pension plan was terminated by the brewing company when the plant was closed and the union contended that since the collective bargaining agreement obligated the company to maintain a pension plan and failed to provide for termination that the pension benefits survived the termination of operations. Judge Weber held that the two documents should be read together and that the company's right to terminate the pension plan applied to the collective bargaining agreement.
Alternatively, we find that an implied term in the Sales Representative Agreement was the continued existence of the partnership business. The reasons for implying the term of ongoing partnership business activity are: the Sales Representative Agreement concerned only the sale of bonded rail joints produced by the partnership; the $ 4,500 monthly payment was solely an advance against commissions to offset expenses in generating sales; the Von Langes under the agreement were to use their best efforts to obtain orders for bonded rail joints, and finally the Sales Representative Agreement specifically referred to termination before the expiration of the three-year term. Clearly, the Sales Representative Agreement contemplated termination and the duties of the Von Langes were completely and solely based on the continuation of the partnership business. The only reasonable way to view the Sales Representative Agreement is that by implication it required the existence of the ongoing partnership business. Any other interpretation would be both unreasonable and inequitable.
The law is clear that terms clearly implied from the entire contract and indispensable to effectuating the parties intentions should be considered a part of the contract. See MacDonald v. Winfield Corporation, 93 F. Supp. 153 (E.D.Pa.1950); Frickert v. Deiter Bros. Fuel Co., Inc., 464 Pa. 596, 347 A.2d 701 (1975). Also, where there is no express provision in a contract as to its duration or termination the intention of the parties in that regard is to be determined from the surrounding circumstances and by the application of a reasonable construction to the agreement as a whole. See, Thomas v. Thomas Flexible Coupling Co., 353 Pa. 591, 46 A.2d 212 (1946). In the instant case the nature of the Sales Representative Agreement and the surrounding circumstances show that the continued existence of the partnership was the foundation upon which the agreement to sell the partnership products was conditioned. This fact was essential to the Von Langes' performance. It therefore must be implied that the termination of the partnership business also terminated the Sales Representative Agreement. To give the Plaintiffs monthly advances against commissions they will not earn to cover expenses they will not incur would be an unreasonable interpretation and at odds with the underlying intention of the parties at the time of entering the contract.
Finally, the Sales Representative Agreement provided that on termination the Von Langes were entitled to receive commissions on all orders in process and received by the manufacturer. They have already been paid this amount and are entitled to no more.
An appropriate order will be entered.
© 1992-2004 VersusLaw Inc.