Summary
noting that a "fundamental principle" of contract interpretation is that "the words in a contract should retain their plain and ordinary meaning unless the context mandates a different interpretation"
Summary of this case from Roller v. Red Payments L.L.C.Opinion
July 12, 1977
Appeal from the Onondaga Supreme Court.
Present — Moule, J.P., Cardamone, Dillon, Goldman and Witmer, JJ.
Order unanimously affirmed, without costs. Memorandum: Both parties appeal from a denial of their motions for partial summary judgment. Plaintiff seeks an order declaring that the contract between the parties has terminated, while defendant requests a declaration that the contract continues in full force and effect. Special Term determined that factual questions exist concerning both the intent of the parties as to the meaning of the terms of the contract and also whether the parties modified the contract by their conduct subsequent to its execution. In 1921 plaintiff's predecessor in interest, The Solvay Process Company, and defendant entered into a contract whereby plaintiff promised to sell a certain quantity of limestone to defendant each week. Paragraph "9" of the agreement provides: "The term of this contract shall be from the date hereof during the time that Solvay shall be quarrying stone at its present quarries at Jamesville, New York, for its own use for manufacturing purposes. Upon Solvay ceasing to so quarry stone at said Jamesville quarries, this contract shall wholly terminate as to the future." The contract also grants defendant an option to purchase quarrying rights, if plaintiff "ceases quarrying stone from its present quarries", on up to 50 acres of limestone-bearing "land now comprising such quarries". In 1925 the contract was amended to increase both the quantity of limestone to be sold as well as the number of acres subject to defendant's option. The amendment further prescribed that the 1921 agreement "shall have the same force and effect as heretofore, as fully, in all respects, as if this amendatory arrangement had not been entered into". In 1975 plaintiff ceased quarrying stone on the lands it quarried in 1921 and notified defendant that it was terminating the agreement. Defendant responded that the contract was still in force and warned that it would hold plaintiff responsible for any damages resulting from nondelivery of the limestone. Special Term correctly determined that plaintiff continues to quarry stone for its own manufacturing purposes, but the question presented is whether plaintiff has ceased quarrying stone at its "present quarries at Jamesville". In accord with the fundamental principle that the words in a contract should retain their plain and ordinary meaning unless the context mandates a different interpretation (Laba v Carey, 29 N.Y.2d 302, 308, mot for rearg den 30 N.Y.2d 694; Mars Assoc. v Health Mental Hygiene Facilities Improvement Corp., 47 A.D.2d 5, affd 38 N.Y.2d 878), we find that the terms "present quarries" refer only to the quarries existing at the time of the execution of the agreement (see Hawaiian Pineapple Co. v Saito, 270 F 749; Barry v Mayor, 38 App. Div. 632; Berger Props. v Kay Jewelry Co., 147 Misc. 173). We further conclude that the contract has no applicability to lands which were not being quarried in 1921. The option provision of the contract grants defendant quarrying rights to "the land now comprising such quarries". Obviously, the option does not include lands subsequently excavated and thus defendant's position that it is entitled to purchase limestone removed from lands which were not being quarried in 1921 is at least inconsistent with the option clause. Moreover, the word "quarry" has been interpreted to mean the spot where the stone is extracted and not "an indefinite extent of stone or rock which may be worked" (Shaw v Wallace, 25 N.J.L. 453, 462; accord, Hoysradt v Delaware, Lackawanna Western R.R. Co., 151 F 321; revd on other grounds 159 F 383, cert den 209 U.S. 551). Likewise, the dictionary defines "quarry" as "a place where stone or slate is excavated" (Webster's New Twentieth Century Dictionary, [2d ed], Unabridged, 1964). Accordingly, we conclude that the parties intended that the contract should terminate when plaintiff ceased quarrying stone upon the lands which it owned at the time of the execution of the contract. Defendant's argument that plaintiff continues to operate a crushing plant, dumps and related storage facilities on the land it owned in 1921, and that it is therefore engaging in activities which satisfy the requirement that it be "quarrying stone at its present quarries" does not alter our conclusion. "Quarrying" refers only to those activities which are inextricably related to the extraction of stone from the earth; it does not embrace the operation of related facilities (see Ellis v Commissioner of Dept. of Mental Hygiene Hosp., 206 Va. 194; Wilson v Pencader Corp., 57 Del. 290, 295; Struyk v Samuel Braen's Sons, 17 N.J. Super. 1, 5-6, affd 9 N.J. 294; Ruttledge v Kress, 17 Pa. Super. 490, 495). Defendant erroneously relies upon the conduct of the parties subsequent to the execution of the contract in order to demonstrate that the words of the contract do not comport with their plain meaning (West, Weir Bartel v Carter Paint Co., 25 N.Y.2d 535, 540, mod 26 N.Y.2d 969; Brainard v New York Cent. R.R. Co., 242 N.Y. 125, 133). Nor does section 2-202 of the Uniform Commercial Code permit the consideration of such evidence inasmuch as the present contract predates the code (Eskimo Pie Corp. v Whitelawn Dairies, 284 F. Supp. 987, 992; Gem Corrugated Box Corp. v National Kraft Container Corp., 427 F.2d 499, 502). Defendant may, however, rely upon extrinsic evidence to establish that the parties have modified the agreement (see Martin v Peyton, 246 N.Y. 213, 218; Beatty v Guggenheim Exploration Co., 225 N.Y. 380; Margolys v Mollenick, 98 N.Y.S 849; Dow Chem. Co. [U.K.] v S.S. Giovannella D'Amico, 297 F. Supp. 699, 707). In setting forth such evidence, defendant has raised questions of fact sufficient to defeat plaintiff's motion for summary judgment. Accordingly, the trial court will be obliged to examine the conduct of the parties under the agreement to determine whether the contract has been modified. Finally, plaintiff acknowledges in its reply brief that the court properly denied summary judgment as to its claim that defendant has no further rights respecting other portions of the option provision of the agreement (see CPLR 3212, subd [b]).