Portsmouth Gas Co. v. Shebar

• Decision Date: 06 September 1968
• Citation: 209 Va. 250,163 S.E.2d 205
• Court: Virginia Supreme Court
• Parties: PORTSMOUTH GAS COMPANY v. Martin SHEBAR et al.

Page 205

163 S.E.2d 205

209 Va. 250

PORTSMOUTH GAS COMPANY v. Martin SHEBAR et al.

Supreme Court of Appeals of Virginia.

Sept. 6, 1968.

Harry E. McCoy, Norfolk (Seawell, McCoy, Winston & Dalton, Norfolk, Cooper, Spong & Davis, Portsmouth, on brief), for plaintiff in error.

H. Lee Kanter, Norfolk (Robert E. Brown, Kanter & Kanter, Norfolk, on brief), for defendants in error.

Before EGGLESTON, C.J., and BUCHANAN, SNEAD, I'ANSON, CARRICO, GORDON and HARRISON, JJ.

GORDON, Justice.

We must decide on this appeal whether the trial court erred in setting aside a jury verdict for the defendant, Portsmouth Gas Company, and entering judgment for the plaintiffs, Martin Shebar and others.

The plaintiffs brought this action against the Gas Company, alleging that under a contract dated April 26, 1963 the Gas Company had agreed to sell them chilled water piping as part of the air conditioning system for an apartment project. They asserted that the Gas Company had sold unsuitable piping, thereby breaching its express and implied warranties under the Contract and asked for damages in the amount of $100,000.

The Gas Company admitted that under the Contract it had agreed to sell certain heating and air conditioning equipment to the plaintiffs. The Gas Company denied, however, that it had agreed to sell, or had sold, chilled water piping to the plaintiffs, asserting that the plaintiffs had bought the piping through an independent contractor who was not the Gas Company's agent.

The crucial question before the trial court was whether the heating and air conditioning equipment agreed to be sold under the Contract included the chilled water piping. The answer to that question depended upon a proper construction of the Contract, which reads:

'THIS AGREEMENT, Made this 26th day of April, 1963, by and between PORTSMOUTH GAS COMPANY, a public service corporation, of Portsmouth, Virginia, party of the first part, hereinafter called the 'Seller', and MARTIN SHEBAR, IRVIN H. COHEN, SIDNEY W. COREN, JOSEPH J. GARNER, and H. LEE KANTER (the plaintiffs in this action), parties of the second part, hereinafter called the 'Buyers';

'WITNESSETH: That for and in consideration of the sum of Sixty-five thousand, two hundred seventy-two dollars and sixty-five cents ($65,272.65), to be paid by the buyers in the following manner, namely, Sixty-five hundred and twenty-seven dollars and twenty-six cents ($6,527.26) at and before the signing and sealing of this agreement, receipt of which is hereby acknowledged, and the balance of Fifty-eight thousand, seven hundred and forty-five dollars and thirty-nine cents ($58,745.39), including interest, to be paid in installments of Three thousand seven hundred and four dollars and twenty-two cents ($3,704.22), the first payment to become due six months after date, and then quarterly until paid, the seller doth hereby bargain, sell and deliver to the buyers the following goods and chattels, to-wit:

'1. Gas air conditioning and heating equipment:

(a) 15 model 54--450 Bryant Gas Chillers, 4.5 tons each.

(b) 3 model 36--450 Bryant Gas Chillers, 3 tons each.

(c) 51 thermostat kits with 2 speed relays.

(d) 51 model 18--407 cooling coils.

(e) 51 model 54904C06 coil housings.

(f) 51 model 50--393--E counterflow furnaces, or the equivalent.

(g) 18 model 5413D part load controls.

(h) 18 model 675A1003 outdoor thermostats.

2. 51 Norge gas refrigerators, model 721--880, 11 cu. ft. double door.

3. 51 Caloric model S351--KX--T ranges with 51 model 943 hoods; 51 model 21 32 double sinks, and 51 model SP--30 splash plates.

4. 51 Caloric caddies.

5. 1 Bryant 75--335 unit heater, installed in laundry room.

6. 1 Ruud model GL82--200 gas water heater for laundry room, but not to be installed.

'Seller will finance installation of heating and air conditioning equipment, which includes chilled water piping, gas piping and duct work, not including electrical work. (Emphasis supplied.)

'Seller covenants and agrees with buyers, that the goods and chattels are of good merchantable quality, and further will warrant title to said goods and chattels to buyers, free from the claims of all persons whatsoever.

'Save as aforesaid, however, the buyers agree to execute a chattel mortgage to Clyde W. Cooper, Trustee, to secure the balance of the purchase price of Fifty-eight thousand, seven hundred and forty-five dollars and thirty-nine cents ($58,745.39), as hereinabove set forth, evidenced by a note in the same amount, bearing same date, and payable in the manner hereinabove prescribed. (Testimonium and signatures follow.)'

The Gas Company contended that the heating and air conditioning equipment to be sold under the Contract comprised only those items listed in clause 1. The words of the Contract, 'the seller doth hereby bargain, sell and deliver to the buyers the following goods and chattels', immediately precede lists of specific items to be sold. Neither the list in clause 1 ('Gas air conditioning and heating equipment') nor the lists in clauses 2 through 6 (other equipment) include chilled water piping.

On the other hand, the plaintiffs contended that the lists of equipment in clauses 1 through 6 do not purport to include all the equipment agreed to be sold under the Contract. They relied upon the succeeding paragraph of the Contract, which reads: 'Seller will finance installation of Heating and air conditioning equipment, which includes chilled water piping, gas piping and duct work * * *'. (Emphasis supplied.) The plaintiffs argued that this paragraph evidences the parties' intention to include chilled water piping as part of the 'Gas air conditioning and heating equipment' agreed to be sold under clause 1 of the Contract.

Conversely, the Gas Company argued that the words 'which includes chilled water piping, gas piping and duct work' were included in this paragraph only to describe particular items of equipment the Gas Company would Finance.

Based on their respective contentions, the plaintiffs and the Gas Company each moved for summary judgment. The court overruled both motions, holding the Contract was ambiguous and parol evidence should be admitted to determine the Gas Company's responsibility for the chilled water piping.

The Gas Company assigned error to the overruling of its motion for summary judgment and to the admission of parol evidence to explain the meaning of the Contract. Although the Contract evidenced a meeting of the minds respecting the sale and purchase of certain heating and air conditioning equipment, we agree with the trial court that the Contract was ambiguous as to what items of equipment the Gas Company committed itself to sell. So evidence of the conduct of the parties, the surrounding circumstances and declarations of intent relating to the Contract was admissible to resolve this latent ambiguity. See Greater Richmond Civic Recreation, Inc. v. A. H. Ewing's Sons, Inc., 200 Va. 593, 106 S.E.2d 595 (1959); 9 Wigmore, Evidence § 2472 (3d ed. 1940). ¹

Much of the evidence that was introduced in the trial court, and much of the argument there and here, related to the question whether the Gas Company agreed to install the chilled water piping and whether the plumber who installed the piping did so as agent for the Company. But since the plaintiffs did not allege or attempt to prove faulty installation of the piping, evidence that the plumber installed the piping as the Gas Company's agent was relevant only insofar as it tended to show that the plumber purchased, as well as installed, the piping as the Gas Company's agent.

Because the jury returned a verdict for the Gas Company, we will state the evidence in the light most favorable to the Company.

In early 1962 Martin Shebar formed Patio Plaza, Incorporated, of which he was the sole stockholder, to buy land in a redevelopment area in Portsmouth and to erect thereon apartments to be known as the Patio Plaza Apartments. In September 1962 a salesman for Portsmouth Gas Company made two written proposals to Shebar, as president of Patio Plaza, Incorporated, each proposal relating to gas air conditioning and heating equipment for the apartments.

Under the first proposal the Gas Company would 'furnish' certain enumerated items of air conditioning and heating equipment ² for the Patio Plaza Apartments at a specified price. This proposal then recited: 'The estimated cost of installation of the aforementioned equipment will be $287.00 per apartment, this being the price quoted by Irving Spindel Plumbing & Heating Contractor with whom you have contracted to install said equipment. It is further agreed that in no case shall the installation cost exceed more than (sic) $300.00 per apartment.' (Emphasis supplied.)

Under the second proposal the Gas Company would 'finance the gas equipment * * * (to be furnished by it, including) air conditioning and heating equipment, refrigerators and ranges plus the cost of installation of the equipment, said installation to be performed by Irving Spindel, Plumbing & Heating contractor'.

Later in September 1962 Shebar and his counsel met with officers of the Gas Company and its counsel to discuss the proposals, after which counsel for the Gas Company drafted a proposed agreement between the Gas Company and Patio Plaza, Incorporated.

The agreement provided: '(T)he Gas Company hereby agrees to finance And install the gas equipment for utilities and appliances in said apartments, which shall include air conditioning and heating equipment, refrigerators and ranges, plus the cost of installation of this equipment; said installation to be performed by Irving Spindel, Plumbing and Heating Contractor'. (Emphasis supplied.) It then listed the air conditioning and heating equipment the Gas Company agreed to 'furnish'. ³ The agreement provided further that the cost of installing the equipment would not exceed $300 per apartment.

When counsel for the Gas Company mailed this proposed agreement to his client and counsel for...