Rusiski v. Pribonic

• Citation: 515 A.2d 507,511 Pa. 383
• Parties: Robert J. RUSISKI and Margaret M. Rusiski, his wife, Appellees, v. Edward M. PRIBONIC and Andrea E. Pribonic, his wife, Appellants.
• Decision Date: 25 September 1986
• Court: United States State Supreme Court of Pennsylvania

Page 507

515 A.2d 507

511 Pa. 383

Robert J. RUSISKI and Margaret M. Rusiski, his wife, Appellees, v. Edward M. PRIBONIC and Andrea E. Pribonic, his wife, Appellants.

Supreme Court of Pennsylvania.

Argued Sept. 18, 1985.

Decided Sept. 25, 1986.

Stanley A. Uhr, Pechner, Dorfman, Wolffe, Rounick & Cabot, Philadelphia, for appellants.

Robert A. Seewald, Louis B. Swartz, Seewald, Carb & Swartz, P.C., Pittsburgh, for appellees.

Before NIX, C.J., and LARSEN, McDERMOTT, HUTCHINSON, ZAPPALA and PAPADAKOS, JJ.

OPINION OF THE COURT

PAPADAKOS, Justice. ^*

The Appellants are the fee-simple owners of a fifty-acre tract in White Oak Borough, Allegheny County. They entered into an Agreement of Sale with the Appellees in which they agreed to sell the house in which they lived with its attendant outbuilding on a two-acre plot carved from their fifty-acre tract. The house and outbuildings in their intended geography were landlocked. To sell, therefore, they offered access across their remaining land to the public roadway.

In the Agreement of Sale, that intention was embodied as follows:

Sellers agree at the time of the conveyance to grant buyers a right of way which includes roughly the last sixty feet of the driveway, leading from the acreage to McKee Road. This right of way is to be granted in the deed and is to be used solely by the buyers for purposes of ingress and egress and it is clearly understood that the owners may, from time to time, use this portion of the land for water lines, sewer lines, electrical lines, gas and other utility functions.

Both parties agreed and signed. A deed, prepared by the Lawyers Title Insurance Corporation for and signed by Appellants, was presented at settlement and contained, as agreed, a deeded provision establishing the access road. It reads, in pertinent part:

ALSO, together with a right in the grantees, their heirs and assigns, to use a driveway as presently located on property of grantors immediately abutting the premises herein described on the North for egress and ingress to McKee Road provided that grantors, their heirs and assigns, hereby reserve the right to use the property over which the driveway runs for water lines, sewer lines, electrical lines, gas and other utility functions so long as said reservation does not interfere with grantees' right of ingress and egress.

At settlement, which the Appellants did not attend, a dispute arose over whether, in the original agreement, the term "owners" referred then to the "buyers" or "sellers." The gravamen of the dispute was whether the ground in which the easement inhered belonged to the "sellers" or the "buyers," that is, whether the buyers owned the ground and granted an easement to the sellers, or the sellers owned the ground and granted an easement to the buyers. Appellants' counsel, to obviate the problem, struck from the deed provision the following:

... provided that grantors, their heirs and assigns, hereby reserve the right to use the property over which the driveway runs for water lines, sewer lines, electrical lines, gas and other utility functions so long as said reservation does not interfere with grantees' right of ingress and egress.

Hence, leaving the part that reserved ownership in the sellers and an easement in the Appellee-buyers.

It was the 11th hour and the buyers, faced with different wording, asked time to consider and evaluate the deletion. Three days thereafter, they agreed to the deletion, accepting the easement and not the ownership as was so plainly stated in the original Agreement of Sale. We say plainly stated because, when the Agreement of Sale was executed, the buyers were not then the owners, and no reading of that agreement could fail to distinguish that Appellants were then owners-sellers granting an easement over their land to the Appellees as buyers.

The problem here, however, does not turn upon that issue, because whatever the Appellant-sellers intended was agreed to by the Appellee-buyers. After the Appellee-buyers notified their acceptance to Appellants, they set a new closing date exactly one month after the original closing. The Appellants failed to appear, contending that the buyers breached the Agreement of Sale by refusing to close on the original settlement date. Three days later, the Appellees filed the instant suit seeking specific performance.

The Chancellor not only granted specific performance, but he also awarded damages of $48,852.00 reduced to present value of $31,441.64. He reduced the purchase price from $63,900.00 to $32,458.36 and added thereto $14,300.00, which the parties agreed was the value of improvements made to the property by Appellants after the signing of the agreement. Thus, the buyers were granted specific performance and were obligated to pay $46,758.36 instead of $78,200.00.

The Chancellor accomplished this arithmetic feat by presuming that the Appellees would have to overpay their mortgage interest by 5% for a period of twenty years. At the original closing date, the buyers had obtained a twenty-year mortgage for $57,500,500.00 at 10.25% interest. Four years later, when the Chancellor issued his decree, the interest rate available was 15.25%. On appeal, the Superior Court affirmed.

Upon petition, we granted allocatur to consider both aspects of the lower court's decision. The precise issues on appeal are: 1) whether a seller who drafts an agreement of sale containing an ambiguity should be estopped from refusing conveyance when the buyer agrees within a reasonable amount of time to accept seller's interpretation; and 2) whether an equity court can award damages to a buyer in a land sales transaction calculated upon an increased mortgage interest rate.

I.

In support of their appeal, the Appellants offer several arguments. First, they contend that there was ambiguity in the original agreement; because of this there was no meeting of the minds and, hence, no enforceable agreement. Second, Appellants argue that the tendered deed was a valid offer, which refused, was a rejection of the contract, and that the buyers' attempted acceptance of that offer was late and, hence, not binding. Finally, with regard to the Chancellor's apportionment of damages, they assert that the use of an increase in the annual mortgage percentage rate to penalize them was inequitable.

The scope of review of this Court in consideration of an appeal from a final decree is well established.

... the findings of the Chancellor will not be reversed unless it appears that he has clearly abused his discretion or committed an error of law. Where credibility of witnesses is important to the determination, the Chancellor's findings are entitled to particular weight because of his opportunity to observe their demeanor. Where a reading of the record reasonably can be said to reflect the conclusions reached by the Chancellor, a reviewing court may not substitute its judgment for that of the Chancellor. A reviewing court, however, is not bound by findings which are without support in the record or have merely been derived from other facts. (Citations omitted.)

Frowen v. Blank, 493 Pa. 137, 142, 425 A.2d 412, 415 (1981).

Sellers principally contend that the term "owners" in the agreement created an ambiguity which necessitated rescission of the contract. Buyers, on the other hand, contend that there was no such ambiguity.

The intent of the parties to a contract is to be determined solely from the express language contained therein. Steuart v. McChesney, 498 Pa. 45, 444 A.2d 659, 661 (1982). We have already noted that the original agreement was plain enough to distinguish the parties and their intention. The learned Chancellor succinctly resolved that issue.

It is clear to the court that the purpose of the disputed language in the deed and Agreement of Sale was to grant ingress and egress to the plaintiffs but reserve a right in the defendant for water lines, sewer lines and other utilities in case defendants, at some future date, decided to develop the surrounding acreage. The clause in question does not make sense otherwise.

Slip opinion, GD 79-9621. Adjudication, p. 3 (7/2/81). The Superior Court, agreeing, stated:

Taking the provision in its context in the deed, it is illogical to interpret "owners" as referring to Rusiki's (sic) (Appellee-buyer) as they "owned" nothing prior to passage of title by deed.

Rusiski v. Pribonic, 326 Pa. Superior Ct. 545, 552, 474 A.2d 624, 628 (1984).

We agree with both analyses, for, assuming arguendo that there was ambiguity, doubtful language is construed most strongly against the drafter thereof. In re Estate of Breyer, 475 Pa. 108, 116, 379 A.2d 1305, 1310 (1977). In this case, it is undisputed that the Appellants drafted both the Agreement of Sale and the deed provision.

Moreover, sellers' contention, if accepted, would only support a finding of unilateral mistake, which, in the absence of fraud or fault attributable to the buyers, would not be grounds for rescission. See, Bosler v. Sun Oil Co., 325 Pa. 411, 190 A. 718 (1937). See also, Herman v. Stern, 419 Pa. 272, 280 n. 5, 213 A.2d 594, 598 n. 5 (1965); McFadden v. American Oil Co., 215 Pa. Superior Ct. 44, 257 A.2d 283 (1969). Neither fraud nor fault is at issue here.

Sellers further contend that since time was of the essence concerning the agreement, buyers were in breach upon their failure to close on the initial date set between the parties. This contention has no merit. The agreement at issue contains a paragraph that in order for time to be of the essence, written notice must be served upon the other party setting a date, time, and place for final settlement. This was not done by sellers. "It is a well-established principle in equity that time is not ordinarily regarded as of the essence in contracts for the sale of real property unless it is so stipulated by the express terms thereof, or it is necessary to be implied so." (Citations omitted.) Carsek Corp. v. Stephen...