Chaplin v. Griffin

Citations

• 252 Pa. 271
• 97 A. 409
• 1916 Pa. LEXIS 606

Syllabus

<p>Contracts — Construction—Agreement to purchase stock — “Pro rata” — Parol evidence rule■ — Affidavit of defense■ — Sufficiency.</p> <p>1. The term “pro rata” means in proportion; proportionately; according to the measure, interest, or liability of each. As applied to persons it never means equality or an equal division, but necessarily implies an unequal division as between different persons. It has no meaning unless referable to some rule or standard.</p> <p>2. The rule that where parties finally put their contract in writing an independent and contemporaneous oral agreement relating to the subject-matter which is inconsistent with the terms of the instrument cannot be given effect to vary or modify its purpose, does not conflict with the rule that for the purpose of interpretation and application of the terms of the contract evidence showing the subject-matter with which the parties dealt and the object which they sought to accomplish as shown by the preceding negotiations, is competent, not to vary what has been reduced to writing, but to aid in its construction and to make plain in what sense the parties used and understood the language they employed.</p> <p>3. A written contract entered into between a trustee and eight stockholders in a corporation recited the ownership of such shares which were then in the name of the trustee, but disclosed nothing to indicate that the shares were owned in any other than equal amounts by the parties to the agreement; authorized the trustee to pledge the stock for a loan until a majority should desire to dissolve the pool; and provided that the owners “will take up their pro rata shares” of the loan and pay the amount due on the stock when the pool was dissolved. In an action by the trustee against one of the eight members after the dissolution of the pool to recover one-eighth of the loan the affidavit of defense set up a parol understanding that the pro rata liability was to be based on the number of shares in the company