Ray M. Ward and Mary K. Ward v. Marilyn Denise Cranford

IN THE COURT OF APPEALS OF THE STATE OF MISSISSIPPI

NO. 2020-CA-00410-COA

RAY M. WARD AND MARY K. WARD APPELLANTS

v.

MARILYN DENISE CRANFORD APPELLEE

DATE OF JUDGMENT: 01/07/2020
TRIAL JUDGE: HON. JOSEPH KILGORE
COURT FROM WHICH APPEALED: CHOCTAW COUNTY CHANCERY COURT
ATTORNEYS FOR APPELLANTS: KELSEY LEIGH DISMUKES
J. LANE GREENLEE
ATTORNEY FOR APPELLEE: JAY HOWARD HURDLE
NATURE OF THE CASE: CIVIL - CONTRACT
DISPOSITION: REVERSED AND REMANDED - 08/24/2021
MOTION FOR REHEARING FILED:
MANDATE ISSUED:

BEFORE WILSON, P.J., GREENLEE AND WESTBROOKS, JJ.

WILSON, P.J., FOR THE COURT:

¶1. Marilyn Cranford entered into a lease-purchase agreement to buy a house from Ray

and Mary Ward. The lease term was three years, and the contract gave Cranford an option

to buy the property “at any point during the term of [the] lease for the sum of $44,000.00.”

The contract also provided that “$400.00 of [each] monthly lease payment shall be credited

against the purchase price.” Near the time the contract was executed, Cranford paid the

Wards a total of $20,000 by three separate checks. Two of the checks were dated ten days

prior to the parties’ contract, and the third was dated the same day as the contract. However,

the contract itself made no mention of the $20,000.
¶2. Prior to the end of the three-year lease term, Cranford notified the Wards that she

intended to exercise her purchase option. Cranford tendered a cashier’s check of $9,600,

which she stated was the remaining balance due after deducting her initial payments totaling

$20,000 and $14,400 credit for monthly rent payments. The Wards rejected Cranford’s

check, asserting that her initial payments totaling $20,000 did not count toward the purchase

price. Cranford then filed suit for specific performance, and the Wards answered and filed

a counterclaim for ejectment. After a trial, the chancellor held that the contract was

unambiguous, that the purchase price for the property was $44,000, and that Cranford validly

exercised the purchase option by tendering the balance due of $9,600. The chancellor

granted specific performance and ordered the Wards to deed the property to Cranford.

¶3. On appeal, the Wards argue that the parties’ contract is unambiguous and that the

chancellor misapplied the “four corners doctrine.” They further argue that the chancellor

improperly considered parol evidence by ruling that Cranford’s initial payments totaling

$20,000 counted toward the purchase price. Finally, they argue that the chancellor erred by

ordering specific performance and that Cranford should have been ejected.

¶4. We conclude that the parties’ contract is ambiguous and unclear with respect to

whether Cranford’s initial payments totaling $20,000 should be counted toward the purchase

price. Therefore, the chancellor erred by holding that the contract was unambiguous. We

reverse and remand for the chancellor to consider all relevant evidence, including parol or

extrinsic evidence; to make findings of fact as to the parties’ intent regarding the disputed

$20,000; and to grant appropriate relief.

2
FACTS AND PROCEDURAL HISTORY

¶5. Cranford contacted Mary K. Ward (“Kathy”) about an advertisement that Kathy had

posted on Facebook about a home for sale in Ackerman. Cranford testified that Kathy agreed

to enter into a lease-purchase contract because Cranford needed to move quickly but could

not secure financing. Cranford and the Wards later signed a lease-purchase contract with a

three-year lease term and a monthly rent of $550. In addition, Cranford was required to pay

for insurance and property taxes.1 If Cranford failed to make any payment required by the

lease within thirty days after the payment became due, the Wards had the right to terminate

the lease and retake possession.2 The contract included the following purchase option:

Option to Purchase: Lessor hereby grants to Lessee an option to purchase the
. . . property at any point during the term of this lease for the sum of
$44,000.00. $400.00 of the monthly lease payment shall be credited against
the purchase price. Lessee may make additional payments during the term of
this lease against the option price. Should Lessee’s [sic] exercise their [sic]
option to purchase, Lessor shall convey the property to Lessee via special
warranty deed.

In the event Lessee is unable or should not exercise this option to purchase,
Lessee shall not be entitled to a refund of any of the rental paid, nor shall they
be entitled to any payment for the improvements or repairs made to the
property.

¶6. At trial, the Wards’ attorney asked Cranford whether Kathy ever expressed a

preference for an outright sale rather than a lease with an option to purchase. Cranford’s

attorney objected that Kathy’s preference was “inadmissible parol evidence and beyond the

1
Cranford paid the Wards $78 per month for insurance, so her actual monthly check
to the Wards was $628. Cranford paid the property taxes directly to the county.
2
The contract did not grant Cranford a right to terminate.

3
four corners of the [contract].” The chancellor sustained the objection but allowed the

Wards’ attorney to make a proffer. The attorney proffered that Kathy “preferred . . . an

outright sale of the property, but in order to help . . . Cranford, she did agree to lease with

option to purchase.”

¶7. Cranford testified that she understood that if she did not exercise the purchase option,

she would not be entitled to a refund of any rent payments she had made. She said that she

was okay with that because $550 per month was a reasonable rent. Cranford denied that she

signed any other document related to the lease or purchase of the property. The Wards’

attorney showed Cranford what the Wards claimed was a preliminary handwritten agreement

with a sale price of $64,000. The handwritten document stated in full:

March 2015
$64,000 Balance
(Without my storage)
She may use it while it is on her property. A contract of her home will be
drawn up.
Denise Cranford
Mary K. Ward

Kathy subsequently testified that the “Balance” was the agreed upon purchase price. Kathy

said the “storage” was a barn on the property. According to Kathy, her husband planned to

move the barn from the property, but they permitted Cranford to make use of it until it was

moved. However, Cranford testified that she did not recognize the document, and she denied

that the signature on the document was hers.

¶8. Cranford testified that she always intended to buy the house and that she paid $20,000

down toward the purchase price at the outset of the lease period. Her down payment

4
consisted of three checks:

• a $5,000 check (#5443) that Cranford signed on March 3, 2015, which
posted on March 5;

• another $5,000 check (#5444) that Cranford signed on March 3, 2015,
which posted on March 16; and

• a $10,000 check (#5446) that Cranford signed on March 13, 2015—the
same day as the parties’ contract—which posted on March 19.

Cranford testified that these payments were “to go towards the purchase of the house.”

¶9. Over the course of the three-year lease term, Cranford made all monthly rent

payments,3 and on March 8, 2018, she sent the Wards a letter notifying them of her intent to

exercise the purchase option. The letter stated in part, “I have paid $20,000 in 2015 and

since that time I have paid $14,400 as per the contract[4] leaving a balance of $9,600 in

accordance with the same contract.” Cranford also tendered a cashier’s check for $9,600 and

asked the Wards to agree to a closing date.

¶10. On April 19, 2018, the Wards responded through their attorney that $9,600 was

“nowhere near the amount needed to pay the remaining balance.” The Wards asked Cranford

to provide documentation to support her calculation. They also “urge[d]” Cranford to

“resume payment on the lease if [she] wish[ed] to maintain it.” Cranford testified that she

did not believe that she owed any additional rent payments, but she attempted to make two

3
Cranford’s payments were late at times. The Wards raised this issue in the trial
court, but the chancellor ruled that the Wards waived any breach by accepting the late
payments. The Wards do not challenge this aspect of the chancellor’s ruling on appeal.
4
This figure was based on the provision of the contract granting Cranford $400 credit
toward the purchase price for each of her thirty-six monthly lease payments.

5
additional rent payments “[t]o satisfy [the] letter.”

¶11. On May 1, 2018, Cranford received a letter from the Wards’ attorney stating that the

Wards had “concluded that [Cranford had] breached the agreement on numerous occasions.”

The Wards stated that they would “seek legal process to evict” Cranford if she did not vacate

the property within fourteen days.

¶12. On May 15, 2018, the Wards’ attorney sent Cranford a final letter. The Wards offered

Cranford a “final opportunity” to resolve the “dispute” and exercise the purchase option by

paying $33,915.5 The Wards stated that if Cranford did not make that payment or vacate the

property within fourteen days, they would file suit to evict her. The Wards also returned the

two recent rent payments that Cranford had attempted to make.

¶13. Cranford filed a complaint against the Wards in the Choctaw County Chancery Court,

seeking specific performance of the parties’ contract. The Wards filed an answer and a

counterclaim for ejectment, alleging that Cranford had breached the lease agreement.

¶14. Kathy testified at trial that she had offered the property for sale on Facebook. The

Wards attempted to offer as an exhibit what appears to be a copy of a photograph of Kathy’s

Facebook post. They argued that the post was relevant to show their alleged asking price for

the property. However, Cranford objected, and the chancellor sustained the objection, ruling

that the original asking price was not relevant to the contract. As a result, the document was

5
Even accepting the Wards’ position that Cranford’s initial payments totaling
$20,000 did not count toward the contractual purchase price, Cranford still only owed a
balance of $29,600 by the end of the lease. The Wards’ letter did not explain how they
arrived at the higher figure of $33,915.

6
marked for identification only.6 Kathy testified that Cranford initially asked if they could

“take . . . less for the house.” Kathy said she could not accept less than the asking price

without talking to her husband, Ray, and Ray later agreed to reduce the price but exclude a

barn on the property from the sale. Kathy testified that she told Cranford that they would

remove the barn from the property later but that Cranford could use it until it was moved.

¶15. As discussed above, Kathy testified that she and Cranford signed a preliminary

handwritten agreement to sell the property—except for the barn—for $64,000. However,

Kathy admitted that the $64,000 purchase price and the barn were never mentioned in the

actual lease-purchase agreement. Kathy testified that she was “shocked” in March 2018

when Cranford tendered $9,600 as payment in full. She testified that Cranford still owed

$33,600 at the time.7 On cross-examination, Cranford’s attorney asked Kathy whether it was

her position that Cranford had “paid the $20,000 for the privilege of entering into this lease-

purchase agreement.” Kathy answered, “She did.” Kathy also testified, “I don’t want the

house back. [Cranford] has made that home. That’s fine. I just want to be paid for what I

6
Although the document was not admitted into evidence, it is part of the record on
appeal. The alleged asking price is not contained in the original Facebook post but rather
is in a comment that Kathy posted after the original post. From the face of the document,
it appears that the relevant comment was posted approximately three years after the original
post—quite possibly after this dispute arose. In support of their motion for a new trial, the
Wards submitted a copy of a photograph of a different Facebook post advertising the house.
In that document as well, the alleged asking price is not contained in the original post but
in a comment that Kathy posted after the original post. From the face of the document, it
is impossible to tell when Kathy posted that comment.
7
As noted above, see supra note 5, even accepting the Wards’ position, Cranford
only owed $29,600 at the end of the lease.

7
owe on my house.”8

¶16. The chancellor subsequently delivered a bench opinion, which was incorporated into

the final judgment. The chancellor summed up the dispute as “whether $20,000 paid around

the time of the contract execution should be included in the calculation of the overall

purchase price, or whether the contract is complete.” Looking at the “four corners” of the

lease-purchase agreement, the chancellor held that its language was clear and unambiguous

and “should be enforced.” The chancellor concluded that there was no enforceable contract

to sell the property for $64,000 because the alleged oral agreement was unenforceable,9 and

the handwritten note allegedly signed by Cranford and Kathy included no description of the

property.10 He concluded that the lease-purchase agreement was the only enforceable

contract and that it granted Cranford an option to purchase the property for $44,000. He

noted that Cranford showed she had already paid $34,400—her initial payments totaling

$20,000 and $14,400 in credit for her monthly rent payments—and thus owed only $9,600,

which she had tendered to the Wards. Accordingly, the chancellor ruled that Cranford was

entitled to specific performance. He ordered the Wards to convey the property to Cranford

8
Kathy testified that “[t]he house [was] still mortgaged” at the time of trial. Her
attorney asked her about the remaining balance on the mortgage, but the chancellor sustained
Cranford’s objection to the question. As noted above, despite Kathy’s testimony that she
only wanted to be paid, the Wards’ complaint requested ejectment, and their attorney
reaffirmed at the close of the evidence that they were requesting that relief.
9
See Miss. Code Ann. § 15-3-1(c) (Rev. 2019) (stating that no action shall be brought
“upon any contract for the sale of lands” unless the contract is “in writing”).
10
See, e.g., Woodruff v. Thames, 143 So. 3d 546, 554 (¶19) (Miss. 2014) (“The
description of the land in a contract for the sale of real property is unquestionably an
essential term that must be stated with specificity.”).

8
by special warranty deed once Cranford had again tendered $9,600.

¶17. The Wards filed a motion for a new trial, which the chancellor denied, and then filed

a notice of appeal. On appeal, the Wards argue that the lease-purchase agreement is

unambiguous, that the purchase option required Cranford to pay $44,000 “during the term

of [the] lease,” and that Cranford’s initial payments totaling $20,000 were made prior to the

term of the lease and therefore did not count toward the purchase price. Therefore, they

argue that the parol evidence rule bars any testimony or evidence regarding Cranford’s “pre-

lease payments” and that Cranford should have been ejected because she failed to tender the

full purchase price.

ANALYSIS

¶18. We will not disturb a chancellor’s findings of fact unless they are manifestly wrong

or clearly erroneous or the chancellor applied the wrong legal standard. Henry v. Moore, 9

So. 3d 1146, 1152 (¶15) (Miss. Ct. App. 2008), cert. denied, 12 So. 3d 531 (Miss. 2009).

However, we review issues of law de novo. Id. Questions involving the construction and

interpretation of contracts are questions of law that we review de novo. Id.

¶19. “The question of law/question of fact dichotomy requires a two-step inquiry in

contract law.” Royer Homes of Miss. Inc. v. Chandeleur Homes Inc., 857 So. 2d 748, 751

(¶7) (Miss. 2003). First, the court must determine whether the contract is ambiguous. Id. at

751-52 (¶7). If the contract’s terms are clear and unambiguous, then the contract must be

enforced as written. Id. Whether a contract is ambiguous is a question of law for the court

to decide and is subject to de novo review on appeal. Id. at 752 (¶7).

9
¶20. If the contract is ambiguous, “the subsequent interpretation presents a question of fact

for the [trier of fact].” Id. at (¶8); accord Henry, 9 So. 3d at 1152 (¶16). A contract is

ambiguous if it is “subject to more than one reasonable interpretation.” Royer Homes, 857

So. 2d at 752 (¶8). We review the fact-finder’s interpretation of an ambiguous contract,

which is an issue of fact, “under the deferential substantial evidence/manifest error standard.”

Henry, 9 So. 3d at 1152 (¶16); accord Royer Homes, 857 So. 2d at 752 (¶8).

¶21. The Mississippi Supreme Court follows “a three-tiered approach to contract

interpretation.” Royer Homes, 857 So. 2d at 752 (¶10). First, we apply “the ‘four corners’

test” and attempt to determine the meaning of the contract based solely on “an objective

reading of the words employed in the contract.” Id. “Our concern is not nearly so much with

what the parties may have intended, but with what they said, since the words employed are

by far the best resource for ascertaining the intent and assigning meaning with fairness and

accuracy.” Id. We “are not at liberty to infer intent contrary to that emanating from the text

at issue.” Id.

¶22. Second, if an analysis of the “four corners” of the contract “does not yield a clear

understanding of the parties’ intent,” the court may next consider any “applicable ‘canons’

of contract construction.” Pursue Energy Corp. v. Perkins, 558 So. 2d 349, 352 (Miss.

1990). For example, one canon holds that when “the language of an otherwise enforceable

contract is subject to more than one fair reading, the reading applied will be the one most

favorable to the non-drafting party.” Royer Homes, 857 So. 2d at 753 (¶11). In the present

10
case, neither party has cited any relevant canons of construction.11

¶23. Third, if the contract remains ambiguous, the fact-finder “should consider extrinsic

or parol evidence,” including evidence of “prior negotiation[s], agreements[,] and

conversations.” Id. At this step, the fact-finder must consider “the totality of the

circumstances” surrounding the execution of the contract in an effort to determine “the

parties’ intent.” Pursue Energy, 558 So. 2d at 353. Indeed, when a contract “is ambiguous,

courts are obligated to pursue the intent of the parties by resort to parol evidence.” Kight v.

Sheppard Bldg. Supply Inc., 537 So. 2d 1355, 1358 (Miss. 1989).

¶24. Thus, we begin our analysis by determining whether the chancellor correctly held that

the parties’ contract is clear and free from ambiguity.12 In general, there are two kinds of

ambiguity. “Ambiguity may be patent—appearing ‘on the face of the contract’—or

latent—‘arising from words which are uncertain when applied to the subject matter of the

contract.’” Keith A. Rowley, Contact Construction and Interpretation: From the “Four

Corners” to Parol Evidence (and Everything in Between), 69 Miss. L.J. 73, 91 (1999)

(footnotes and brackets omitted) (quoting Burton v. Choctaw County, 730 So. 2d 1, 8 (¶33)

(Miss. 1997), and IP Timberlands Operating Co. v. Denmiss Corp., 726 So. 2d 96, 110 (¶59)

(Miss. 1998)); accord 11 Richard A. Lord, Williston on Contracts § 33:43, at 1194 (4th ed.

2012). A “latent ambiguity” arises when a “writing appears on the face of it[] certain and

11
Cranford testified that she did not draft the lease-purchase agreement, but there was
no evidence as to who did draft it.
12
As noted above, this is a question of law that we review de novo on appeal. Royer
Homes, 857 So. 2d at 751-52 (¶7).

11
free from ambiguity, but the ambiguity is introduced by evidence of something extrinsic, or

by some collateral matter out of the instrument.” Brown v. Guice, 46 Miss. 299, 301-02

(1872); accord Peacher v. Strauss, 47 Miss. 353, 365 (1872). Relevant parol or extrinsic

evidence should be used to resolve a latent ambiguity. Peacher, 47 Miss. at 365; Brown, 46

Miss. at 302.

¶25. In the present case, both the Wards and Cranford argue that the language of the lease-

purchase agreement is unambiguous. However, they argue that it unambiguously means two

very different things. The Wards emphasize that the contract granted Cranford the right to

buy the property “at any point during the term of [the] lease for the sum of $44,000.00.”

(Emphasis added). They further emphasize that the contract allowed Cranford to “make

additional payments during the term of [the] lease against the option price.” (Emphasis

added). The Wards argue that Cranford’s initial payments totaling $20,000 were made prior

to the lease term, not during it. They contend that under the unambiguous terms of the

contract, those payments did not count toward the $44,000 contractual purchase price. The

Wards further argue that the chancellor improperly allowed “parol evidence” regarding those

payments to contradict the unambiguous terms of the parties’ contract.

¶26. In contrast, Cranford argues that the chancellor correctly ruled that the contract

unambiguously establishes a purchase price of $44,000—not $64,000, as the Wards claim.

Cranford further argues that the chancellor correctly deducted her initial payments totaling

$20,000 from the contractual purchase price.

¶27. Although both parties argue otherwise, we conclude that their contract is ambiguous.

12
Specifically, a latent ambiguity arises when we attempt to apply the terms of the contract to

Cranford’s March 2015 payments to the Wards. As discussed above, Cranford paid the

Wards a total of $20,000 in March 2015. She wrote them two $5,000 checks dated ten days

prior to the parties’ contract and one $10,000 check dated the same day as the parties’

contract. There is no dispute that these payments were related to the purchase of the

property. Kathy testified at trial that the payments were consideration for the mere “privilege

of entering into [the] lease-purchase agreement.” And on appeal, the Wards only vaguely

refer to the payments as “pre-Lease payments.” In contrast, Cranford claims that the

payments were a down payment that must be counted toward the contractual purchase price.

¶28. Yet these payments totaling $20,000—which, according to the parties, amount to

roughly one-third or one-half of the value of the house—are not even mentioned in the

parties’ contract. Moreover, the language of the contract does not clearly and unambiguously

resolve how those payments should be treated. The Wards emphasize that the contract

permitted Cranford to buy the property “during the term of [the] lease” and to “make

additional payments during the term of [the] lease.” But the fact that Cranford could buy the

property and make payments “during” the lease does not directly address the question

whether her prior payments should also be counted toward the contractual purchase price.

In addition, the contract does not define or specify the start date of “the term of [the] lease.”

Finally, the Wards also fail to account for the fact that Cranford paid $10,000 of the disputed

$20,000 on the same day the contract was signed. They do not explain why, at minimum,

that $10,000 payment should not count toward the purchase price.

13
¶29. In contrast, Cranford argues that the chancellor correctly concluded that the contract

was unambiguous because it clearly provided for a purchase price of $44,000—not $64,000,

as the Wards claimed. But the clarity of the purchase price also does not answer the question

whether Cranford’s March 2015 payments count toward the purchase price. Cranford had

already paid $10,000 prior to the date of the lease and paid another $10,000 on the date of

the lease, yet those payments are not mentioned in the contract. The contract’s complete

silence on this issue leaves it ambiguous as to whether the parties intended for the $20,000

to count toward the contractual purchase price or instead regarded it as additional

consideration on top of the amount stated in the contract.

¶30. “A contract is ambiguous when it ‘can be interpreted as having two or more

reasonable meanings.’” Austin v. Carpenter, 3 So. 3d 147, 150 (¶14) (Miss. Ct. App. 2009)

(quoting Miss. Farm Bureau Cas. Ins. Co. v. Britt, 826 So. 2d 1261, 1265 (¶14) (Miss.

2002)), cert. denied, 12 So. 3d 531 (Miss. 2009). For the reasons discussed above, the

contract in this case is susceptible to two different reasonable interpretations with respect to

the proper treatment of the disputed payments totaling $20,000. Accordingly, the contract

is ambiguous. Therefore, applying a de novo standard of review, Royer Homes, 857 So. 2d

at 751-52 (¶7), we hold that the chancellor erred by ruling that the contract was “clear” and

“free from ambiguity” under “the ‘four corners’ test.” For the same reason, the chancellor

also erred by declining to consider parol evidence related to the negotiations leading up to

the execution of the contract.

¶31. Because the contract is ambiguous, the chancellor should consider all “extrinsic or

14
parol evidence” that is relevant and probative regarding the parties’ intent with respect to the

disputed $20,000. Pursue Energy, 558 So. 2d at 353. The “totality of the circumstances”

leading up to the execution of the contract, including any evidence of “negotiations between

the [parties],” “may help reveal the parties’ intent” on this dispute of fact. Id. Accordingly,

we reverse and remand for the chancellor to consider all relevant evidence, make findings

of fact regarding the parties’ intent on this issue of fact, and then determine the appropriate

remedy.13

¶32. REVERSED AND REMANDED.

BARNES, C.J., GREENLEE, LAWRENCE AND SMITH, JJ., CONCUR.
WESTBROOKS, J., CONCURS IN RESULT ONLY WITH SEPARATE WRITTEN
OPINION, JOINED IN PART BY McDONALD AND McCARTY, JJ. EMFINGER,
J., DISSENTS WITH SEPARATE WRITTEN OPINION, JOINED BY CARLTON,
P.J., AND McDONALD, J.; McCARTY, J., JOINS IN PART.

WESTBROOKS, J., CONCURRING IN RESULT ONLY:

13
We note two issues that could arise on remand, although the parties have not
addressed them at this point in the litigation. First, the parties’ contract provides that
Cranford “shall not be entitled to a refund of any of the rental paid” if she does not exercise
the purchase option, but the contract does not address whether Cranford would be entitled
to a refund of the disputed $20,000. Thus, Cranford could be entitled to a refund of or credit
for some or all of those funds in the event she does not exercise the purchase option. See
Thomas v. Scarborough, 977 So. 2d 393, 398-400 (¶¶14-19) (Miss. Ct. App. 2007) (holding
that a provision of a lease-purchase agreement requiring the lessees to forfeit their $30,000
down payment in the event of a breach was “void” as an “unreasonable penalty”). Second,
the chancellor could find that the parties never actually agreed upon or came to a mutual
understanding as to whether the disputed $20,000 would count toward the purchase price.
If that is the case, a question arises whether there was ever a “meeting of the minds,” which
is an essential element of an enforceable contract. See Viverette v. State Highway Comm’n,
656 So. 2d 102, 103 (Miss. 1995) (holding that there was no “meeting of the minds”
regarding a settlement agreement when there was no evidence that the parties ever
“considered and agreed upon” whether a prior payment should be deducted from the
settlement amount). We express no opinion on these issues but simply note them as
potential issues that may arise depending on the chancellor’s factual findings on remand.

15
¶33. From my perspective, there are two issues on appeal: (1) whether the lease-purchase

agreement between Cranford and the Wards is ambiguous; and (2) the purpose of the three

March 2015 payments. The plurality analyzes the lease-purchase agreement in the context

of latent ambiguity surrounding Cranford’s payment of $20,000 to the Wards separately from

the monthly rent. Based on the perceived ambiguous nature of the contract, the plurality

remands the case for the chancellor to consider all relevant parol evidence pertaining to the

three pre-lease payments. I agree that the chancellor should address this issue, but I do not

agree with the plurality that the contract is ambiguous.

¶34. A contract is not ambiguous as a matter of law simply because the contracting parties

disagree as to its meaning. Turner v. Terry, 799 So. 2d 25, 32 (¶17) (Miss. 2001). Based on

the plain language contained in the lease-purchase agreement itself, with no extraneous

evidence, a fact-finder would be hard-pressed to find any ambiguity. The “Lease With

Option to Purchase” entered into by the parties differs from a standard lease agreement, yet

the provisions are clearly set forth: instead of addressing only a set payment being remitted

at regular intervals as rent, the contract gave Cranford the “Option to Purchase . . . for the

sum of $44,000.00.” And, in the event the purchase option was exercised, the monthly rent

payments of $400 would be applied against the option price. The $20,000 in pre-lease

payments are not addressed specifically or alluded to, but “silence alone does not necessarily

create an ambiguity as a matter of law.” Facilities Inc. v. Rogers-Usry Chevrolet Inc., 908

So. 2d 107, 115 (¶19) (Miss. 2005) (“It is the silence, not the language of the lease, that has

created this dispute.”). Staying within the four corners of the document, the lease-purchase

16
agreement is unambiguous, and Cranford “exercise[d]” her option to purchase in accordance

with the contract by remitting the $20,000.

¶35. A finding that the contract is unambiguous does not call for the Court to resolve the

case any differently than a finding that it is ambiguous. Even if this lease-purchase

agreement were found to be unambiguous, there would still be an issue remaining as to the

purpose of the three pre-lease payments. See Tupelo Redev. Agency v. Abernathy, 913 So.

2d 278, 284 (¶14) (Miss. 2005) (“Where a contract is silent as to one of its terms, the court

is not bound to adopt a construction . . . [that] no man in his right mind would have agreed

to.”). This case was filed in a court of equity, and the chancellor can and should make a

decision as to the purpose of the March 2015 payments based on the principles of equity to

ensure fairness to the parties. See Shelton v. Shelton, 477 So. 2d 1357, 1358-59 (Miss. 1985)

(“[T]he principles of equity and righteous dealing [are] the purpose of the very jurisdiction

of the [chancery] court to sustain.”). It is the duty of the chancellor to ensure that neither

party is unjustly enriched. The chancellor, as the trier of fact, is also in the best position to

determine whether either party has violated the principles of equity, including, but not limited

to, the “unclean hands doctrine.” To the extent the chancellor can determine which party

drafted the contract, this may also assist him in crafting an equitable resolution.

¶36. For the foregoing reasons I respectfully concur with the plurality in the result only.

McDONALD AND McCARTY, JJ., JOIN THIS OPINION IN PART.

EMFINGER, J., DISSENTING:

¶37. Because of circumstances involving elderly parents, Ray and Mary “Kathy” Ward

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decided to sell their home in Ackerman, Mississippi. They listed the home for sale on

Facebook. Marilyn Denise Cranford became aware of the listing, possibly from Facebook,

and contacted Kathy. They entered into negotiations regarding the property in March 2015.

Kathy testified that she and Cranford negotiated the purchase price, and, while originally

asking $68,000 for the house, the Wards agreed to sell Cranford the house for $64,000

without a barn that was on the property. Cranford denies she agreed to a purchase price of

$64,000. Cranford testified that she agreed to enter into a lease with the option to purchase

because she was living in a home in Sturgis and needed to get out pretty quickly, and she

needed time to remedy her credit score. In any event, prior to the execution of any written

contract or agreement, Cranford gave the Wards three checks in the total amount of $20,000.

The Wards contend the $20,000 was given as consideration for them to enter into the lease

with the option to purchase with the sale price reduced from $64,000 to $44,000. Cranford

contends that the $20,000 was given to the Wards as “good faith” money and was meant to

apply toward the $44,000 option price. However, none of that really matters.

¶38. On March 13, 2015, the parties entered into a “LEASE WITH OPTION TO

PURCHASE” that is not ambiguous and contained all the essential elements to form a valid

and enforceable option contract. In his bench opinion the chancellor said:

The Supreme Court will enforce a contract that is “clear, definite, explicit,
harmonious in all its provision, and is free from ambiguity.” Citing Bert Allen
Toyota, Inc. v. Grasz, 909 So. 2d 763 (Miss. Ct. App. 2005).

The court finds that the language used in the Exhibit 1 lease-purchase
agreement falls within these parameters and should be enforced. It is
reasonably complete and definite and thus allows for specific performance to
be a specific remedy.

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I agree with the chancellor that the agreement is “free from ambiguity,” however I disagree

with how he interpreted this unambiguous document to allow pre-lease payments to be

credited against the purchase price stated in this option. The applicable provision of the

agreement reads as follows:

(10) Option to Purchase: Lessor hereby grants to Lessee an option to purchase
the above described property at any point during the term of this lease for the
sum of $44,000.00. $400.00 of the monthly lease payment shall be credited
against the purchase price. Lessee may make additional payments during the
term of this lease against the option price. Should Lessee’s exercise their
option to purchase, Lessor shall convey the property to Lessee via special
warranty deed.

(Emphasis added).

¶39. While Cranford testified that she intended the pre-lease payments to be evidence of

her “good faith” to purchase the property and that she believed those payments would be

credited against the option purchase price, the chancellor should not have considered such

testimony. In Royer Homes of Mississippi Inc. v. Chandeleur Homes Inc., 857 So. 2d 748,

752-53 (¶10) (Miss. 2003), the court said:

This Court has set out a three-tiered approach to contract interpretation. Pursue
Energy Corp. v. Perkins, 558 So. 2d 349, 351-53 (Miss. 1990). Legal purpose
or intent should first be sought in an objective reading of the words
employed in the contract to the exclusion of parol or extrinsic evidence.
Cooper v. Crabb, 587 So. 2d [236, 241 (Miss. 1991)]; City of Grenada v.
Whitten Aviation Inc., 755 So. 2d 1208, 1214 (Miss. Ct. App. 1999) [(negative
history omitted)]. First, the “four corners” test is applied, wherein the
reviewing court looks to the language that the parties used in expressing their
agreement. Pursue Energy Corp., 558 So. 2d at 352 (citing Pfisterer v. Noble,
320 So. 2d 383, 384 (Miss. 1975)). We must look to the “four corners” of the
contract whenever possible to determine how to interpret it. McKee v. McKee,
568 So. 2d 262, 266 (Miss. 1990). When construing a contract, we will read
the contract as a whole, so as to give effect to all of its clauses. Brown v.
Hartford Ins. Co., 606 So. 2d 122, 126 (Miss. 1992). Our concern is not

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nearly so much with what the parties may have intended, but with what
they said, since the words employed are by far the best resource for
ascertaining the intent and assigning meaning with fairness and accuracy.
Simmons v. Bank of Miss., 593 So. 2d 40, 42-43 (Miss. 1992). Thus, the
courts are not at liberty to infer intent contrary to that emanating from
the text at issue. Id. (citing Cooper, 587 So. 2d at 241). On the other hand, if
the contract is unclear or ambiguous, the court should attempt to “harmonize
the provisions in accord with the parties’ apparent intent.” Pursue Energy
Corp., 558 So. 2d at 352. Only if the contract is unclear or ambiguous can a
court go beyond the text to determine the parties’ true intent. Id. “[T]he mere
fact that the parties’ disagree about the meaning of a contract does not make
the contract ambiguous as a matter of law.” Turner [v. Terry], 799 So. 2d [25,
32 (Miss. 2001)]; Cherry v. Anthony, 501 So. 2d 416, 419 (Miss. 1987).

(Emphasis added). Because the plain language of the agreement only allowed credit against

the purchase price for “additional payments during the term of this lease,” the chancellor

clearly erred when he credited pre-lease payments in the amount of $20,000 to reduce the

option price.

¶40. However, Cranford made all the monthly rental payments due under the lease and,

pursuant to the agreement, was entitled to be credited $14,400 against the option price. On

March 8, 2018, Cranford notified the Wards, in writing, of her intent to exercise the purchase

option. In Ing v. Adams, 248 So. 3d 881, 885-86 (¶20) (Miss. Ct. App. 2018), the court said:

“[W]ritten notice to the seller of intent of the option holder to exercise an
option has the effect of an acceptance, converting the option into an
enforceable bilateral contract. It is not necessary for an option holder to tender
the purchase price in order to exercise the option.” Creely v. Hosemann, 910
So. 2d 512, 519 (¶29) (Miss. 2005) (emphasis added) (citing Busching v.
Griffin, 542 So. 2d 860, 864-65 (Miss. 1989) ). Indeed, “[a]bsent language in
the contract to the contrary, an option holder has no obligation or duty to show
an ability to pay the entire sales price before the closing.” Prestenbach [v.
Collins], 159 So. 3d [531, 534] (¶12) [(Miss. 2014)] (emphasis added). “The
holder of an option is entitled to specific performance of the optioner’s duty
to convey, so long as the holder is willing to pay the option price.” Creely, 910
So. 2d at 519 (¶29).

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With the letter giving notice of her intent to exercise the option, Cranford tendered a

cashier’s check in the amount of $9,600, which she contended was the balance due under the

agreement. The Wards rejected the offer and maintained that the $9,600 did not represent the

balance due under the agreement. I agree with the chancellor that Cranford gave timely

notice to the Wards of her intent to exercise the option. Because a good faith disagreement

over the option price arose, closing was not possible within a reasonable time thereafter.

Because Cranford timely gave the Wards notice of her intent to exercise the option, I would

find that the option converted into an enforceable bilateral contract. Accordingly, once the

dispute concerning the purchase price is resolved, Cranford should be given a reasonable

time to close the transaction.

¶41. I dissent from the plurality opinion reversing the grant of specific performance.

Instead, I would affirm the grant of specific performance but reverse and remand to alter the

details of the grant. I would find that upon remand, the chancellor should order that upon

Cranford’s presentation of $29,600, plus interest from March 13, 2018, through closing, in

an amount to be determined by the chancellor, the Wards shall present Cranford a special

warranty deed as required by the agreement. Since I would find that Cranford has not

breached the agreement and timely exercised the option, I would also affirm the denial of the

Wards’ claim for ejectment at this time.

CARLTON, P.J., AND McDONALD, J., JOIN THIS OPINION. McCARTY,
J., JOINS THIS OPINION IN PART.

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