Opinion ID: 1598165
Heading Depth: 1
Heading Rank: 11

Heading: vagueness, indefiniteness and uncertainty

Text: We now proceed to address ourselves to the last contention made by appellees that the provisions of the agreement purporting to give interests to Sterling are vague, indefinite and uncertain. It is a cardinal principle that, where testimony is taken ore tenus, the findings of facts made and entered by the trial court will be sustained unless they are clearly and palpably wrong or without supporting evidence, or are manifestly unjust. Renfroe v. Weaver, 285 Ala. 1, 228 So.2d 764 (1969). Where the trial judge's ruling is grounded on no specific ground, his judgment must be sustained on appeal if any good ground is presented. Martin v. Birmingham Southern R. Co., 250 Ala. 583, 35 So.2d 339 (1948). Upon review of the record in this cause, we are of the opinion that there was ample evidence to support a conclusion by the trial judge that the agreement was invalid and unenforceable on the ground that certain essential provisions in the agreement were vague and uncertain. First, it appears clear that the issue of the uncertainty of the agreement was properly before the trial court and was, in fact, tried by the parties. Both the original complaint as amended and Chamberlain's cross-complaint contain the following allegations: a. The so-called Agreement is conflicting, ambiguous, indefinite and uncertain and cannot be specifically performed, for it contains no specific agreement on (1) monthly operating costs    (2) the wellhead price    (3) the rate of production    and as a result the agreement provides no means of determining the value of the 25 percent working interest referred to in the Sterling Agreement, nor for computing an override which would be equal thereto in value   . And in their prayer for relief, appellees contend that: 6. The Sterling Agreement, insofar as it purports to bind Jett and Chamberlain to convey an interest in the former Gulf producing properties, as that term is sought to be defined in the so-called Sterling Agreement, is void for uncertainty and indefiniteness which cannot be cured through construction, or by the intervention of arbitrators, as the parties omitted to include and agree upon essential elements which it was necessary for them to include and agree upon in order to create a valid, legally binding and specifically [enforceable] [performable] agreement. Appellant Sterling expressly joined issue with appellees on the question of uncertainty in its Additional Defensive Pleading. In its answer, Sterling admitted that the agreement did not contain specific agreement on the three items enumerated in the complaint, but alleged in defense that the agreement was subject to both the Federal Arbitration Act, 9 U.S.C. § 1, and to Chapter 19, Arbitration and Award, of Title 7, Code of Alabama 1940 (Recompiled 1958), §§ 829-844. It appears that the trial court did reach the question of the uncertainty of the agreement. The pre-trial order of May 3, 1971 states that:    [I]t is ORDERED and DIRECTED by the Court that the trial of the case shall proceed first to a determination to the issues of the validity of the `Sterling Agreement', secondly, to a consideration of the issues relating to the construction of the `Sterling Agreement', and thirdly, to the issues relating to accounting only if and after the Court has concluded that the `Sterling Agreement' is valid and after the issues relating to construction have been determined by the Court. In the interlocutory order of July 10, 1971, ending the first phase of the trial, the trial judge indicated that the court would then proceed to a determination of all controversies between the parties with respect to the meaning and enforceability vel non of the specific provisions of the Sterling Agreement. After a full trial, which included extensive testimony on the issue of the uncertainty of certain provisions of the agreement, the trial judge issued a final decree stating: The Court is further of the opinion after consideration of all the said legally admissible evidence, the oral arguments of the attorneys for the respective parties, and the written briefs which have been submitted in this cause, that said agreement is not valid and enforceable. (Emphasis supplied) We, therefore, conclude that the issue of uncertainty was considered by the trial court. Moreover, we are convinced that there was ample evidence before the trial court to support a conclusion that essential terms of the agreement were too vague and uncertain to constitute a binding contract. Chamberlain testified that a supplemental agreement defining certain terms and setting certain production and price figures would be necessary to give any meaning to the agreement; that he suspected even at the time of entering into the agreement that there was no such thing as an ascertainable override equal in value to a 25% working interest absent further agreement of the parties on a number of other factors; that the agreement was something substantially less than an agreement; and, that paragraph 7(c) was so indefinite that it is unenforceable. Raymond Corcoran testified that he had seen other documents attempting to give similar overriding royalties, but that they usually have a good bit more definition of terms for computing same. B. P. Huddleston, a consulting petroleum engineer, testified that he could not convert the 25% working interest into an overriding royalty interest without information from the parties with regard to the definition of value, the starting date, instructions on type of reserves, instructions on escalation of the future price of crude oil, relationship of the Sterling override to the Gulf override, and probably other items. William Horner, another petroleum engineer, similarly testified as to various factors which were needed to make the conversion but which were not specified in the agreement, characterizing an overriding royalty interest without specification of such factors a leap into fantasy. Even though appellant Sterling produced expert witnesses who testified that they could determine the interest specified by paragraph 6, there was sufficient evidence to support a conclusion by the trial judge that the meaning of paragraph 6 was so uncertain as to be invalid. Furthermore, contrary to Sterling's contentions, such uncertainty cannot be cured by arbitration. While the agreement itself made provision for arbitrators, it is wellsettled law in this state that courts cannot specifically enforce an agreement to submit a controversy to arbitration. Title 9, § 55, Code of Alabama 1940 (Recompiled 1958). We, therefore, conclude that the judgment of the trial court declaring the Sterling agreement invalid and unenforceable is due to be affirmed.