Court Opinion

ID: 9794829
Source: CourtListenerOpinion
Date Created: 2023-08-31 03:12:28.417755+00
Date Added: 2024-06-11T08:21:09.423708
License: Public Domain

Rosellini, J.
(concurring in the result) — I do not think the fact that the parties acted under the contract in accord with its written terms is sufficient to resolve the ambiguity raised by the failure of the contracting parties to specify the length of time Mrs. Henry was to receive the salary check which she had been receiving from the Pep Publishing Company. The fact that she was allowed to retain it as long as it was paid to her proves only that the parties intended that she was to receive it for that length of time.
The question remains, was it their intent that she receive the check each month as long as Pep Publishing Company paid it to any of the parties; or was she to receive it only so long as it was made payable to her personally; or was she to receive $275 per month regardless of whether Pep Publishing Company continued to do business with the Henry s?
In determining the intention of the parties, where the language is ambiguous, the court must examine the contract as a whole and also all of the surrounding circumstances, including the subject matter and the subsequent acts of the parties. Hastings v. Continental Food Sales, Inc., 60 Wn.2d 820, 376 P.2d 436 (1962).
The contract reveal^ that the intent of the Henrys was to sell their business to the Linds, and, that they were to be paid for it over a period of 4 years. A total purchase price is not mentioned, and the evidence does not show the total value of the business. However, the following circumstances are to be considered: Pep Publishing Company was the principal customer, and it had a written agreement *206with, the Henrys that they were not to assign their contract for advertising commissions without the consent of Pep Publishing Company. Its consent to this assignment was not obtained. It therefore becomes apparent why the contract provided that Mrs. Henry was to retain the $275 per month being paid to her by Pep Publishing Company, instead of providing that the Linds should pay her that sum out of their receipts from Pep Publishing Company. I think it also makes it clear why there was no provision that the payment was to continue for 4 years.
It is reasonable to suppose that the parties understood that, since Pep Publishing Company was the principal customer, the business would retain its value only so long as that customer was retained; or at least that, if it lost that customer, it would lose a large part of the value gained for it by the efforts of the Henrys. This explains why the contract did not call for a payment of $275 per month by the Linds, in which case they would have been liable for the amount even though their business relations with Pep Publishing Company were terminated.
Consequently, the reasonable meaning of the language was that, until the expiration of the contract or the earlier termination of payments by Pep Publishing Company, Mrs. Henry was to receive the $275 per month paid by Pep Publishing Company for publishing services. That right, given under the contract, could not be altered by the fact that the Pep Publishing Company unilaterally changed the payee on the monthly check. This was done because Pep Publishing Company decided to approve and ratify the assignment to the Linds. The parties to the Henry-Lind contract evidently failed to take this possibility into account when they drew their agreement, or if they did, they assumed that the language of the contract was adequate to assure that Mrs. Henry would continue to receive that portion of the purchase price covered by the Pep Publishing Company monthly salary check.
Thus, I agree that the trial court erred in holding that the parties intended that Mrs. Henry was to retain the check only so long as it was paid directly to her, but I think *207that it is necessary to examine not only the contract and the subsequent conduct of the parties, but also the circumstances surrounding their agreement, to determine their intent.
August 5, 1969. Petition for rehearing denied.