HARDY v. HARDY

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District Court of Appeal, Second District, Division 2, California.

HARDY v. HARDY.

Civ. 13874.

Decided: April 02, 1943

Roger Marchetti and Bartlett & Kearney, all of Los Angeles, for plaintiff and appellant. Benjamin W. Shipman, of Los Angeles, for defendant and respondent.

Plaintiff appeals from an adverse judgment following a summary proceeding. Her contention is that the court abused its discretion in not deliberately trying the action inasmuch as the contract pleaded is susceptible of more than one meaning and the ascertainment of its true import presented an issue of fact for the determination of the trial court. The contract evidenced a property settlement of the parties.

On the 6th of September 1933, the parties made their first agreement. It provided for the payment of certain sums by defendant to plaintiff, which provision is found in the Tenth paragraph of the agreement which is the only passage involved and reads as follows:

“Tenth: As and for the support of first party, second party shall pay to first party from this time forward, or until first party remarries (in the event of the dissolution for any cause of the existing marriage between the parties hereto) any person other than second party, the sum of two hundred fifty dollars ($250.00) per week but in the event the weekly amount received by second party from any source whatever, either as income, salary, royalty, commissions, bonuses and/or earnings (exclusive of any sum, income and/or dividends he may receive from or on account of said endowment policy of life insurance) falls below one thousand dollars ($1,000.00) per week, the amount which second party is required to pay to first party during the week or weeks when such income, etc. falls below $1000.00, is to be reduced to one–fourth of the amount so actually received by second party from the said source. Nothing herein contained shall require the second party to pay to the first party any part or portion of the amount he may be entitled to hereunder from and out of said endowment insurance policy or any income or dividends arising therefrom.”

The Amended Complaint

The parties were divorced shortly after the first agreement. They were subsequently reconciled, and after a second separation a second contract was executed on the 14th of April, 1937, which contained the identical Tenth paragraph. Thereafter defendant paid $250 per week except for certain designated weeks in which he paid nothing or 25 per cent of his income for those particular weeks. The complaint demands $21,625 as the total of sums unpaid. She derives this from the construction which she places upon the contract whereby she insists that the annual income of defendant should be averaged and that she should be paid on an average of $250 per week if defendant's income totaled $52,000 or more for the year and one fourth of his average weekly income if it fell below $1,000. She alleges in her complaint that a determination of the question whether, during any of the weeks listed in her pleading, the weekly amount of income received by defendant from all sources (except from a certain annuity life insurance policy) fell below $1,000 per week and to what extent defendant paid plaintiff one fourth of the amount actually received by him during any of such weeks, and whether defendant was at all relieved from his obligation to make such payment of $250 on the contingency specified in the contract and whether he complied with its provisions by paying the reduced amount and the extent of his default can be determined accurately and only by an accounting by defendant. She alleges that such determination involves the compilation of receipts for 90 separate weeks, the examination of “many contracts by him and by others”; that it was agreed that her support money would be reduced to less than $250 per week only in the event defendant's income should fall below $52,000 annually to “such an extent that his income during any year would average less than $1000 per week”; that she had demanded an accounting and that it was refused with the claim of defendant that the weekly income of defendant is to be determined at the end of each individual week solely on the basis of his actual receipts for such week and that the only income to be considered was his weekly salary of $1,000 and that if he failed to receive his salary in any week he was entitled to make a reduction by paying only 25 per cent of his actual income for the week; that an accounting would show that, during the entire four years prior to the filing of the action, or during each of the four years or during any year ending with any one week, or by averaging his income in any reasonable manner, the income of defendant would not during any of such periods fall below an average of $1,000 per week; that prior to the agreement she intended that in computing defendant's income in any year all sources of income should be included except that from an annuity policy and that plaintiff believes that paragraph Tenth did so provide; that the true construction of the language is in accordance with her intention and understanding at that time; that her intention and understanding was acquiesced in by defendant; that she never had any notice of a contrary construction or intention prior to the execution of the agreement with regard to the Tenth paragraph; that defendant had reason to suspect that plaintiff so understood the agreement; that the income of defendant in all negotiations between the parties was considered on an annual basis; that defendant was an actor in the motion picture industry; that it was a custom to employ actors of the importance of defendant under contract for a period of a year or years, the compensation to be based on the total to be paid for the year allowing a lay–off period of 12 weeks; that such custom was well known to both parties; that despite such custom defendant never discussed with plaintiff the possibility of his being entitled to claim a reduction of the $250 weekly by reason of the language of the Tenth paragraph; that on the 29th of May, 1937, defendant by letters written to plaintiff first asserted his construction of the contract, to wit: that since his compensation was only $100 for such week she should receive only 25 per cent of that sum.

She alleged that in November 1937 she brought an action against defendant for $1,750, being the total amount of sums claimed by her at the rate of $250 per week less the sums actually paid her and demanded a reformation of the contract in accordance with her understanding; that, in April 1940 other defaults having occurred, she dismissed such action; that defendant has not been prejudiced by the filing or the pendency thereof.

The Answer

By his answer, defendant along with other denials and positive allegations alleged that since the 14th of April 1937, he has paid to plaintiff $250 for each week for which he received $1,000 or more and 25 per cent of his earnings when his income was less than $1,000; that he has performed the contract except for the payment of $50 which he paid at the time of filing his answer; that about July 15, 1937, he made a complete accounting to plaintiff which he forwarded to her with a letter and a check in the sum of $325 in settlement of his obligation to her from the date of the contract to the date of payment; that the check was retained and thereafter defendant made other payments by check for the sums received by him for weeks while his income did not amount to or exceed $1,000; that the checks represented 25 per cent of his actual income for the particular week, of which fact plaintiff had knowledge; that such checks were not then cashed, but on August 17, 1937, plaintiff filed an action in the superior court, Number 419297; that at all times plaintiff knew (1) that he was under contract to Hal Roach Studios; (2) that the compensation received there was defendant's sole source of income; (3) that his income was $1,000 a week during certain weeks and less than $1,000 a week during other weeks; (4) that the amount of his compensation for any period was solely in the discretion of his employer; (5) that payment would be made to her as in the contract provided as to each week depending upon the amount received by defendant; (6) that he made payment and accounting of the compensation actually received by him. He alleged that his contract with Hal Roach terminated about April 5, 1940 at which time there was a controversy pending between Hal Roach and defendant with respect to eleven weeks which was settled by the payment to defendant of $1,100 after this action was commenced; that when his services for the Studios terminated plaintiff was holding the check for $325 in payment of all sums due her under the contract to August 7, 1937, together with his checks for 25 per cent of the amount he had received for weeks for which his income was less then $1,000 per week for designated weeks; that plaintiff cashed each of such checks after April 5, 1940, and dismissed the action 419297 on April 24, 1940; that defendant received no income between the last–mentioned date and the filing of this action except certain dividends in the sum of $199.99, $50 of which he paid plaintiff contemporaneously with filing his answer; that the contract including the Tenth paragraph was approved by the court, in the presence of plaintiff and her counsel; that in the year 1937 he paid plaintiff $4,850; in 1938, $11,225; in 1939, $10,150; in 1940, $2,500. Basing his plea upon the facts above recited defendant urges an estoppel against plaintiff.

The Motion

Defendant's motion for a summary judgment was made upon the ground that the agreement of April 14, 1937, “is clear and unambiguous and the parties have previously by their own acts and conduct acted in conformity with the provisions of the agreement, wherein and whereby each week since * * * April 14, 1937, was and constituted a separate accounting period, and plaintiff acted pursuant thereto and in conformity therewith and has dismissed prior proceedings for an adjudication * * *.”

The motion was based upon the records and files and upon defendant's own affidavit as well as upon the affidavit and deposition of plaintiff.

By his affidavit defendant averred substantially the facts set forth in his answer; also that at the time of making the first agreement with the plaintiff he was working for the Roach Studios under a contract of November 11, 1929; that such contract provided that defendant's employment would be for a minimum of 40 weeks out of each year but that the contract could be cancelled by the studios at any time beyond 30 days' notice; that it provided for the payment of his weekly compensation for each week during which he worked but a compensation of $100 a week for such weeks that he did not work; that plaintiff was familiar with the terms of his contract with Hal Roach Studios; that in May 1941 defendant contracted for his corporation, to wit: Laurel and Hardy Feature Productions to make a picture for 20th Century Fox and by the terms thereof granted an option for the rendition of further service by the Laurel and Hardy Corporation; that during the term of his service to 20th Century Fox, defendant paid $250 for each of the 10 weeks while fulfilling his engagement.

In response to the motion and the affidavit of defendant, plaintiff filed her affidavit and the affidavit of one of her counsel, to wit: Parker Veazey, Jr. No statement contained in either of such affidavits is pointed out as additional to the matters alleged in the amended complaint and pertinent to the motion and we find none. In addition to such affidavits, plaintiff objected to the filing of the motion for a summary judgment upon the grounds that the (1) moving papers were not identified and not served; (2) that such judgment rests only in the discretion of the court; (3) that defendant's affidavit does not show that he could testify competently to the facts; (4) that triable issues of fact existed.

The Merits

Appellant contends that there is an issue of fact to be tried; that under the interpretation given the Tenth paragraph by the court below it might be possible for defendant to arrange to have an annual salary paid in a lump sum on one particular day in which event he would have his annual income paid for one week and no income for 51 weeks. We cannot construe the writing on the presumption that defendant might perpetrate a fraud upon plaintiff. Possibilities of misunderstanding and of wrongdoing are factors that govern parties in reducing their agreement to writing. But after it has been so reduced the courts have to determine only what the language used actually means.

Plaintiff resorts to a novel bit of logic in order to develop an ambiguity requiring a finding. She reasons thus: “I contend that out of defendant's total earnings for each year I should be paid $250 per week if such total shall amount to or exceed $52,000 per year; if it shall average less than $1000 weekly he need pay me no more than one fourth of such average weekly sum. Defendant contends that by the contract he owes me only one fourth of his weekly compensation actually received, when less than $1000. These diverse contentions create an ambiguity requiring a finding of the trial court.”

It is not the claim of a party that creates an ambiguity. If one exists it must be found in the language of the writing itself. The phraseology of any agreement may be given a twist by a brilliant interpolation so as to make the meaning of the writing different from that which it would be if the plain import of the text is followed. But evidence cannot be received for the purpose of interpolating into an agreement a provision not inserted by the parties. Barnhart Aircraft, Inc., v. Preston, 212 Cal. 19, 24, 297 P. 20. Its meaning must be ascertained from the writing alone, if possible, Section 1639, Civil Code. The language of the writing if clear and explicit must govern its interpretation, Section 1638, Civil Code. It must be so interpreted as to make it reasonable and operative if it can be done without violating the intention of the parties. Section 1643, Civil Code. Its words are to be understood in their ordinary sense, Section 1644. It may be explained by the circumstances under which it is made, Section 1647, Civil Code. But the circumstances in this instance are disclosed by the writing itself.

The language of the Tenth paragraph is so clear and explicit that its meaning can be ascertained therefrom. Therefore there is no necessity for resorting to parol proof. Taking its words in their ordinary sense we find nothing obscure. It records the evident covenants of the parties upon a subject familiar to them both. There is no ambiguity to be found in its language. An ambiguity can exist in a written contract only in those cases where the language is susceptible of more than one meaning. Where the determination of the meaning of a contract is not dependent upon the solution of an issue of fact, that is if the alleged facts are accepted, they create only an issue of law and summary judgment is an appropriate remedy. Bank of America v. Casady, 15 Cal.App.2d 163, 168, 59 P.2d 444.

In support of her contention, plaintiff cites Walsh v. Walsh, 18 Cal.2d 439, 116 P.2d 62. In that action an adopted son sued upon a property settlement agreement providing for his support. A summary judgment in favor of the defendant was reversed because there the Supreme Court held there was in fact an ambiguity inhering in the very text of the contract itself in the use of the words “child or children.” The Supreme Court was of the opinion that the words “child or children” as used in the writing are ambiguous. The words vary in their meanings sometimes designating a minor and at other times designating the parental relationship. The phraseology of the passage under discussion in the Walsh case, considered in its entirety, has held nothing more than that where an actual ambiguity appears upon the face of the instrument such ambiguity should be determined deliberately, after the adduction of permissible evidence, and not by a summary judgment. The case of McComsey v. Leaf, 36 Cal.App.2d 132, 97 P.2d 242, also cited by appellant, is not pertinent. The only point decided there was that the practice should be followed in resorting to summary proceedings only where it is plain that there is no substantial issue to be tried.

The contract of the parties hereto was made at a time when they were dealing at arms' length. Each was represented by counsel. The writing was thereafter approved by the court. Had it been the intention of the parties to make an average of all of defendant's income for each year and to pay her an average of $250 per week if defendant received an average income of $1,000 per week for the entire year, it would have been recited. It is a reasonable construction of the contract that the parties contemplated payment from each week's income just as it should be received for each week. Such construction makes it operative definite, reasonable and capable of being carried into effect, Civ. Code, § 1643. In the absence of a provision by the parties for averaging the defendant's annual income over the fifty two weeks of the year, or for any other period of time, we conceive no basis or principle of construction upon which the court may prescribe a formula for authorizing such an averaging, Code Civ.Proc., § 1858. It would not have been proper to receive evidence in explanation of the contract so as to write into the instrument a provision not placed there by the parties themselves. Barnhart Aircraft, Inc., v. Preston, supra. It was not a part of the legislative scheme that a contract reduced to writing by the parties should have anything added to it or taken from it by proof of surrounding circumstances. Id.; Burt v. Garden City Sand Co., 237 Ill. 473, 86 N.E. 1055.

But if the context of the contract were not clear, the affidavit, as well as the deposition of plaintiff, proves that she had no positive conception that defendant's weekly income was to be totaled for a year, or for any other period, and then averaged for the weeks in order to ascertain the extent to which $1,000 per week exceeded his actual average weekly income. She averred that they discussed the terms of their contract on eight occasions “with uniform agreement”; that they did not use the word “average”; that the arrangement they discussed was “general”; that in all conversations he said that he would always pay her $250 a week for life and that they could not judge things correctly always in advance and predict “what the future would be and carry it along according to a fixed rule.” Such averments clearly demonstrate that plaintiff conceives that the terms of their agreement were not accurately recorded in the writing, the only cure for which was an action to reform. She testified in her deposition that when she received his seventeen checks each in payment of $25 per week for 22 weeks, she knew he was not getting his full salary; that she cashed fourteen of such checks of defendant notwithstanding each of them bore such inscription as: “Account Hardy, payment in full, including week ending * * *” (giving the date of the week's end); that, also, she cashed six checks of defendant's counsel issued to her in payment of defendant's obligation; that she sued him for the deficiency she claimed in 1937 and dismissed her action in April 1940. Could such conduct signify anything but her acquiescence in defendant's construction of the contract?

When a genuinely true dispute exists between a debtor and a creditor as to the sum due to the creditor and, while the debt remains unliquidated, the debtor tenders his check for a sum less than the creditor's claim with a statement that the check is given in full payment by his act in cashing the check, the creditor adopts the terms which accompanied the tender and will not be heard to say that he retained the amount upon any terms other than those imposed by the debtor. Johnson v. Burnett, 17 Cal.App. 497, 501, 120 P. 436. Such an acceptance of a lesser amount than that claimed by the creditor constitutes an accord and satisfaction. Robertson v. Robertson, 34 Cal.App.2d 113, 118, 93 P.2d 175. Therefore, plaintiff not only adopted defendant's construction of the contract by cashing the $25 checks and dismissing her action in 1940, but she actually accepted his offer as a full settlement of her claim.

Having knowledge of the eccentric methods of the studios in engaging actors for a period of time and knowing that during portions thereof the actors are not steadily at work or steadily on the same compensation, if she had understood that she was to receive one fourth of his annual income if it should amount to less than $52,000 per year, plaintiff, herself, would have required a definite sum per week and would have scorned the superfluous words about those weeks when defendant's weekly salary should be less than $1,000. Acting under the advice of her attorney who counseled her at its execution and appeared for her at its judicial approval she must be held to have understood the full significance of the language to which she subscribed.

In her effort to show that an ambiguity exists in the Tenth paragraph, plaintiff generously amplifies the record with extensive interpolations which she says set forth the correct construction of the passage. Such proposals mean nothing more than that by virtue of the understanding of the parties prior to the execution of the writing which was by reason of a mistake, mutual or otherwise, not expressed by the writing, it should be revised. It has not been reformed and in its extant form we find no ambiguity therein. No ambiguity appearing in the contract and therefore no issue of fact requiring a determination as a basis for judgment, the court below exercised a sound discretion in granting the summary judgment.

Affirmed.

MOORE, Presiding Justice.

W. J. WOOD and McCOMB, JJ., concur.