STEUART v. McCHESNEY
498 Pa. 45 (1982)
444 A.2d 659
Lepha I. STEUART, Appellant, v. William McCHESNEY and Joyce McChesney, Appellees.
Supreme Court of Pennsylvania.
Decided April 30, 1982.
M. Richard Mellon, Gerald J. Villella, Erie, for appellant.
James C. Blackman, Blackman, Blackman & O'Sheill, Warren, for appellees.
Before O'BRIEN, C.J., and ROBERTS, NIX, LARSEN, FLAHERTY, McDERMOTT and HUTCHINSON, JJ.
OPINION OF THE COURT
This is an appeal from an Order of the Superior Court
On June 8, 1968, the appellant, Lepha I. Steuart, and her husband, James A. Steuart (now deceased), executed an agreement granting to the appellees, William C. McChesney and Joyce C. McChesney, husband and wife, a Right of First Refusal on a parcel of improved farmland. The agreement provided:
On July 6, 1977, the subject property was appraised by a real estate broker at a market value of $50,000. Subsequently,
The primary issue on appeal concerns the price at which the Right of First Refusal may be exercised. The Court of Common Pleas, after hearing testimony, held that the formula of twice the assessed value was intended to serve as "a mutual protective minimum price for the premises rather than to be the controlling price without regard to a market third party offer." The agreement was, therefore, construed as granting appellees a preemptive right to purchase the land for $35,000, the amount of the first bona fide offer received.
It is well established that the intent of the parties to a written contract is to be regarded as being embodied in
Application of the plain meaning rule of interpretation has, however, been subjected to criticism as being unsound in theory. "The fallacy consists in assuming that there is or ever can be some one real or absolute meaning." 9 Wigmore, Evidence § 2462 (Chadbourn rev. 1981). "[S]ome of the surrounding circumstances always must be known before the meaning of the words can be plain and clear; and proof of the circumstances may make a meaning plain and clear when in the absence of such proof some other meaning may also have seemed plain and clear." 3 Corbin, Contracts § 542 (1960). "It is indeed desirable that it be made as difficult as is reasonably feasible for an unscrupulous person to establish a meaning that was foreign to what was in fact understood by the parties to the contract. However, this result can be achieved without the aid of an inflexible rule." Murray, Contracts, § 110 (1974).
While adhering to the plain meaning rule of construction, this Court, too, has cautioned:
Estate of Breyer, 475 Pa. at 115 n.5, 379 A.2d at 1309 n.5 (1977). Indeed, whether the language of an agreement is clear and unambiguous may not be apparent without cognizance of the context in which the agreement arose:
Hurst v. Lake & Co., Inc., 141 Or. 306, 310, 16 P.2d 627, 629 (1932), quoted in 4 Williston, Contracts § 609 (3d. ed. 1961).
Nevertheless, the rationale for interpreting contractual terms in accord with the plain meaning of the language expressed is multifarious, resting in part upon what is viewed as the appropriate role of the courts in the interpretive process: "[T]his Court long ago emphasized that `[t]he parties [have] the right to make their own contract, and it is not the function of this Court to re-write it, or to give it a construction in conflict with . . . the accepted and plain meaning of the language used.' Hagarty v. William Akers, Jr. Co., 342 Pa. 236, 20 A.2d 317 (1941)." Felte v. White, 451
In addition to justifications focusing upon the appropriate role of the courts in the interpretive process, the plain meaning approach to construction has been supported as generally best serving the ascertainment of the contracting parties' mutual intent. "When the parties have reduced their agreement to writing, the writing is to be taken to be the final expression of their intention." 17A C.J.S. Contracts § 296(2). "Where the contract evidences care in its preparation, it will be presumed that its words were employed deliberately and with intention." 17A C.J.S. Contracts § 296(2). "In determining what the parties intended by their contract, the law must look to what they clearly expressed. Courts in interpreting a contract do not assume that its language was chosen carelessly." Moore v. Stevens Coal Co., 315 Pa. at 568, 173 A. at 662. Neither can it be assumed that the parties were ignorant of the meaning of the language employed. See Fogel Refrigerator Co. v. Oteri,
Accordingly, the plain meaning approach enhances the extent to which contracts may be relied upon by contributing to the security of belief that the final expression of
In the instant case, the language of the Right of First Refusal, viewed in context, is express and clear and is, therefore, not in need of interpretation by reference to extrinsic evidence. The plain meaning of the agreement in question is that if, during the lifetime of the appellant, a bona fide purchaser for value should be obtained, the appellees may purchase the property "at a value equivalent to the market value of the premises according to the assessment rolls as maintained by the County of Warren and Commonwealth of Pennsylvania for the levying and assessing of real estate taxes." Indeed, a more clear and unambiguous expression of the Right of First Refusal's exercise price would be onerous to conceive. By conditioning exercise of the Right of First Refusal upon occurrence of the triggering event of there being obtained a bona fide offer, protection was afforded against a sham offer, made not in good faith, precipitating exercise of the preemptive right. The clear language of the agreement, however, in no manner links determination of the exercise price to the magnitude of the bona fide offer received through that triggering mechanism.
By construing the clause in question to merely signify that the exercise price be, in effect, "not less than" the market value of the premises according to the assessment rolls, the Court of Common Pleas ignored the clearly expressed intent that the exercise price be "equivalent to the market value of
Appellant contends that, based upon equitable considerations, specific performance at the assessed market value of $7,820 should be denied; in particular, the divergence between assessed market value and the amount of the bona fide offers assertedly renders an award of specific performance inequitable. As this Court has established, however, "`[i]nadequacy of consideration is not ground for refusing to decree specific performance of a contract to convey real estate, unless there is evidence of fraud or unfairness in the transaction sufficient to make it inequitable to compel performance. . .' Welsh v. Ford, 282 Pa. 96, 99, 127 A. 431, 432 (1925). See also Payne v. Clark,
ROBERTS, J., files a dissenting opinion in which LARSEN, J., joins.
ROBERTS, Justice, dissenting.
I dissent. Although the contract at issue mandates that appellees may purchase appellant's property at "the market value of the premises according to the assessment rolls as maintained by the County of Warren . . .," it is by no means clear that $7,820 is the price which appellees should pay.
The omission from the contract of a specific future purchase price was intentional because, according to the draftsman, the parties "wanted to reflect either increase or decrease of the assessed value as of [the] time" of appellees' exercise of the option to buy. To assure the accuracy and currency of this "reflection" of the change in assessed value, the parties provided that "the date of valuation shall be that upon which the said Steuarts notify said McChesneys, in writing, of the existence of a Bona Fide purchaser."
Written notice of appellant's receipt of an offer for the property was delivered to appellees on or about October 25, 1977. At that time, the assessed value of the property, as recorded on the tax rolls of Warren County, was $3,910, or 50% of the "market value" of $7,820. However, from the testimony of the draftsman, it would appear that the property had not been reassessed since 1972, when the assessed value was increased by only $405.
Section 602 of the Fourth to Eighth Class County Assessment Law provides:
72 P.S. § 5453.602(a) (1964). As this Court stated in Brooks Building Tax Assessment Case,
Accord, Buhl Foundation v. Board of Property Assessment,
Here, where appellant received bona fide offers of $30,000, $35,000, and $50,000 for her property, there can be no doubt that the actual value of appellant's property in 1977 was at least four times greater than the value according to the outdated assessment on the Warren County tax rolls. It is the height of unfairness to grant appellees' requested decree for specific performance at a price based on a valuation which took place in 1972. In effect, appellees are receiving a substantial windfall simply because Warren County has apparently failed to maintain accurate assessments "according to the actual value" of appellant's property, as required by law.
In these circumstances, I would remand this case to the Court of Common Pleas of Warren County for a determination of what the proper assessed value of appellant's property would have been on October 25, 1977, the "date of valuation," with directions to enter a decree of specific performance in favor of appellees at a "market value" based upon that determination.
LARSEN, J., joins in this dissenting opinion.
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