North v. Philliber

• Court: Arkansas Supreme Court
• Writing for the Court: STROUD; HICKMAN
• Citation: North v. Philliber, 269 Ark. 403, 602 S.W.2d 643 (Ark. 1980)
• Decision Date: 30 June 1980
• Docket Number: No. 80-77,80-77
• Parties: Keath NORTH, Appellant, v. William V. PHILLIBER and Loreta Philliber, his wife, Appellee.

Page 643

602 S.W.2d 643

269 Ark. 403

Keath NORTH, Appellant, v. William V. PHILLIBER and Loreta Philliber, his wife, Appellee.

No. 80-77.

Supreme Court of Arkansas.

June 30, 1980.

Rehearing Denied Aug. 25, 1980.

Patten, Brown, Leslie & Davidson, by Charles A. Brown, Little Rock, for appellant.

Homer Tanner, North Little Rock, for appellee.

STROUD, Justice.

This is a suit for damages for the breach of a written contract to convey real property. The trial court denied judgment and found the seller was justified in refusing to convey. We disagree.

In early 1978 appellees listed certain residential property in Little Rock for sale with Block Realty Company for the asking price of $28,750. Appellant, a licensed real estate broker, inspected the apartments on the property and submitted an offer in his own behalf of $22,500 to appellees through Grady Wahlquist, one of Block's salesmen. The offer was accepted and signed by appellees on April 3, 1978, and provided that the "closing date to be designated by agent, is estimated to be on or about 45 days from acceptance." On or about June 12, appellees came to Little Rock and were requested by appellant to sign certain papers concerning the conventional loan required as a part of the transaction, but they refused to do so. After several months of negotiations and demands proved futile, appellant filed suit against appellees seeking $10,000 in damages for breach of the offer and acceptance agreement. The trial court, sitting as a jury, found that the contract was in several respects fatally ambiguous, that appellant had attempted to vary the terms of the written agreement, that the transaction was "raw" as appellant and Wahlquist had attempted to take advantage of appellees, that appellant had failed to tender to appellees copies of the closing instruments and payment of the cash portion of the contract price, and that appellant had failed to prove the allegations in his complaint by a preponderance of the evidence. Appellant brings this appeal, alleging five points for reversal.

Appellant first contends that the trial court erred in finding the agreement ambiguous as to the terms of the purchase price, the execution of closing documents, the subordination of the proposed lien of appellees, and the use of the proceeds of the loan to be obtained by appellant. The offer and acceptance, after reciting the purchase price of $22,500, in pertinent part provided:

$6,500.00 of the purchase price payable in cash. Balance of purchase price in the amount of $16,000.00 in the form of a note secured by a Second Deed of Trust (mortgage) on the property; to be executed by Purchaser in favor of Sellers, payable at $162.29 per month, or more, including interest at 9% per annum, (with entire balance due 15 years from date of note or upon sale or transfer of the property). Conditioned upon purchaser obtaining a conventional loan to be secured by the property in an amount not to exceed 75% of appraised value.

After Wahlquist received the offer from appellant, he discussed the terms with Rev. Philliber by telephone, and mailed them the offer and acceptance upon being advised that they wished to accept it. It is the duty of the court to construe a contract according to its unambiguous language without enlarging or extending its terms. Christmas v. Raley, 260 Ark. 150, 539 S.W.2d 405 (1976); New York Life Insurance Company v. Dandridge, 202 Ark. 112, 149 S.W.2d 45 (1941). Further, while any ambiguity in a contract must be construed against the party who drafted it, Christmas, supra, a construction which neutralizes any provision of a contract should never be adopted if the contract can be construed to give effect to all provisions. Continental Casualty Co. v. Davidson, 250 Ark. 35, 463 S.W.2d 652 (1971); Fowler v. Unionaid Life Ins. Co., 180 Ark. 140, 20 S.W.2d 611 (1929). In Fowler, supra, we stated the following:

It is also a well-settled rule in construing a contract that the intention of the parties is to be gathered not from particular words and phrases but from the whole context of the agreement. In fact, it may be said to be a settled rule in the construction of contracts that the interpretation must be upon the entire instrument and not merely on disjointed or particular parts of it. The whole context is to be considered in ascertaining the intention of the parties, even though the immediate object of inquiry is the meaning of an isolated clause. Every word in the agreement must be taken to have been used for a purpose, and no word should be rejected as mere surplusage if the court can discover any reasonable purpose thereof which can be gathered from the whole instrument. The contract must be viewed from beginning to end, and all its terms must pass in review, for one clause may modify, limit, or illuminate the other. Taking its words in their ordinary and usual meaning, no substantive clause must be allowed to perish by construction, unless insurmountable obstacles stand in the way of any other course. Seeming contradictions must be harmonized, if that course is reasonably possible. Each of its provisions must be considered in connection with the others, and, if possible, effect must be given to all.

The testimony of Rev. Philliber, Wahlquist and appellant indicates that they all understood that a portion of the down payment of $6,500 would be used to pay off a current loan of appellees secured by the property, and that the $16,000 lien to be retained by appellees at closing would be a...