Mealey v. Kanealy
| Decision Date | 20 June 1939 |
| Docket Number | 44566. |
| Citation | 286 N.W. 500,226 Iowa 1266 |
| Parties | MEALEY et al. v. KANEALY. |
| Court | Iowa Supreme Court |
Appeal from Municipal Court of Des Moines; Chas. S. Cooter, Judge.
Action at law upon contract for real estate commission. Opinion states the facts. From judgment for plaintiffs upon directed verdict, defendant appeals.
Reversed.
Geo A. Mahoney, H. M. Havner, and Margaret I. Cunningham, all of Des Moines, for appellant.
A. J Myers, of Des Moines, for appellees.
This is an action at law by appellees against appellant for real estate commission based upon a written contract. Appellant Lillian Kanealy, had certain negotiations with Thomas Berryman and wife for exchange of real estate. Appellees, J. R. Mealey and Charles M. Domback, represented both parties to the proposed exchange and submitted a contract for execution by said parties. The contract contained provisions relative to titles, abstract, possession and conveyances as usually found in exchange agreements, the last paragraph having reference to appellees' commission. As originally submitted the instrument was unsatisfactory to appellant, who refused to sign it until she had retyped it and made certain changes. This was done in appellees' office. The change made in the last paragraph was by adding thereto the following sentence, " The commission being due and payable upon the transfer of the properties." As thus modified the paragraph read as follows:
Appellant then signed the contract and it was turned over to appellees who took it to the Berrymans and secured their signatures thereon. Appellees were not named as parties to the contract nor did they execute it.
The foregoing facts were established without substantial dispute by the evidence of appellees in their own behalf and by the appellant on her part. Appellant further testified concerning oral negotiations and conversations between appellees and appellant relative to the contract and commission prior to, at the time of, and subsequent to her execution of the contract. Certain evidence was also introduced by appellant tending to show that the exchange was never consummated because of the inability of the Berrymans to perform. Although there was some dispute upon the foregoing proposition it is not contended that the properties were ever transferred. At the conclusion of the evidence the court struck out all the oral evidence introduced on behalf of appellant and directed a verdict in favor of appellees. This appeal is from such rulings and the resulting judgment.
Primarily the controversy involves the interpretation of the last paragraph of the contract above quoted. The trial court interpreted this paragraph to mean the commission was due at the time the contract was signed, thus disregarding the final sentence, " the commission being due and payable upon the transfer of the properties" . This interpretation was based upon a secondary rule of construction mentioned in certain texts and decisions and referred to by appellees as holding, " Where there are two provisions in a contract, one repugnant and contradictory to the other, the former will stand and the latter will be rejected" . For convenience this may be termed " the rule of priority of clauses" under which the first of two repugnant clauses is preferred to the second solely by reason of priority of position. 13 C.J. 535, § 497; 12 Am.Jur. 778; Elliot on Contracts, Vol. 2, p. 790; Chitty on Contracts, 11th Am.Ed., 128; 2 Parsons on Contracts, 513. This must not be confused with the rule that a proviso or clause which is repugnant to the general purpose and intent of a contract will be disregarded no matter where located in the contract. Reference will hereinafter be made to certain authorities based upon this latter rule.
The rule of priority of clauses is ancient and probably originated in the construction of deeds. Stukely v. Butler, H. 12 Jac.Rot. 827, published in the year 1657, in the reports of Sir Henry Hobart, Lord Chief Justice of the Court of Common Pleas, at page 168, discusses the case of a general grant followed by the word " viz." and certain exceptions, and holds, " and I am of the opinion that the Viz. as the whole sentence is, is utterly void." However, apparently, the viz. and resultant divided sentence governed the decision since the court also said, at page 171: " And indeed in one sentence it is vaine to imagine one part before another; for though words can neither be spoken nor written at once, yet the minde of the Author comprehends them at once, which gives vitam & modum to the sentence."
Blackstone's Commentaries, published in 1768, contain the following, at page 379: " (3) That the construction be made upon the entire deed rather than upon disjointed parts of it * * *."
Even a proviso limiting the effect of the entire contract may be valid if it is not wholly repugnant to the general purpose of the instrument. This is illustrated by Williams v. Hathaway, 1877, L.R. 6 Ch.Div. 544, in the words of Jessell M.R.:
Although Williams v. Hathaway is not a recent decision, the rule stated was adopted almost verbatim in Chitty on Contracts, 19th Edition, 1937, Chapter V, p. 108.
Various American Encyclopedias and text books refer to the rule of priority of clauses although they agree that it is to be employed only as a last resort. Peculiarly noticeable is the circumstance that the authorities cited in these works, to a considerable extent, do not support the text. Many of the cited cases, particularly the more recent, merely mention the rule and do not adopt it, while others turn upon the rule of a provision repugnant to the general purpose of the contract. This may be demonstrated by examining a few of the cases most frequently cited as supporting the rule of priority of clauses.
Vickers v. Electrozone Commercial Co., 1902, 67 N.J.L. 665, 52 A. 467, probably is not based upon this rule, but rather upon the rule against the destruction of the general purpose of the contract by a proviso.
Straus v. Wanamaker, 1896, 175 Pa. 213, 34 A. 648, is in part based on the rule of priority of clauses, although the decision does give other reasons for arriving at " the true meaning" . However, this same court, in 1915, passed upon a set of facts in an action at law very similar to the case at bar, Miller v. Reading Hotel Co., 248 Pa. 541, 94 A. 225.This was a suit upon a contract which provided:
The opinion cited the Straus case and held that the rule or priority of clauses, as therein enunciated, had no application to the facts in the Miller case, and that there was no ambiguity or repugnancy. Plaintiff was non-suited because there was no proof that the hotel had been constructed.
Green Bay, etc., Co. v. Hewitt, 1882, 55 Wis. 96, 12 N.W. 382, 42 Am.Rep. 701.By a subsequent clause in a deed it was sought to diminish the interest and title conveyed, as expressed in the granting clause. The court held the subsequent clause ineffective under the rule of priority of clauses and the rule of construction against the grantor. Although this case has been widely cited, it appears to have escaped the attention of commentators and courts that the decision was subsequently vacated, a new trial granted and the case decided the other way. Green Bay, etc., Co. v. Hewitt, 62 Wis. 316, 21 N.W. 216, 22 N.W. 588.True, in the second trial, an equitable counterclaim was set up, but the fact remains that the suit was retried, reappealed and an opposite conclusion reached.
Contrary to the original Hewitt decision is Witt v. St. Paul & N P. Ry. Co., 38 Minn. 122, 35 N.W. 862, 865.In an able opinion, on substantially the same state of facts, the Minnesota court, in a damage suit and apparently without resort to equity, held that the deed should be construed as a whole and said: ...
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