Wilson v. Holyfield

• Decision Date: 09 March 1984
• Docket Number: No. 811384,811384
• Citation: 313 S.E.2d 396,227 Va. 184
• Parties: David S. WILSON v. L.B. HOLYFIELD. Record
• Court: Virginia Supreme Court

Page 396

313 S.E.2d 396

227 Va. 184

David S. WILSON v. L.B. HOLYFIELD.

Record No. 811384.

Supreme Court of Virginia.

March 9, 1984.

Charles L. Williams, Jr., Roanoke (Melissa J. Warner; Gentry, Locke, Rakes & Moore, Roanoke, on brief), for appellant.

James N. Kincanon, Roanoke (Martin P. Burks, Roanoke, on brief), for appellee.

Before CARRICO, C.J., and COCHRAN, POFF, COMPTON, STEPHENSON, RUSSELL and THOMAS, JJ.

THOMAS, Justice.

On August 30, 1978, L.B. Holyfield and David S. Wilson entered into a contract in which Holyfield agreed to sell and Wilson agreed to buy certain land located near Smith Mountain Lake. Prior to closing, the parties fell into a dispute as to the meaning of the contract.

As a result, Wilson filed a motion for declaratory judgment in which he asked the trial court to "construe the contracts, agreements and understandings between the parties...." In response, Holyfield contended, for several reasons, that "the minds of the two parties have never met on material matters, essential to be contained in any enforceable contract for the sale and purchase of land...." Holyfield asked the trial court to declare that no contract existed. The trial court ruled in favor of Holyfield. Wilson appealed, contending that the trial court erred. We agree with Wilson. Therefore, we will reverse the decision of the trial court.

Though Holyfield advanced several arguments in support of his position that the minds of the parties had not met on essential terms, the trial court based its ruling solely on the argument that the financing provision in the contract was incomplete, indefinite and thus unenforceable. Consequently, our review is limited to the question whether the financing provision was so indefinite that the trial court could not determine its meaning.

The total purchase price was set forth as $150,000. The financing provision, on which the trial court based its opinion, reads as follows:

Owner financing of 71% of purchase price, $106,500, at an interest rate of 10 percent per annum for a period of eight (8) years. Balance of 29% of purchase price, $43,500, to be paid as follows: $7,500 option payment to be credited to buyer and balance of $36,000 to be paid by buyer at settlement. Payments to be made yearly with interest to seller.

Holyfield argued that the foregoing provision is indefinite because it makes no reference either to a deed of trust or other security, or to either prepayment or anticipation.

The trial court first explained its ruling in a letter opinion dated May 11, 1981. There, the court wrote as follows:

The Court is of opinion that terms of the Option and Contract of Sale relating to financing, including amount of annual payments on principal and interest, deed of trust lien and partial release or subordination thereof, substituting other security for a deed of trust lien, and right of anticipation, are incomplete and indefinite. The parties never fully agreed on the details of financing but each party's evidence indicated that the financing terms were incomplete and meant entirely different things to each party. The Court cannot make a contract for the parties by rewriting the contract to provide what it thinks should be done to conform to "customary practices."

The court elaborated upon its views in its Final Decree of May 20, 1981, which incorporated by reference the May 11 letter opinion. The Court wrote this in its decree:

[T]he terms and provisions of the Option and Contract of Sale executed by the parties hereto under date of August 30, 1978, as they relate to payment of deferred purchase money to become due thereunder and to the security to be given therefor are ambiguous, incomplete and uncertain, so that the Court cannot say what was intended to be agreed upon between the parties....

The essence of the trial court's opinion is that because the financing provision is silent as to certain matters that are customarily found in contracts for the sale of real estate, the provision, as written, is ambiguous, incomplete, and uncertain. In taking that approach, the trial court did exactly what it stated it would not do: it ruled on what the parties might have agreed to instead of ruling on what they actually agreed to.

The principles surrounding court review of contracts are well-settled. Contracts are not rendered ambiguous merely because the parties disagree as to the meaning of the language employed by them in expressing their agreement. See Manss-Owens Co. v. Owens & Son, 129 Va. 183, 197, 105 S.E. 543, 547 (1921). Further, the question whether a contract is ambiguous is not one of fact but one of law.

In addition, we have often said that it is the duty of the court to construe a contract as written:

It is the function of the court to construe the contract made by the parties, not to make a contract for them. The question for the court is what did the parties agree to as evidenced by their contract. The guiding light in the construction of a contract is the intention of the parties as expressed by them in the words they have used, and courts are bound to say that the parties intended what the written instrument plainly declares.

Meade v. Wallen, 226 Va. 465, ---, 311 S.E.2d 103, 104 (1984); Magann Corp. v. Electrical Works, 203 Va. 259, 264, 123 S.E.2d 377, 381 (1962). A corollary to the last stated principle is that courts cannot read into contracts language which will add to or take away from the meaning of the words already contained therein. See Virginian Ry. Co. v. Avis, 124 Va. 711, 719, 98 S.E. 638,...