Title: Strickland v. Rahaim
Citation: 549 So. 2d 58
Docket Number: N/A
State: Alabama
Issuer: Alabama Supreme Court
Date: July 14, 1989

549 So. 2d 58 (1989)
Glen STRICKLAND
v.
W.G. RAHAIM.
88-368.

Supreme Court of Alabama.
July 14, 1989.
James Tony Glenn of Bedford, Bedford &amp; Rogers, Russellville, for appellant.
Gary L. Jester and Willson Jenkins, Florence, for appellee.
HOUSTON, Justice.
In 1980, Glen Strickland, W.G. Rahaim, and Don Sharp entered into the following contract:
In 1987, Rahaim received the following offer from his son, Charles Rahaim, who, at that time, was an officer, director, and stockholder of Tri-Cities:
Rahaim immediately mailed the following letter to Strickland:
"I have received the enclosed offer from Chuck to buy my stock in Tri-Cities. Subject to our right of first refusal, I am going to accept this offer and retire from the company. Please let me *60 know if you want to purchase my stock under the same terms within the next 30 days.
Shortly thereafter, Rahaim received the following letter from Strickland:
Rahaim later decided that he did not want to retire, declined his son's offer, and refused to sell his stock to Strickland.
Strickland filed suit against Rahaim, seeking specific performance of the contract that, he says, came into existence when he accepted Rahaim's offer to sell his stock. The trial court, after hearing ore tenus evidence, denied Strickland's request for specific performance. Strickland appealed; we affirm.
At this point we should note that when a trial court has heard ore tenus evidence, as in this case, its judgment based upon that evidence is presumed correct and will be reversed only if, after consideration of the evidence and all reasonable inferences to be drawn therefrom, the judgment is found to be plainly and palpably wrong. Furthermore, when a trial court does not make specific findings of fact concerning an issue, this Court will assume that the trial court made those findings necessary to support its judgment, unless such findings would be clearly erroneous. Robinson v. Hamilton, 496 So. 2d 8 (Ala.1986).
The trial court ruled, inter alia, that the language of the 1980 contract was ambiguous, and allowed Rahaim to introduce parol evidence to explain the intent of the parties. The judgment of the trial court reads, in pertinent part, as follows:
Implicit in the trial court's judgment were findings either that Rahaim mistakenly believed that he was obligated under the 1980 contract to offer his stock to Strickland, that Strickland was aware of that mistake, and that, under the circumstances, it would be inequitable to require Rahaim to sell his stock to Strickland, or that Rahaim and Strickland, acting under a mutual mistake, believed that the 1980 contract required the offer to be made.
Strickland contends that the trial court erred in its determination that the language of the 1980 contract was ambiguous and, therefore, that it erred in allowing Rahaim to introduce parol evidence. He argues that the 1980 contract clearly required Rahaim to make the offer that he did, and that once that offer was accepted an enforceable contract was formed. We disagree.
The construction of a written instrument is a function of the court. Whether a contract is ambiguous is a question of law for the trial court. When its terms are clear and certain, the court has the duty to determine the meaning of the agreement. In order to ascertain the intention of the parties, the clear and plain meaning of the terms of the contract are to be given effect, and the parties are presumed to have intended what the terms clearly state. Extrinsic evidence may be admitted to interpret a contract only if the court finds that the contract is ambiguous. Terry Cove North v. Baldwin Co. Sewer Authority, Inc., 480 So. 2d 1171 (Ala.1985).
We hold that the trial court correctly concluded as a matter of law that the language of the 1980 contract was ambiguous. That contract, as written, required *61 Rahaim to offer his stock to Strickland and Sharp prior to accepting an offer from "someone other than the undersigned." The trial court construed that phrase as being modified by the second and third paragraphs of the contract, which stated that the purpose of the agreement was to prevent the transfer of stock in Tri-Cities to a party "not interested in the conduct of the business of the corporations." Thus, the trial court, giving effect to the plain meaning of the contract's terms, construed it as requiring Rahaim to offer his stock to Strickland and Sharp prior to accepting an offer from "someone other than the undersigned" who was "not interested in the conduct of the business of the corporations." On its face, this requirement was clear enough; however, a question arose as to whether Charles Rahaim fell within the category of someone "not interested in the conduct of the business of the corporations." The evidence revealed that Charles Rahaim was a director, officer, and stockholder of Tri-Cities and, therefore, that he would ordinarily be thought of as someone "interested in the conduct of the business of the corporations." However, Rahaim asserted, and the evidence tended to show, that the primary purpose of the 1980 agreement was to prevent the transfer of any stock to Frank Caseglia, another director and stockholder of Tri-Cities, with whom Strickland, Rahaim, and Sharp had major differences of opinion with regard to the manner in which the corporations were to be managed. The trial court did not err in admitting parol evidence to explain what was intended in 1980 when the language "not interested in the conduct of the business of the corporations" was inserted into the contract. See, also, Mass Appraisal Services, Inc. v. Carmichael, 404 So. 2d 666, 672-73 (Ala.1981) (discussing the "latent ambiguity" exception to the parol evidence rule). Furthermore, the trial court's finding that the 1980 contract did not require Rahaim to offer his stock to Strickland was not plainly and palpably wrong.
As previously stated, implicit in the trial court's judgment were findings that either Rahaim mistakenly believed that he was obligated under the 1980 contract to offer to sell his stock to Strickland, that Strickland was aware of that mistake, and that under the circumstances, it would be inequitable to require Rahaim to sell his stock to Strickland, or that Rahaim and Strickland, acting under a mutual mistake, believed that the 1980 contract required the offer to be made. Neither of these findings of fact would be clearly erroneous. In Montgomery v. Strickland, 384 So. 2d 1085 (Ala.1980), the trial court granted the Stricklands' prayer for specific performance of a contract in which they agreed to purchase a tract of land from the Montgomerys. The Montgomerys claimed that the contract was entered into by them while under the mistaken impression that the tract contained 21 acres of land when, in fact, there was approximately 35 acres in the subject tract. In affirming the trial court's judgment, this Court noted:
"`The equity of the instant bill is rested on the principle which has been referred to by this court as follows:
"`"If one of the parties, through mistake, names a consideration that is out of all proportion to the value of the subject of negotiation and the other party realizing that a mistake must have been committed, takes advantage of it and refuses to let the mistake be corrected when it is discovered, he cannot under these conditions claim an enforceable contract. Where there is a mistake that on its face is so palpable as to place a person of reasonable intelligence upon his guard, there is not a meeting of the minds of the parties, and consequently there can be no contract. 6 R.C.L. page 623, section 42; 12 Amer. Jur. 624, section 133, and cases there cited." Ex parte Perusini Const. Co., 242 Ala. 632, 636, 7 So. 2d 576, 578.'
384 So. 2d  at 1086-87. The rule stated in Montgomery v. Strickland, supra, would be applicable in the present case.
Likewise, in Glenn v. City of Birmingham, 223 Ala. 501, 502-03, 137 So. 292, 293 (1931), the Court, discussing the remedy of rescission of a contract on the ground of mutual mistake, stated as follows:
"`It is ... freely and frequently granted where there is a mistake of both parties as to a collateral matter which constitutes the very basis of the contract, and the inducement to its formation.'" (Quoting Vol. 5, Pomeroy's Eg. Jur. § 2106.) The rule stated in Glenn v. City of Birmingham would also be applicable here.
In addition, the trial court made the following finding:
The trial court did not err in admitting parol evidence to explain what Rahaim's son meant when he stated in his letter that he needed time "to secure suitable financing."
After a careful review of the record, we cannot hold that the trial court, sitting in equity, abused its discretion in denying Strickland's request for specific performance. Montgomery v. Strickland, supra.
For the foregoing reasons, the judgment appealed from is due to be affirmed; therefore, we pretermit a discussion of any other grounds assigned by the trial court in support of its judgment denying specific performance.
HORNSBY, C.J., and JONES, SHORES and KENNEDY, JJ., concur.