Opinion
Jan. 18, 1972.
Editorial Note:
This case has been marked 'not for publication' by the court.
Page 384
Hamilton, Hamilton & Shand, Durango, for plaintiffs-appellees.
Robert C. Duthie, Durango, for defendant-appellant.
ENOCH, Judge.
This appeal involves the interpretation of a contract and the determination of a libel charge. The parties appear in reverse order of their appearance in the trial court. Plaintiff, The Pagosa Hot Spring, Inc., hereinafter referred to as the corporation, is the owner of the motel involved. Robert Curvey, the other plaintiff, will be referred to by name or as buyer. The defendant, Samuel J. Arnold, will be referred to by name or as seller. Trial was to the court.
The first claim for relief was for damages for seller's alleged breach of contract. The trial court awarded the plaintiff corporation judgment for $16,978 on this claim. The second claim for damages was based on an alleged libel committed by seller against the corporation. The court held that the seller's statements were libelous per se and awarded plaintiff corporation damages in the amount of $1,500. Seller appeals both judgments.
I.
The seller and buyer entered into a written contract for the sale and purchase of 51% Of the stock in the corporation. The contract provided that seller would hold the corporation harmless from all general obligations of the corporation which were owed on May 1, 1968, and warranted that the property was free and clear of all liens and encumbrances except 'the obligations under the note, chattel mortgage and deed of trust above referred to.' The contract recited that the corporation owed 'approximately $149,000' on a first deed of trust to the Citizens Bank of Cortez, Colorado, and the Small Business Administration (S.B.A.) and 'approximately $20,000 on another note secured by a chattel mortgage on the equipment in the motel and restaurant.'
After taking over the operation of the motel, buyer discovered that there was a considerable number of general obligations outstanding which the corporation was forced to pay. The amount of these obligations was included in the judgment against the seller and no issue is made in this appeal as to these accounts. Buyer also discovered that instead of one note secured by a chattel mortgage, there were outstanding and unpaid five notes secured by five chattel mortgages plus two other secured obligations, all of which totaled approximately $20,000. The trial court found that the phrase in the contract, 'approximately $20,000 on another note secured by a chattel mortgage . . .', was ambiguous and after hearing testimony on the issue determined that the corporation was liable for just one note owed to General Innkeepers Acceptance Corporation in the amount of $14,345.80 and that the seller was responsible for the other secured obligations. Seller alleges the trial court's interpretation of this part of the contract was error. We affirm.
The parties agreed that the contract was ambiguous as to the chattel mortgage clause. It then became necessary for the trial court to construe the contract with reference to the intent of the parties. Leach v. LaGuardia, 163 Colo. 225, 429 P.2d 623. The court heard conflicting testimony as to the intent of the parties and determined that only one note secured by one chattel mortgage was intended to be included. Because this interpretation required determination of a question of fact, the trial court's findings will not be disturbed on review where, as here, there is evidence to support such findings. Adler v. Adler, 167 Colo. 145, 445 P.2d 906. See Skinner v. Davidson, 142 Colo. 423, 351 P.2d 872.
The seller cites Christmas v. Cooley, 158 Colo. 297, 406 P.2d 333, for the proposition that in case of doubt, a contract is construed most strongly against the one who drafted it. We agree with this principle, but find it to be inapplicable to the facts of this case. Though the buyer's attorney did draft the contract in question, the record also shows that the attorney had available only that information which was supplied to him by the seller, who in fact knew about the existence of the several notes and chattel mortgages.
II.
The seller also alleges that the trial court erred in finding that certain statements in letters written by the seller were libelous Per se and further erred in awarding the corporation damages in the amount of $1,500.
The evidence shows that a few weeks after the buyer took over the operation of the motel, the seller mailed letters to most of the general creditors of the corporation. In these letters, seller acknowledged that he had sold the motel and that he was supposed to pay the general creditors, but he stated he was not going to pay the accounts. Seller's letters then inferred that the creditors would get no satisfaction from the buyer and suggested that the creditors file liens on the motel, giving the legal description of the real estate for their use. On July 6, 1968, seller mailed another letter to the Citizens Bank of Cortez, which serviced the S.B.A. loan on the motel. In this letter, seller made the following statements:
'Curvey (buyer) is not paying on any chattel contracts, so I asked all to repossess.'
'Curvey has no money.'
'Curvey does not have the necessary management know how.'
'Foreclosure should proceed now in order to bring the best price.'
A third letter was later sent by seller to the Small Business Administration which contained the following statement:
'If Curvey does not comply with the contract with me I am servicing (sic) notice upon you with this letter that I intend foreclosure or whatever legal steps are necessary; . . ..'
It is libel Per se to make false statements attacking a merchant's credit or imputing insolvency, financial difficulties or embarrassment. McKenzie v. The Denver Times Publishing Co., 3 Colo.App. 554, 34 P. 577; Kobey v. Eddy, 21 Colo.App. 140, 121 P. 948. The seller apparently tried to precipitate the financial collapse of the corporation by encouraging creditors to file liens, initiate foreclosure actions and by directly advising creditors that they would not be paid. The trial court had ample evidence before it to support its conclusion that seller's statements constituted libel Per se.
Seller alleges the trial court erred in awarding damages of $1,500 in light of the trial court's finding that the corporation failed in its proof of any specific amount of damages. Seller claims that under these circumstances, only nominal damages should have been awarded. We disagree.
In Kendall v. Lively, 94 Colo. 483, 31 P.2d 343, the Supreme Court held:
'Where words are actionable per se . . . injury is presumed without the pleading or proving of special damage, and a plaintiff is entitled to general damages as a matter of course. These are recoverable by inference of law and require no evidence.'
The corporation accordingly was entitled to general damages even though the corporation did not prove any specific amount. The trial court found that the corporation had been harmed by the libel and we do not find the award excessive in light of the evidence presented.
Judgment affirmed.
SILVERSTEIN, C.J., and DWYER, J., concur.