Court Opinion

ID: 3433117
Source: CourtListenerOpinion
Date Created: 2016-07-05 20:02:05.672646+00
Date Added: 2024-06-11T13:46:07.716893
License: Public Domain

The case was tried below and presented to this court by the parties on the theory of an ambiguous contract, plaintiffs claiming, on the one hand, ambiguities in the contract which entitled them to resort to parol evidence, and the defendant, on the other hand, contending there is no ambiguity, that the contracts as executed are complete, accurate and unambiguous and speak for themselves, that *Page 64 
recourse to parol was unnecessary and that the admission of such testimony violated the well-established rule forbidding the introduction of extrinsic evidence which contradicts and varies the plain wording of the written instruments. I am unable to see any ambiguity in the contract.
There is no question but what all the prior conversations and contemporaneous agreements were reduced to writing and are contained in the exhibits set out in the majority opinion. The rule universally adopted (page 243 of 177 Iowa) is that:
"The contemporaneous and prior oral arrangements bearing on the same subject are conclusively presumed to be merged in the terms of the written instrument. * * * That an expressed consideration named in a written agreement cannot be altered by parol evidence when the consideration is contractual and not merely formal, is well settled." Slump v. Blain, 177 Iowa 239, 242, 158 N.W. 491, 492.
In the cited case, a lease was involved by the terms of which the rent to be paid was the sum of $1,050. The conversation sought to be proven tended to show an oral agreement that a different amount should be paid as rent. Such evidence manifestly tended to vary and contradict the provisions of the written contract.
In Parks  Co. v. Howard Hotel Realty Co., 200 Iowa 479, 481, 203 N.W. 247, 248, there was involved the question of the percentage of commission to be paid the plaintiff. The written instrument provided for 10 percent. The defendant introduced evidence to show that the oral understanding and agreement was that the percentage to be paid to the plaintiff was to be 8 percent. The trial court refused to admit the evidence and, in affirming the case, this court said:
"It will be noted that the contract is clear and unambiguous. Oral evidence that the contract was for 8 per cent commission, and not 10 per cent, is clearly contradictory to the essential terms of the written contract. The general rule that an oral collateral agreement contemporaneous with a written agreement may be proved, is quite beside the mark herein. In order *Page 65 
to be so provable, the alleged contract must be consistent with the written contract, and must ordinarily relate to matters not covered by the written contract.
"To apply the rule as contended for by appellant, would be to put oral evidence upon a parity with the written contract. No written contract could be immune against oral contradiction. The question has been before us many times, and nothing can be gained by extended argument thereon." (Citing cases.)
The written instruments which are the basis for plaintiffs' suit are in nowise ambiguous or uncertain so as to call for extrinsic evidence to render certain the meaning of language which, without it, would be obscure or unintelligible. The issues of fraud, misrepresentation, accident or mistake are not involved. The extrinsic parol testimony, to the effect that the actual agreement between the parties was for the payment of $5.00 per rod for the right of way, materially changes the terms of the written instruments; not only so, it tends to destroy and render ambiguous and meaningless the contractual provisions as to damages to crops, surfaces, fences, and premises because of the laying of each line of pipe and the further provision for arbitration. It is a direct contradiction of the express language of the receipts and releases which on their face purport to cover both damages to property and payment for right of way across the premises.
The instruments provide that, by the payment of $1.00 plus 50¢ per rod, the company secured the right to go upon the premises and lay one pipe line. This was a consideration given for the right or easement for right of way. Nothing further was due or payable under the terms of the written instruments until after this right was exercised and the pipe line laid, at which time the remainder of the promised consideration expressed in the contract, namely, damages to crops, surfaces, fences and premises, became due and payable; in the event the parties were unable to agree upon the amount of such damages, the contract sets up a tribunal of three arbitrators to settle and fix the amount of the damages. As contended by appellant, it is the tenet of contractual construction, too fundamental for the *Page 66 
citation of authority, that an instrument must be construed as a whole and meaning given to every part thereof whenever possible. It is also a fundamental rule of construction that the rules of construction created by the court to aid in its interpretation of various instruments cannot be invoked to contradict the express language of the instrument so interpreted. If we adopt the appellees' theory that the agreement was to pay $5.00 per rod for the right of way alone, it is impossible to give consideration to the other provisions of the contract. They are rendered meaningless. The portion of the written instruments which is the basis of plaintiffs' claim is the following clause:
"Additional lines shall be laid for a consideration the same as the first."
Appellees say that this particular statement contains no ambiguity. This is very true. The only thing to be ascertained is the consideration which the contract provides was to be paid for the first line. The appellees go beyond the written contract to ascertain what was agreed to be paid for the laying of the first line and resort to parol testimony to the effect that the agreement was $5.00 per rod instead of the consideration plainly expressed in the written instruments.
"A written instrument is ambiguous only when found to be of uncertain meaning by persons of competent skill and information. 1 Greenleaf on Ev. (Lewis Ed.), Sec. 298." Comptograph Co. v. Burroughs, 179 Iowa 83, 108, 159 N.W. 465, 473.
Contracts containing identical provisions with the contract in question have been construed in other jurisdictions. Shoemaker v. Great Lakes Pipe Line Co., 227 Mo. App. 941, 60 S.W.2d 76, affirmed, Mo. Sup., 75 S.W.2d 849; O'Connor v. Great Lakes Pipe Line Co., 8 Cir., (Mo.) 63 F.2d 523; Fulkerson v. Great Lakes Pipe Line Co., 227 Mo. App. 882, 60 S.W.2d 71, affirmed, 335 Mo. 1058, 75 S.W.2d 844. In the O'Connor case, the circuit court for the Eighth Circuit, after quoting from the right-of-way agreement the identical language, found in the instant case, said [63 F.2d 523, 526]: *Page 67 
"The damage, if any, for which payment was to be made was provided by the contract. It was to crops, surfaces, fences, and premises, not by the granting of the easement, but by `the laying
of each line of pipe'. The contract provides for burying the line of pipe so as not to interfere with the cultivation of the whole farm. If the amount of damages to the fences, crops, and premises by reason of the laying of each line of pipe cannot be determined, etc., then a method is provided so to do. If any new line is laid, plaintiffs are to be paid for all the physical damage to crops, surfaces, fences, and premises. All damage done in making repairs is to be paid, maintenance damages when they occur are to be paid, and plaintiffs are to receive a compensation of 50 cents a rod for all pipes laid. We see nothing ambiguous about this."
In the Shoemaker case, supra, the court said:
"The contract provides that when any pipe line is completed that the whole damage, for said pipe line, becomes due and payable. The contract further provides that for each pipe line constructed in the future said additional lines shall be laid for a consideration the same as the first. * * * We conclude in that case, and still conclude, that the contract entered into between the parties fixed and limited the elements of damages so that same must be determined by the terms of the contract, rather than by the general provisions of the law governing condemnation proceedings.
"The granting clause of the contract in issue starts out with an expression of consideration of $1. We conclude that the whole contract must be considered in determining the consideration for the rights granted and conclude that, under the terms of the contract, the consideration for each pipe line laid is such damage to crops, fences, and premises as may occur by reason of laying, maintaining, operating, altering, or removing said pipe line. We conclude further that, that all consideration by way of damage, present and future, as to any pipe line when constructed then becomes due, and that for the construction of any pipe lineconstructed in the future the consideration, by *Page 68 
way of damages, embrace the same elements, that is, the damages for any future pipe line constructed, becomes due when constructed, and damages to crops, fences and premises, both present and future, can then be determined on the same basis and including same elements as in this instance." (Italics ours.)
The two receipts set out in the original opinion, one for $840 and the other for $440, expressly state they are given in payment of "all property damage real or personal by reason of constructing one * * * pipe line * * *. This receipt covers payment for right of way agreement."
From the Fulkerson case, supra, we quote the following [335 Mo. 1058, 75 S.W.2d 846]:
"The easement, `the right to lay, maintain, operate, re-lay and remove at any time a pipe line or pipe lines,' is expressly granted in the first paragraph of the contract. True, the consideration there named is nominal, $1. In the fourth paragraph a further consideration of 50 cents per rod of line laid is provided. That is an actual consideration and is to be paid regardless of whether damage results or not. Thus by the terms of the contract the grant of the easement if used is compensated apart from any damage that may result to the land and its appurtenances from acts done in the exercise of the right granted. But the parties contemplated that in doing the things which the contract granted defendant the right to do the latter might damage plaintiffs, and they provided that plaintiffs should be compensated for such damage. The damage there provided to be paid is not for or because of the granting or the existence of the easement or the right to go upon the land and lay, maintain, operate, re-lay, and remove pipe lines, but for and because of the laying of each line of pipe."
It is obvious to me that the construction placed upon the language of the contract by the Missouri court and the Federal circuit court is unanswerable. The decision of the majority in the instant case does away with the $1.00 consideration and the 50¢ per rod and substitutes $5.00 per rod. This eliminates or fails to take into account all the provisions with reference *Page 69 
to damages or the provisions for arbitration. Under this decision, the appellees, were it not for the receipts, Exhibits 2 and 4, set out in the original opinion, could still collect the damages, if any. Appellees have never made any such claim. Plaintiffs signed these receipts. They purport to cover both damages and right of way. It must necessarily follow that, even though parol evidence is to be considered as competent, such evidence is direct contradiction of these written receipts and the writing should prevail. As to the first line, the parties settled in advance both the damages and the cost for the right of way. The damages had not yet occurred. The pipe line had not been laid. However, it will be noticed that the receipts looked ahead and cover damages sustained "about August 15, 1931". The pipe line was completed the following November.
Our conclusion is that, since there can be found no ambiguity permitting introduction of parol evidence, it follows that the trial court was in error in permitting the introduction of such testimony. The appellant, before answering, offered and tendered complete performance according to the terms of the written instruments. This was repeated in the answer filed. Due and proper objections were interposed to the parol testimony and, at the close of the plaintiffs' testimony, defendant offered the written instruments, Exhibits 1, 2, 3 and 4, and renewed its offer to pay the crop damages alleged in plaintiffs' petition and to pay to the plaintiffs, on account of the laying of the second line of pipe, damages to crops, surfaces, fences and premises such amount as it be ascertained or determined by three disinterested persons, specified in said agreement, and 50¢ per rod, specified in the right-of-way agreement, and all costs accrued up to the date of the offer. The defendant offered no other testimony but rested its case in the court below on the express terms of the contract and its offer to fulfill the same. This was all that was required of the defendant.
The case should be reversed.
SAGER and STIGER, JJ., join in the dissent. *Page 70