Opinion
Stanley J. Myers, Denver, for plaintiffs in error.
Goldsmith, Carter & Fleischman, Denver, for defendant in error.
DUFFORD, Judge.
This case was originally filed in the Supreme Court of the State of Colorado and was subsequently transferred to the Court of Appeals under the authority vested in the Supreme Court.
Plaintiffs in error were plaintiffs below in an action for specific performance of a contract for the purchase of real estate owned by the defendant. Plaintiffs were assigned their rights under the contract by Les Lea Manors Construction Co., the original buyer. Trial was to the court, which denied plaintiffs' claim for specific performance of the contract and granted defendant Seller's claim for rescission.
The basic questions presented here are focused upon the admissibility of extrinsic evidence by the trial court and upon its ultimate conclusions as to whether certain contingencies contained in the contract were inserted for the sole benefit of the buyer or whether these contingencies were inserted for the mutual benefit of both parties to the agreement. Plaintiffs argue that these contingencies were clearly for the buyer's benefit, and that they could, therefore, be waived by the buyer. Defendant's position is that the contingencies were for the mutual benefit of the buyer and the seller.
1. ADMISSIBILITY OF EVIDENCE
The contract in question is a composite of a printed form of receipt and option agreement, used commonly in this State for real estate transactions, and two pages of typewritten provisions which are attached to the printed form. The provisions contained in the typewritten pages cannot be read with any meaning by treating them either as a single continuation of the printed instrument or as a single insertion to be made at one point in the printed instrument. Rather it is necessary to intersperse certain of the typewritten paragraphs at varying points within the printed paragraphs if any meaning is to be derived from the agreement.
The physical composition of the contract is not the only challenge which it presents. Imbedded within the over-all of the agreement are four separate statements as to what the legal impact will be if certain obligations of the contract do not occur or are not satisfied within the time periods specified therefor. At one point the agreement specifies that if Any condition of the agreement is not performed the contract will be void. At another point it is stated that the agreement is voidable only at the buyer's option if certain 'approvals' are not secured within ninety days. Another provision states that the securing of these same 'approvals' is a contingency upon which the validity of the entire agreement rests, and there is also a provision providing for an extension of the time in which such 'approvals' can be secured.
To construe the agreement, the trial court heard and considered certain extrinsic evidence in making its determination as to whether the unmet contingencies which are in issue were inserted in the contract for the benefit of only the buyer or for the benefit of both buyer and seller. In our opinion such action of the trial court was proper. We find the contract ambiguous on this point. As we view the record, the trial court's action here in admitting evidence outside the contract, including parol testimony, was done, not to vary the terms of the contract, but to explain its ambiguities. This was not error. Schmelzer v. Condit, 69 Colo. 405, 195 P. 323. The problem facing the court was that of interpreting an ambiguous contract, and in such situation it is proper to use as a guide expressions as to the intent of the parties. Schmelzer v. Condit, supra.
2. RIGHTS OF PARTIES
From an examination of the contract and from the extrinsic evidence it received, the trial court found in substance the following facts which are significant here:
(a) The seller was selling only a portion of the land owned by her and was retaining ownership of part of her land. The retained portion included the site of her home.
(b) The 'approvals' which the buyer was to secure consisted, first, of a preliminary loan insuring approval from the Federal Housing Authority as to possible future home construction. Second, approvals were to be secured from the City and County of Denver as to street dedications to be made as provided for in the contract, together with attendant City water and sewage lines.
(c) The seller was to release without compensation to the City and County of Denver enough ground for the dedication of certain strips of land to be dedicated for street purposes. Additionally, the seller agreed to cooperate with the purchasers in platting the area for home development and in establishing a street improvement district for the paving of dedicated streets.
(d) In agreeing to the sale of her property, the seller informed the buyer that her main interest in selling the property was to obtain for her retained residence easily and cheaply accessible City water and sewage facilities tied to a public system, as well as street improvements. She also expressed her anticipation that performance of the contract would result in increased safety for her residence and garage, accessibility to a new street that was to be created under the proposed platting, and the availability of residential financing which would be insured by the Federal Housing Administration.
In addition to these findings made by the trial court, we note from the face of the contract itself that the delivery of title insurance from the seller to the buyer was to occur only if and when the buyer had been able to secure the 'approvals' specified in the contract.
In our opinion the evidence in this case clearly supports the various findings of fact made by the trial court, and such findings shall not be disturbed on appellate review. Fletcher v. Garrett, 167 Colo. 60, 445 P.2d 401.
We further conclude, in view of such facts that the trial court properly decided that the securing of the 'approvals' required by the terms of the contract to be obtained by the buyer were covenants and conditions precedent, the performance of which was for the benefit of both the buyer and seller. Such being the case, it necessarily follows that such conditions and covenants could not be waived by the unilateral action of the buyer, and that in the absence of such covenants and conditions being satisfied, the trial court properly denied the buyer's claim for specific performance and properly granted the seller's counterclaim for rescission.
Judgment is affirmed.
COYTE and PIERCE, JJ., concur.