Kelso v. Kelso, 5077.

• Decision Date: 01 September 1955
• Docket Number: No. 5077.,5077.
• Citation: 225 F.2d 918
• Parties: Jerry Mae KELSO, Appellant, v. Emerson R. KELSO, Kelso Department Store, Incorporated, a corporation, Kelso Clothing Company, Inc., a corporation, Aircraftsmen, Inc., a corporation, Charles W. White, and Elizabeth Beatrice Avant, Executrix of the Last Will and Testament of Tom Avant, Deceased, Appellees.
• Court: U.S. Court of Appeals — Tenth Circuit

225 F.2d 918 (1955)

Jerry Mae KELSO, Appellant, v. Emerson R. KELSO, Kelso Department Store, Incorporated, a corporation, Kelso Clothing Company, Inc., a corporation, Aircraftsmen, Inc., a corporation, Charles W. White, and Elizabeth Beatrice Avant, Executrix of the Last Will and Testament of Tom Avant, Deceased, Appellees.

No. 5077.

United States Court of Appeals Tenth Circuit.

August 6, 1955.

Rehearing Denied September 1, 1955.

John H. Cantrell, Oklahoma City, Okl., for appellant.

J. A. Rinehart, El Reno, Okl., for appellees.

Before PHILLIPS, Chief Judge, and HUXMAN and PICKETT, Circuit Judges.

PICKETT, Circuit Judge.

Jerry Mae Kelso and Emerson R. Kelso were formerly husband and wife. On July 21, 1951, Mrs. Kelso obtained a decree of divorce from Kelso on a cross-complaint. On the same day the parties executed a property settlement agreement which was incorporated in the decree. Thereafter, a dispute arose as to the handling of the property set aside to Mrs. Kelso and the amount of the monthly payments which were to be made to Mrs. Kelso. This declaratory judgment action was brought to obtain an interpretation of certain provisions contained in the agreement and decree. The trial court found against Mrs. Kelso on the principal issues presented. 124 F.Supp. 294.

Kelso was an active businessman in the City of El Reno, Oklahoma, and was engaged in several different enterprises and businesses at the time the decree was entered in the divorce action. He was a majority stockholder in Kelso Department Store, Inc., Kelso Clothing Co., Inc., and Aircraftsmen, Inc., and a partner in Charley White Food Market, of El Reno, Oklahoma, the Village Market, and Tom Avant Motor Company of El Reno, Oklahoma. The property settlement made provision for a division of these businesses and of real and personal property which belonged to the parties. It is evident from the terms of the agreement that the parties, as nearly as possible, intended to divide equally all of the property owned by them. It is also evident that Kelso was to retain possession of the interest of Mrs. Kelso in the businesses; manage and operate them as he had in the past; and make monthly payments to Mrs. Kelso. The provision providing for such monthly payments reads:

"That such division of property shall be by way of settlement of property rights between the parties, the second party Jerry Mae Kelso agreeing to pay all income tax on income which she receives from said property and as a further consideration first party Emerson R. Kelso agrees that in the future operation of the various properties above mentioned, the profits and income as earned of the second party will be faithfully and properly paid to her at the rate of $1,000.00 per month, and in the event her interest in said properties and businesses does not earn that amount per month, then such deficiency may be charged against her later earnings of said property to supply such deficiency."

Immediately after the entry of the divorce decree, and by virtue of his control over the business enterprises, Kelso, unknown to Mrs. Kelso, allocated to the different businesses certain amounts which each one was to furnish to make up the $1,000 monthly payments to Mrs. Kelso. Apparently these amounts were fixed arbitrarily and had no relation to the earnings of the business. In keeping records of these payments, if Mrs. Kelso's share of the profits did not equal the amount of the payment allocated to a particular business, Kelso charged the difference against her capital interest in that business. As a result, the books showed a substantial reduction in the interests of Mrs. Kelso in each business.¹

Some time after the entry of a divorce decree, the Village Market was sold and Kelso reduced the $1,000 monthly payments by $100, and continued to pay $900 a month. No payments have been made since this action was filed.

Kelso construed the contract to mean that he was under no obligation to pay Mrs. Kelso any sum over and above her share of the profits from the different businesses. In keeping her accounts, he considered any payments over and above her share of actual earnings to be in the nature of an advancement and chargeable against her property as he had allocated them. The trial court agreed with this construction.

We are unable to find in the words of the agreement and the circumstances surrounding its execution a justification for such construction. If Kelso is permitted to manipulate the payments and the deficiencies as he has done, he soon could dissipate Mrs. Kelso's entire interest in any or all of the businesses which she owned as her absolute property. The purpose of the contract was "the full settlement of the property rights or claims for alimony" growing out of the marital relations of the parties. Although the contract did not provide for alimony, provision was made through a division of the property for the support and maintenance of Mrs. Kelso. It is quite evident from the language of the contract that it was the intention of the parties that Mrs. Kelso should have a monthly income of $1,000 as long as Kelso continued to control and operate her property, and we think by the terms of the contract Kelso obligated himself to make such payments even though the profits and income from Mrs. Kelso's share did not equal that amount.² His only right to recoup any deficiencies was from the future earnings of her property.

In construing a contract, the whole of the same must be considered together so as to give effect to every part if reasonably practicable. 15 Okl.St. Ann. § 157; Greeson v. Greeson, 208 Okl. 457, 257 P.2d 276; Shorten v. Mueller, 206 Okl. 62, 241 P.2d 187; Oklahoma Southern Life Ins. Co. v. Mantz, 191 Okl. 515, 131 P.2d 70; Sullivan v. Gray, 182 Okl. 487, 78 P.2d 688; Franks v. Bridgeman, 178 Okl. 557, 63 P.2d 984; Prowant v. Sealy, 77 Okl. 244, 187 P. 235. The intent of the parties is to be gathered from a consideration of the contract as a whole. Tilley v. Allied Materials Corp., 208 Okl. 433, 256 P.2d 1110; Cities Service Oil Co. v. Geolograph Co., Inc., 208 Okl. 179, 254 P.2d 775; Fourth Nat. Bank of Tulsa v. Eidson, 205 Okl. 145, 236 P.2d 491. Courts, in construing a contract or a judgment of a court based upon a contract, may not rewrite the agreement or decree. Cities Service Oil Co. v. Geolograph Co., Inc., supra; Shorten v. Mueller, supra; Federal Deposit Ins. Corp. v. Grim, 184 Okl. 275, 86 P. 2d 774; Occidental Life Ins. Co. of Cal. v. Marmaduke Corbyn Agency, 10 Cir., 187 F.2d 553. The paramount object in construing contracts is to ascertain the intent of the parties at the time the contract was entered into and to give effect to their intention, if it can be done consistent with legal principles. 15 Okl. St.Ann. § 152; Coston v. Adams, 203 Okl. 605, 224 P.2d 955; Popplewell v. Jones, 202 Okl. 185, 211 P.2d 283; McDowell v. Droz, 179 Okl. 119, 64 P.2d 1210; Gladys Belle Oil Co. v. Clark, 147 Okl. 211, 296 P. 461; Tradesmen's Nat. Bank of Oklahoma City v. Harris, 145 Okl. 54, 291 P. 38; Strange v. Hicks, 78 Okl. 1, 188 P. 347. The trial court in effect held that the $1,000 provision in the contract was meaningless; that Mrs. Kelso was entitled to receive only her share of the earnings from the different businesses; and that any amounts received over and above her share of the earnings were in the nature of loans. This, we think, is contrary to the...