Harmon v. Thompson , 119 Ky. 528 ( 1905 )

Opinion of the coubt by

JUDGE O’REAR

Affirming.

This suit involved the construction of the contract copied below, the measure of damage for its breach, and the nature and requisites of the action upon it.

The contract is worded as follows:

“This agreement witnesseth that whereas H. P. Thompson owns certain lands in and near Winchester, Kentucky, and whereas the undersigned P». E. Talbutt and Archer Harmon desire to have the control and right of selling said lands consisting of the unsold lands lying south of Belmont street, which runs south of the house of said H. P. Thompson and on the boundary bought by him of James Ballard’s heirs, amounting to between one hundred and one hundred and twenty-five acres, lying south of said Belmont street in the town of Winchesternow it is agreed between the parties hereto as follows; Said Talbutt and Harmon undertake to sell said’lands in lots of such size as may suit purchasers and he most advantageous to the interest of the sellers, and to account to said Thompson for said land at the price of six hundred dollars per acre for two-thirds of the said land, and to leave the said Thompson the owner of the other third — that is to say, that the said Thompson shall receive pay for two-thirds of said land at. the rate of six hundred dollars per acre, and be entitled to the other third of said purchase money of said lands. The said Talbutt and Hannon shall open such streets and alleys through such lands as they may think proper; one-third thereof shall be chargeable to said Thompson, and two-thirds thereof to said Talbutt and Harmon, but the whole expense thereof is primarily to be borne by said Talbutt and Harmon, and said Thompson is to pay his one-third of said expenses. All the streets to be opened shall be by mutual agreement of the parties as to location and cost thereof, and not without such consent. Before deeds are made to said Harmon and Talbutt for the said lands, the said Thompson is to receive two-thirds of the purchase price at the rate stipulated above in money or satisfactory notes. No interest is to be charged by Thompson until after January 1st, 1891, and he shall not account for interest for such sums as may be received by him in excess of his two-tlxirds. For the balance due on the 1st day of January, 1S91, notes are to be given with lien on the remaining land, or such security as said Thompson may accept in lieu thereof. [Signed] H. P. Thompson, Archer Harmon, B. E. Talbutt. Witness: B. F. Buckner.”

The contract was made February 17, 1890. At that time, and for some time prior, there had been considerable animation at Winchester in the real estate market. A “boom,” so common during that period, was being experienced. Appellee had cut a farm, or a good part of it, into town lots, and was selling them at fairly remunerative prices. Appellant and Talbutt were promoters or speculators dealing in town lots in various localities where active speculation was possible, owing to inflated prices and excited expectations. Appellee’s contention in this case is that they were attracted by what appeared to be favorable opportunities afforded by his property at Winchester, and bought it for that purpose. Appellant contends, on the contrary, that he and Talbutt engaged merely to promote appellee’s venture in exposing his lots to public sale. The paper is said to be ambiguous, and, because of that claim, it was sought by appellant to have his construction of its meaning aided by extraneous evidence.

It is not every contract of vague or slightly obscure meaning that calls for, or that will admit of, other evidence to aid in its interpretation. If the paper itself affords a reasonably clear understanding of what the parties have engaged themselves to, it is safer, and it is the law, that its language alone should be consulted in arriving at that meaning. It is upon that reason that such rules as that all the terms of the writing must be consulted and reconciled, if possible, are founded. For, when the parties to a contract have deliberately written down and signed a memorial of their undertaking, it is presumed, and, in the absence of fraud or mutual mistake, it is conclusively presumed, that the whole of the undertaking, and all negotiations leading up to it, are merged in the writing. The writing is the best evidence, and, so long as it can be produced, is the only evidence receivable, of what the parties have agreed to do, and of their whole meaning with reference thereto. It were better if all agreements were perfectly clear and free from controversy. But they are not. It does not at all follow from that fact, though, that all agreements not perfectly plain and having but one possible interpretation are subject to be explained in every case by extraneous and parol evidence. If such were so, the value of written contracts would be reduced to a minimum, if not nil. It is because such is not the law that the numerous rules for construing written contracts are in existence. For, most' obviously, a perfectly plain, undoubted meaning needs no rule to aid in its construction. So, when the written terms seem to be in conflict with each other — where some part of the writing is apparently inconsistent with another part— it does not follow that the bars are to be let down, and parol evidence, with its train of uncertainties, admitted. Before that is allowed, the resources of the paper itself must be exhausted. That is what the law assumes the parties intended by reducing the agreement to writing, for, if it were to be left to parol testimony as to any part of its meaning, it was idle to have been to the trouble of having it written down. When, after applying to the writing those rul.es of interpretation found safe and just in the experience of the law, the meaning, or the probable meaning, in law, of the parties, can be fairly gathered with a certainty satisfying the judicial mind, the courts will consult the writing alone, rejecting extraneous evidence as aid in construing it. But where, after applying the rules of interpretation applicable to the writing alone, the judicial mind is still in doubt as to the meaning of the parties, and there exists a latent ambiguity, the law admits parol or other outside evidence to explain what was meant by the writing. Technical terms and trade expressions afford probably the most numerous instances of the application of the rule just stated, though there are, of course, many others.

Oan the intention of the parties to the agreement sued on be gathered from that writing? Subjecting the paper to analysis, it appears clearly enough that Thompson, the owner of the land described, wanted to sell it, and was by that paper undertaking to sell it. The price at which he was willing to sell two-thirds of it is fixed at $600 per acre. Appellant and Talbutt appear in the paper as both buyers and sellers. They were not selling to Thompson. They had to buy from him before tliey could sell to anybody, unless they were authorized by Thompson to sell for him- To buy. from him, the terms upon which they were to get the land must be agreed on. So it was stated that Thompson was to receive $600 per acre for what he was selling, viz., two-thirds of the tract. But that was not the whole agreement. It was contemplated, as shown by the paper, that appellant and Talbutt were to resell, and possibly immediately before the date when by their agreement they would be compelled to pay for what they wede buying. To protect Thompson in so parting with his title, it was therefore proposed in the paper that, in the event such sales were made, the purchase money, or acceptable purchase-money notes, if notes were taken in lieu of cash, were to be turned over to Thompson to the extent of $600 per acre for such parts as were so sold, he not accounting for interest on it. It seems, from the papei*, to have been also contemplated that some part, or maybe the whole, of the purchase money for the land sold I-Iarmon and Talbutt by Thompson, would not be paid or secured by notes of Harmon and Talbutt’s vendees be-bore January 1, 1891. It was therefore provided that in that event Thompson was to have interest from Harmon and Talbutt after that date, and to have purchase-money notes for such balance before he made them a deed. Other features of the contract show that Thompson expected and that the parties agreed that Thompson’s one-third of the land not sold to Harmon and Talbutt was to be sold by them in their general plan of subdividing the whole tract into town lots, and selling them off. The paper provided for the expense of such division, all the parties bearing it in proportion to their ownership of the whole tract. It was likewise provided that Thompson was to receive the pay for his one-third interest in the tract, if sold in lots under this scheme by Harmon and Talbutt, at whatever price it might be sold, while for the other two-thirds— the part sold to Harmon and Talbutt — Thompson was to get only his original purchase price; the excess going to the owners, Harmon and Talbutt. Thus construed, every term, every provision, and every word of the contract as written is accounted for and given a consistent meaning, while the whole document is given a rational construction.

To adopt appellant’s theory, which is that he and Talbutt were merely promoters, and were to sell Thompson’s land for Thompson and on commission — the commission being the excess price realized on the part sold over .$>000 per acre— would necessitate the ignoring or expurgation of several very explicit and important provisions of the agreement. That is never done when it is possible to avoid it, nor unless it clearly appears that such provisions are annulled intentionally by other provisions of the paper. For it must always be borne in mind that the office of the court is to arrive at the meaning of the parties — not necessarily what may have been in the minds of either one or both of them, but their meaning as it may be gathered from their written agreement. It would not do to allow, years after or at any time after a written agreement has been executed, upon a disagreement arising as to its meaning, to hear evidence outside the contract as to what the parties meant, simply be- , cause the paper admits of a doubt as to its meaning. Parol evidence would not be safer as a guide to the original intention of the parties, in the absence of an allegation of fraud or mutual mistake, than the law’s process of confining the inquiry to the agreed document so long as it is susceptible of reasonable certainty in being understood. Otherwise every disputable clause in a written document would open it up to every evil of chance, of misrecollection, and of perjury that the parties have attempted to avoid by reducing the matter to writing.

Under these rules, the court did not err in rejecting appellant’s amended answer pleading his interpretation of the contract, although it was said that it was a mistake if the contract did not so express the meaning of the parties. For the mistake, to be available, must have been a mutual mistake, and not that alone of one of the parties to the agreement. It was not pleaded that it was a mutual mistake. In that state of the record, it devolved upon the court to construe the writing. That construction was in accord with the one we have given it.

Harmon and Talbutt caused a sale to be made of some of the lots before January 1, 1891. The prices realized were less than $G00 per acre. The sale was discouraging, and marked the enterprise a failure. Whereupon Talbutt and Harmon abandoned the contract, and refused to have anything further to do with it. Early in 1891, appellee brought this suit, alleging the abandonment and consequent breach of the contract, and praying judgment for some $51,000 in damages because thereof. Other features of the petition are seized on as showing that appellee was endeavoring to hold appellant and Talbutt bound for a specific execution of their undertaking. But upon the whole, it satisfactorily appears that the real action was to recover damages for the breach of the undertaking by appellant and Talbutt to receive and pay for the land within the time stated. The case from the beginning seems to have been constructed upon that theory. A demurrer to the petition was overruled. The ground of the demurrer is, conceding the suit to be one to recover damages from ihe vendees for their refusal to take and pay for the property as agreed, that the petition fails to aver that the plaintiff was able and willing to convey to the vendees on January 1, 1891, a good title to the property, and did not aver a tender of a deed'; also that the petition did not aver that plaintiff; was then willing, ready, and able to convey a good title. A contract to sell land, unlike one to sell personal chattels, gives to the vendor choice of two remedies for its breach by the vendee: One, an action against the vendee for specific execution of the contract, in which case the vendor must aver and show that he has the title contracted to be sold, and must tender it. The other is a suit to recover the damages sustained by the vendor by his vendee’s breach of the contract where the breach is occasioned by the vendee’s abandonment. In the latter case, the vendor elects, as he may do, to retain the property, where the agreement is executory, and proceeds to recoup himself in damages from the vendee. The vendee, having broken the contract, is not entitled to have it enforced if the breach is an abandonment of it and a refusal to execute his part of it. Nor is it necessary for the vendor to tender to his vendee a deed when the latter has already declared that he will neither pay for the property nor accept the deed. The reason for requiring a tender in an action to enforce the specific execution of a contract is wholly lacking in a suit where it is sought to recover damages because the vendee has abandoned and refused to perform the contract. As the law does not require the doing of a vain thing, it will not require a pleading to aver that the pleader has offered to do what the defendant admits he would not accept if done.

That appellee was able and willing and ready to convey the title as agreed on January 1, 1891, was a necessary allegation, because it was an essential fact. For, although his vendees were in default in failing to take the property, yet, to entitle him to recover damages, he must have owned the property, and have been in position to have complied with his contract according to its terms. This defect in the petition is one of form. After verdict and judgment, it affirmatively appearing by the record that appellee was able, ready, and willing to comply with his part of the agreement within the time fixed by the contract, the defect in the pleading was cured. Duncan v. Brown, 15 B. Mon., 196; Rountree v. Hendrick’s Admr., 1 B. Mon., 189; Hill v. Ragland, 114 Ky., 209, 24 R., 1053, 70 S. W., 634.

After January 1, 1891, appellee incumbered this property by mortgage, under which it was sold before this, case came on for trial. It is contended by appellant that this act of appellee’s was an abandonment by him of the contract; that by that act and its consequences he put it out of his power to comply with his agreement, and for that reason can not recover against his vendees. Where the vendee of an executory contract to buy land abandons the agreement and refuses to comply with its terms, the vendor, upon electing to proceed for damages for the breach, may, after having made his election, and after the time when by the terms of the agreement the conveyance was to have been made, dispose of the property by sale or otherwise, and without regard to the contract. It is the vendor’s property. The contract repudiated by the vendee can not give the latter any right to the land, nor to control it. The only question then open between the parties is the extent of the damages sustained by the vendor for the breach. These he is entitled to recover in addition to the land. McBrayer v. Cohen, 92 Ky., 479, 13 R., 667, 18 S. W., 123. The vendee has no more right to control the vendor’s use or disposal of his own land before the verdict and judgment fixing the damages than he would have after they were so fixed and paid. Upon such breach the quantum of damages is the difference between tlie contract price and tlie actual value of the land on the date of the breach, provided the actual value is less than the contract price. In addition, interest may be awarded. Such was the course pursued by the trial court in this case.

That the case dragged along for several years before trial can not affect the right of appellee to recover what is legally due him. Appellant might have insisted on an earlier trial if he had desired it. The delay is reasonably accounted for by appellee. No substantial right of appellant seems to have been affected by it.

The action for a while was on the equity docket. On appallant’s motion, it was transferred to the common-law docket for a trial by jury. Before the order of transfer was made, the court decided upon the face of the record that appellant and Talbutt had abandoned the contract as of January 1, 1891. The evidence then in the record, in the form of depositions and exhibits, fully sustains the judgment. Whether there had been such abandonment was an issue in the case. Had appellant moved for the transfer of that issue to the common-law docket when he answered, it would have been so ordered. Section 10, Civil Code Prac. But he did not then move for it. It was thereafter within the discretion of the trial judge whether he would order it transferred. On the subject of an abandonment by appellant and Talbutt, the evidence is all one way. In truth, it is not contended seriously in the argument for appellant that he had not abandoned the contract. It' was not an abuse of discretion by the trial judge to decide that question himself, and to send the question of damages to the jury to try. The judgment of the court, decreeing that appellant had abandoned the contract January 1, 1891, was not entered till October 24, 1903, although the judgment was in fact announced by the court on October 17, 1903. Before the orders of the latter date were signed, tlie court amended them so as to conform to the facts stated. We see nothing in this prejudicial to appellant, or that was beyond the power of the court to do.

Perceiving no error in the record, the judgment is affirmed.