Court Opinion

ID: 3919677
Source: CourtListenerOpinion
Date Created: 2016-07-06 09:46:54.009331+00
Date Added: 2024-06-11T07:42:50.924436
License: Public Domain

On Rehearing.
Appellees the Texas Company and Bateman, Scott, and York have filed motions for rehearing vigorously protesting this court's holding that the contract is ambiguous, and that the pleadings are sufficient to show such ambiguity and to entitle plaintiff to explain the same by parol, and to prove a practical construction by the parties consistent with his theory. Where the original opinion is adhered to it is unusual, on rehearing, to write on the questions discussed therein, but the earnestness of the argument of appellees moves us to discuss again the matters above mentioned. The parties are hereinafter referred to as they appeared in the trial court.
We all agree that the ambiguity, vel non, of the contractual term of the contract must be determined from the contract itself before parol evidence is admissible to explain it, but to the majority of the present court the words and figures, "1/2 of 1/8 of .08 cents per thousand cubic feet," suggest at once an uncertainty as to their meaning, and they are therefore, in our opinion, ambiguous. The use of the word "cents" indicates that more than a fraction of a cent and more than one cent was meant. The change from the common form of fractions to the decimal form suggests the probability that the scrivener started to write the equivalent of eight cents in decimal fractions of a dollar, and added the word "cents" by way of repetition. It is common knowledge that in the United States it is customary, in expressing a number of cents in figures, to indicate the sum by a decimal fraction of the unit of value, the dollar. Decimal fractions are seldom used in this country except to indicate fractions of a dollar, and then they are usually read as so many cents or so many mills, etc., rather than so many tenths, hundredths, thousandths, etc., of a dollar. For instance eight cents would likely be written $.08, and would be read as "eight cents" rather than as "eight one-hundredths of a dollar," which latter would be strictly correct. The usual and customary way to write, in decimals, the monetary term equivalent to "eight one-hundredths of one cent" is to indicate the amount in decimal fractions of the dollar thus $.0008, which would be eight ten-thousandths of one dollar; or, if not written in decimals, then the usual way would be 8/100 of one cent. The cent is not the unit of value, and it is unusual to indicate fractions thereof in decimals. We consider it quite significant that the use of common fractions was not continued throughout the expression. At any rate, the use of the words and figures in such an unusual way and arrangement arouses a doubt in the minds of the majority as to what was actually intended, whether eight cents or eight one-hundredths of one cent. We consider that the terms used might be interpreted either way, and we withdraw the statement contained in the original opinion that the words and figures used, when taken literally, do not mean anything. We think the ambiguity in this contract is similar to that found by the Supreme Court of Mississippi in the case of Schlottman v. Hoffman, 73 Miss. 188, 18 So. 893,. 55 Am. St. Rep. 527, in which a codicil to a will read: "To my son Jerry Hoffman the sum of $5 00 dollars and to my son Rufus Hoffman the sum of $5 00 dollars." The construction turning on the arrangement of the letters and figures, the court said:
"Now, these figures, if written in our way, would express the sum of five hundred dollars; if written with the decimal mark ($5.00), would mean five dollars; and so if written alone, without the decimal mark, either with the ciphers in the position of a numerator ($500), or distinctly and unequivocally removed by sufficient space from the figure `5.' An inspection of the original codicil shows the ciphers in each case connected together, removed by a distinct space from the `5' — in the one instance somewhat above, and in the other distinctly above, the line. When different sums may be expressed by the use of the same characters or figures, according to their collocation, and, as arranged, an uncertainty as to their meaning is suggested, an ambiguity appears upon the face of the instrument; and such, we think, is disclosed by the codicil in this case."
Such ambiguity being patent, parol evidence is admissible to show the intention of the contracting parties. In 22 C.J. 1199, the rule is thus stated:
"Where any doubt arises as to the true sense and meaning of the words themselves, or any difficulty as to their application under the surrounding circumstances, the sense and meaning of the language may be investigated and ascertained by evidence dehors the instrument, for both reason and common sense agree that by no other means can the language of the instrument be made to speak the real mind of the party. In such a case parol evidence is admissible ex necessitate."
The ultimate purpose of the courts should be to arrive at the real intention of the parties to a contract, and to give the contract force accordingly. It is an important rule of construction that a written contract, plain and reflecting no shadow of doubt as to its meaning, shall be the sole evidence of the intention of the contracting parties. But, if the contract is not clearly unambiguous, the rule should not be permitted to defeat an intention and understanding which can be clearly proven by parol, and to lead to a conclusion which is absurd. We think that, where there is room for reasonable doubt as *Page 212 
to the meaning intended by the use of a term in a contract, as there is in this case, that the parties should be permitted to explain the same by parol.
Putting one of two possible constructions on a term in a contract, without permitting the parties to show which was actually in their minds, is taking the chance of enforcing a contract entirely different from that on which their minds met. No harm can be done in discovering and enforcing the real agreement, if such can be done, without doing violence to some principle of transcending importance. The parol evidence rule, like other rules of practice, is designed to effectuate justice, but it is not inflexible, and so many instances have arisen where its strict application would be arbitrary and oppressive that the reports contain a great body of exceptional law.
We do not understand that a term is to be separated into its different words and figures, and, if each has a literal meaning, that such meaning shall be controlling. All the words and figures are to be taken together, their use and arrangement considered, and they are to be harmonized, if possible.
In 6 R.C.L. par. 231, p. 841, it was said:
"When the language of a contract is ambiguous or susceptible of several significations, conjectures are necessarily resorted to to determine the meaning of the parties; and, for this purpose, conjectures may be drawn from the subject-matter, and from the circumstances of the contract. This rule, however, is applicable only where the language in which the parties have expressed themselves, either from the terms or their arrangement, leaves their intention doubtful."
If we are correct in our opinion that the contract here under consideration contains a patent ambiguity, it follows that under appropriate pleadings plaintiff may introduce evidence of a construction placed upon the contract by the parties, tending to show what they actually meant and understood by the terms employed.
The undisputed evidence is ample to show that the contract dated April 21, 1919, was drawn by the agent of defendant the Texas Company; that, before the plaintiff signed the same, the agent of the Texas Company told plaintiff that the Texas Company would pay for casing-head gas at the rate of eight cents per thousand cubic feet; that said contract was read to plaintiff and his wife by said agent, as providing for payment at that rate; that plaintiff so understood the provisions in said contract, and would not have signed same had he not so understood it; that the Texas Company repeatedly thereafter actually paid to plaintiff under said contract royalty on casing-head gas on the basis of eight cents; that under said contract said defendant paid to the children of plaintiff royalty on land embraced in said contract on that basis; that defendant the Texas Company, on one occasion, paid under said contract less than said rate of eight cents, and, upon having the matter called to its attention, wrote a letter to a son of plaintiff, who owned an interest in the royalty on other lands embraced in said contract, acknowledging a mistake, and in effect admitting that said contract called for payment on the basis of eight cents. The expressions of that letter are significant as bearing upon the point under consideration. It will be set out in full
                                "Exhibit H.                            "The Texas Company.                        "Texaco Petroleum Products.
"Producing Department.        247 — 2
"North Central Texas Division,
"L. E. Barrows, Manager.
Fort Worth, Texas,
August 25, 1926.
                          "Casinghead-Gas Royalty.
"Mr. Claude A. Curry, P. O. Box No. 1187, Breckenridge. Texas — Dear Sir: Referring to our telephone conversation of this morning pertaining to casing-head gas royalty for the month of July on payments from Curry wells Nos. 9, 10 and 11.
"We find upon investigation, that the amount paid you is in error, since it was on the basis of 1/8th of net proceeds of this gas, when it should have been on the basis of 1/8th at eight cents, and will therefore arrange to issue additional checks to all royalty owners on this gas. As a matter of information, we might advise that the total amount of the 1/8th royalty as paid the Curry children amounted to $135.99, while the correct amount is $645.39.
"This error was caused by oversight on the part of the clerk handling this royalty, and we wish to thank you for calling our attention to same. Yours truly,
"The Texas Company,
"Producing Department,
"by L. E. Barrows.
"CC to all parties at interest.
"FLM B               M"
We consider that such practical construction removes from the realm of conjecture the meaning of the terms employed, and the intention and understanding of the parties, and that the terms of the contract, considering their use and arrangement, are clearly susceptible of such construction.
Quoting further from Cavazos v. Trevino, 6 Wall. (U.S.) 773, 785, 18 L. Ed. 813, cited in original opinion:
"The practical interpretation which the parties, by their conduct, have given to a written instrument in cases like this is always admitted, and is entitled to weight. There is no better test of the intention of the instrument. None are less likely to be mistaken. There is no danger of too large an admission."
The rule is of universal application, and in G., HI.  S. A. Ry. Co. v. Johnson, 74 Tex. 256, 11 S.W. 1113, our Supreme Court said; *Page 213 
"The language of the contract being doubtful the practical construction deliberately given it by both parties should control its interpretation."
See, also, Smith v. Wilcox Oil Co. (Tex.Civ.App.) 253 S.W. 642, and cases there cited.
We turn then to a consideration of the sufficiency of the pleadings to set up a patent ambiguity and to allege a practical construction consistent with plaintiff's theory of the meaning and intention of the contract.
He pleads the contract in hæc verba, and shows by his pleading, and so says, that he seeks to "explain" that part fixing the rate of royalty on casing-head gas by saying that the consideration "was and is" "one-half of one-eighth of eight cents," and alleges what he conceives to be the legal effect of the term in the contract; and, after alleging that the mutual understanding, agreement and intention of the parties was on that basis, avers:
"And to show that it was the contract and mutual agreement between plaintiff and defendant as lessor and lessee in said lease contract, and it has at all times been understood and agreed and by them so construed that the consideration was and is one-half of one-eighth of eight cents per one thousand cubic feet, which the defendant the Texas Company has been paying for gas saved and produced from other lands belonging to plaintiff, and leased to the defendant the Texas Company, under a similar lease contract as the one herein sued upon."
The question of the necessity and sufficiency of pleadings to permit recovery in case of ambiguous contracts appears to have not been often discussed by our courts.
Judge Boyce in opinion on rehearing in Quanah, A.  P. Ry. Co. v. Cooper (Tex.Civ.App.) 236 S.W. 813, expresses doubt as to the necessity of such pleadings by a defendant when the contract has been set out by plaintiff and shows ambiguity on its face. In the case of Morgan v. Turner, 4 Tex. Civ. App. 192, 23 S.W. 287, distinguished by Judge Boyce, the contract did not show an ambiguity on its face.
Judge Smith, in San Antonio Machine  Supply Co. v. Allen (Tex.Civ.App.) 268 S.W. 532, says:
"But it devolved upon appellee to set out in specific allegations the words and phrases claimed by him to be ambiguous, or which he intended to modify or explain by parol evidence, and to also distinctly set forth those modifications and explanations. Having failed to do so, he was not entitled to judgment even though his testimony was ample."
The case, being one in which appellee had recovered on pleadings held to be insufficient, was reversed and remanded apparently to permit amendment of pleadings and full development.
While the pleadings in the instant case are meager, we believe they in effect set out an ambiguity, and come within the rule stated by Judge Gill in Linton v. Brownsville Land  Irrigation Co.,46 Tex. Civ. App. 225, 102 S.W. 433, wherein it is said:
"It has been held, however, and we think rightly, that one suing on an ambiguous contract, who chooses to set it out in hæc verba, must put a definite construction on it by averment. Durkee v. Cota, 74 Cal. 313,16 P. 5; Joseph v. Holt, 37 Cal. 253; 4 Ency.Pl.  Pr. 918. This, however, amounts to nothing more than the familiar principle that the pleading must be sufficiently certain to support a judgment. In the case first cited, the contract was susceptible of more than one construction, and it was held, not that the pleader must allege the facts and circumstances upon which he predicated a particular construction, but that he must by a sufficiently clear averment indicate to the court the construction under which he predicated his right to a judgment. In the case before us, it so happens that by the facts averred and relief demanded the pleader has clearly indicated the construction placed by him upon the term of the instrument embodied in his petition."
This latter case was cited by Judge Higgins in Greene Gold-Silver Co. v. Silbert (Tex.Civ.App.) 158 S.W. 803, in which a patently ambiguous contract had been set out in hæc verba, and a construction thereof alleged. The court said:
"The telegrams and letters, relied upon by appellee as evidencing the contract sued upon, are set out in the petition in hæc verba. In so far as concerns liability for past-due salary, the same are regarded as ambiguous. The question of the sufficiency of the petition to support a judgment for such salary, therefore, arises. * * * Since the telegrams and letters are pleaded in hæc verba, the petition, of necessity, must partake of whatever ambiguity exists therein, and in such case the pleader, by averment, must place some definite construction thereon, in order to cure the ambiguity and to support a judgment. Linton v. Brownsville L.  T. Co., 46 Tex. Civ. App. 225, 102 S.W. 433; Durkee v. Cota, 74 Cal. 316, 16 P. 5, 4 Ency.Pl.  Pr. 918. In this case the allegations sufficiently show the construction placed by appellee upon the contract, and the petition is sufficient. McCauley v. Long,  61 Tex. 74; Wooters v. Railway Co., 54 Tex. 294."
Although the allegation, "and by them so construed that the consideration was and is one-half of one-eighth of eight cents," etc., would not be good under special exception, in its absence we consider that plaintiff was entitled to prove facts to sustain the conclusion pleaded. His evidence, as above stated, was ample to show that the Texas Company had paid him and his children repeatedly on that basis under the very contract here involved.
We adhere to the opinion of this court on original hearing that justice will probably be better subserved by remanding this cause. While there is no competent evidence in the record to show the amount of casing-head gas produced, yet, in view of the obligation of the Texas Company in the contract to keep *Page 214 
account of casing-head gas saved and utilized, etc., and to render monthly statements, if requested, and plaintiff's demand in his pleadings for a statement, we consider that the statements of counsel referred to in the original opinion were calculated to lead the court and counsel to believe that the amount of casing-head gas produced was being agreed to and was not in dispute.
Even though there is insufficient evidence to support a judgment, yet, when it appears probable that a cause has not been fully developed, the appellate court will on reversal, in the interest of justice, remand rather than render it.
As said by the Commission of Appeals in Associated Oil Co. v. Hart, 277 S.W. 1043, and expressly approved by the Supreme Court:
"There is no reason to suppose this testimony cannot be supplied upon another trial, and it would be highly inequitable for us to render judgment, or what is the same thing, in effect, to affirm the judgment of the Court of Civil Appeals, and thus deprive plaintiffs in error of the opportunity to meet this defect in their case. It is the rule, where a judgment has been reversed, to remand to the trial court rather than to render, where the ends of justice will be better subserved thereby. Such remanding has often been ordered to supply additional testimony, to amend the pleadings, and even to show jurisdiction. Buzard v. Bank, 67 Tex. 83,2 S.W. 59. 60 Am.Rep. 7; Combes v. Stringer, 106 Tex. 427, 167 S.W. 217; Hill v. Moore, 85 Tex. 335, 19 S.W. 162; Dunn v. Taylor, 102 Tex. 80,113 S.W. 265; Smith v. Patton (Tex.Com.App.) 241 S.W. 109; Faulkner v. Reed (Tex.Com.App.) 241 S.W. 1002; Camden, etc., Co. v. Yarbrough (Tex.Com.App.) 215 S.W. 842; Baker v. Shafter (Tex.Com.App.) 231 S.W. 349; Pershing v. Henry (Tex.Com.App.) 255 S.W. 382."
See, also, Paris  G. N. R. Co. v. Robinson, 104 Tex. 482,140 S.W. 434, and Finberg v. Gilbert, 104 Tex. 539, 141 S.W. 82.
We adhere to the original holding on the other questions discussed in the motions.
The motions for rehearing are overruled.