Coles v. Redskin Realty Co.

• Decision Date: 26 October 1962
• Docket Number: No. 3060.,3060.
• Citation: 184 A.2d 923
• Parties: Marvin J. COLES, Appellant, v. REDSKIN REALTY CO., a corporation, Appellee.
• Court: D.C. Court of Appeals

Page 923

184 A.2d 923

Marvin J. COLES, Appellant, v. REDSKIN REALTY CO., a corporation, Appellee.

No. 3060.

Municipal Court of Appeals for the District of Columbia.

Argued September 5, 1962.

Decided October 26, 1962.

Stanley O. Sher, Washington, D. C., with whom Coles & Goertner, Washington, D. C., was on the brief, for appellant.

Robert B. Frank, Washington, D. C., with whom Milton W. King and Bernard I. Nordlinger, Washington, D. C., were on the brief, for appellee.

Before HOOD, Chief Judge, QUINN, Associate Judge, and CAYTON (Chief Judge, Retired), sitting by designation under Code § 11-776(b).

HOOD, Chief Judge.

In this action the appellee sought to recover from appellant a debt said to be due under an agreement between appellee and members of a syndicate formed for the purchase and sale of real estate in the District of Columbia. The issue was joined on the question whether or not appellant was bound by this agreement.

The trial court, sitting without a jury, found as facts the following. Sometime in 1952 George P. Marshall brought to the attention of one John W. Harris the availability of certain land located in the District of Columbia. Harris formed a syndicate and obtained an option to purchase the land, and individual members of the syndicate at that time agreed to pay Marshall ten per cent of the syndicate profits in consideration for his services as finder of the land. Appellant Coles testified that he entered the syndicate after its original formation, contributing $10,000, and that he entered the syndicate without knowing of its arrangement with Marshall. Harris obtained successive renewals of the option; after the last of these had expired, Harris arranged for the purchase of the land by the American Securities Corporation. American Securities, Hegeman-Harris Company (a corporate syndicate member organized by Harris) and others jointly developed the site, building cooperative apartments and offices there, and realized substantial profits from the transaction. Harris made agreements with various members of the former syndicate to pay them certain sums as their share of these profits. One such agreement was made with appellant; as a result, he realized a gross return on his $10,000 investment of $25,550.17.

In 1957 Marshall made demands on the individual members of the syndicate for ten per cent of their profits. Counsel for Hegeman-Harris appraised this claim as having considerably more than nuisance value, concluding that the publicity attendant upon the filing of a damage suit by Marshall would have a detrimental effect on the project, and urged that an equitable settlement be sought. Accordingly, an agreement was drawn up, with Hegeman-Harris and the individual members of the syndicate as parties of the first part, and George P. Marshall and appellee Redskin Realty Co., his assignee, as parties of the second part. Under this agreement, the syndicate members agreed to pay Marshall five per cent of their profits. All individual members of the syndicate except appellant and one other¹ signed this agreement. Appellant refused to do so, claiming that he recognized neither a legal nor a moral obligation to Marshall or to Redskin Realty, and thereafter persisted in his refusal to pay.

The trial court reasoned that appellant could be found liable only on the theory that as a member of the syndicate he was bound by the agreement entered into by a majority of the syndicate members. Characterizing the syndicate as a partnership, the court then considered whether the contractual provisions for payment to Marshall were in the nature of a distribution of profits or a fee for services.

Originally, at the conclusion of trial, the court was of the opinion that the agreement represented a distribution of profits, requiring the unanimous consent of the partners, and entered a finding for appellant. Thereafter, on appellee's motion for judgment notwithstanding the finding or for a new trial, the court reconsidered its earlier conclusion, and determined that its finding had been "in error as a matter of law." The court now decided that the agreement was for the payment of a fee, and that a majority of partners could bind dissenting partners to such an agreement. Granting appellee's motion, the court found appellant Coles liable on the agreement for $777.51.

At the outset appellant contends that the trial court was without power to reverse its finding after it had been formally entered, since, he argues, that finding involved a question of fact or at least a mixed question of fact and law.² It is undoubtedly correct that the trial court's statement that it had been in error "as a matter of law" does not foreclose this court from determining that a question of fact was involved.³ But we are satisfied that the trial court's change of opinion resulted from a reconsideration of the written agreement itself, and not from a reappraisal of the parol evidence offered in aid of interpretation.⁴ The uncertainty as to the nature of the agreement did not arise from ambiguity of language, which could be resolved through parol evidence as to usage or surrounding circumstances. Where "the difficulty of interpretation must be solved from the writing alone," the court will deal with the matter itself. Williston, Contracts § 616 (3rd ed. Jaeger). This we believe to be the case here. All the operative facts necessary to the trial court's determination were fully set forth in the written agreement. There is no explicit reference by the court to testimony dehors the agreement. It remained only to draw a legal conclusion as to the nature of the agreement. The court reached one conclusion at the close of trial; another, upon consideration of a seasonably presented motion. This the court, under the decided cases, was free to do.

Appellant's next contention is that the syndicate to which he belonged was a joint venture rather than a partnership, and that a majority of joint adventurers cannot bind the minority over its objections. Alternatively, appellant suggests that if the syndicate be considered a partnership, the agreement represented a distribution of profits, a matter requiring the unanimous consent of the partnership.

We are convinced that the trial court correctly determined the agreement to be for the settlement of a claim through the payment of a fee, rather than in the nature of a distribution of profits. Although Marshall's compensation was to be determined on the basis of a percentage of profits, the language of the agreement makes it abundantly clear that its overriding purpose was to settle Marshall's claim and forestall suit. The agreement recites, for example, that Marshall brought to Harris's attention the availability of certain lands; that by letter of November 18, 1952, the syndicate members agreed to pay him ten per cent of profits in consideration for his bringing the optioned lands to their attention; that a dispute arose over Marshall's rights under that letter, with Marshall indicating an intention to institute litigation "to ascertain and enforce his rights"; and that the parties then "indicated their desire and willingness to adjust all matters of dispute without necessity for resorting to litigation." In two similarly worded paragraphs, the agreement provides that the five per cent profit participation is accepted by Marshall and Red-skin Realty in full settlement of all claims against the syndicate members.

That it was a considerable advantage to the syndicate to settle Marshall's claim in this manner, rather than to contest it in court, is evidenced by the syndicate counsel's estimate of its precarious position and of the harm which could result to the syndicate...