Higgins v. California Petroleum & Asphalt Co.
1898 Cal. LEXIS 822, 120 Cal. 629, 52 P. 1080 (1898)
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Rule of Law:
Evidence is admissible to prove that a term in a written agreement, including a term with a statutory definition, has a local, technical, or otherwise peculiar signification and was used in that sense by the parties, in which case the agreement must be construed according to that specific meaning.
Facts:
- Plaintiff and Defendants entered into a lease agreement.
- Under the agreement, Defendants were to pay Plaintiff royalties for mining bituminous rock and liquid asphaltum.
- The royalty rate was set at "fifty cents per ton for each and every gross ton."
- A dispute arose between the parties over the definition of a "gross ton."
- Plaintiff contended a "gross ton" was a statutory ton of 2,000 pounds, while Defendants contended it was a long ton of 2,240 pounds.
Procedural Posture:
- Plaintiff sued Defendants in a trial court to recover royalty payments.
- The trial court found that the term 'gross ton' in the parties' lease meant 2,240 pounds.
- Following the trial, the court entered a judgment for the Plaintiff based on its finding.
- Plaintiff (as appellant), dissatisfied with the amount of the judgment, appealed the decision to the appellate court.
- The appeal was submitted on the judgment-roll alone, meaning the appellate court could not review the evidence presented at trial.
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Issue:
Does a statutory definition of a term, such as 'ton,' preclude a party from introducing evidence to show that the parties to a contract intended a different, technical, or local meaning for that term?
Opinions:
Majority - Temple, J.
No. A statutory definition of a term does not prevent a party from introducing evidence to show the parties intended a different meaning. The court's decision is governed by section 1861 of the Code of Civil Procedure, which explicitly allows for evidence that terms in a writing have a 'local, technical, or otherwise peculiar signification' and were used and understood in that manner. The court reasoned there is no exception to this rule for terms that also happen to have a statutory definition, such as weights or measures. The court hypothesized that evidence of industry-wide usage, local custom, or prior dealings between the parties could have supported the trial court's finding that 'gross ton' meant 2,240 pounds. Because the appeal was on the judgment-roll alone, the appellate court must presume that sufficient evidence was presented at trial to support the finding of fact that the parties intended the term 'gross ton' to mean a long ton.
Analysis:
This decision solidifies that statutory definitions do not create an irrebuttable presumption in contract interpretation. It affirms the principle that the primary goal of contract construction is to ascertain the intent of the parties, allowing extrinsic evidence of trade usage or custom to inform the meaning of terms. This reinforces the importance of context over rigid textualism in contract law, ensuring that agreements are interpreted in light of the specific industry and circumstances in which they were made. The ruling empowers courts to look beyond the 'four corners' of a document and a statute book to effectuate the parties' actual agreement.
