Coble v. Scherer, 50253

• Decision Date: 17 August 1979
• Docket Number: No. 50253,50253
• Parties: Teddie L. COBLE and Barbara Coble, Appellants, v. Francis SCHERER, Jo Ann Scherer, and Jackson & Scherer, Inc., and Sun Savings Association, Appellees.
• Court: Kansas Court of Appeals

Page 561

598 P.2d 561

3 Kan.App.2d 572

Teddie L. COBLE and Barbara Coble, Appellants, v. Francis SCHERER, Jo Ann Scherer, and Jackson & Scherer, Inc., and Sun Savings Association, Appellees.

No. 50253.

Court of Appeals of Kansas.

Aug. 17, 1979.

Syllabus by the Court

1. Whether a contract is ambiguous is a question of law to be determined by the trial court.

2. A contract determined to be unambiguous must be enforced according to its terms without reliance upon parol evidence of other understandings or other prior or contemporaneous agreements that vary the contractual terms.

3. Admission of parol evidence to clarify the intent of the parties to an unambiguous contract is improper.

4. When a real estate purchase agreement contains a forfeiture clause that is clearly unambiguous, the forfeiture clause must be strictly enforced according to its terms.

5. An ambiguous contract must be interpreted as a whole to ascertain the intent of the parties and to achieve a reasonable interpretation.

6. An ambiguous contract is to be construed strictly against the drafter.

Robert L. Boyce, Jr., Kansas City, for appellants.

Steve Fabert and James P. Nordstrom, of Fisher, Patterson, Sayler & Smith, Topeka, for appellee Jackson & Scherer, Inc.

Before SPENCER, P. J., and SWINEHART and MEYER, JJ.

SWINEHART, Judge:

Plaintiffs Teddie Coble and Barbara Coble appeal from a judgment denying them recovery of a $5,000 deposit on a contract for the purchase of real estate.

The plaintiffs seek reversal of the judgment on alternative grounds. (1) There was no meeting of the minds and hence no contract. (2) The contractual agreement specifically limited the liquidated damages for breach of the contract to $1,000. (3) The contract was ambiguous, and since defendant Jackson & Scherer, Inc., drafted the contract, any doubt about its provisions should be resolved against the drafter. (4) The defendant, as drafter of the contract, was guilty of willful and negligent conduct in failing to reduce the parties' agreed understanding to writing.

In February, 1976, the plaintiffs saw a Jackson & Scherer, Inc., real estate ad offering for sale land owned by the defendants Francis Scherer and Jo Ann Scherer. Before contacting the real estate agency, the plaintiffs spoke directly to the owners, and on February 8, 1976, they viewed the property. During that time the plaintiffs learned that the property was mortgaged. Plaintiffs testified that they were told that the mortgage payments were in excess of $400 per month, although they were actually $328 per month. Plaintiffs wished to purchase the property, but at all times stated they could not afford monthly payments in excess of $300.

On February 10, plaintiffs listed their own home for sale with Barkyoumb & Co., realtors, and on February 11, visited with Louis Scherer of defendant Jackson & Scherer, Inc., regarding the property. During that conversation the parties discussed the selling price of $77,500 and according to Teddie Coble, plaintiffs informed Scherer that the sale would be dependent upon obtaining a loan. The Cobles intended to sell their own home and another piece of property to partially finance the real estate purchase. Apparently there was also some discussion about the possibility of drawing on a $35,000 savings account that was held in the names of Mrs. Coble and her father-in-law, if necessary. Mrs. Coble denies that plaintiffs represented they could draw on that account to raise the purchase price, and Mr. Coble only mentioned that he thought it might serve as collateral for a loan. Mr. Scherer testified, however, that the Cobles informed him they had the money in their savings account if they did not sell their house.

During the February 11, 1976, meeting, the Cobles told Mr. Scherer that they could only afford monthly payments of $300 and Scherer recalls informing them that the payments under the mortgage held by Francis and Jo Ann Scherer were $328 per month, although the plaintiffs deny that they received this information. Due to the conflicting testimony, it is very difficult to reconstruct what exactly took place at the meeting and what topics were discussed. In fact, even the trial judge acknowledged this dilemma in his opinion. There is no doubt, however, that Teddie and Barbara Coble signed a contract for purchase of real estate that was also signed for Jackson & Scherer, Inc., by Louis Scherer. A short time later Francis and Jo Ann Scherer also signed the agreement. The contract recited that $1,000 was received in part payment for purchase of the property. Additionally, the contract contained a handwritten provision that another $4,000 cash payment was due February 18, 1976. Both payments were timely made. The $72,500 balance was to be paid by assuming the mortgage of Francis and Jo Ann Scherer held by the Fidelity Savings & Loan, now Sun Savings Association, which amounted to approximately $30,000, and by paying the remainder in cash. Under the agreement, the plaintiffs had until June 11, 1976, to complete the purchase. Also handwritten in the contract were the words "the additional aforesaid $4,000 to be considered earnest deposit." The meaning and significance of the term "earnest deposit" is hotly disputed by the parties.

The events which transpired after signing this contract are uncertain. The plaintiffs submitted a loan application to Fidelity Savings & Loan and talked to Leavenworth Mutual about borrowing approximately $33,000. They decided against obtaining the loan at Leavenworth Mutual because the payments would be more than they could afford. They were initially told by Fidelity that they could not qualify for a loan on the home and that an assumption of the Scherer mortgage was impossible. However, when Mrs. Coble contacted Louis Scherer to notify him of Fidelity's decision and request the return of the plaintiffs' down payment, Scherer informed her that Fidelity was required to allow the plaintiffs to assume the mortgage. For some unknown reason, however, the plaintiffs never entered into any serious discussions with Fidelity or the Scherers about assuming the mortgage. Mrs. Coble claimed that an official at Fidelity had told her that the assumption payments would be between $400 and $450 per month which was more than...