Court Opinion

ID: 9668923
Source: CourtListenerOpinion
Date Created: 2023-08-24 02:32:10.794678+00
Date Added: 2024-06-11T18:15:50.134780
License: Public Domain

John A. Fogleman, Justice, dissenting. I do not agree that appellants were entitled to judgment as á matter of law. The trial judge properly recognized that there was an issue as to the proper construction of the contract because of ambiguity. There was at least a latent ambiguity and the court submitted the question of the meaning of the parties to the jury by a correct instruction. It seems to me, however, that a cardinal rule of construction should have been stated to the jury and that appellant submitted a correct instruction which would have advised the jury that any doubt or ambiguity about the meaning of the contract was to be resolved against the party who prepared it. See Manhattan Factoring Corp. v. Orsburn, 238 Ark. 947, 385 S.W. 2d 785; Stevenson v. Marques 241 Ark. 321, 407 S.W. 2d 391. The contention of appellee that a contract was not involved cannot be sustained. All of the testimony shows clearly that all parties, even when testifying, regarded it as a contract, not a quotation or unaccepted offer. The highway contract number was shown as the subject of the letter which constituted the agreement. The approximate number of gallons of asphalt for which the “quotation” was made was stated. It was specified that the material should meet Arkansas Highway Department specifications. The offer or “quotation” required an acceptance and expressed an appreciation, not for the opportunity to furnish a quotation, but for “this business.” This is not a case where orders were invited or where appellee, the offeror, simply offered to supply whatever Arkansas Rock & Gravel Company ordered. Appellee points up the question involved in construing the words “in the spring of 74” by referring to the duration of the “quote” as being limited “through the spring of 1974” or as being “for the spring of 74.” They are treated in the majority opinion as if they read “during the spring of 74.” Absent the circumstances surrounding the execution, I would agree that the words should be treated as the majority treats them. But, given the circumstances, the circuit court in my opinion correctly recognized that there was evidence from which it could be said that there was a latent ambiguity. A latent ambiguity arises from facts not disclosed in the instrument. Dorr v. School District No. 26, 40 Ark. 237. It may imply a concealment of the real meaning or intention of the writer which does not appear upon the face of the words used until they are brought in contact with collateral facts. It arises, not upon the words as looked at in themselves, but upon those words when applied to that which they describe. It does not appear upon the face of the language used in the instrument, but occurs when the language appears to be clear, intelligible, unambiguous, but in fact, is shown by some intrinsic fact or extrinsic evidence to be uncertain in meaning. 3A GJS 409, Ambiguity; Conkle v. Conkel, 31 Ohio App. 2d 44, 285 N.E. 2d 883 (1972). In determining whether a latent ambiguity exists, a contract must be read in the light of what the parties intended as gathered from its language in view of all surrounding circumstances. Arkansas Amusement Corp. v. Kempner, 57 F. 2d 466 (8 Cir., 1932). See also, Ellege v. Henderson, 142 Ark. 421, 218 S.W. 831. Words not ambiguous in the abstract may, when considered in relation to the circumstances surrounding the making of it, create an ambiguity requiring interpretation. Arkansas Amusement Corp. v. Kempner, supra. Paepcke-Leicht Lumber Co. v. Talley, 106 Ark. 400, 153 S.W. 833. See also, Ellege v. Henderson; supra; Easton v. Washington County Insurance Co., 391 Pa. 28, 137 A. 2d 332 (1957). . In order for the court to determine whether a latent ambiguity exists, it is obviously necessary that it consider evidence of extraneous and collateral facts as to extrinsic circumstances. Logan v. Wiley, 357 Pa. 547, 55 A. 2d 366 (1947). The rule is well settled that extrinsic evidence is admissible to show that a latent ambiguity exists. Hall v. Equitable Life Assurance Society, 295 Mich. 404, 295 N. W. 204 (1940); McCarty v. Mercury Metalcraft Co., 372 Mich. 567, 127 N.W. 2d 340, cert. den., 380 U.S. 952, 129 N.W. 2d 854 (1964); Widney v. Hess, 242 Iowa 342, 45 N.W. 2d 233 (1951). See also, Ellege v. Henderson, supra; Easton v. Washington County Ins. Co., supra; 3 Jones on Evidence 124, § 16:23. To discover a latent ambiguity, it is proper to go outside the instrument to ascertain whether the words used aptly fit the facts existing when the instrument was executed and the words used. Widney v. Hess, supra; Queen Insurance Company of America v. Meyer Milling Co., 43 F. 2d 885 (8th Cir., 1930). In making the determination, courts may acquaint themselves with the persons and circumstances that are the subjects of the statements in the written instrument and place themselves in the position of the parties who made the contract, so as to view the circumstances as they did. Wood v. Kelsey, 90 Ark. 272, 119 S.W. 258. Once it was shown that there was a latent ambiguity, oral evidence was admissible to explain it. Ft. Smith Appliance Co. v. Smith, 218 Ark. 411, 236 S.W. 2d 583; Paepcke-Leicht Lumber Co. v. Talley, supra; Ellege v. Henderson, supra. Testimony of the parties as to the meaning of the words is admissible. Ellege v. Henderson, supra. Parol evidence is also admissible tó explain the situation and relation of the parties and the surrounding circumstances at the time of the execution of the contract. Wynn & Sklar v. Phillips Oil Co., 254 Ark. 332, 493 S.W. 2d 439; Clear Creek Oil & Gas Co. v. Bushmaier, 165 Ark. 303, 264 S.W. 830. The agreement was reached by acceptance on October 10, 1973. George Thweatt, officer of Ben M. Hogan & Company who became the chief managing officer of appellee, made the offer after negotiations with other representatives of Hogan. Thweatt was familiar with Arkansas Highway Department specifications that prohibited application of the asphalt materials between October 31 and April 1 or when the air temperature was below 60 degrees. He knew that the material was not to be used until springtime and that it could not be used before April 1 and that April 1 was not the beginning of “spring,” whether spring be March, April and May or March 21 through June 20. He knew that appellee had fixed working days, i.e., 90, from the issuance of a work order by the highway department for completion of the contract. Obviously, working days are not the same as calendar days. The price was increased from 13 cents to 14 cents, because appellee asked for a firm price. There was also evidence tending to show that Hogan, whose obligation appellee assumed, was interested in selling appellee crushed stone or chips and appellee bought chips from Hogan for use in performing this highway job. John Harsh, who was employed by Arkansas Rock & Gravel Co. took a quotation on the asphalt in September, 1973 from Ivan Justice, a representative of Hogan, on the eve of the bidding for the highway contract. He delivered the price quotation to officials of Arkansas Rock & Gravel Company. One of these, Warren Simmons, talked with Justice on the telephone and asked for a firm figure. When Justice returned the new price Simmons asked that it be confirmed in writing and as a result the “contract letter” came into being. The jury might well have inferred that Arkanaas Rock & Gravel Company based its bid on the job on the agreement with appellee. The work order was not issued until May 28, 1970. Simmons testified that had it not been for rain and other matters, the highway contract might have been completed by June 20, but that he had not expected to do so, even though they had planned theoretically to do so. He also said that he had not been made aware, in the telephone conversation, that the firm price was based upon the contract being completed in the spring of 1974. Ivan Justice said that the sentence in question here was a sentence added to appellee’s usual form of quotation and that the intent was “how soon it was to be used.” There was contradictory evidence from which the jury might have found that appellee was well aware that the quotation or firm price was based upon the use of all the material during the spring of 1974, but I agree with the circuit judge that there was a fact question. Under the circumstances, the contract could have meant only that the use was to commence after the beginning of the highway department’s sealing season and continue during the time allotted for completion of the job. I see no reason why the instruction I have previously referred to should not have been given. I would reverse the judgment because of its being refused. I am authorized to state that Mr. Justice Byrd joins in this opinion.