Bredouw v. Jones

• Decision Date: 10 May 1966
• Docket Number: No. 40729,40729
• Citation: 431 P.2d 413,1966 OK 93
• Parties: Jack BREDOUW, d/b/a Bredouw and Company, Plaintiff in Error, v. Horace S. JONES, and Dean M. Colbert, individually, and Horace S. Jones and Dean M. Colbert, d/b/a Capri Motor Hotel Company, a partnership, Defendants in Error.
• Court: Oklahoma Supreme Court

Page 413

431 P.2d 413

1966 OK 93

Jack BREDOUW, d/b/a Bredouw and Company, Plaintiff in Error, v. Horace S. JONES, and Dean M. Colbert, individually, and Horace S. Jones and Dean M. Colbert, d/b/a Capri Motor Hotel Company, a partnership Defendants in Error.

No. 40729.

Supreme Court of Oklahoma.

May 10, 1966.

As Corrected on Denial of Rehearing July 10, 1967.

Syllabus by the Court

1. Evidence offered to show a conditional delivery of a written instrument does not tend to show any modification or alteration of the written instrument, but that it never became operative and its obligation never commenced.

2. If a written contract is in force and operative, evidence, of a contemporaneous oral agreement is subject to the parol evidence rule and inadmissible.

3. Where a party was induced by false and fraudulent representations to enter into a contract which he would not have entered into but for such false and fraudulent representations, the parol evidence rule is not applicable.

4. In a law action where the plaintiff submits its case to the jury, without demurring to the evidence or asking for an instructed verdict, and does not challenge the sufficiency of the evidence until a motion for new trial is filed, the question of whether there is sufficient evidence to support the verdict for the defendant will not be considered on appeal.

5. The failure to demur to the evidence in a law action or to move for a directed verdict does not operate to waive appellate review of errors in instructing the jury or in admitting or rejecting evidence, or of any other erroneous ruling during the progress of the trial.

6. Where two issues were submited to the jury, either of which would support the general verdict for the defendant, but one issue was erroneously submitted, the error will be regarded as prejudicial where it is impossible to determine the basis of the jury's verdict from an examination of the record.

Appeal from the District Court of Oklahoma County; A. P. Van Meter, Trial Judge.

Action by Jack Bredouw, dba Bredouw and Company, upon a series of promissory notes against Horace S. Jones, Dean M. Colbert, individually and as partners, dba Capri Motor Hotel Company, arising out of a brokerage contract. A jury trial resulted in a judgment in favor of the defendants and plaintiff appeals. Reversed and remanded for new trial.

Charles Dunn, Tulsa, for plaintiff in error.

Crowe, Boxley, Dunlevy, Thweatt, Swinford & Johnson, Oklahoma City, for defendants in error.

HODGES, Justice.

This is an action by the plaintiff on a series of promissory notes against the defendants which represent the unpaid balance due and owing to the plaintiff under a written contract entered into with the defendants for brokerage fees on the sale of a motel.

The plaintiff, Jack Bredouw, is a licensed realtor in Tulsa, Oklahoma, operating under the name of Bredouw and Company. The defendants, Horace Jones and Dean Colbert, are owners and partners of the Capri Motor Hotel. The Captain-Miniver Corporation was the subsequent purchaser and lessor of the Capri Motor Hotel and will hereafter be referred to as purchasers.

In April, 1958, an employee of the plaintiff approached the defendant Jones on the possibility of listing the Capri Motor Hotel for sale with their agency. Although no listing was given at this time the plaintiff was advised that if he had an interested buyer he would be willing to discuss the matter.

The plaintiff subsequently contacted a brokerage firm in New York City, by the name of Helmsley-Spear. This brokerage firm knew of persons interested in this type of investment and as a result, a syndicate was formed known as the Captain-Miniver Corporation. An agreement was reached whereby the plaintiff was to furnish the listing, the Helmsley-Spear firm the purchaser, and the transaction was to be handled on a co-brokerage basis with an equal division of any commissions.

The New York purchaser, apparently was only interested in the purchase of the Capri Motor Hotel on a sale and leaseback purchase. This type of arrangement was unfamiliar both to the plaintiff and defendants and numerous conferences and negotiations were held before any final contract was approved. It was during this period that the plaintiff and Helmsley-Spear, on March 28, 1959, entered into a written brokerage contract, with the defendants, which led to the execution of the promissory notes in question. The contract provided that in the event the New York purchaser executed a contract for the purchase of the Capri Hotel, a commission of $45,000.00 would be owing and payable by the defendants to the brokers, to be paid over a period of three years, in equal monthly installments and evidenced by a series of promissory notes consecutively numbered, in the amount of $1,250.00 each. The even numbered notes were payable to Helmsley-Spear and the odd numbered notes, payable to the plaintiff.

From the evidence it appears that the negotiations between the defendants and the New York purchaser were completed on March 28, 1959. Pursuant to this agreement the defendants executed a deed on August 3, 1959, to the Capri Motor Hotel, to the New York purchaser for $225,000.00 down payment with the balance secured by a first mortgage in the amount of $220,000.00 and a second mortgage in the amount of $455,000.00, for a total consideration of $900,000.00. Contemporaneous with the execution of this deed, a lease contract was signed by the defendants and the New York purchaser, whereby the purchaser leased the Capri Motor Hotel to the defendants for twenty five years for an annual rental of $90,870.00. The parties also agreed that the note and second mortgage in the amount of $455,000.00 was pledged as security to the purchasers, guaranteeing their performance of the lease provisions and the payment of the rental thereunder.

On August 3, 1959, the defendants executed and delivered, pursuant to the contract of March 28, 1959, thirty-six promissory notes payable to the plaintiff and Helmsley-Spear. The defendants and Helmsley-Spear then agreed to settle their one-half commission for a cash payment of $15,000.00. The evidence is conflicting as to whether the plaintiff was made the same offer of settlement by the defendants.

The defendants continued to pay the notes held by the plaintiff, until the first eight notes had been paid, defaulting on note seventeen or the ninth note of the plaintiff and refusing payment on the remaining ten notes.

The defendants having occupied the Hotel under the lease, for approximately seventeen months, notified the New York lessors on December 1, 1960, that they were surrendering the lease. On February 1, 1961, the lease was terminated by the defendants and the New York purchaser and all obligations thereunder were discharged.

On December 5, 1960, the plaintiff was advised by the defendant Jones, that they were turning the property back and in accordance with their agreement the remaining ten notes were not payable.

It was the contention of the defendants that the plaintiff and defendants had orally agreed that if and when the leased premises were surrendered back to the purchaser, no further notes would be due and owing. This purported oral agreement was denied by the plaintiff. Upon trial of the cause the jury found in favor of the defendants and plaintiff has perfected his appeal to this court.

The plaintiff submits that the trial court erred in permitting the introduction of parol evidence at variance with the terms of a written contract.

The trial court permitted over the objections of the plaintiff the introduction of testimony by the defendants of a separate oral agreement between the parties which provided that in the event the defendants relinquished the lease and delivered possession of the Capri Motor Hotel back to the purchaser there would be no liability on the remaining unpaid notes.

The plaintiff contends that the introduction of such parol evidence varied the terms of a written instrument and therefore was inadmissible. The plaintiff advances the proposition that where a written contract is complete in itself and is unambiguous, oral evidence tending to vary, contradict, enlarge, or narrow the terms of the writing is not admissible. Coker v. Hudspeth, Okl., 308 P.2d 291; Enola Oil Company v. Bogie, Okl., 290 P.2d 763.

It is the position of the defendants that the contemporaneous oral agreement between the plaintiff and defendants was in the nature of a condition precedent. That the consideration and delivery of the promissory notes were conditional upon the defendants remaining in possession of the promises as lessee, citing, Harlow Publishing Co. v. Walden, 168 Okl. 163, 32 P.2d 278; Farmers' Bank of Roff v. Nichols, 25 Okl. 547, 106 P. 834; Horton v. Birdsong, 35 Okl. 275, 129 P. 701, L.R.A.1916B, 1048; In re Fullerton's Estate, Okl., 375 P.2d 933.

The statutes of the State of Oklahoma in Title 15 O.S.1961, § 137 provide:

'The execution of a contract in writing, whether the law requires it to be written or not, supersedes all the oral negotiations or stipulations concerning its matter, which preceded or accompanied the execution of the instrument.'

A well established exception to this parol evidence rule was expressed by this court in Farmers' Bank of Roff v. Nichols, 25 Okl. 547, 106 P. 834:

'The authorities hold that where the maker of a note delivers it to the payee with the agreement that it shall not take effect until the happening of a certain contingency or the performance of a certain condition, and where neither the contingency has occurred nor the condition been performed, the note never becomes operative, and an action thereon by the payee or his assignee with notice cannot be maintained.'

The issue thus presented for our determination is the application of the factual situation in the instant case to the above principles. The query is whether the oral agreement is such a condition or contingency...