Case Name: AMERICAN BANK OF COMMERCE, Plaintiff-Appellee and Cross-Appellant, v. M & G BUILDERS, LTD., Sunland Builders, Inc., Defendants-Appellees and Cross-Appellees, v. COACHMAN REAL ESTATE INVESTMENT CORP., William Wieman, George Headrick, Doug Stock, Bob Bowersock and Coachman Albuquerque Partnership, Defendants-Appellants and Cross-Appellees
Court: Supreme Court of New Mexico
Jurisdiction: New Mexico
Decision Date: 1978-10-23
Citations: 92 N.M. 250
Docket Number: No. 11727
Parties: AMERICAN BANK OF COMMERCE, Plaintiff-Appellee and Cross-Appellant, v. M & G BUILDERS, LTD., Sunland Builders, Inc., Defendants-Appellees and Cross-Appellees, v. COACHMAN REAL ESTATE INVESTMENT CORP., William Wieman, George Headrick, Doug Stock, Bob Bowersock and Coachman Albuquerque Partnership, Defendants-Appellants and Cross-Appellees.
Judges: McMANUS, C. J., and PAYNE, J., concur.
Reporter: New Mexico Reports
Volume: 92
Pages: 250–254

Head Matter:
586 P.2d 1079
AMERICAN BANK OF COMMERCE, Plaintiff-Appellee and Cross-Appellant, v. M & G BUILDERS, LTD., Sunland Builders, Inc., Defendants-Appellees and Cross-Appellees, v. COACHMAN REAL ESTATE INVESTMENT CORP., William Wieman, George Headrick, Doug Stock, Bob Bowersock and Coachman Albuquerque Partnership, Defendants-Appellants and Cross-Appellees.
No. 11727.
Supreme Court of New Mexico.
Oct. 23, 1978.
Rehearing Denied Nov. 27, 1978.
Thomas L. Grisham, Albuquerque, for plaintiff-appellee and cross-appellant.
William Madison, Albuquerque, for defendants-appellees and cross-appellees.
Kool, Kool, Bloomfield & Eaves, John L. Hollis, Albuquerque, Warren S. Zweiback, Omaha, Neb., for defendants-appellants and cross-appellees.

Opinion:
OPINION
FEDERICI, Justice.
Coachman Real Estate Investment Corporation (Coachman), appellant and cross-appellee, is a general contractor. It entered into subcontracts with M & G Builders, Ltd. and Sunland Builders, Inc. (M & G-Sun-land). Coachman's subcontract with M & G-Sunland was for the original sum of $138,727.02. Various oral modifications were made to the subcontract, but these modifications were found by the trial court to be irrelevant to the issues involved in the lawsuit. Subsequently, Coachman signed a "Letter of Assignment" addressed to the American Bank of Commerce (ABC), appellee and cross-appellant, the text of which reads:
This letter is to inform you that funds in the amount of $138,727.02 will be paid to Sunland Builders Inc./M & G Builders, Ltd. per subcontract agreement dated March 4, 1976. These funds are available through an interim financing loan at Bank of New Mexico and will be disbursed by an Albuquerque New Mexico title co. Payments will be made by checks written payable to Sunland Builders Inc./M & G Builders, Ltd. and American Bank of Commerce. This assignment of funds is made at the request of Wayne H. Gribble, President of Sunland Builders Inc./M & G Builders, Ltd.
The trial court found that the Letter of Assignment was given for the purpose of inducing the bank to lend M & G — Sunland funds for the performance of the subcontract with Coachman.
The subcontract between Coachman and M & G-Sunland required that M & G — Sun-land provide waivers of lien and evidence of payment of labor and material costs as a condition to final payment. In accordance with the Letter of Assignment, Coachman made payment by check payable to M & G — Sunland and ABC in the amount of $126,984.00. M & G-Sunland did not furnish waivers of lien or releases in connection with a request for final payment of the balance of the amount stated in the Letter of Assignment or $11,743.02. ABC brought this action against M & G — Sunland for advances made to them and joined Coachman as a party defendant. The trial court granted judgment to ABC against Coachman for the balance owing under the Letter of Assignment for advances made by ABC, but not to exceed a total of $138,727.02. The trial court held against ABC on its claim for amounts advanced by ABC in excess of $138,727.02.
Appellant Coachman contends, first, that the trial court failed to make sufficient findings of fact and conclusions of law to show on what basis judgment was granted for ABC, and, second, that the trial court erred in concluding that the Letter of Assignment created an independent obligation on the part of Coachman to pay the amount stated in the Letter of Assignment.
By its findings of fact and conclusions of law the trial court made clear that the case was decided upon the basis that the Letter of Assignment constituted a binding agreement or contract between Coachman and ABC to pay up to but not to exceed the entire $138,727.02. The trial court determined that this agreement was breached by Coachman. We do not agree with Coachman's contention that this theory of relief was not litigated before the trial court. ABC did plead this theory in its complaint and introduced evidence without objection. ABC also mentioned this theory in its opening statement and final argument to the trial court. The issue was litigated. Under Rule 15(b), Rules of Civil Procedure [§ 21-1-1(15)(b), N.M.S.A.1953 (Repl.1970)] and prior opinions of this Court, the pleadings are considered amended to conform to the evidence. In re Sedillo, 84 N.M. 10, 498 P.2d 1353 (1972); Luvaul v. Holmes, 63 N.M. 193, 315 P.2d 837 (1957).
As to Coachman's second contention, the trial court ruled that the liability of the parties under the Letter of Assignment was on a.contract basis; that the Letter of Assignment created an independent obligation on the part of Coachman to pay. We agree. The Letter of Assignment, which was signed by Coachman and relied upon by the bank in making the loans to M & G-Sunland, was more than a simple assignment. We hold that by virtue of this instrument Coachman agreed to pay the entire stated amount to ABC. This instrument constituted an independent contract between Coachman and ABC and simply provided additional protection to the bank for the making of the loan to M & G-Sunland. Farmers & Merchants State Bank v. Snodgrass & Sons Const. Co., 209 Kan. 119, 495 P.2d 985 (1972). Being an independent contract, rather than a simple assignment, this written agreement is not governed by the Uniform Commercial Code — Secured Transactions [§§ 50A-9-101 to 50A-9-507, N.M.S.A.1953 (Repl.1962 and Supp.1975)]. It is our opinion that the trial court did not err in granting judgment to ABC against Coachman for the balance owed ABC (approximately $11,000) for advances made to M & G-Sunland under the Letter of Assignment.
It is further our opinion that the trial court did not err in denying relief to ABC for amounts in excess of a total of $138,727.02, the amount specified in the Letter of Assignment. The transcript reveals that the trial court found the Letter of Assignment ambiguous as to the amount owed by Coachman to ABC under it. Where a contract is ambiguous, the intent of the parties is to be ascertained from the language and conduct of the parties and the surrounding circumstances, and oral evidence as to that intent is admissible. Prior to admitting the evidence the court must find that there is an ambiguity. Sierra Blanca Sales Co., Inc. v. Newco Industries, Inc., 84 N.M. 524, 505 P.2d 867 (Ct.App.1972). The trial court concluded that the contract was ambiguous and properly permitted evidence to be introduced to determine the intent of the parties. The amount in excess of the sum specified in the Letter of Assignment was a result of oral modifications between Coachman and M & G-Sun-land. ABC was not a party to these modifications, and the contract between Coachman and ABC was not affected thereby.
The judgment of the trial court is affirmed.
IT IS SO ORDERED.
McMANUS, C. J., and PAYNE, J., concur.