Baker v. McCarthy, 81-122

• Decision Date: 05 March 1982
• Docket Number: No. 81-122,81-122
• Citation: 443 A.2d 138,122 N.H. 171
• Parties: Carolyn A. BAKER v. Louis B. McCARTHY, Jr. et al.
• Court: New Hampshire Supreme Court

Page 138

443 A.2d 138

122 N.H. 171

Carolyn A. BAKER v. Louis B. McCARTHY, Jr. et al.

No. 81-122.

Supreme Court of New Hampshire.

March 5, 1982.

Flynn, McGuirk & Blanchard, Portsmouth (Raymond P. Blanchard, Portsmouth, on the brief and orally), for plaintiff.

Tybursky & Watson, Portsmouth, and McLane, Graf, Raulerson & Middleton P. A., Manchester (Thomas R. Watson, Portsmouth, and James R. Muirhead, Manchester, on the brief, and James R. Muirhead, Manchester, orally), for defendants.

PER CURIAM.

The plaintiff, Carolyn A. Baker, brought a bill in equity based on a right of first refusal in a deed dated October 5, 1965, in which her grantors, Gertrude B. McCarthy, Charlotte P. Milne and John F. Dingwall, conveyed to the plaintiff a 2.41-acre parcel of land, out of a larger tract, which they owned as tenants in common on Wild Rose Lane in New Castle. (See plan appended to this opinion.)

The principal issue presented by this appeal is whether subsequent conveyances of their interests in the remaining land by tenants in common John F. Dingwall and Charlotte F. Milne to their tenant in common Gertrude B. McCarthy and to her irrevocable trust triggered and violated the right of first refusal which they had granted to the plaintiff in their conveyance of October 5, 1965.

This is an issue of first impression in this jurisdiction, and courts elsewhere that have considered it have arrived at differing results. See Annot., 70 A.L.R.3d 203, 212 (1976).

The Master (Douglas R. Gray, Esq.) found that the transfers from Dingwall and Milne violated the right of first refusal which the plaintiff had bargained for and had acquired, and that the plaintiff was entitled to notice and did not receive it. The master established a schedule by which the plaintiff was to tender payment and receive a deed for an undivided two-thirds interest in the property in question. The master's recommendations were approved and a decree in accordance therewith was issued by Temple, J.

The basic facts are not contested by the parties. For reasons hereinafter set forth, we arrive at a different interpretation of the respective rights and obligations of the parties. Consequently, we vacate the court's decree and enter a judgment for the defendants.

The entire parcel of land on Wild Rose Lane in New Castle, containing about twenty-two acres, of which the premises in question are a part, was acquired in 1954 by Louis McCarthy, husband of defendant Gertrude B. McCarthy, and by Charlotte P. Milne and John Dingwall, each of whom owned undivided one-third shares in common. The three families had been friends since the 1930's. The property was purchased for two reasons: First, the parties wanted to keep the property, which bordered on the Atlantic Ocean, away from developers; and second, they each intended to build a summer residence on the premises. A rough layout of three homesites for the three co-tenants was discussed as early as 1954.

The McCarthy residence was to be in the middle of the tract of land. To effectuate this first step of the co-tenants' plans, co-tenants Dingwall and Milne conveyed 5.09 acres of the tract to Louis and Gertrude McCarthy as joint tenants. A residence was built thereon. At her husband's death, Gertrude became the sole owner of that property and the owner of an undivided one-third share in common of the remaining land. There was evidence that the other two tenants in common still contemplated that they, or their families, would build homes on the remaining tract of land.

Sometime in 1965, plaintiff Carolyn A. Baker's husband approached Gertrude B. McCarthy in order to purchase another parcel of land which she owned nearby. Mrs. McCarthy declined to sell that land but began discussions concerning the prospective sale of the land involved in this case. The three owners of the land, McCarthy, Milne and Dingwall, were willing to sell part of it. The Bakers were advised, however, that the land would be sold subject to multiple restrictions and conditions, which were eventually included in the deed conveying the 2.41 acres to the plaintiff.

The Bakers indicated that they wanted either to obtain an easement for a view of the ocean, or to buy additional land between the tract they were acquiring and the ocean. This resulted in the inclusion in the deed of the so-called "trim" rights which read as follows:

"The said Grantee shall also have the right to trim and remove trees, shrubs and other growth from the rear lot line of the premises herein conveyed to the Atlantic Ocean, said right to trim and remove trees, shrubs and other growth shall be for the sole purpose of maintaining a view from the premises granted herein to the Atlantic Ocean. The right ... shall remain in effect for only so long a time as the area in which said right can be exercised is owned by the Grantors herein or their heirs, executors, administrators, successors and assigns. Said right shall be terminated by the grantors or their heirs, executors, administrators, successors and assigns on either the sale of the land in which said right to trim and remove trees, shrubs and other growth is exercised or by the erection of a house on said area by the Grantors, their heirs, executors, administrators, successors and assigns ...."

The right of first refusal on which the plaintiff relies is contained in her deed from the grantors and reads as follows:

"It is a condition, however, that in the event the said Grantors, their heirs, executors, administrators, successors and assigns, shall at any time receive an offer of purchase for said area hereinbefore referred to, or for the entire balance of the land, which they are willing to accept, they shall first offer it to the said Grantee by giving notice b(y) registered or certified mail of the offer which they are willing (to) accept, and the Grantee shall have fifteen days following receipt of said letter, to notify the Grantors in writing by registered or certified mail of her intent to exercise this option, or notify the Grantors of her intent not to so exercise this option."

It is a well-established principle of law in this jurisdiction that the proper interpretation of a contract, such as a deed, is a question of law for this court. Catamount Const. Inc. v. Town of Milford, 121 N.H. 781, 782-83, 435 A.2d 123, 124 (1981); Clark v. Neergaard, 121 N.H. 632, 635, 434 A.2d 599, 600 (1981). In reaching the proper interpretation of a contract, we must apply the common meaning of the words and phrases used by the parties. Murphy v. Doll-Mar, Inc., 120 N.H. 610, 611-12, 419 A.2d 1106, 1108 (1980). This court will determine the meaning of the contract based upon the meaning that would be attached to it by reasonable persons. Id. at 612, 419 A.2d at 1108.

The trial court granted the plaintiff's request for findings and rulings No. 10 which reads as follows: "10. That no ambiguity exists in the agreement of the parties requiring the admission of evidence outside the agreement to explain its terms." Hence, this is not a case involving the meaning of extrinsic evidence, where this court, in its review, will adopt ...