Koerner v. Custom Components, Inc.

• Decision Date: 30 November 1979
• Docket Number: No. 50331,50331
• Parties: Otto J. KOERNER, Appellee, v. CUSTOM COMPONENTS, INC., Elmer Wiechman and Terry Wiechman, Appellants.
• Court: Kansas Court of Appeals

Page 628

603 P.2d 628

4 Kan.App.2d 113

Otto J. KOERNER, Appellee, v. CUSTOM COMPONENTS, INC., Elmer Wiechman and Terry Wiechman Appellants.

No. 50331.

Court of Appeals of Kansas.

Nov. 30, 1979.

Syllabus by the Court

1. When a party procures a court to proceed in a particular way and invites a particular ruling, he is precluded from assailing such proceeding and ruling on appellate review.

2. A ruling on the relevancy of evidence, based on remoteness, ordinarily rests in the discretion of the trial court and will not be reversed unless it clearly appears the ruling constituted an abuse of sound judicial discretion.

3. When a case is tried to the court and the evidence is heard orally, the district court's findings in the case have the force and effect of a jury's verdict and if supported by substantial evidence the findings will not be disturbed on appellate review.

4. A cardinal rule in the interpretation of contracts is to ascertain the intention of the parties from the contract as a whole and to give effect to that intention if it can be done consistently with legal principles.

5. K.S.A. 61-2309 and K.S.A.1977 Supp. 61-1716(A ) do not make the right to jury trial mandatory upon demand; rather, the test to be applied is whether the parties are entitled to a jury trial pursuant to constitutional dictates.

6. The constitutional right to a jury trial guaranteed by Section 5 of the Bill of Rights of the Constitution of the State of Kansas refers to that right as it existed at common law.

7. At common law and under the provisions of the Kansas Constitution a party in a suit in equity is not entitled to a trial by jury as a matter of right.

8. In determining whether an action is one in equity, the test is whether the essential nature of the action is grounded on equitable rights and is one in which equitable relief is sought.

9. When a court of equity obtains jurisdiction of an action for the purpose of granting some distinctive equitable relief, the court will take jurisdiction for all purposes and determine all issues in the case so that a full, effective and determinative decree adjusting the rights of the parties may be entered and enforced.

10. In an action for peaceable entry and forcible detainer, the record is examined and it is Held : That the trial court did not err in any of its holdings specified as errors, all as more fully set forth in the opinion.

Mark F. Anderson of Kidwell & Williamson, Chartered, Wichita, for appellants.

Jerry G. Elliott and Nicholas S. Daily of Foulston, Siefkin, Powers & Eberhardt, Wichita, for appellee.

Before REES, P. J., and ABBOTT and SPENCER, JJ.

ABBOTT, Judge:

This case involves an action for peaceable entry and forcible detainer brought by the plaintiff, Otto J. Koerner, pursuant to K.S.A. 61-2301 Et seq., to evict the defendants from commercial premises in Valley Center, Kansas, and to recover accrued but unpaid rent for the use of those premises. The trial court granted plaintiff possession and a judgment in the amount of $8,955 for past due rent. Defendants appeal.

The defendants are Custom Components, Inc., Elmer Wiechman and Terry Wiechman. Elmer and Terry are father and son. They are the officers and sole stockholders of Custom Components, Inc. The written leases hereinafter referred to were signed by the Wiechmans both in their corporate capacity and individually.

Otto J. Koerner, a Wichita lawyer, had been counsel for the Wiechmans for many years and for Custom Components, Inc., since it was formed in 1973. Custom Components manufactures roof and floor trusses and various other components used in the building trade. In July of 1974 the defendants were having financial problems and lost possession of the building in which they manufactured their products. Koerner's aid was obtained in an effort to secure new quarters. The record indicates that considerable effort was made to locate suitable existing quarters, but when that effort was unsuccessful the parties decided to build. Two and a half acres of land located in Valley Center were purchased and an option was taken to purchase an additional seven and a half acres. The Wiechmans, due to their financial condition, were unable to obtain financing. An attempt was made to issue industrial revenue bonds but the bond companies advised that the bonds would not sell because of the Weichmans' financial condition. They finally decided that Koerner's credit would be used to build a building.

Defendants executed an agreement with Koerner on July 18, 1974. The agreement provided that Koerner would purchase the two-and-a-half-acre tract and that defendants would then provide the labor to erect a building thereon for use as a manufacturing facility. The agreement further provided that Koerner would advance sums to defendants for site preparation and materials to be used in erecting a building. The same day, the parties entered into a lease agreement covering the same property. The lease was for a ten-year term, with rent at $500 a month. A separate provision of this contract provided that Koerner was to provide legal, financial and managerial advice in return for one percent of the defendants' gross business. Koerner made arrangements for long-term financing of $60,000 and for interim financing in the same amount, and ultimately the building was constructed.

Defendants made no rent payments nor payments on the retainer portion of the contract. After the permanent loan was made and the parties knew what the cost of servicing the loan would be, the parties entered into a new agreement, effective July 1, 1975, in which Koerner waived all past due amounts owing and the rent was raised from $500 to $810 a month, an amount corresponding to Koerner's new mortgage payments on the property. In other respects the agreement was similar to the previous one, requiring defendants to pay the taxes and the insurance premiums.

Defendants' payments under this second agreement were irregular from the start. In July of 1976 they quit making payments on the retainer portion of the contract. (Koerner makes no claim in this lawsuit for money due under the retainer provision.) In the summer of 1976, Koerner gave defendants notice of default and defendants responded by bringing their payments current by December 7, 1976. By November of 1977, defendants were $4,860 behind on their rent. Koerner sent them a second notice of default on November 28, 1977. A corrected notice of default was sent on December 1, 1977. It provided that the lease would be terminated if defendants did not become current within forty days.

Defendants contend that thereafter a meeting of the parties occurred at Koerner's office. They testified that an agreement was reached at that meeting between the parties wherein defendants would make double monthly payments for the months of January, February and March 1977, at which time defendants would be current. Koerner denies such an agreement, as did a second lawyer who was representing Koerner and was present during part of the meeting. On January 3, 1978, defendants paid $1,620, but they were still in arrears. A notice of termination was served on defendants on January 16, 1978. Defendants were notified on January 31, 1978, that if they remained in possession it would be on a month-to-month basis and rent would be $2,000 a month, a sum Koerner testified he felt was the reasonable rental value. On May 26, 1978, after having received no rent payments since January, Koerner served notice to quit and notice of suit on defendants. This lawsuit was filed June 19, 1978.

Defendants have admitted Koerner has legal title to the property and that they received the notices. Defendants further admit they were behind on rent at the time default was declared and that they have remained in possession without making any attempt since January 1978 to pay rent.

The case was tried to the court. At the conclusion of trial the court ruled that there existed a valid lease which was breached by defendants; that defendants owed rent in the amount of $8,955 (evidently computed by adding the $2,430, which the court found unpaid at the time Koerner attempted to raise the rent, to the sum of five months' accrued rent, which the court concluded had a reasonable monthly value of $1,305 per month); and that defendants be evicted from the premises. Defendants posted a supersedeas bond in the penal sum of $17,910 and have remained in possession of the premises pending appeal. Further facts will be set forth as they become relevant.

Defendants do not allege fraud, and they stated at oral argument that they neither allege nor rely on violation of the Code of Professional Responsibility. They raise the following issues:

1. Did the trial court err in construing the proffered testimony of O. J. Baalman?

2. Did the trial court err in construing the June 9, 1975, agreement as a lease?

3. Is the plaintiff estopped from proceeding in this action because the June 9, 1975, agreement is one of conditional sale rather than lease?

4. Did the trial court err in overruling defendants' demand for jury trial?

O. J. Baalman is a management and marketing consultant for small corporate entities and was employed in that capacity by defendants to help solve their financial difficulties. He began performing services for the corporation in the summer or early fall of 1977, almost a full year after the defendants quit paying Koerner for legal and managerial services.

The trial judge ruled that Baalman's testimony pertaining to his acts subsequent to Koerner's participation in the management of the corporation was irrelevant and inadmissible. Defendants' counsel then made a proffer that their purpose in calling Baalman was to establish that plaintiff's faulty management contributed to their inability to pay the rent and carry out the provisions of the lease, thereby creating an estoppel defense to the eviction proceeding.

Koerner made no claim for def...