Small v. Ogden

• Decision Date: 13 December 1966
• Docket Number: No. 52304,52304
• Citation: 259 Iowa 1126,147 N.W.2d 18
• Parties: Claude Perrin SMALL and Kathryn Small, Appellants, v. Frank OGDEN and Helen Ogden, Appellees.
• Court: Iowa Supreme Court

Page 18

147 N.W.2d 18

259 Iowa 1126

Claude Perrin SMALL and Kathryn Small, Appellants, v. Frank OGDEN and Helen Ogden, Appellees.

No. 52304.

Supreme Court of Iowa.

Dec. 13, 1966.

W. R. Mockridge, DeWitt, for appellants.

Lane & Waterman, by Robert V. P. Waterman and Donald H. Sitz, Davenport, for appellees.

RAWLINGS, Justice.

By an action in equity for declaratory judgment plaintiffs sought construction of a real estate contract and asked that forfeiture proceedings previously instituted by defendants be enjoined. The trial court found the contract unambiguous, denied the relief prayed by plaintiffs, and they appealed.

A written contract was entered into January 6, 1949, under which plaintiffs agreed to purchase and defendants agreed to sell certain farm land in Clinton County. The given purchase price was $30,000, with specified payments to be as follows: $2000 down payment, $6000 on or before March 1, 1949, then $1000 December 1st and a like sum June 1st of each year until December 1, 1964, at which time final payment of $385.77 was to be made.

The contract also provided: 'The entire amount may be paid off at any time in accordance with schedule A of which each party has (sic) been delivered a copy.'

Another pertinent provision in the agreement is as follows: 'Payments do not bear interest'.

Schedule A then provides in part: 'If parties of the second part want to pay in full the remaining unpaid payments due under the terms of the agreement, they may do so by notifying party of the first part sixty (60) days prior to the time payment is to be made and by making such payment as appears below.

                                                   regular
                1949  payment  to  be  $23,420.00  less  any/payments  made  during  the  year
                1950     "     "   "    22,196.80   "     " "           "      "      "    "
                1951     "     "   "    20,928.67   "     " "           "      "      "    "
                1952     "     "   "    19,613.82   "     " "           "      "      "    "
                1953     "     "   "    18,350.37   "     " "           "      "      "    "
                1954     "     "   "    17,036.38   "     " "           "      "      "    "
                1955     "     "   "    15,669.84   "     " "           "      "      "    "
                1956     "     "   "    14,248.63   "     " "           "      "      "    "
                1957     "     "   "    12,770.28   "     " "           "      "      "    "
                1958     "     "   "    11,233.40   "     " "           "      "      "    "
                1959     "     "   "     9,634.74   "     " "           "      "      "    "
                1960     "     "   "     7,972.13   "     " "           "      "      "    "
                1961     "     "   "     6,243.02   "     " "           "      "      "    "
                1962     "     "   "     3,998.28   "     " "           "      "      "    "
                1963     "     "   "     2,444.74   "     " "           "      "      "    "
                1964     "     "   "     1,385.77   "     " "           "      "      "    "
                

The last and final payment shall be made 12/1/1964 in amount $385.77.'

Plaintiffs satisfied all installments due under the contract until a total of $29,000 had been paid, then January 4, 1961, tendered the sum of $1000 and demanded deed. This was refused by defendants and July 17, 1964, they instituted forfeiture proceedings claiming default by plaintiffs in making payments due June 1, 1960, and all subsequently owing. Plaintiffs then commenced the subject action.

This being a proceeding in equity, evidence was presented by both parties after which the trial court found the contract not ambiguous, and dismissed plaintiffs' petition, holding they were required, by the agreement, to make All payments specified, Or exercise right of prepayment according to schedule A. In so doing the court found no need to resort to extrinsic evidence.

I. Our review is de novo. See Ullmann v. Reed Ins. Agency, 258 Iowa 100, 137 N.W.2d 690, 691.

II. In Bruhl v. Thul, 257 Iowa, 889, 134 N.W.2d 571, 573--574, this court said: '* * * we are asked to interpret the contract which the parties made for themselves. The objective is to ascertain the meaning and intention of the parties as expressed in the language used. (Authorities cited.)

'It is the court's duty to give effect to the language of the contract in accordance with its plain and ordinary meaning and not make a new contract for the parties by arbitrary judicial construction. (Authorities cited).

'The court will not resort to construction where the intent of the parties is expressed in clear and unambiguous language. In interpreting a contract we may resort to rules of construction only where the language of the instrument is of doubtful meaning. (Authorities cited).'

Our first problem is to determine whether the agreement entered into by plaintiffs and defendants is or is not ambiguous.

III. Ambiguity may be said to appear when, After application of certain rules of interpretation to the face of the instrument, a genuine uncertainty results as to which one of two or more meanings is the proper one. Morris Plan Leasing Co. v. Bingham Feed and Grain Co., Iowa, 143 N.W.2d 404, 412.

And, in arriving at the intent of the parties as expressed by their agreement we consider the entire instrument, giving effect, if possible, to all language used. Chicago & N.W. Ry. Co. v. Kramme, 244 Iowa 944, 948, 59 N.W.2d 204; Randolph v. Fireman's Fund Ins. Co., 255 Iowa 943, 951, 124 N.W.2d 528, 8 A.L.R.3d 907; and Harrison Sheet Steel Co. v. Morgan, (8 Cir.), 268 F.2d 538, 542.

Looking again to the face of the contract between plaintiffs and defendants we find the purchase price to be $30,000, followed by a provision for specified periodic payments which total the sum of $38,385.77, without interest.

Also to be considered is schedule A, identified as exhibit E, which is a part of the contract by which plaintiff-purchasers are accorded permissible prepayment rights.

In this respect the contract itself provides the entire amount May be paid off at any time in accordance with schedule A, which in turn contains a provision to the effect that If the purchasers desire to exercise right of prepayment, they may do so by remittance of an annually reduced sum over a term of about 15 years.

It requires only a surface mathematical computation to understand, and if necessary, clarify any or all of the payment terms provided by the contract, including schedule A. See Harvey Const. Co. v. Parmele, 253 Iowa 731, 736, 113 N.W.2d 760.

For example, if plaintiff-purchasers had elected to liquidate the contract in 1949, they would have previously paid $8000, and under schedule A would have paid an additional $23,420, making a total of $31,420 paid by them for the farm.

And, if they had desired to take deed in 1952, the down payment and annual periodic...