Board of Directors, Ben Davis Conservancy Dist. v. Cloverleaf Farms, Inc.

Decision Date20 January 1977
Docket NumberNo. 2--1274A296,2--1274A296
Citation359 N.E.2d 546,171 Ind.App. 682
PartiesBOARD OF DIRECTORS, BEN DAVIS CONSERVANCY DISTRICT, Appellant (Defendant below), v. CLOVERLEAF FARMS, INC., Appellee (Plaintiff below). . 1
CourtIndiana Appellate Court

Phillip C. Klotz, Noblesville, Robert E. Sward, Andrew Jacobs, Sr. Indianapolis, for appellant.

J. C. Burris, Indianapolis, of counsel; Burris & Gross, Indianapolis, Campbell, Kyle, Proffitt, Cook & Campbell, Noblesville, for appellee.

LYBROOK, Judge.

Defendant-appellant Ben Davis Conservancy District (District) appeals from a decision entitling Cloverleaf Farms, Inc. (Cloverleaf) to a remuneration from the District for the cost of sewers installed on land developed by Cloverleaf. Cloverleaf claimed below that an easement contract to which they were successors in interest, entitled them to installed sewers at the District's expense.

On April 27, 1960, the District and James Hardin entered into an agreement whereby Hardin granted to the District a sewer easement over his land. As partial consideration for the easement the District agreed that the following clause be included in the agreement:

'The Grantee agrees further that it will permit the Grantor, or his successors, heirs, representatives, or assigns, in interest, to connect to and use the sewer system of the Ben Davis Conservancy District for the whole or any part of said real estate upon the same basis and under the same conditions that such sewer system is used by land owners within the Ben Davis Conservancy District.'

Subsequently, Hardin conveyed the land to Cloverleaf, which developed it into a housing subdivision. After a dispute with the District concerning the above clause, Cloverleaf installed sewers as the land was improved.

Cloverleaf claims that the easement is not ambiguous, and that since the District installed sewers in a nearby neighborhood at the time of the making of the easement, the District was obligated to install sewers in their area as well, pursuant to the above clause.

Leslie Cadwell, a former official of the District, testified that sewers in the District were initially paid for with a bond issue which was subsequently retired through taxes placed on the beneficiaries of the sewer system. None of the proceeds of the bond issue were committed to construction of sewers in the Cloverleaf addition, yet residents of Cloverleaf at the time of the suit were subject to the same sewer tax as other residents of the District.

The District contends that after the date of the agreement new housing had to install its own sewers. On the other hand, existing housing brought into the system had sewage facilities provided by the District. Thus, the phrase '. . . upon the same basis and under the same conditions . . .' would mean that Cloverleaf, being new housing, had to supply its own sewers.

Of interest is the testimony of Hardin, original signatory to the agreement. He stated . . .

'Q. Tell me this, Mr. Hardin, just--just--you can just say anything you want to as far as I'm concerned. I'm going to ask you this question. I want you to tell Judge New what if anything was ever said between you and any member of the Ben Davis Conservancy District Board, its' attorney or anyone else that led you to think that under this easement agreement, the Ben Davis Conservancy District was going to pay for the laying of mains in the development on your land. What if anything, we ever said?

A. Nothing was said but only our original instrument is all that we go on. And the Judge will have to decide whether he does or he does not.'

'Q. Well--well when you signed that agreement that merely said they would be brought in and treated the same as anyone else in the District, did you even have in mind who was going to pay for sewers in the streets?

A. No. I didn't. I also didn't know who was going to buy it or who would need the sewer. Whether you need one or twenty.'

Later on Cadwell responded to a question from the bench.

'THE COURT: Did any of them say to you prior to the date of this letter 2 that the agreement, easement, bound the District to install sewers?

A. No sir. They never did.

Q. Then was this letter that you received from Mr. Butler, the first intimation that you had that they made any such claim or were about to make any such claim?

A. Yes sir, that's right.

Cadwell also denied that it was ever considered that the District was to pay for Cloverleaf's sewers.

The District, throughout the trial and in its brief, maintained that events after the signing of the easement delineate what is meant by the following clause:

'The Grantee agrees further that it will permit the Grantor, or his successors, heirs, representatives, or assigns, in interest, to connect to and use the sewer system of the Ben Davis conservancy District for the whole or any part of said real estate upon the same basis and under the same conditions that such sewer system is used by land owners within the Ben Davis Conservancy District.' (Emphasis supplied).

Cloverleaf, throughout the trial and in its brief, maintained that events prior to the execution of the easement determined its meaning.

The problem arises from the above clause. The emphasized phrasing can either be construed to relate to the time at which a connection would be made or to the time the contract was made. This is so because of the use of the words 'will permit' and 'is used'. The conflict between these two tenses gives rise to uncertainty about what time period is being discussed in relation to 'same basis' and 'same conditions'. It should be noted that the ambiguity would not have arisen had the District treated all parties alike over the time period in question. This would have resulted in only one standard of behavior on the part of the District that 'same basis' could possibly have related to.

In construing a contract, several maxims should be kept in mind. First, the instrument should be construed as a whole, Linton v. Linton (1975), Ind.App., 336 N.E.2d 687, and, it should be so construed, if possible, as to render the agreement valid rather than void. Wiltse v. Cornell (1970), 146 Ind.App. 447, 256 N.E.2d 572. Furthermore, the purpose of construing a contract is to ascertain the intention fo the parties at the time of the making of the contract, Robison v. Fickle (1976), Ind.App., 340 N.E.2d 824, from the language used in the instrument, Fort Wayne Bank Bldg., Inc. v. Bank Bldg. & Equipment Corp. (1974), Ind.App., 309 N.E.2d 464, unless there is an ambiguity. House v. Lesow (1975), Ind.App., 339 N.E.2d 86. 3 The test for determining whether a contract is ambiguous is whether or not reasonable men would find the contract subject to more than one interpretation. Myers v. Maris (1975), Ind.App., 326 N.E.2d 577. Furthermore, where an agreement is so...

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