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Lucie v. Kleen-Leen Inc.

decided: May 29, 1974.


Appeal from the United States District Court for the Southern District of Illinois, Northern Division. No. P CIV 72 40 ROBERT D. MORGAN, Judge.

Swygert, Chief Judge, Fairchild and Sprecher, Circuit Judges. Fairchild, Circuit Judge (concurring).

Author: Per Curiam

Plaintiff appeals from a grant of summary judgment in favor of the defendant. The plaintiff contends that the district court erred in construing the August 20, 1962 contract in that the district judge failed to allow extrinsic evidence which would have assisted in ascertaining the intention of the contracting parties. The defendant makes the counter argument that the language of the contract is plain and unambiguous and that the intention of the parties must be discerned solely from the language of the instrument itself without resort to extrinsic evidence. The sole issue before us is the propriety of the district court's grant of summary judgment for the defendant. We are of the view that there exists genuine issues of material fact relative to the interpretation of the August 20, 1962 contract and as such this matter was not an appropriate one for summary judgment.

We cannot accede to the defendant's assertion that no extrinsic evidence reflecting on the parties' intentions should be considered. It is well-established that the test of admissibility of extrinsic evidence to explain the meaning of a written instrument is not whether the instrument appears to be plain and unambiguous, but whether the offered evidence is relevant to prove a meaning to which the language of the instrument is reasonably susceptible. A rule that limits the determination of the meaning of a written contract to its four-corners, merely because the court deems it clear and unambiguous, is a rule that ignores the intentions of the parties or presumes a degree of verbal precision and crystallization presently unattainable by our language.

Words do not have absolute and uniform meanings. The meaning of particular words or groups of words varies with the ". . . verbal context and surrounding circumstances and purposes in view of the linguistic education and experience of their users and their hearers or readers . . . . A word has no meaning apart from these factors; much less does it have an objective meaning, one true meaning." Corbin, The Interpretation of Words and The Parol Evidence Rule, 50 Cornell L.Q. 161, 187 (1965).

Extrinsic evidence is admissible to establish the intention of the contracting parties.*fn* In addition, it is quite apparent here that the proffered extrinsic evidence presents numerous issues of material fact not properly disposable in a summary judgment motion.

Accordingly, we reverse and remand for trial and apply Circuit Rule 23.

FAIRCHILD, Circuit Judge (concurring).

Under the August 20, 1962 agreement, plaintiff agreed to deliver seed stock sows, of a hybrid type known as Lucie swine, and he claims that he performed. The present dispute centers particularly about paragraph 3 of the agreement, providing for payment. Paragraph 3 provides:

"3. That said Corporation will pay to [plaintiff] in return, the sum of Thirty Five Thousand Dollars ($35,000.00) in cash and Ten Thousand Dollars ($10,000.00) in the common stock of said Corporation. . . . In addition thereto, said Corporation agrees to pay Seventy Five Dollars ($75.00) per boar for each Lucie boar used or sold by the Corporation, until the total sum of One Hundred Fifty Thousand Dollars ($150,000.00) has been paid."*fn1

Pursuant to paragraph 3, plaintiff received the $35,000 cash, common stock valued at $10,000, and $19,800 in $75 payments. Defendant then changed its operations so that there was no further use or sale of Lucie boars, and no further $75 payments were made.

Plaintiff contends that defendant had an unconditional obligation to pay $195,000 for the hogs he furnished, and that paragraph 3 merely established a convenient schedule for liquidation of the $150,000 balance remaining after the initial payment of $45,000. He suggests that paragraph 4, applying a royalty at a lower rate thereafter, supports his view. Defendant reads the language of paragraph 3 literally, and argues, as the district court apparently concluded, that it had only to make the $75 payments if and when boars descendant from plaintiff's stock were used or sold.

I agree with much that is said in the per curiam opinion. In order to give meaning to a written contract, a court should consider extrinsic evidence illuminating the persons, objects, and events to which its words apply. See, e.g., American Casualty Company of Reading, Pa. v. Reidy, 386 F.2d 795, 797 and fn. 2 (7th Cir., 1967).

On the summary judgment motion, the parties presented a considerable body of evidence, in the form of depositions, answers to interrogatories, and accompanying documents, bearing on the dealings between the parties and the circumstances of the formation of the contract. Unfortunately, the district court did not set forth in the record any analysis of this material, but ...

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