Gaddy v. North Carolina National Bank

BRITT, Judge. In their brief, appellants state the questions presented as follows: (1) Did the Court below err by admitting testimony in contradiction of the written contract dated June 11, 1971 between Fred Gaddy and North Carolina National Bank? (2) Did the Court below err by finding facts as follows : (a) That it was the intent of said agreement that the agreement speak as of the 11th day of June, 1971, and that no accrued interest would accumulate on said notes beyond June 11, 1971? (b) That none of the beneficiaries of the will have appeared to contest, the plaintiff’s interpretation of said agreement dated June 11, 1971? (3) Did the Court below err in its Conclusion of Law that the phrase “including all accrued interest” means that no interest would be due after June 11, 1971; and, further, by signing the Judgment as appears of record? Appellants’ argument with respect to the first question appears to be directed primarily to the testimony of plaintiff, and particularly that part pertaining to plaintiff’s conversation with defendant bank’s agent Frost prior to, and at the time of, the signing of the agreement. While defendant bank entered numerous objections to plaintiff’s testimony, plaintiff’s witness Drum provided very similar testimony to which there was no objection. It is well settled that exception to the admission of evidence will not be sustained when evidence of like import has theretofore been, or is thereafter, introduced without objection. Glace v. Pilot Mountain, 265 N.C. 181, 143 S.E. 2d 78 (1965). Therefore, assuming arguendo, that the court erred in admitting the testimony objected to, we think evidence of like import *174 was admitted without objection, thereby rendering any error harmless. The main focus of the controversy presented by this appeal is on the phrase of the agreement “including all accrued interest”, and whether the interest on the notes stopped accruing on 11 June 1971, the date of the agreement, or whether the interest continued to “accrue” until the estate was settled. Defendant bank insists that the court is bound by the rule restated in Corbin v. Langdon, 23 N.C. App. 21, 25, 208 S.E. 2d 251 (1974), “ . . . that when the language of a contract is clear and unambiguous, the court must interpret the contract as written . " While we recognize the validity of this rule, we do not think it controls this case. In Oldham v. Kerchner, 79 N.C. 106, 111 (1878), Justice Rodman, speaking for the court, said: “ ... If the words are clear and unequivocal, neither party can say that he understood them in a different sense from what they plainly bear; and if either party knows that the other understands him as speaking of one object, or with one meaning, he will not be allowed to say that he had in his mind another object, or intended a different meaning. ...” (Emphasis added.) In 3 Corbin, Contracts § 537, at 45 (1960), we find similar language. “ ... If ... A knew or had reason to know the meaning that B in fact gave to A’s promissory words, then the substantive law declares that B’s understanding shall be given legal effect. . . .” See also Corbin, supra, § 610; 13 Williston, Contracts §§ 1573, 1577 (Jaeger ed. 1970 and 1974 Supp.) ; Restatement of Contracts § 505 (1932). In deciding what evidence should be allowed to determine the meaning of the portion of the contract under consideration, Corbin, supra at 48-9 states: But there are now two separate issues before the court; (1) What was the meaning that B in fact gave to the quoted promissory words? (2) Did A know or have reason to know that B gave the words that meaning? On each of these issues, the court should admit all relevant, evidence; it should know all surrounding circumstances that may have influenced B’s interpretation of the words, and also all that tend to prove or to disprove knowledge, or reason to know, on A’s part. All other circumstances are immaterial and should be excluded. *175 If the second of these issues is found affirmatively by the court, this determines whose meaning must be given effect; it is B’s meaning. And the process of interpretation has been and still is the process of determining what B’s understanding was. It is not the meaning that A gave; or the meaning that a normal user of English would have given; or the meaning that the court may hastily think is “plain and clear.” All of these should be considered in the process of determining whether or not B in fact held any of them, and also in the process of determining whether or not A had “reason to know” the understanding that B had. But they are merely steps in the evidential search of B’s meaning and A’s reason to know it; no one of them is the one that must itself prevail. All of them together, even though they happen to be identical, may be wholly overpowered by other more compelling testimony. Applying the stated principles to the case at bar, we conclude that the evidence fully supports a finding that defendant bank’s agent Frost knew the interpretation that plaintiff was giving to the agreement, “ . . . that there would be no interest on the notes after that date (11 June 1971) ”. Assuming that the words of the agreement are unambiguous, the parol evidence rule is not applicable in this case for the reason that the intention of the parties was plaintiff’s interpretation which defendant bank understood, not the language per se in the contract. The evidence tended to show that defendant bank knew, or had reason to know, that plaintiff understood the language in the contract to mean that interest would not accrue after 11 June 1971. Defendant bank in effect is estopped to assert a different meaning. 13 Williston, Contracts § 1577, at 505 (Jaeger ed. 1974 Supp.). With respect to the court’s finding “ . . . [t]hat none of the beneficiaries of the will have appeared in this action to contest the plaintiff’s interpretation of said agreement . . . ” , it is true that the beneficiary Jack Gaddy is an appellant. While technically this finding was erroneous, we conclude that it was not prejudicial to defendants. For the reasons stated, the judgment appealed from is Affirmed. Judges Clark and Arnold concur.