Williams v. Idaho Potato Starch Co.

• Citation: 245 P.2d 1045,73 Idaho 13
• Decision Date: 11 June 1952
• Docket Number: No. 7812,7812
• Parties: WILLIAMS v. IDAHO POTATO STARCH CO.
• Court: United States State Supreme Court of Idaho

Page 1045

245 P.2d 1045

73 Idaho 13

WILLIAMS v. IDAHO POTATO STARCH CO.

No. 7812.

Supreme Court of Idaho.

June 11, 1952.

Rehearing Denied July 8, 1952.

Robert M. Kerr, Jr., Marion J. Callister, Blackfoot, for appellant.

J. H. Andersen, Blackfoot, Albaugh, Bloem, Barnard & Smith, Idaho Falls, for respondent.

THOMAS, Justice.

Appellant, a well drilling contractor, entered into a written contract with respondent, dated May 31, 1949, to drill a well on a designated site; the well was intended to supply water for a potato starch processing plant of respondent. At the time the contract was executed respondent made an advance of $1000 to appellant and it was agreed that respondent would pay appellant $12 per foot on the completion of the well, in accordance with the terms of the contract, the $1000 to apply upon such sum.

The contract provided that appellant would drill a hole 'sufficiently straight to accommodate a ten inch pump at a sufficient depth below the water level to insure a continuous flow of water'.

Appellant commenced work on the well on or about June 8, 1949, ultimately drilled a hole to a depth of 203 feet, and on or about March 1, 1950 ceased further work thereon, removed his equipment therefrom, and demanded payment of the balance of the contract price; respondent refused payment on the ground that the well was not sufficiently straight to accommodate a ten inch pump at sufficient depth below the water level to insure a continuous flow of water; the hole was not straight and on several occasions during the drilling operations disagreement arose as to whether the well was sufficiently straight so that the pump might work therein.

Appellant thereafter and within the time provided by law filed a claim of lien, and thereafter initiated this action to foreclose such lien.

Respondent filed an answer and cross-complaint, in which it denies liability under the contract on the ground that the well did not comply with the terms of the contract because it was not sufficiently straight to accommodate a ten inch pump, and cross-complained for the recovery of damages for breach of the contract in the sum of $1923.85, which included the $1000 advanced to appellant.

The case was tried before the court, with a jury sitting in an advisory capacity. The court submitted two special interrogatories to the jury, both of which were answered in the negative; the first interrogatory submitted the question whether or not appellant substantially complied with, or was ready, willing and able, within a reasonable time, to comply with the terms of the written contract; the second interrogatory submitted for determination the question of whether the respondent suffered any damage on account of loss or damage to casing or cost of recovering casing from the well because of the action of appellant.

The court made findings of fact and conclusions of law, and in so doing adopted the findings of the jury as to the special interrogatories, and found that the appellant failed to substantially comply with the terms of the contract, in that he failed to drill a well sufficiently straight to accommodate a ten inch pump of the type contemplated by the parties at a sufficient depth below the water level to insure a continuous flow of water; that the appellant was not entitled to any lien; that respondent did not accept the well, and that respondent was entitled to judgment for the $1000 which the court found was an advance and not a payment, together with interest thereon at the rate of six per cent per annum from the 31st day of May, 1949, together with costs, and judgment was accordingly entered. From this judgment the present appeal was taken.

Appellant makes numerous assignments of error. These respective assignments will be particularly treated as we proceed with the disposition of all matters presented for determination.

It is urged by appellant that the contract is clear and unambiguous in its terms and that the trial court erred in receiving, over objection, evidence of prior and contemporaneous negotiations between the parties, particularly with reference to the type of pump intended to be used in the well; it is insisted in this respect that the court erred in permitting the respondent to introduce evidence that the contract contemplated a water lubricating pump, for the reason that the introduction of such evidence tends to vary, alter, or add to an unambiguous contract; on the other hand, it is the contention of respondent that while this general rule is conceded where a contract is clear and unambiguous, yet that it is equally well settled that where a contract is vague, uncertain, and ambiguous, it is proper to admit evidence of prior and contemporaneous oral negotiations between the parties in order that the true intent of the parties might be ascertained.

It is deemed advisable, in order to dispose of this assignment of error, to briefly review some of the evidence relating thereto. The appellant introduced evidence to the effect that he knew that the well was intended to furnish water for the processing of potatoes in a starch processing plant then under construction by respondent; under cross-examination he was queried as to whether or not the respondent had told him at the time the contract was made, the type and make of pump which had been purchased by respondent for use in the well. While he testified under cross-examination that he did not remember of any certain type of pump having been mentioned to him, there was no objection to this testimony; appellant, on direct examination, through one of his expert witnesses, brought out testimony that a pump for such a well as was involved in this case would have to be a turbine pump and that there were three types of turbine pumps; water lubricated, oil lubricated, and submersible; he further testified that an oil lubricated pump should not be used where the possibility of oil getting into the water might be a factor, and that if one was going to pump a lot of sand and abrasive materials, an oil lubricated pump would be favored over a water lubricated pump; he testified in great detail with reference to the three types of pump and how they operated in a well, and in this respect he testified that it was quite common in wells that are not straight to use an oil lubricated pump over a water lubricated pump, and gave his reasons therefor; he testified that he had on two occasions made an examination of this particular well and, upon re-direct examination, positively testified that he would hesitate to put a water lubricated pump in this particular well, giving his reasons, then testified further in this respect as follows: 'As I said, I would guarantee to put a pump in there, but I wouldn't put a water lubricated pump in; I would put a submersible or oil lubricated pump in.'

The contract refers to a pump, but makes no reference to what type of pump, if any, was in the contemplation of the parties; the appellant volunteered to introduce testimony that there were three types of pumps generally used in the vicinity; while the contract might have been clear on its face by the use of the general words 'a ten inch pump', a matter which it is not necessary to nor do we decide, this extrinsic evidence brought into the record by the appellant shows that there are at least three pumps, any one of which might properly have been in mind. Upon the admission of this testimony, an ambiguity arises.

Thereafter the court received evidence by respondent, over objection, to the effect that the parties had engaged in conversations during their negotiations with reference to this matter prior to the execution of the contract; that during these negotiations appellant was informed that respondent had received satisfactory service out of a Fairbanks-Morse Pomona Pump and that respondent was handling such pumps and was buying a Fairbanks-Morse Pomona water lubricating pump to be used in the well; that respondent at that time informed appellant that an oil lubricating pump would not be satisfactory because respondent did not want to take any chance of getting oil into and contaminating the water. It is this particular testimony that appellant strenuously urges constituted reversible error, asserting that it would operate to alter and modify the terms of a written contract which was clear and unambiguous on its face.

Where a writing contains a reference to an object or thing, such as a pump, and it is shown by extrinsic evidence that there are two or more things or objects, such as pumps, to which it might properly apply, a latent ambiguity arises; Queen Insurance Co. v. Meyer Milling Co., 8 Cir., 43 F.2d 885; Meinhardt v. White, 341 Mo. 446, 107 S.W.2d 1061; Hall v. Equitable Life Assurance Co. of the U. S., 295 Mich. 404, 295 N.W. 204; Zydel v. Clarkson, 29 Ohio App. 382, 163 N.E. 584; Koplin v. Franklin Fire Ins. Co., 158 Pa.Super. 301, 44 A.2d 877. See also 32 C.J.S., Evidence, § 961, page 917, and Jones on Evidence, 4th Ed., Vol. 4, Sec. 472, p. 902, wherein the general rule is recognized that parol evidence cannot be received to contradict, vary, add to or subtract from the terms of an unambiguous written agreement, but where it is also recognized that there are some well recognized exceptions to this rule which includes, as does this case, a situation where a latent ambiguity might not appear upon the face of the contract, but lies hidden in the subject to which it has reference: Where such ambiguity is thus disclosed by extrinsic evidence such as was disclosed by the appellant through his testimony, such ambiguity may be removed by the same means, that is, extrinsic evidence to show which type of pump the description related to. Jones on Evidence, 4th Ed., Vol. 4, Sec. 472, p. 902.

We hold that the court did not err in admitting evidence that the parties contemplated the use of a water lubricating pump in the well.

Appellant points out that the contract fixed no time for...