*1 192 Jennings, J.,
Cracraft, C.J., dissent. that the agree While I Judge, dissenting. Jennings, John E. fact, I remand, do not, change findings its may Commission a fails to display agree opinion Commission’s not sought. See of the relief basis for the denial substantial Co., 23 Ark. App. v. Mar-Bax Shirt Linithicum under- disc in 1985 and Mr. suffered herniated Lunsford a “reoccurrence” In 1986 he suffered laminectomy. went After the laminectomy. a second herniated disc underwent pain. he suffer from severe back second continued to surgery decide, did, as it might reasonably The Commission the claimant and his conversations between regardless doctor, sojourn of a on horseback” an undertaking “long so as to break the under the circumstances activity unreasonable compensable injury chain of between Mr. Lunsford’s causation and his fracture. subsequent spinal
I dissent. respectfully C.J., Cracraft, dissent. joins in this STACY, III, Lands, Edgar A. K. Peggy Stacy, Stacy Jr., WILLIAMS, and Alba Williams Inc. W. Hunter CA 91-457 S.W.2d 156 Court of of Arkansas Appeals
En Banc Opinion delivered June *3 Clark, Bell, & Joe D. Friday, for Eldredge by: appellants. Barton, Barton, Ball & Whit for by: appellees. Jennings, E. from Judge. judg- John Appellants appeal ment of the Circuit Court which dismissed Mississippi County their claim for on their breach of contract and awarded appellees, counterclaim, $10,000.00 of money return their earnest in deposit. finding contend that the circuit erred Appellants judge financing to obtain appellees’ ability appellants’ purchase was a condition to the enforcement of their property find contract. We no error and affirm.
Appellants own a farm in On Mississippi County. 588-acre 14,1985, Jr., Williams, June Williams, Alba and Hunter Williams, (now Sr. deceased), signed purchase $882,000.00. appellants’ farm Specifically, pre-printed contract provided:
Seller covenants and to sell and agrees convey Prop- thereon, erty, with all or cause it to be improvements deed, and sufficient conveyed, by good to Pur- warranty chaser, or to such or as Purchaser person persons may Purchaser, however, designate; shall not be released from Purchaser’s agreements undertakings as set herein, stated; forth unless otherwise and Purchaser cove- nants and agrees to for the Property accept total price Hundred ($882,000.00) Eight Eighty Two Thousand and Dollars, terms as follows: upon no/100 — After this language, the following insertion was added typed appellants’ real estate agent, Kemp Whisenhunt:
Buyers to pledge 900 acres approximately of land in Tallahatchie County together with Mississippi lands herein described for loan to pay purchase price. crop rent of 1 cotton and other to be crops transferred to /4 1/3 buyer. on or Closing before August 1985. The contract also provided that appellees were to obtain posses- sion of the property January 1986.
Initially, appellees encountered some problems in *4 financing for the because the property farm had been leased to a third party until December 1987. Appellees sought financing from a number of institutions, different lending without any success. Equitable Life Assurance Society was the only lender appellees found that was interested in making the loan. The loan made, was never however, because Equitable ran out of farm mortgage money before the loan could be finalized. On Septem- 15, 1985, ber Williams, Sr., ill, became and he died on 10,1985. October Several later, months appellants sold the farm tenant, to their Koehler $630,000.00. for Blankenship, Appel- lants then sued appellees contract, for breach of seeking $252,000.00, which represented the difference between the $882,000.00 purchase price offered by appellees $630,000.00 Mr. paid by Blankenship. Appellees counterclaimed for the return of their earnest money deposit. case was tried to the court sitting as the jury.
196 to the agreement purchase referred
The court found that the
$882,000.00,
pledge approxi-
terms that appellees
as
upon
price
the subject
with
together
of
in Mississippi,
acres
land
mately 900
found
The court also
lands,
price.
a loan to pay
purchase
for
contract,
that,
agent, Kemp
appellants’
the sale
drafting
before
Whisenhunt,
could not
purchase
that appellees
was aware
court concluded that
a loan. The
farm without first
loan was a condition precedent
to obtain a
ability
and,
than
since
used more
they
of the contract
their performance
so, the
and were unable to do
to obtain a loan
reasonable efforts
and was unenforceable.
contract terminated
erred in
that the trial court
argue on
Appellants
appeal
a loan to
purchase
to obtain
holding
appellees’ ability
duty
to their
precedent
farm was a condition
contract does not
contend that the parties’
farm. Appellants
and does
creates a condition
contain
which
the contract in the
not
to be released from
allow
to obtain a loan.
event
are unable
amounts to a
Whether a
in a contract
provision
is
on what the
generally dependent
parties
condition precedent
intended,
Holley,
McMinn v.
adduced from the contract itself.
229,
186,
When the terms of a
(1963).
384 P.2d
231
86 Idaho
more than one
are
ambiguous
susceptible
written contract
to establish the
extrinsic evidence is permitted
interpretation,
then becomes
meaning
intent of the
and the
parties
Ass’n, 23
Floyd
v. Otter Creek Homeowners
fact.
question
120,
Ark.
742 S.W.2d
122-23
See also
App.
50, 52,
Appellee appellants’ Whisenhunt, broker, knew that did not have Kemp appellees cash to for the farm unless obtained a loan. Mr. pay sufficient Mr. clear to was made perfectly Hunter testified that this fact Williams, Jr., 3,1985, on July Whisenhunt. Additionally, intent to announcing Edgar Stacy wrote to appellant One such reason for several reasons. rescind the contract provided: your agent, a mutual mistake between
There was Whisenhunt, to the market value my family Kemp County, owns in Tallahassee of farm land that my family were of the family opinion Your agent my Mississippi. $900.00 and land was between that the market value of this $1,000.00 the land only enjoys an acre. In actuality, $600.00 any acre. The basis of per market value of present by offer to land was to finance purchase your purchase fact, exchange land. In an selling the Mississippi with the cash difference between along property to being negotiated market was properties value gains avoid taxes. any payment capital 16,1985, Bell, On to July attorney Joe for appellants, responded letter, stating this in part:
The offer is not conditioned on the land Mississippi Instead, $1,000 $900 a value of acre. having per land, farm, with the be used as along Stacy collateral for a loan to your family Stacy purchase untenable, farm. Your on this issue is position loan, further seek such a delay your part immediately and close the sale with the will be treated as a Stacys, breach of the full your pay Stacys purchase price.
It can be inferred from Mr. Bell’sletter that were appellants aware that it would be to obtain a loan in necessary order to There is no property. testimony or their witnesses which contention appellants disputes appellees’ that their success in was a condition of the loan agreement.
When two in a contract are contradictory, provisions over ones. Leonard typewritten provisions prevail printed Bank, S.W.2d Merchants and Farmers (1986); Casualty McKinnon v. Southern Farm Bureau *6 709, 711 The 282, 285-86, 335 (1960). S.W.2d Co., 232 Ark. Ins. agreement “buyers in the parties’ insertion contained typed in County in Tallahatchie acres of land pledge approximately for loan pay lands herein described with together Mississippi the con .,” in ambiguity . created an clearly purchase price. discerned from the tract, could not be intent of the parties and the therefore, court, could The circuit of the agreement. four corners in construing intent evidence of the parties’ consider properly of the contract. language sitting jury circuit court as a findings of fact of a against preponder unless appeal clearly
will not be reversed on
determination,
evidence,
give
we
in
making
ance of the
judge
the trial court to
regard
superior opportunity
due
to the
to be
their
weight
given
and the
of the witnesses
credibility
276,
Co.,
273,
25 Ark. App.
Bass v. Service
testimony.
Supply
We cannot
52(a).
R. Civ. P.
(1988);
Ark.
to obtain
ability
holding
that the trial court’s
say
to enforcement
financing was a condition precedent
of the evidence.
against
contract is clearly
preponderance
that,
the contract
out
at the time
Appellants point
Williams, Jr.,
drafted,
was a newly-licensed
appellee
that,
make
if
had intended to
first-year attorney
contract,
to the
their
a loan a condition
precedent
true,
not
While this is
it does
clearly
could have
so provided.
unambiguous.
in the
The fact
language
render
denoting
that a
fails to
the usual words
a condition
employ
clause
“if,”
controlling
determining
or
is
“subject
such as
to”
not
(Sec
Restatement
whether a condition
was created.
The contract was
ond) of Contracts
Comment
§
therefore,
broker,
is
drafted
if the
by appellants’
unclear,
See
against
it should be construed strictly
appellants.
Elcare,
Gocio,
159, 161
605, 608-09, 593
Inc. v.
S.W.2d
Giordano,
414, 418, 76 A.2d
(1980); Bradbury v.
10 N.J. Super.
817;
Mathews,
at
Hawkins &
242 Ky.
Chamberlain
Furthermore, courts other have construed jurisdictions from unclear, language, similar to create conditions equally precedent. Mathews, 732, 733-34, 47 In Hawkins & Chamberlain v. 242 Ky. following language S.W.2d at was found to create a the contract could be condition that had to be met before ($9,000.) of Nine Thousand agreed price enforced: “[A]t Dollars, $1500.00 follows: At least an amount plus to be paid $6,000 loan in a association building of not less than obtained on *7 In to be in cash. . . .” mortgage, paid secured first by Giordano, 816, at v. 10 N.J. 76 A.2d Bradbury Super. Giordano, the agreed property the Mr. to sell appellant, appellee $12,500.00. for to the agreed satisfy purchase price appellee in following manner:
“On execution of this for $1,000.00
which this is also a receipt deed, On delivery of cash $ By assuming the at mortgage a lien on
present the premises, the same paying according $9,600.00 to the terms thereof * * * On Bond and Mortgage $ The purchaser agrees to assume
an F.H.A. now mortgage existing on these premises the amount $9600.00, and the purchaser agrees and secure a apply secondary GI in the mortgage $1,900. 1,900.00 amount (Italics mine.) 12,500.00” In this addressing language, court stated:
The language we here deal is language with defendants and should be against construed them. strictly It does not a strict construction to require reach the result that both vendor and vendee dealt with to an respect assumed condition to arise in the future and that the performance of the agreement each of the by parties was contingent and conditioned upon event contemplated arising. 418,
10 N.J.
at
Super,
Proof of
kind
this
does not establish the
type
that constitutes
impossibility
a defense. There is a famil-
iar distinction
objective
between
which
impossibility,
done,”
amounts
thing
to
“The
cannot be
saying,
Rest.,
subjective
cannot do it.”
Con-
impossibility —“I
tracts,
455;
Contracts,
latter,
Williston on
The
1932.
§
§
which is well illustrated
aby promisor’s
inability
financial
does not
the
pay,
discharge
contractual
and is
duty
therefore not a bar to a decree for specific performance.
Likewise, in Ingham Lumber Co. v. Ingersoll, appellant sought to be released from a contract because the appellant “could get not money into the with which to for the country pay work.” The court supreme responded:
But the written contract did not for a release of provide defendant from such a liability upon contingency. contract must be measured rights by of the parties invalid, nor A is not which themselves made. they from its discharged in manner obligor is the therein effect, or it turns out to be difficult because binding cannot be abro- burdensome to A valid contract perform. thereto; if assent gated or modified unless both parties in his one of the manifests parties unequivocal modified, intention not to the contract unless it is perform not be may compelled he breaches the contract. He cannot, on account of the undertaking but he perform relieve himself from the undertaking, hardship incurred the contract. liability 452, 125 court, 93 Ark. at S.W. at 142. The from Johnson quoting 1081, 1089 v. 61 Ark. went on Bryant, (1895), S.W. though to state: “Inconvenience or the cost of compliance, might make cannot excuse a from compliance hardship, party the performance undertaking of an absolute and to do unqualified thing that is and lawful.” possible Lumber Co. Ingham 452, 125 93 Ark. at S.W. Ingersoll, at 142. The issue in the case at bar, however, is not the issue is whether the impossibility; appellees’ duty was made conditional under the perform terms of the parties’ agreement. argue further and their
Appellants agents unreasonably to obtain the delayed attempting neces loan, therefore, sary did not exercise good faith. See Betnar v. Rose, 820, 826-27, 719, 723 (1976), which that, held contract, in the absence of in a specific provisions *9 buyers have the duty make reasonable efforts and to accept Here, reasonable terms in procuring loan. the circuit judge fact, found the to be contrary true. In he held that not appellees efforts, only efforts, made reasonable but made extensive obtain a loan within a reasonable time and further noted that they went beyond their obligation by an additional 120 pledging acres of land in attempting obtain the loan.
The evidence demonstrated that the was signed 14, 1985; however, on June were appellees not notified that the problem regarding the existing lease the farm had been Calhoon, resolved until a month later. Burl for appraiser Equita- ble Farm Mortgage Department, testified that he could not have Mr. Calhoon leases. outstanding
made the loan if there were any Whisenhunt, at agent, Kemp he told also testified that appellants’ legal description, need a he would meeting on June that .OnAugust5,1985, because one was not attached to the from Mr. however, description received the he still had not Whisenhunt, attorney of appellees’ to the office go and he had testified that the abstracts. He also get in order to it from him everything in getting were appellees prompt cooperative the loan. he needed to process Williams, Jr.’s great Hunter Malcomb Greenway, appellee He testified uncle, a loan. agent acted as appellees’ years loans for over thirty-five that he had been farm arranging regard- institutions lending and that he contacted seven different lender only the loan. He stated that was ing making Equitable who showed interest. failed to use reasonable argue also that
Appellants appellees offer to finance a following through efforts not by appellants’ are very The terms of this offer portion purchase. appellees’ evidence, introduced a letter into dated vague. Sep- Appellants Bell, 17, 1985, tember from their Joe attorney, informing Graham attorney, Sudbury, appellees appellants other were to finance a No willing portion purchase price. The letter further given. provided: details were week, needs to be acted on this as the This proposal because of the buyers, will offer the land to other Stacys If Williams desire to pursue Williams’ failure to close. further, get should in touch before Septem- the matter the farm will be offered for sale next ber since week. he had an earlier conversation
Graham testified that Sudbury in which Bell stated that appellants with Joe Bell in September $750,000.00, with a four- to sell the willing property would be he this offer to interpreted testified that Sudbury hour time limit. $750,000.00, with four hours to come up mean that had Williams, Jr., testified that which he felt was ridiculous. time, his 20th and Bell’s letter on September he first saw and, under the unconscious father, buyers, one of the could do. circumstances, what else he he did not know
203 bar in the case at of the Whether the efforts trier of fact. See Betnar a for the reasonable was question were on the evidence 827, at 723. Based Rose, 259 Ark. at clearly his is holding we cannot judge, say the circuit before evidence. of the against preponderance Affirmed.
Rogers JJ., dissent. Cooper, dissent dissenting. I Rogers, Judge, respectfully Judith because the employed from the decision of the majority did not create a condition agreement precedent. in the purchase a condition holding affirmed the chancellor’s The majority conditioned the appellees’ existed in the contract which farm on their to obtain obligation ability purchase appellants’ to the terms of financing. clearly contrary This is interpretation the agreement. that,
We have held when their contracting parties express unambiguous intention a written instrument in clear and is language, agreement it our to construe the written duty according to the plain meaning language employed. Barnes, 147, Student Loan Guar. Found. v. 34 Ark. App. contract, (1991). S.W.2d In construing intention of the is to be not from some parties gathered, particular but phrase, from the whole context of the Arkansas agreement. Power & Co. v. 231 Ark. S.W.2d Light Murry, Philliber, 403, 602 In North v. S.W.2d 643 (1980), the supreme court stated:
isIt
also a well-settled rule in
construing
that the intention of the
is to be
not from
parties
gathered
words
particular
but from the whole context of
phrases
fact,
the agreement. In
it
be said to be a settled rule in
may
the construction of
that the
must
interpretation
contracts
be
the entire
upon
disjointed
instrument and not
merely
or
of it. The whole context is to be
particular parts
considered in
even
ascertaining the intention of the parties,
though the immediate
is the
object
meaning
inquiry
an isolated clause.
word in the
must be
Every
taken to have been
word
used for a
and no
should
purpose,
rejected
be
as mere
if the court
discover
surplusage
can
*11
reasonable
which can be
from
purpose
gathered
thereof
the whole instrument. The contract must be viewed from
end,
review,
all its terms must
in
for
beginning
and
pass
limit,
one clause
or illuminate the other.
may modify,
its words in
no
Taking
ordinary
meaning,
their
and usual
substantive clause must be allowed to
construc-
perish by
tion, unless insurmountable obstacles stand in the
ofway
any
Seeming
other course.
contradictions must be harmo-
nized, if that course is
Each of its
reasonably possible.
must be
provisions
considered
connection with the
others, and, if
given
effect must be
possible,
all.
406-07,
If the title is good not and cannot be made good within a reasonable time after written notice given has been defective, the title is defects, specifically pointing out the then the above earnest shall be returned money to Pur- chaser and the usual commission shall be to the paid undersigned Agent by Seller. If good the title is Purchaser shall herein, fail to pay Property specified Seller shall have the right to elect to declare this contract cancelled, election, and upon such the earnest shall money be retained divided between equally Seller and Agent, as liquidated damages and commission respec- tively, but in no event shall Agent’s share exceed the regular commission. The right given Seller to make the above election shall not be Seller’s exclusive remedy, and either party shall have right to elect to affirm this contract and enforce its specific performance or recover full damages for its breach. . . . renders this is conditional to find the majority
For the which neutralizes A construction meaningless. can be if the contract be adopted cannot of the contract provision Lindell its provisions. effect to all gives which way construed in a Ass’n, 27 Sav. and Loan v. Savers Fed. Partnership Ltd. Square S.W.2d Ark. App. finding that the chancellor’s has affirmed majority *12 the inserted in printed the language parties
following typed created a condition agreement precedent: land in 900 acres of Buyers pledge approximately with lands together County Mississippi Tallahatchie 1985 crop to pay purchase price. herein described for loan to be transferred rent of 1 cotton and 1 other crops /3 /4 or before 1985. Closing August buyer. language never intended this by It is clear that the parties Read as a obtaining financing. condition the sale on appellees’ whole, not* of only appellees’ pledging this provision speaks lands as collateral for the but also of purchase, appellees’ certain on the land to be receiving the benefit of rents crop purchased. then, the obvious According language to the of the contract plain it agreement construction of the inserted in the is that language the financing was intended to the terms of explain simply purchase. of land frequently
Contracts for the sale and purchase financing arrangements contain provisions referring to be made the Determination proposed by purchaser. the force and effect of such involves the provisions applica- tion of the usual rules for construction contracts the and sale of land. purchase or not a in a contract for the sale of Whether provision arrange- referring uncompleted to the realty purchaser’s ment for the balance of the financing purchase price of the con- a condition precedent performance creates intention of the parties primarily upon tract depends contract, the of the surround- deduced from the executed, contract was at the time the ing circumstances to be contract. sought accomplished and the purpose Purchaser, Moreover, (1975). and 77 Am. Jur. 2d Vendor § the court’s intended for a condition finding parties is clearly against to be included in the contract of the evidence. preponderance Williams, Jr., testified at trial that it was
Appellee broker that had to appellees made clear to perfectly appellants’ and, the farm these obtain a loan in order to after purchase discussions, If agreement was prepared. appellees contract, had intended be term of the that such a condition Nevertheless, signed could have so clearly provided. appellees agreement without such is a being Appellee a condition included. knows that a written contract lawyer presumably merges extinguishes negotiations, all thereby prior contemporaneous understandings, agreements subject and verbal same Ass’n, Garrison, matter. See Farmers Inc. v. Cooperative Ark.
Furthermore, actions inference negate any the purchase agreement was conditional. After the executed, discovered there outstanding was an *13 lease on the and to rescind property the contract. In his attempted rescission, letter notifying the intended appellants appellee Williams, Jr., discussed understanding his of the parties’ agreement. He stated:
3. There was a mutual agent, mistake between your Whisenhunt, and Kemp as to the market value my family of farm land that owns my family in Tallahassee County, agent Your and Mississippi. my were of the family opinion that the $900.00 market value of this land was between $1,000.00 an acre. In the land actuality, only enjoys a $600.00 present market value of per acre. The basis of any offer to purchase land your was to finance the purchase by selling the fact, land. In Mississippi an exchange of property along with the cash difference between the market value of the properties was being negotiated to avoid any payment gains capital taxes.
4. In light of the present market value of the land, Mississippi and the age of it is my parents, highly doubtful that any lending institution would finance this purchase. to be value of collateral discussed the in his letter he
Although loan, perform- that he never stated a obtaining used in loan. obtaining on ance was conditioned letter, attorney replied: In to this response appellants’ Ed firm, Oscar Fendler along represents with This with June your family’s in connection Stacy and Peggy Stacys. farm from the to 588 acre agreement buy 3,1985 family’s Stacy, stating letter to Ed your Your July been has to rescind attempt unilateral It is Ed and Fendler me for answer. referred to Mr. to binding purchase that a Peggy Stacys’ position rescind unwilling are has been consummated that contract. that were from this majority appellants infers statement in order to financing purchase
aware needed inference, be a it is not evidence While this correct property. may be this would financing that the parties agreed to the condition contract.
Furthermore, being problems regarding notified that cleared, lease had been outstanding appellee responded:
I of your My am in letter of 1985. receipt July has family welcomes the news that Koehler Blankenship 1,1986. agreed vacate the farm prior January Stacy news, with With most of had my family the problems land have remedied. consummating this been purchase My has family Stacy wanted always goal July farm and have been toward that since working 1985. An of our land was conducted appraisal Mississippi and the was between value attached the cultivable acres *14 $1,000.00 $900.00 and an acre. no which would
Again, existing mention is made condition relieve from under the contract. Even appellees performing Sudbury, advising letter from appellees’ attorney, appel- Graham been does not financing, lants had unable to obtain appellees to obligation state that the were from their released appellees financing. the farm because were unable to obtain purchase they fact, counterclaim, In it almost a was not until filed their appellees 208 suit, after had filed first
year they argued appellants agreement terminated because of the failure of a condition precedent.
Although it have been may appellees impossible the farm were to obtain the necessary when unable loan, that does not relieve of the impossibility obligation them do so.
Subjective in cases impossibility, where it is except also does objective, not excuse non-performance of contract. or Insolvency to obtain funds inability necessary is a perfect illustration of subjective It impossibility. for; absolutely making a contracted precludes payment but creditor, unless caused wrongfully by the insolvency is no excuse. And any arising from a impossibility promisor’s inadequate resources will pecuniary very rarely afford an excuse. Williston, Contracts,
18 Samuel 10-11 (3d 1932 at ed. 1978). § 407, See also Christy v. 224 273 Pilkington, Ark. 533 S.W.2d (1954); Ingham 447, 452, Lumber Co. v. Ark. Ingersoll, 93 125 139, S.W. (1910).
It is the of the duty court to construe contract according its unambiguous language without or enlarging expanding its 153, terms. Raley, 405, Christmas v. 260 Ark. 539 S.W.2d It is not within the province court to add conditions in order to relieve a from the party harshness of the binding effect of a contract. Accord Rector-Phillips-Morse, Inc. Vroman, 750, 753, v. Here, 253 Ark. 4 (1973). there is no in the provision contract making appellees’ obligation perform contingent contract their upon to obtain a ability In loan. absence such a in the provision agreement, a condition cannot be read into the the court. See Johnson, Baugh App. S.W.2d (1982). For the to look majority outside the four corners of this purchase agreement add additional terms order to allow escape binding effect of their renders thousands of contracts uncertain and will throw them into the courts. sum,
In I regard do not provision being ambiguous, *15 a merely included provision that this I think it clear not as but financing arrangements to the proposed reference a loan to obtain inability that appellees’ such condition of sale. the contract under obligations of their relieve them would the which states this contract in is no There can and while it precedent, as a condition was intended provision a loan to purchase needed that appellees it was known be said that finding does not support introduced evidence the property, the a loan. I on their was conditioned the contract to terms of the expand course to think it an unwise allowing appellees, thereby a condition precedent, create to purchase their agreement effect of binding escape discarded, I object be so easily should not Contracts property. alter contracts so as to in interpreting wide latitude taking such import language employed. meaning the plain It this case. far majority goes beyond particular decision world in the commercial usage the custom and places jeopardy I would in real estate transactions. of offer and acceptance but remand the the chancellor reverse the decision of therefore damages. determination of appellants’ case to him for a joins dissenting opinion. in this Judge Cooper of Arkansas Michael STEVENS v. STATE Terry S.W.2d 275 CA CR 91-255 Court of of Arkansas Appeals I
Division delivered June Opinion