Montauk Corp. v. Seeds

• Decision Date: 26 February 1958
• Docket Number: No. 112,112
• Citation: 215 Md. 491,138 A.2d 907
• Parties: MONTAUK CORPORATION v. Carl B. SEEDS and Washington Suburban Sanitary Commission.
• Court: Maryland Court of Appeals

Page 491

215 Md. 491

138 A.2d 907

MONTAUK CORPORATION v. Carl B. SEEDS and Washington Suburban Sanitary Commission.

No. 112.

Court of Appeals of Maryland.

Feb. 26, 1958.

David I. Abse and N. L. Silberberg, Washington, D. C., for appellant.

Arthur J. Hilland, Rockville, for Carl B. Seeds.

John B. Kenkel, Bladensburg, and B. Houston McCeney, Silver Spring, for Washington Sub. Sanitary Commission.

Before BRUNE, C. J., and HENDERSON, HAMMOND, PRESCOTT and HORNEY, JJ.

PRESCOTT, Judge.

The appellee, Carl B. Seeds (Seeds), sued the appellant, Montauk Corporation (Montauk), in the Circuit Court for Montgomery County for damages for the breach of a contract. Montauk joined the other appellee, Washington Suburban Sanitary Commission (Commission), as a third-party defendant. The case was tried by a judge with a jury, and resulted in a verdict in favor of the appellee, Seeds, against the appellant, Montauk; and a verdict in favor of the Commission, the third-party defendant. Judgment was entered on the verdict in favor of Seeds against Montauk, but no judgment was entered on the verdict in favor of the Commission. From the judgment in favor of Seeds against Montauk, Montauk has appealed.

Seeds owns and operates a drain cleaning and pumping service business in Washington, D. C., and the surrounding territory. He performs such work on either a job or contract basis. Montauk was building a subdivision of houses, known as Georgetown Village, in the Bethesda area, and Arnold L. Perry (Perry) was its president. In order to provide sewer service for the houses it built and sold in Georgetown Village, Montauk had to build a sewage pumping station on one of its lots. As it was necessary to connect this with the general sewage system in the area, the plans and specifications therefor had to be submitted to the Commission and its approval obtained; and, thereafter, the construction, maintenance and operation of the pumping station, by statute (1 Mtg.Cty.Code (1955) sec. 74-55), would be under the supervision and general control of the Commission. The Commission was also empowered, whenever it deemed it expedient, to take over any privately owned sewage system in the area either by purchase or condemnation.

Early in the year 1954, Perry asked Seeds to submit a proposal for service on the pumping station on an annual basis, for a period of five years. Negotiations followed that request, and two written proposals were submitted by Seeds to Montauk which were not accepted. On April 13, 1954, Montauk, through Perry, accepted Seeds' third written proposal to do the required work, which was specified in the proposal, for $2,160 per year, for a period of five years, payable in monthly instalments, to commence upon the completion of the pumping station and the occupancy of the first group of houses. His proposal contained no provision that made it subject to the approval of the Commission, or to change or cancellation because of any subsequent action of the Commission.

This third proposal, with its acceptance by Montauk, was delivered to Montauk's attorney, who forwarded it to the Commission. An executed duplicate original thereof was offered by Seeds at the trial as his exhibit No. 1. Seeds' ability to perform the services and his business integrity had been approved by the Commission; but, without ratifying the third proposal of Seeds, which had been accepted by Montauk, the Commission decided to undertake the operation of the pumping station itself. Whereupon, after further negotiations, it executed a contract with Montauk which was quite favorable to Montauk from a monetary standpoint. In substance, the Commission agreed to take over the permanent operation of the pumping station upon the payment by Montauk to the Commission of the same amount of money that Montauk had agreed to pay Seeds to operate it for five years. Montauk did not notify Seeds of this contract with the Commission. Seeds was at all times ready, willing and able to perform his contract with Montauk.

I

The appellant's principal contention is that the contract was subject to an implied ¹ condition precedent that it had to be approved by the Commission, and, as the Commission never approved the same, neither party to the contract was bound to perform. It argues that the law is well established that conditions upon which the right to require performance of a contractual obligation depends may be implied, where not to do so would defeat the clear intention of the parties and the object of the contract.

The contract was in writing and extraneous evidence of the surrounding circumstances was admitted, without objection. It is therefore unnecessary to decide whether that evidence was admissible because of any ambiguity in the terms of the written instrument under consideration. Irving Trust Co. v. Williams, Inc., 168 Md. 588, 597, 178 A. 848. At the trial below, the question of the intention of the parties as to whether the contract was conditional or unconditional was presented to the jury, and its decision was against the appellant. There is no doubt that as a general rule the construction of a written instrument is a duty of the court. However, this general rule is subject to certain qualifications. This Court, in Warner v. Miltenberger's Lessee, 21 Md. 264, 274 (a will case), quoted with approval from the case of Wooster v. Butler, 13 Conn. 309, as follows:

'That the construction of written documents is a matter of law, and is not in ordinary cases to be submitted to the jury, as a matter of fact, is true; but where the doubt is produced by the existence of collateral and extrinsic facts, not appearing upon the instrument, its consideration ceases to be a matter of mere legal construction, and the intention of the parties is to be sought for, by a recurrence to the state of facts as they existed when the instrument was made, and to which the parties are to be presumed to have reference. The ambiguity in such case, is a latent one, which may be explained by parol evidence and submitted to the jury.'

This language was again quoted, with approval, in the later case of Keyser v. Weintraub, 157 Md. 437, 445, 146 A. 275, 65 A.L.R. 641 (a contract case); and the Keyser case was cited in Baltimore Luggage Co. v. Ligon, III, 208 Md. 406, 413, 118 A.2d 665. See also 17 C.J.S. Contracts § 616 note 11. Professor Williston recognizes this qualification of the general rule ² when he states:

'The jury's function in the interpretation of documents then will arise wherever, in view of the surrounding circumstances and usages offered in evidence, the meaning of the writing is not so clear as to preclude doubt by a reasonable man of its meaning. If the meaning after taking the parol evidence, if any, into account is so clear that no reasonable man could reach more than one conclusion as to the meaning of the writing under the circumstances, the court will properly decide the question of fact for itself as it may any question of fact which is equally clear.'

We think the ruling of the trial court was correct. It comes within the scope of the holding in the Keyser case. The true meaning of the contract was not such, after taking the parol evidence into account, as to make it so clear that no reasonable man could reach more than one conclusion concerning the same. We find no error in the trial court's submitting the question to the jury for its determination.

The appellant cited to us, on its first point, the case of Compania de Astral S. A. v. Boston Metals Co., 205 Md. 237, 107 A.2d 357, 108 A.2d 372, 49 A.L.R.2d 646, but we find nothing in that case that conflicts with anything we have said above.

II

The appellant next contends that if it be assumed that a valid contract existed between Seeds and Montauk, its nonperformance was the direct result of governmental action, which served to nullify the obligations of both parties. It contends that the decision of the Commission to assume direct supervision of the maintenance of the sewage system makes applicable the 'frustration' doctrine of contracts, and renders its obligation to perform nugatory. 6 Williston, Contracts, secs. 1935, 1936, 1937, 1939; Restatement, Contracts, sec. 454 et seq.; Wischhusen v. American Medicinal Spirits Co., 163 Md. 565, 568-570, 163 A. 685; Patch v. Solar Corp., 7 Cir., 149 F.2d 558.

In the instant case, this question was submitted to...