Kittel v. Krause

• Decision Date: 12 December 1959
• Docket Number: No. 41523,41523
• Citation: Kittel v. Krause, 185 Kan. 681, 347 P.2d 269 (Kan. 1959)
• Parties: George KITTEL and Golda Kittel, Appellants, v. Gayle A. KRAUSE and Kathleen E. Krause, Appellees.
• Court: Kansas Supreme Court

Page 269

347 P.2d 269

185 Kan. 681

George KITTEL and Golda Kittel, Appellants, v. Gayle A. KRAUSE and Kathleen E. Krause, Appellees.

No. 41523.

Supreme Court of Kansas.

Dec. 12, 1959.

Syllabus by the Court

1. Where a written contract is the crux of an action, a question as to its ambiguity is one of law to be determined by the trial court, and it is proper for that court to make such determination in advance of trial. (G.S.1949, 60-2902.)

2. In an action predicated upon a written conditional sales contract for the sale of equipment used in operating a Tastee Freez business which contract unambiguously and clearly stated in provision (a) how the purchase price was to be paid if the buyers complied with the duties placed upon them by other terms and provisions of the contract, and the contract further stated in paragraph 4 of provision (b) that in the event of default of the buyers by reason of their failure or refusal to comply therewith, the sellers had the option of retaking possession of the property, or filing an action for the balance due on the contract price, as is more fully set out in the opinion, it is held, the contract was unambiguous and clear and the trial court erred in determining that it was ambiguous and such erroneous determination and the trial had thereunder require a reversal of the cause and the granting of a new trial.

Robert J. Dole, Russell, argued the cause and was on the briefs for appellants.

Robert L. Earnest, Russell, argued the cause and was on the briefs for the appellees.

ROBB, Justice.

Plaintiffs sought to recover a money judgment in an action arising out of breach of a written contract. This appeal by plaintiffs relates only to the verdict of the jury and the judgment in favor of defendants entered thereon by the trial court based on the first cause of action.

An amended petition, answer and reply established the issues and since there is no question as to the pleadings, we need not reiterate their contents herein.

On January 21, 1956, plaintiffs agreed, by written contract, to sell to defendants the following personal property: Two Harlee freezers, a root beer dispenser, a walk-in cooler, a deep freeze, a five spindle multimixer, a roof sign and a cone dispenser, all used in the operation of a Tastee Freez business. The contract contained numerous provisions but we shall include herein quotation of only the salient parts relating to the first cause of action and this appeal, which concerns payment by the Krauses for the above equipment:

'(a) Purchaser agrees and understands that the purchase price of the above described equipment is $6,933.77 to be paid at the rate of $3.00 per every ten-gallon can of Tastee Freez Mix used by purchaser in conducting and operating the Tastee Freez business at 300 South Fossil, Russell, Kansas.

'It is agreed and understood that the creamery from which the Purchaser buys mix used in the operation of the Tastee Freez business shall have the right to add $3.00 to the purchase price of every ten-gallon can of mix sold to Purchaser and said Seller herein agrees that the creamery, from which the Purchaser purchases mix, shall act as agent in the collecting to the $3.00 per ten-gallon can, which shall be credited on the unpaid balance of the purchase price and interest thereon.

* * *

* * *

'(b) * * * 4. In the event of any default by the Purchaser in the performance of any of the terms or conditions hereof, the Seller may at its option and without notice declare the unpaid portion of the purchase price, together with accrued interest thereof, if any, immediately due and payable, and thereupon the Seller may either proceed to collect from the Purchaser the balance due or retake possession of the property, including the supplies and products, wherever it may be found, with or without legal process, and hold the same free of all claims of the Purchaser and retain as liquidated damages all payment theretofore made.'

A written sublease agreement and a subsequent written agreement providing for the moving of the above equipment to avoid expensive rent were a part of the contract and appear in the record but those agreements do not require our attention in this appeal.

The grounds of the motion for new trial and the errors complained of in the notice of appeal and the specifications of error are numerous but in reality we have only one prime question which is whether the abovequoted portions of the contract are ambiguous.

Plaintiffs moved that the trial court determine in advance of trial whether the contract was ambiguous by reason of the following allegation of defendants' answer:

'8. That said Conditional Sale Contract was impossible of being performed on Defendants part; that such a possibility was within the contemplation of the parties Plaintiff and Defendant; that both parties contemplated payment only if Tastee-Freez mix were purchased; that both parties contemplated payment only if the business remained a going concern and then in that event such payments would be made only at the rate of three dollars per can of Tastee-Freez mix purchased; that payment of three dollars per can of Tastee-Freez mix purchased was the only method of payment provided for and such payment is fully set forth in section (a) of the Conditional Sale Contract.'

The trial court ruled that parol evidence to substantiate allegations of the answer as to facts in connection with contract negotiations would be admissible, and further stated:

'The court also finds that the contract is ambiguous as to the source of money from which payment under the conditional sales contract is made in the event of default in the contract. It being pointed out by the court that paragraph (a), which is the third paragraph on Page 1 of the conditional sales contract, sets out the source of money from which payments are to be made, namely, 'at the rate of $3.00 per every ten-gallon can of Tastee-Freez mix' etc. And paragraph number 4 on page 2 of the conditional sales contract sets out that in the event of default by the purchaser 'the seller may at its option * * * declare the unpaid portion of the purchase price * * * immediately due and payable. * * *' It being pointed out that it is ambiguous as to whether said paragraph 4 abrogates the provision of said paragraph (a) in regard to the source of moneys from which payment is to be made.'

This opened the way for an abundance of conflicting evidence in regard to preliminary negotiations and facts and circumstances present at the time of the execution of the contract by defendants on February 8, 1956, and by plaintiffs on February 13, 1956. The same was also true regarding the intention of the parties under paragraph 4 of provision (b) of the contract above quoted.

It was undisputed that the contract form was copied by plaintiffs from one previously used by them and a former purchaser of the same business. The defendants opened the business about March 17, 1956, and operated it until August 16, 1956, during which time the $3 payments were made pursuant to provision (a) of the contract until an amount of $176.36 was paid, leaving a balance of $6,757.41 due on the principal. Defendants had 'kept the business open' for about five months in 1956 when they were required by the signed contract to keep the premises open for business a minimum of eight months. They did not reopen in the spring of 1957 notwithstanding the fact that the Kittels contacted them in regard thereto. Defendants had not paid any taxes and had failed to renew the liability insurance as provided in the contract.

Defendants had written plaintiffs in July, 1956, as follows:

'In the event I don't find a buyer and I am forced to close, I wonder what you plan to do?'

After defendants failed to reopen in March, 1957, plaintiffs commenced this action on September 3, 1957.

Plaintiffs' counsel made...