Morgan v. Wheeler

• Decision Date: 10 November 1939
• Docket Number: 34427.
• Citation: 95 P.2d 320,150 Kan. 667
• Parties: MORGAN v. WHEELER et al.
• Court: Kansas Supreme Court

95 P.2d 320

150 Kan. 667

MORGAN v. WHEELER et al.

No. 34427.

Supreme Court of Kansas

November 10, 1939

Rehearing Denied Dec. 16, 1939.

Syllabus by the Court.

Where written contract between owner of property and broker provided that liability of property owner for stipulated commission was contingent on the actual consummation execution, and delivery of "the lease now in negotiation," broker was not entitled to recover the stipulated commission for services alleged to have been rendered in negotiating an entirely different lease for the property owner about a year later.

The interpretation of a written contract, free from ambiguity, is a judicial function.

"Ambiguity" in a written instrument does not appear until application of pertinent rules of interpretation to the face of the instrument leaves it genuinely uncertain which one of two or more meanings is the proper meaning.

Where a written contract is free from ambiguity, no oral testimony relative to what the parties understood the contract provided or meant is necessary or proper.

All that is required of the plaintiff in an action on an express and unambiguous contract is the establishment of the contract and actual performance of the contractual conditions on which liability is expressly made contingent.

Where no authorities from the jurisdiction were cited by the appellee which were inconsistent with the Supreme Court's conclusion that the appellee was not entitled to recover under unambiguous contract, and it would serve no useful purpose to remand the action for retrial, the Supreme Court would order final judgment on reversal in favor of the appellants.

1. The interpretation of a written contract, free from ambiguity, is a judicial function and does not require oral testimony to determine its meaning. Ambiguity in a written instrument does not appear until application of pertinent rules of interpretation to the face of the instrument leaves it genuinely uncertain which one of two or more meanings is the proper meaning.

2. Where a broker declares upon an express contract for the recovery of a specified commission for negotiating a lease between the owner of property and a third party, and the written contract specifically provides that liability for the stipulated commission is contingent upon the actual consummation, execution and delivery of "the lease now in negotiation," the broker is not entitled to recover the stipulated commission for services claimed to have been rendered in negotiating an entirely different lease for the property between the owner and the third party about a year later.

3. An action for recovery of a broker's commission, examined and held: (1) The trial court erred in its interpretation of the commission contract; (2) the overruling of appropriate motions of the defendant in the course of trial touching the interpretation of the contract, including motions for requested findings of fact and conclusions of law, a motion for judgment and the overruling of defendants' demurrer to plaintiff's evidence, constituted reversible error.

Appeal from District Court, Sedgwick County, Division No. 1; Ross McCormick, Judge.

Actions by Harry T. Morgan against H. V. Wheeler and the Midland Building Company for commission for allegedly negotiating a lease. From a judgment in favor of the plaintiff, the defendants appeal.

Judgment reversed, with directions to enter judgment for the defendants.

Robert C. Foulston, George Siefkin, Sidney L. Foulston, Lester L Morris, George B. Powers, Carl T. Smith, C. H. Morris, and John F. Eberhardt, all of Wichita, for appellants.

A. V Roberts, Paul W. Schmidt, and Verne Roberts, all of Wichita for appellee.

WEDELL Justice.

This action was instituted by a broker to recover a fixed commission alleged to be due and owing to him under the express terms of a written agreement, for having negotiated a lease for the defendants with Sears-Roebuck & Company. Judgment went for plaintiff and defendants appeal.

Separate actions were filed against the defendants, H. V. Wheeler and The Midland Building Company, a corporation. The commission contract was made with Wheeler. Later Wheeler transferred the property for which a lease was obtained to the defendant, The Midland Building Company. The latter company executed a lease to Sears-Roebuck & Company. It was stipulated below to waive trial by jury and to try the two actions together on the same evidence and that no distinction should be made between the liability of Wheeler and The Midland Building Company.

The commission claimed by appellee in this action was $2,500, that being the first installment of a total commission claimed in the exact sum of $10,000. It is conceded, appellee is either entitled to recover $2,500, in the present action, or nothing. His claim to $2,500 in the present action, and to an ultimate commission in the sum of $10,000, is predicated upon a written contract. The contract was pleaded and attached to his petition as the basis of his cause of action. The principal question with which we are concerned, at the outset and at the end of this litigation, is the interpretation of the contract relied upon by the plaintiff. All other specifications of error are incidental. We shall, therefore, turn immediately to the provisions of the commission contract. It reads:

"This agreement entered into on this the 30th day of July, 1937 by and between:

"H. V. Wheeler, as party of the first part, sometimes herein called the 'Owner' and Harry T. Morgan, of Wichita, Kansas, as the party of the second part, sometimes herein called the 'Broker'

"Witnesseth:

(1) "That it is agreed between the parties hereto that the 'Owner' shall, upon the conditions herein stated and not otherwise, be liable to and shall pay the 'Broker' the sum of Ten Thousand ($10,000.00) Dollars in full payment and consideration for his services as a broker in negotiating a lease between the undersigned owner and the Sears-Roebuck & Company, a corporation.

"The services of the 'Broker' herein referred to relate to the following property located in Wichita, Sedgwick County, Kansas, to-wit:

"All of Lots 'G', 'H' and 'I', and the South 1494 feet of Lot 'J', on Market Street, in Replat of Reserve in Greiffenstein's Addition to the City of Wichita, Kansas.

(2) "The liability of the 'Owner' to the 'Broker' is contingent upon the following conditions:

"That the lease now in negotiation shall actually be consummated, signed, executed and delivered by the parties, and if said lease is not so executed, whether it be the fault of either the lessor or the lessee, no commission or liability for commission shall exist on the part of said 'Owner'.

(3) "In event said lease is signed, executed and delivered, then the said sum of Ten Thousand ($10,000.00) Dollars shall be paid and payable as follows, without interest:

"(a) Two Thousand Five Hundred ($2,500.00) Dollars at the time when said lease is actually executed and delivered;

"(b) Two Thousand Five Hundred ($2,500.00) Dollars at the time when said building is half completed;

"(c) Five Thousand ($5,000.00) Dollars when the building is actually completed, and accepted as completed and ready for occupancy by the Sears-Roebuck & Company.

"In the event said building is completed and not actually accepted for occupancy, then there shall be no liability for the said Five Thousand ($5,000.00) Dollars.

4. "The 'Broker' accepts the conditions of this agreement in lieu of and in full compensation for his services in connection with said lease, and the 'Owner' agrees to pay said sum at the times and upon the conditions and contingencies herein stated.

5. "This contract shall extend to and be binding upon the heirs, executors, administrators, successors, trustees and assigns of the parties hereto.

"In witness whereof, the parties hereto have caused this agreement to be executed and delivered on this the day and year first herein written.

"(Signed) H. V. Wheeler,

"First Party and 'Owner',

"(Signed) Harry T. Morgan,

"Second Party and 'Broker'."

(Italics inserted.)

(The paragraphs of the contract were not originally numbered, and have been numbered for our convenience.)

Appellant contends the contract, when read in its entirety and especially the italicized portions thereof, clearly indicates this was a contingency contract and that the conditions upon which a commission in the sum of $10,000 would become due and owing, are clearly specified in the contract. It is his position that since this action is predicated upon an express and not upon an implied contract, liability attached only upon the happening or fulfillment of the conditions specified and not otherwise. He contends the clearly stated and plain condition of liability was that expressed in paragraph two, namely, that "the lease now in negotiation shall actually be consummated, signed, executed and delivered by the parties", and that the contract was obviously not intended to make him liable in the sum of $10,000, for the consummation of an entirely different kind of lease than that which was in process of negotiation at the time the commission contract was signed.

Appellee just as strenuously, urges the contract simply required him to negotiate "a" lease with a definite lessee, namely, Sears-Roebuck & Company, and on the premises described; that the words in paragraph two, to-wit: "the lease now in negotiation", simply meant "a" lease between the parties designated, which was then in negotiation. The trial court adopted appellee's interpretation. That interpretation is disclosed by the court's finding number 13, which reads: "The court finds the phrase in the contract 'the lease now in negotiation' did not refer to any definite or...