Holliday v. Pegram

OPINION. May 23, 1911. The opinion of the Court was delivered by The plaintiff contends, that the letters "B," "C" and "D," show a complete contract between him and the defendants, and that the verdict was properly directed. On the other hand, the defendants contend, that the letters merely show negotiations for an agreement, which was not to be binding upon the parties, until it was formerly executed; also, that G.H. Pegram, alone, rented the house in his individual capacity.

The first question that will be considered, is, whether the letters which were introduced without objection, make out a complete contract. The letters "B," "C" and "D" must be considered in connection with the letters "A," "E" and "F," as they were introduced without objection.

"A valid contract may doubtless be made by correspondence, but care should always be taken, not to construe as an agreement, letters which the parties intended only, as a preliminary negotiation. The question in such cases always is, did they mean to contract by their correspondence, or were they only settling the terms of an agreement, into which they proposed to enter, after all its particulars were adjusted, which was then to be formally drawn up and by which alone they designed to be bound." Lyman v. Robinson, 14 Allen 242.

"Courts, in the construction of contracts, look to the language employed, the subject matter and the surrounding circumstances. They are never shut out from the same light, which the parties enjoyed, when the contract was executed, and, in that view, they are entitled to place themselves, in the same situation, as the parties who made the contract, so as to view the circumstances, as they viewed them, and so to judge of the meaning of the words, and of the correct application of the language, to the things described." Nash v. Towne, 5 Wall., 689.

"Where there is a doubt as to the proper meaning of the contract, the Court may receive evidence of the practical construction, which the parties themselves have placed on it, as indicated by their acts under it, for it is a canon in the interpretation of contracts, that the practice of the parties under them, may furnish a solid basis, on which their construction may rest, inasmuch as the subsequent acts of the parties, in executing a contract, may reflect their intention in making it." 21 A. E. Enc. of Law, 1115.

"It is unquestionably the duty of the Court, in construing a written instrument, to interpret its language, and it may also state the effect thereof, where it is susceptible of, but one inference; but where the inference to be drawn, from the facts stated in the instrument, is in dispute, and such facts susceptible of more than one inference, then the question must be determined by the jury, especially when the inference to be drawn, is dependent upon other facts in the case." Clover v. Gasque, 67 S.C. 34, 45 S.E. 113.

"Doubtless the general rule is, that it is the province of the Court, to construe written instruments; but, it is equally well settled, that where the effect of the instrument depends, not merely on its construction and meaning, but upon collateral facts and extrinsic circumstances, the inference of fact to be drawn from the paper, must be left to the jury."West v. Smith, 101 U.S. 263.

"Where the parties to a contract have given it a particular construction, such construction will generally be adopted by the Court, in giving effect to its provisions. And the subsequent acts of the parties, showing the construction they have put upon the agreement themselves, are to be looked to, by the Court, and in some cases may be controlling." 9 Cyc. 588-9.

"The construction of a contract, is a question for the Court, if the terms of the contract, and the extrinsic facts, which may affect construction, are free from dispute. This rule applies where the contract consists of several writings, as where it consists of letters exchanged between the parties. * * * If the terms of the contract are in dispute, or it is possible, to draw more than one inference from the established facts, which are relied on, to show the intention of the parties, the jury must determine such facts, or decide which of such inferences, is the correct one. The Court should, in such cases, submit the question, of fact to the jury, under proper alternative instructions, as to the construction to be given, in the event of each possible finding of fact, by the jury." 2 Page on Contracts, sec. 1129.

"It is a well settled principle, that when the construction to be given a contract, is rendered doubtful, by the language thereof, the interpretation of the contract, by the parties themselves, is entitled to great weight." Williamson v.Association, 54 S.C. 582, 32 S.E. 765.

In letter "B" the plaintiff says: "If you want it, we can arrange the rent agreement, when you come down, to look after the work." In letter "C" the defendant, G. H. Pegram, says: "You can send me copy contract, will arrange rent agreement, when come down." In letter "D" the plaintiff says: "We can arrange the agreement, when you come down, to begin work, in the country." In letter "E" the defendant says: "I am ready to make contract for your warehouse," and in letter "F" the plaintiff says: "Call by and we can fix up our contract." It will also be observed, that the other letters do not mention, all the provisions of the contemplated agreement, set out in letter "A".

The foregoing authorities show, the Court erred in ruling that the said letters, made a complete contract.

But even if the said letters showed, that the contract was complete without further action, on the part of the plaintiff, and the defendants, it would not follow that the presiding Judge was right, in directing a verdict. When the defendants offered testimony tending to show, that there was an agreement as to repairs, the plaintiff's attorneys objected to the introduction of such testimony, whereupon the defendants' attorney thus stated the object of the testimony: "I want to show, that, according to the terms of the agreement, entered into between Mr. Holliday and Mr. Pegram, and the subsequent agreement between Mr. Holliday and Mr. Pegram of Pegram Co., that Mr. Holliday agreed to have this work done."

The following then took place:

"The Court: You do not plead it in your answer.

"Mr. Ragsdale: How could I set up a counterclaim under the law of this case?

"Mr. Willcox: He could sue us in an independent action.

"Objection sustained."

If there is a lease in writing, which makes no reference to repairs, the lessee is not precluded from introducing parol testimony to show, that, as a part of the consideration of the agreement to pay rent, the lessor promised to make repairs. And, if it appears that the lessee suffered damage, by reason of the lessor's failure, to make the repairs, he would not be allowed to recover the whole amount mentioned as rent, but only that amount, after deducting such damages, as the lessee may have sustained, by reason of the lessor's failure to make the repairs. Williams v. Salmond, 79 S.C. 459, 61 S.E. 79.

The foregoing authorities also show, that the presiding Judge erred in his ruling that the letters and proposed contract, which he refused to allow the defendants to introduce, were not admissible in evidence.

The next question that will be considered, is, whether there was error in directing a verdict, on the ground that there was testimony tending to show, that G. H. Pegram alone, rented the warehouse in his individual capacity.

His Honor allowed defendants to introduce testimony to that effect. He did not change his ruling, or strike out such testimony. Therefore, in determining whether there was error in directing a verdict, the testimony which he ruled to be competent, must be taken into consideration. As the defendants denied the allegation, that the defendants, as partners, entered into the contract, and there was testimony tending to show, that G.H. Pegram alone entered into the contract, in his individual right, the presiding Judge erred, in withdrawing such fact, from the consideration of the jury, by directing a verdict.

It is the judgment of this Court, that the judgment of the Circuit Court be reversed, and that the case be remanded to that Court, for a new trial.