First National Bank v. Hancock Warehouse Co.

Hill, J. (After stating the foregoing facts.) 1. The court below held that the following letter, written by the purchaser of certain cotton from the defendant warehouse company, was not ambiguous, and that it only referred to cotton which had been purchased by Thomas and paid for by the First National Bank of Sparta up to September 27, 1911, the date of the letter. A verdict was accordingly directed for the defendant, and exception was taken to the judgment overruling the plaintiff’s motion for a new trial. The letter was as follows: “Sept. 27, 1911. The Hancock Warehouse Company, City. Gentlemen: This is to notify you that all cotton bought by me and paid for by the First National Bank belongs to them, and can not be disposed of by me without their consent, the cotton being subject to their order. Very respectfully, [signed] Joe A. Thomas.” Is the language contained in the above-quoted letter unambiguous, as held by the trial judge? Ambiguity is an uncertainty of meaning in the terms of a written instrument. 1 Words & Phrases, 367. Under our Civil Code, § 4268, parol evidence is admissible to explain both latent and patent ambiguities. In Belle Green Mining Co. v. Tuggle, 65 Ga. 652, 657, Chief Justice Jackson thus states the rule: “Parol testimony may explain written terms when doubtful, and if those terms do not show a clear meaning, the understanding of the parties may be shown outside to ascertain the meaning; but where the contract is not cloudy, but all light, it were folly to make it shine by lesser lights. Where the sun is shining, gas is useless.” In Armistead v. McGuire, 46 Ga. 232, it was held: “Where the language of an instrument in writing is ambiguous and may be fairly understood in more ways than one, it should be taken in the sense put upon it by the parties at the time of its execution, and the court will hear evidence as to the facts and surroundings, and decree according to the truth of the matter.” It is insisted that the language of the letter of instructions is susceptible of but one construction, namely, that it referred to cotton which had already been “bought” and had been “paid” for, and at that time belonged to the First National Bank of Sparta. If this view is correct, then the court was undoubtedly right in the construction placed by him upon the letter of Sept. 27th, and in directing a verdict for the defendant. But from a [104] careful reading of the letter we think it is also susceptible of the construction that it referred not only to all cotton previously bought by Thomas and which was paid for by the bank, but to all cotton which was to be bought by Thomas in the future and thus paid for. The testimony of the officers of the bank tended to show that Thomas was insolvent, and that this letter was the sole basis of credit upon which the cheeks given by Thomas to the warehouse company were paid by the bank. And the testimony of Thomas himself tended to show that, of the thousands of bales of cotton bought by him and paid for by the bank, this was the only transaction in which he had had the cotton receipts issued in his own name. The president of the warehouse company had been notified of the letter and its contents. The evidence for the plaintiff tended to show that in all the transactions between Thomas and the hank the title to the cotton was to be in the bank. Under the uncertainty of the language as contained in the letter, what was the real intent of the parties as expressed in the letter itself? If the meaning is uncertain, as we think it is, then parol evidence should be allowed to go to the jury that they may find what the true meaning of the parties was. We do not think it can be said, as matter of law, under the facts of this case, that the letter is so certain and definite that parol evidence is not admissible to explain the true meaning of the parties. See 9 Cyc. 577, 579, 585, 587; Armistead v. McGuire, 46 Ga. 232. In Agawam Bank v. Strever, 18 N. Y. 502, 513, where a note was delivered to a bank with a written memorandum thereon that it was left as collateral security for “all liability incurred by D. & H.,” it was held, “that evidence was admissible for the purpose of arriving at the intent of the parties in the hypothecation, that D. & H. were, at the time, under no liability to the bank. The words ‘all liability’ in the contract of hypothecation import a continuing guaranty, and not a security for a single sum, or exhausted when the loans equal the amount of the note.” See also Olson v. Cook, 57 Minn. 552 (59 N. W. 635); 1 Words & Phrases, 319. The letter being ambiguous, the case under the testimony should have been submitted to the jury. 2. Error is assigned because the court allowed H. L. Middle-brooks, the cashier of the plaintiff and a witness on its behalf, in response to a question of defendant’s counsel on cross-examination, to testify: “Mr. Thomas exeeuted to us a note and mortgage for [105] $500, to secure anything that he might lose in the cotton business thereafter. This is the note and his signature (indicating note as appears on page 9 of. the brief of evidence). That was on the day he signed this letter, but I don’t recall whether they were signed at the same time. The $500 note was a margin on which he was to purchase cotton that season. We still hold Mr. Thomas’s note and have made no effort to collect it; it was simply given as a margin.” This ruling of the court was not erroneous for the reason that, Thomas not being a party, the private arrangements for financing his personal account were not relevant to the issue in the case, it not being contended that the bank had not lost the amount paid for the 14 bales of cotton. This evidence was admissible as throwing some light on the meaning of the letter-of September 27, 1911. 3. Complaint is made because the court allowed J. A. Thomas, a witness for the defendant, to testify, over the objection of plaintiff’s counsel, as follows: “I exhibited this letter of credit [indicating letter of E. L. Wall to J. A. Thomas, dated September 11th, 1911] to Mr. H. L. Middlebrooks, and he said, all right, to go ahead and buy cotton. On this I bought 200 or 300 bales of cotton. I bought cotton by giving my check for it, shipping to E. L. Wall, and he gave the draft, and I would pay the warehouse with my cheek on the First National Bank. I did not buy a bale of this cotton for J. A. Thomas individually, I bought it on a letter of credit mailed to me by Mr. Wall.” This evidence w'as admissible for the same reason as that set out in the preceding division of this opinion. 4. Error is assigned because the court permitted J. A. Thomas, a witness for the defendant, to testify: “Mr. Middlebrooks suggested that I buy 40 or 50 bales of cotton to reduce the average price. He said, ‘Give me a margin and buy cotton for yourself.’ I gave him a $500 mortgage as a margin to buy cotton in the future.” This ruling was not erroneous for the reason assigned, that Thomas was not a party to the case and his private transaction could not affect the issue. It was admissible for the same reasons given in the two preceding divisions of this opinion. 5. The court erred in directing a verdict for the defendant. The evidence should have been submitted to the jury. It was a question for the jury to determine from all the evidence what the parties meant by the language as contained in the letter of Sep [106] tember 27th. Was the title to- all the cotton purchased by Thomas and paid for by the bank after that date to be in the bank, subject to its order; or was only the cotton so purchased and paid for prior to that date to belong to the bank and to be subject to its order ? Did the warehouse company agree to hold all the cotton purchased by Thomas, and paid for by the bank subsequently to September 27th, subject to the order of the bank? These are some of the issues of fact which should be submitted to the jury under the evidence. We think the court erred in holding the letter of September 27 unambiguous, and in directing a verdict for the defendant. ' Judgment reversed. All the Justices concur.