Court Opinion

ID: 9679083
Source: CourtListenerOpinion
Date Created: 2023-08-24 06:40:24.957298+00
Date Added: 2024-06-11T18:17:09.653509
License: Public Domain

WELBORN, Commissioner
(dissenting).
I must respectfully dissent from the opinion of Judge HOUSER in this case. The trial court concluded that the contract should be interpreted to extend the rights of Interstate for a term which would include the time permitted for judicial review of the Interstate Commerce Commission’s order denying authority to transfer the rights. The trial court reached its conclusion on the basis of the testimony of the draftsman of the contract, the attorney for Interstate, that he intended to provide for judicial review. Judge HOUSER does not accept the trial court’s basis for interpretation of the contract, but reaches the same result, primarily on the theory that the existing law provided for judicial review of the order and that the parties to the contract must be presumed to have contracted with reference thereto.
The trial court undoubtedly applied an improper standard of interpretation when he relied on the statement of the draftsman, the representative of a party to the contract. The correct standard of interpretation is set out in § 230 of the Restatement of Contracts, p. 310, as follows:
“The standard of interpretation of an integration, except where it produces an ambiguous result, or is excluded by a rule of law establishing a definite meaning, is *948the meaning that would be attached to the integration by a reasonably intelligent person acquainted with all operative usages and knowing all the circumstances prior to and contemporaneous with the making of the integration, other than oral statements by the parties of what they intended it to mean.”
This standard would preclude reliance upon the statement of the draftsman as the basis for interpreting the agreement.
The rule relied upon by Judge HOUSER is of limited value in this case. Corbin rejects such a rule as a rule of interpretation for contracts. As he points out: “ * * * [A] fter the terms of a contract have been interpreted, its legal operation can be determined only with due reference to all applicable constitutions, statutes and doctrines of the common law; but this is not a rule of Interpretation and the statutes and rules of law are certainly not incorporated into the contract.” 3 Corbin on Contracts, § SSI, p. 197. None of the cases cited in the opinion actually employed this rule in the interpretation of a written contract. The case of Connecticut Mutual Life Ins. Co. v. Cushman, 108 U.S. 51, 65, 2 S.Ct. 236, 245, 27 L.Ed. 648, cited in the opinion, states: “The laws with reference to which the parties must be assumed to have contracted * * * were those which in their direct or necessary legal operation controlled or affected the obligations of such contract.” See Emerson v. Treadway, Mo. App., 270 S.W.2d 614, 623 [23, 24], Here, the parties were free to contract as they saw fit as to when the rights and obligations under the contract should terminate. Interstate’s counsel acknowledged that the phrase “final order” might refer either to “administrative finality” or what he referred to as “constitutional finality,” involving the right of judicial review. The problem is one of interpretation in the light of this admitted ambiguity.
In my opinion, the standard of interpretation quoted above from the Restatement must be applied. Considering the language of the agreement in the light of the relevant surrounding circumstances, I am of the opinion that the proper interpretation of the contract is that the rights of the parties thereunder were to terminate 90 days after the Interstate Commerce Commission’s order became final, within the meaning of the statutes and rules governing the action of that agency.
Of significance is the fact that a denial by the Interstate Commerce Commission of authority to transfer rights was seldom subjected to judicial review. The absence of such practice would indicate that neither party contracted with a view to such right. More important, however, is the fact that a contract limited to expire based upon the exercise of the right of judicial review, would be, in effect, an open-end agreement, because, as witnesses for both sides agreed, there is no definite period within which the right of review must be exercised. That the parties would so contract appears unreasonable, in the light of the definiteness which the interpretation contended for by the receiver would bring to the agreement. The conduct of Interstate’s officers, as set out in Judge HOUSER’s opinion, following the publication of the February 10, 1965 order of the Interstate Commerce Commission indicates that they considered the February 11 effective date of such order as the “final order” referred to by the agreement. True, there was evidence of some discussion of judicial review, but none indicating that either party might, by the exercise of such right, necessarily prolong the duration of rights and obligations under the contract.
In my opinion, the contract should be interpreted as one under which Interstate’s rights terminated on May 12, 1965, and the obligations of the parties, in this litigation, should be determined accordingly.