Wynnewood State Bank v. Embrey, 17389

• Decision Date: 20 February 1970
• Docket Number: No. 17389,17389
• Citation: 451 S.W.2d 930
• Parties: WYNNEWOOD STATE BANK, Appellant, v. James L. EMBREY, Appellee.
• Court: Texas Court of Appeals

Page 930

451 S.W.2d 930

WYNNEWOOD STATE BANK, Appellant, v. James L. EMBREY, Appellee.

No. 17389.

Court of Civil Appeals of Texas,

Dallas.

Feb. 20, 1970.

Rehearing Denied March 13, 1970.

Wm. Andress, Jr., Andress, Woodgate & Hartt, Sanders & Nolen, Dallas, for appellant.

H. Louis Nichols, Saner, Jack, Sallinger, & Nichols, Dallas, for appellee.

BATEMAN, Justice.

The appellant Wynnewood State Bank sued appellee James L. Embrey on a letter agreement, and now appeals from a take-nothing judgment. The case turns on the interpretation of that letter.

In 1960 one John Harris borrowed $60,000 from appellant, giving his note for that amount secured by the pledge of 249 shares of the capital stock of Mayridge Investment Company and a letter dated November 11, 1960, signed by Embrey agreeing to purchase the said corporate stock, if offered to him within one year from the date thereof, at a price of $60,000.

By August 22, 1961 the unpaid balance of the note was $45,000. The form of Embrey's first letter agreement being unsatisfactory to the Bank Examiner, he gave appellant a new one, as follows:

'I, James Lindsay Embrey, agree to purchase from John T. Harris or the Wynnewood State Bank two hundred forty-nine (249) shares of Mayridge Investment Company Stock, which Mr. John T. Harris has pledged to secure a loan at the Wynnewood State Bank. This offer stands good anytime within ninety (90) days from this date, and the agreement purchase price is to be $45,000.00.

'If for any reason Mr. John T. Harris defaults on the loan mentioned above and the Bank feels that it should be paid, I shall purchase it upon demand of the Wynnewood State Bank.'

Thereafter Harris' note was renewed several times, in each instance accompanied by a similar letter from Embrey to appellant, the agreed purchase price of the stock being in each case in an amount equal to the then unpaid balance of Harris' debt to appellant, with a definite time for the purchase stated in each letter, but without any change in the second paragraph. The last renewal note was dated June 28, 1964, in the sum of $27,000, due ninety days after date. Embrey's letter was dated July 28, 1964 and was identical with the one dated August 22, 1961, quoted above, except that in the first paragraph it stated the offer would 'stand good' for 180 days, and the purchase price would be $27,000.

Appellant did not offer the stock to Embrey within 180 days after July 28, 1964, or at any other time. Harris having defaulted, appellant sold the stock on January 25, 1966 for $498 to one Ed Mudge. On March 22, 1966 appellant made demand on Embrey to purchase The loan, taking the position that the second paragraph of the letter obligates him to do so as Harris defaulted and the Bank 'feels that it should be paid.' Appellant urges that the second paragraph of the letter should be interpreted and enforced as if it read:

'If for any reason Mr. John T. Harris defaults on the loan mentioned above and the Bank feels that the loan should be paid I shall purchase the loan upon demand of the Wynnewood State Bank.'

The trial court sought the aid of the jury in determining the intent of the parties, and the jury found in response to special issues that (1) the parties did not intend the word 'it' in the last line of the letter agreement of July 28, 1964 to mean the loan of Harris at the Bank, and (2) that if Embrey did agree to purchase the loan such agreement was limited to 180 days from July 28, 1964. The take-nothing judgment was rendered on that verdict.

Appellant's first point of error is that 'the trial court erred in holding that the instruments signed by Embrey agreeing to purchase the note were ambiguous,' and its second point is that since the agreements were not ambiguous appellant was entitled to an instructed verdict and judgment for the amount of its debt. These points were be considered together.

Certain general rules applicable to these questions are thus aptly stated in 13 Tex.Jur.,2d, Contracts, § 110, pp. 263--265:

'If there is no ambiguity whatever in a written contract, its construction then becomes a question of law for the trial court only . This principle also obtains where, thing there is doubt as to the meaning of a written contract, the ambiguity arises solely from the language used in the agreement and not from any extrinsic matters. * * * On the other hand, if a written contract is ambiguous as to the intent of the parties, and if parol evidence is admitted on the matter and is subsequently controverted, the matter of resolving the conflict in the evidence is properly left to the jury. However, where the parol evidence admitted is undisputed, the question as to what the parties intended is a matter for the trial court alone.'

If the language used in a written contract is such as to give it a certain or definite legal meaning, it is not ambiguous; and a contract is said to be ambiguous only when the application of pertinent rules of interpretation to the instrument as written leaves it genuinely uncertain which of two or more meanings is the proper one. 'In other words, if after applying established rules of interpretation to the contract it remains reasonably susceptible to more than one meaning it is ambiguous, but if only one reasonable meaning clearly emerges it is not ambiguous.' Universal C.I.T. Credit Corp. v. Daniel, 150 Tex. 513, 243 S.W.2d 154, 157 (1951).

The writing as a whole must be looked to 'and given its reasonable, natural and probable meaning. It must be interpreted according to the obvious import of its language without resorting to a subtle or a forced construction. One clause cannot be considered by itself; every clause must be considered with reference to the whole instrument as well as with reference to every other clause.' Brown v. Brown, 245 S.W.2d 995, 997 (Tex.Civ.App., Amarillo 1951, writ ref'd).

We agree with appellant that the letter agreement signed by Embrey was not ambiguous and that there were no issues to go to the jury. Even if it be said that some doubt exists as to the meaning intended by the parties in their use of the word 'it' in the second paragraph of the letter, it appears clearly from the record that this uncertainty, or ambiguity, arises solely from the language used in the letter and not from any extrinsic matters. Therefore, the question was nevertheless one for the court and not for the jury. Dallas Hotel Co. v. Lackey, 203 S.W.2d 557, 561 (Tex.Civ.App., Dallas 1947, writ ref'd n.r.e.); Penn v. Hare, 223 S.W. 527 (Tex.Civ .App., Texarkana 1920, writ dism'd).

However, if the trial court...