Court Opinion

ID: 6690014
Source: CourtListenerOpinion
Date Created: 2022-07-20 21:36:50.983444+00
Date Added: 2024-06-11T16:01:04.956987
License: Public Domain

GATES, J.
(dissenting). My colleagues consider that we must presume that the drawing of the dotted line through the blank between the worths “rate of” and the words “per cent.” was the known act' of the party of the first part and that the partiés thereby demonstrated an intent that the agreement should not bear interest before maturity. If wie are bound to make presumptions,' why not presumé that, if the act was done by the party of the first part, it was done so that a rate of interest less than the legal rate could not have been inserted if the blank had not been filled, or if the act was done by the party of the second part, why not presume that it’was done so that a rate of interest greater than the legal rate could not have been inserted if the blank had not been filled?
But where is there room for a presumption that interest was not intended when the agreement expressly says “with interest”? If there is any presuming to be done, I say we should conclusively presume that interest was inténded, but that, the rate not being given, the legal rate was intended. Section 1416, C. C. (section 1039, -Rev. Code 1919). I have always supposed that the -drawing of a line through a blank between words in a printed form was done for the purpose of filling the gap. The filling of the blank in the same manner in this instrument between the words “payable” and “annually” indicated that interest' was to be paid annually. It was so filled to prevent the insertion of words which otherwise might have *470been inserted so as to make interest payable, monthly, quarterly, or semi-annually. The filling of this blank did not eliminate from the agreement all reference to the time of payment of interest. No more, in my opinion, did the filling of the blank between the words “rate of” and “.per cent.” eliminate from the agreement the understanding that interest should be paid. If there had been no blank between those words, and therefore if the agreement had read, “with interest at the rate of per cent, per annum payable annually on the whole sum,” etc., would we not be compelled to say that the agreement called for interest at the legal rate? I think this instrument, should be so construed.
It seems evident to me that, if the parties had not intended to contract for interest, they would have obliterated the words “with interest.” By their “deliberate act” they allow'ed those words to remain. Instead of imputing to the parties the intention not to contract for interest, the drawing of the dotted line, in my opinion, imputed an intention not to declare the rate of interest that the deferred payment should bear. The decision of the intermediate Texas court relied upon in the majority opinion affirmed the decision of the trial court in its holding that a state of facts ,similar to those at bar showed a latent ambiguity and therefore allowed explanatory evidence. If the ambiguity was latent, it could not be patent. Therefore the quoted portion of that opinion was inconsistent with the decision, and besides was entirely obiter.
There is, however, another ground’ upon which, I think, the decision of the trial court should be sustained. While the contract between the parties did not in so many words provide that the vendee should take immediate possession of the property, it plainly so contemplated, because it did contain a provision that upon default of the vendee in performing- the terms of the agreement the vendee should have the right to re-enter and take possession of the premises. The trial court found:
“That immediately upon the execution of said contract, the plaintiff entered into possession of the said premises hereinbefore described, and ever since that time has been and now is in possession of the same, and has received and retained for his own use all of the rents, income, profits, and benefits arising- therefrom, which are of the value of $1,120.”
*471It seems to' be a general rule that, where no specific agreement is made as to interest on 'deferred payments the law! will imply an agreement to pay interest, if the agreement contemplates that the vendee is to take immediate possession. In Warvelle, Vendors, § 180, the author says:
“And it must be a strong case, clearly made out, in which the purchaser will not be obliged to pay interest where he has received the rents and profits.”
In King v. Ruckman, 24 N. J. Eq. 298, the court laid down the general rule as follows:
“In equity, the result of a contract sale is that the thing sold thereupon becomes the property of the purchaser, and the purchase money the property of the vendor; that, as a corollary, the purchaser is entitled to the rents of the estate from the time fixed for completion, and the vendor is- entitled to interest on the purchase money from the same time; that the estate and the purchase money are things mutually exclusive, and neither party can at the same time he entitled to both.”
That- case, like this, was one for specific performance. The same rule should apply where the contract contemplates possession by the vendee prior to the date fixed for -completion of the contract, unless a contrary intention clearly appears.
Now, unless my colleagues intend to go so far as to hold that the contract before us affirmatively provides that no interest shall be charged on the -deferred payment, then they should affirm the judgment. If they hold as they apparently intend, they thereby declare that evidence would not have been admissible to explain the intent of the parties, if the living party had not been precluded from testifying by the death of the other, It seems to me that in any event this court should go no farther than to hold that the ambiguity was such that evidence was admissible to- explain it (following the real decision of the Texas court). Thereupon, no evidence being offered other than the matter of the taking of immediate possession by the vendee and the receipt of the rents and profits by him, the court should in any event affirm the judgment.
• Upon both grounds herein- discussed, I think the judgment should be affirmed.
S'MITU, J., concurs in the dissent.