Harmon v. Thompson

• Decision Date: 24 January 1905
• Parties: HARMON v. THOMPSON.
• Court: Kentucky Court of Appeals

84 S.W. 569

119 Ky. 528

HARMON v. THOMPSON.

Court of Appeals of Kentucky.

January 24, 1905

Appeal from Circuit Court, Clark County.

"To be officially reported."

Action by H. P. Thompson against Archer Harmon and others. From a judgment for plaintiff, Harmon appeals. Affirmed.

Wm Lindsay, Morton, Webb & Wilson, and Beverly R. Jouett, for appellant.

Pendleton & Bush, J. H. Hazelrigg, and J. M. Benton, for appellee.

O'REAR J.

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 B. 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 Winchester; now 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 be 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 Harmon 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-thirds. For the balance due on the 1st day of January, 1891, 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 rules 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.

Can 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 they 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...