Court Opinion

ID: 9530423
Source: CourtListenerOpinion
Date Created: 2023-08-07 03:59:45.26708+00
Date Added: 2024-06-11T13:28:06.720804
License: Public Domain

DAVISON, Chief Justice
(dissenting).
I am unable to agree with the opinion promulgated by the majority of my associates in this case. I am of the opinion that the trial court erred in sustaining plaintiff’s motion for a directed verdict. It is my opinion, after an examination of the entire record, that the matter should have been submitted to the jury for a determination of the intent of the parties and of the agreement made by the parties, as reflected by the evidence.
In Hanna v. Parrish, Okl., 317 P.2d 745, 746, we stated the law to be:
“In passing upon a motion for a directed verdict, the trial court must consider as true all the evidence favorable to party against whom the motion is directed, together with all inferences that may be reasonably drawn therefrom, and disregard all conflicting evidence favorable to the movant.”
I will refer to the plaintiff as Williams, the defendant as Pray, Redlands Oil Company as Redlands, and Kenneth Ellison as Ellison.
Applying the above rule of law the following evidence and reasonable inferences therefrom must for the purposes hereof be considered as true.
It appears from the record that the matter of drilling the well had been the subject of oral and written communications prior to the submission of the contract of March 14, 1956, to Pray in Florida. Red-lands had talked to Williams concerning the drilling and the ownership of the leasehold and Pray had told Williams he would be responsible for only his part of the bill (CM 61). Redlands, in which Pray had no interest, wrote Williams on February 27, 1956, requesting submission of a bid and directing it be submitted to Pray (CM 123).
Pray received the Williams letter of March 14, and the contract, quoted in the majority opinion and Williams called Pray in Florida on March 19. Pray was in Florida recuperating from an illness. Williams had already moved equipment on the lease. In that conversation Pray agreed to sign the contract providing “they would bill, charge, and collect (sic) everybody involved which they had knowledge of, charge each one of us our pro rata share as our interest in the lease appeared and that was agreeable”. On the same day Pray dictated to his Chicago office and there was mailed to Williams the letter relative to billing each interest holder direct for their pro rata share. Williams then wrote Pray the letter of March 20 agreeing to bill each interest holder direct for their pro rata share of the drilling. These letters are set forth in the majority opinion.
After completion of the well on May 8, 1956, Williams addressed and submitted a separate invoice to each of the interest holders reflecting the work done, the total charge, and a breakdown of the pro rata share owed by Redlands, Pray and Ellison. Ellison paid his share. Pray paid his share May 17, 1956. Redlands did not pay.
The record reflects that thereafter and on May 25, 1956, Williams addressed and submitted separate credit memorandums to Ellison and to Redlands reciting a total credit and a breakdown of the pro rata credit Ellison, Redlands and Pray were entitled to. The record does not contain a credit memorandum addressed to Pray.
From May 8, 1956, to November, 1956, Williams tried to collect from Redlands and *388was looking to Redlands, “Until we had exhausted every effort to collect it” (CM 132). Williams borrowed money from a bank with the Redlands indebtedness as security and on September 14, 19S6, wrote Redlands insisting “an arrangement be made” and reciting the bank “refused to extend your note beyond October 2, 1956” (CM 131). Redlands at all times admitted its indebtedness and on June 22, 1956, wrote Williams (CM 133) regarding payment of $10,000 cash and assignment of part of the runs from the well to pay and secure the balance. Apparently this failed because of inability to pay the $10,000 (CM 134).
Williams made no demands upon Pray except that in a telephone conversation a representative of Williams “more or less inferred that he was going to try to hold me for it and I wrote him a letter at that time and reminded him of our agreement in the thing” (CM 89). This letter from Pray was dated August 9, 1956. Williams filed this suit November 2, 1956.
This is in the main the evidence with aid of reasonable inferences therefrom supporting the defense of Pray. For the purpose of the motion for directed verdict it must be taken as true and all conflicting evidence favorable to Williams is to be disregarded.
At the time of signing the contract of March 14, 1956, Pray was away from his office in Chicago and recuperating from an illness. Williams had moved upon the lease. It is apparent that the parties believed a type of emergency existed. The contract as drawn was not satisfactory to Pray because it was not drawn along the lines agreed upon that each interest holder pay their pro rata share. Because of the situation Pray signed the contract upon condition Williams would bill, charge and collect from each interest holder their pro rata share. This was agreeable to Williams. If Williams had not agreed to this condition then Pray would not have signed the contract.
In Yeager v. Jackson, 162 Okl. 207, 19 P.2d 970, 971, this court said:
“Parole evidence is not admissible to vary the terms of a written contract, but parol evidence may be introduced to prove a separate parol agreement constituting a condition precedent to the taking effect of the written contract.”
To the same effect see: Gamble v. Riley, 39 Okl. 363, 135 P. 390; Waggoner Bank & Trust Co. v. Doak, 69 Okl. 245, 172 P. 61; Commercial National Bank of Muskogee v. Ahrens, 117 Okl. 65, 245 P. 557.
If the condition of separate billing, charges and collection pro rata from the interest holders was not agreed to by Williams and so done, then no pro rata liability would have attached to Pray. It goes to the very existence of the contract.
Furthermore the contract, when construed in the light of the surrounding circumstances, is capable of interpretation that Pray, Ellison and Redlands were to be obligated only on a pro rata basis. In the letter of February 27, 1956, from Redlands to Williams inviting submission of a bid for the drilling of a well, reference is made to the separate interests of Redlands and Pray. In the letter of Williams to Pray submitting the contract to Pray reference is made to the separate interests of Ellison, Pray and Redlands. The contract describes Pray as “Company”. The letter of Williams of March 20, 1956, is addressed to Pray individually and expresses approval “ * * * for us to bill each of you direct for your pro rata share * * * Plurality of persons is expressed.
Since Pray is not a corporation and is not by himself an association, partnership or group of persons or concerns, then use of the word “Company” would not apply to Pray. The term must therefore contemplate and include parties of which Pray is one party. This conclusion is supported by the definition of “Company” given in 15 C.J.S. pages 646 and 647, wherein many illustrations of the use of the word are stated. It is significant that in none of these illustrations is the term limited to a single individual. The conclusion is that the use *389of the word in the contract, when considered in connection with the oral expressions and writings of Pray and Williams, substantiates the contention of pro rata liability of the interest holders.
Furthermore the evidence, as considered here, of the condition and actual agreement of the parties does not rest in parol. Pray’s letter of March 19 and Williams’ letter of March 20 is written evidence of the agreement as finally consummated by them. The original instrument and the two letters constitute the contract. Title 15 O.S.A.1951 § 237, states:
“A contract in writing may be altered by a contract in writing, or by an executed oral agreement, and not otherwise.”
The contract and Pray’s letter of March 19 were received simultaneously by Williams and constituted a qualified acceptance by Pray. This was a new proposal by Pray which Williams could accept or reject. This conclusion is supported by 15 O.S.A. 1951 § 71, when it states:
“An acceptance must be absolute and unqualified, or must include in itself an acceptance of that character, which the proposer can separate from the rest, and which will include the person accepting. A qualified acceptance is a new proposal.”
See also Fry v. Foster, 179 Okl. 398, 65 P.2d 1224, in which we said:
“A qualified acceptance of an offer is a new proposal which may be accepted in accord with the terms thereof.”
When Williams wrote the letter of March 20 to Pray approving this new proposal and agreeing to bill each of the interest holders for their pro rata share it was an acceptance by Williams of the new proposal made by Pray. These three instruments constitute the contract.
In Lee v. National Refining Co., 181 Okl. 556, 75 P.2d 406, 407, we so held when we said:
“Where a person offers to do a definite thing, and the party to whom the offer is made accepts conditionally, or introduces a new and material term into the acceptance, his answer constitutes a counter proposal, and if the party to whom the counter proposal is made unconditionally accepts it, such counter proposal and acceptance constitutes a binding contract.”
Williams was legally bound to recognize the legal effect of his receipt of the contract and letter from Pray and the acceptance and approval thereof by his letter to Pray. Any contention by Williams that a separate billing and charging of the interest holders for their pro rata share was a favor to Pray is without foundation. Why? Because Pray told Williams in the telephone conversation of March 19 that the contract was not drawn as agreed and that the interest holders were to be billed, charged and collected from on the basis of their pro rata share. In view of this statement Pray’s letter could not otherwise be construed. This testimony, for the purpose of the motion for a directed verdict, must be taken as true.
The proof of my conclusions is in the manner in which the parties construed the agreement by their performance of the same. Williams drilled the well and separately invoiced the interest holders for their pro rata share. Ellison and Pray recognized and paid their pro rata share. Williams separately addressed and submitted credit memos to Ellison and Red-lands. Redlands defaulted. Months passed and no demands were made by Williams on Pray for payment. In the meantime Williams was demanding and negotiating for payment from Redlands, which admitted the indebtedness. Williams borrowed money from the bank on its account against Red-lands. On the evidence being considered Williams recognized the agreement to require billing, charging and collecting from the interest holders their pro rata share according to their interest in the lease.
Decisions of this court recognize the acts of the parties as being evidence of intention and interpretation placed on their agreements. In McDowell v. Droz, 179 Okl. 119, 64 P.2d 1210, it is stated:
*390“Where it becomes a question of what the agreement of the parties was, the conduct of the parties may be proven to establish the interpretation placed on the agreement by the parties themselves. The mutual interpretation of contracts affords cogent evidence of their meaning.
“The chief object in construing contracts is to ascertain the intention of the contracting parties, and subsequent acts and conduct of the parties may be considered in arriving at the intention.”
If it be construed or conceded that the agreement between the parties was uncertain then the parties by their acts may construe the meaning thereof. In Wiebener v. Peoples, 44 Okl. 32, 142 P. 1036, 1037, this court said:
“Where the language of a contract is uncertain and the parties thereto, by their subsequent acts and conduct, have shown that they construed it alike and within the purview of the constructions permitted as possible by such language, the courts will ordinarily follow such adopted construction as the correct one.”
See also Currey v. Willard Steam Service, Inc., Okl., 321 P.2d 680, as follows:
“Where the meaning of the terms used in a written contract is not clear, but such terms have been construed and acted upon by the parties interested, such construction will be adopted, even though the language of the contract may be susceptible of another construction.
“In interpretation of a contract, the intention of the parties at the time the contract was made is the paramount objective, and in arriving at the intent the condition and circumstances under which the contract was made and the subsequent acts and conduct of the parties may be considered.”
What has been set out above demonstrates the incorrect conclusion reached by the majority opinion and that the law therein cited does not apply to the situation presented by this appeal. The lower court -not only undertook to construe the contract and the two letters between Williams and Pray, but also delegated to itself the function of passing upon the effect and meaning of the letters coupled with the conversations and conduct of the parties as interpretive of the parties’ agreement. This latter assumed function was an invasion of the province of the jury as determiner of the questions of fact as to what the parties’ intent was and what reasonable inference could be drawn from the instruments and acts of the parties in connection therewith. The lower court was without power to determine these questions of fact.
The general law is that prior oral negotiations are merged in the written contract and that oral testimony is not admissible to vary the terms of a valid written instrument. As shown above it is equally true that parol testimony may prove a separate parol agreement constituting a condition precedent to the attaching of any obligation thereunder and that a written contract may be altered by a written contract or executed oral agreement. That is the situation here.
The majority opinion cites McConnell v. Holderman, 24 Okl. 129, 103 P. 593, and a quote out of context thereof which would appear to sustain the opinion. Examination of the decision reveals the decision is not in point under the facts in the instant appeal. In that case the question was liability of an agent because of failure to reveal his principal, whereas in this case there was no question of agency. In that case the agreement was oral, whereas in this case the agreement consists of written instruments and conduct of the parties pursuant thereto. In that case there was no evidence of an agreement that others were to be charged and collected from as appears in the instant case. In that case the plaintiff charged and sent invoices only to the defendant, whereas in this case Williams charged and invoiced the other interest holders as well. In that case the issues were submitted to a jury which returned a verdict for the plaintiff. The statement in *391that case that the motion of plaintiff for a directed verdict should have been sustained is at most only dictum or supportive of its opinion that the verdict of the jury reached the right conclusion.
In the instant case the judgment of the lower court should be reversed with instructions to retry the case and submit the same to the jury.