Morris v. Jordan Financial Corp.

• Decision Date: 23 March 1978
• Docket Number: No. 1107,1107
• Parties: Robert J. MORRIS, Appellant, v. JORDAN FINANCIAL CORPORATION, Appellee.
• Court: Texas Court of Appeals

Page 180

564 S.W.2d 180

Robert J. MORRIS, Appellant, v. JORDAN FINANCIAL CORPORATION, Appellee.

No. 1107.

Court of Civil Appeals of Texas, Tyler.

March 23, 1978.

Rehearing Denied April 20, 1978.

A. Hardcastle, Jr., Geary, Stahl, Koons, Rohde & Spencer, Dallas, for appellant.

David P. Seikel, Hewett, Johnson, Swanson & Barbee, Dallas, for appellee.

MOORE, Justice.

This is a suit to recover on a promissory note executed in payment of a brokerage commission. Plaintiff, Jordan Financial Corporation, brought suit to recover on a promissory note executed by defendant, Robert Morris, in payment of a brokerage fee as provided for in a contract executed by the parties. Morris denied liability on the ground that the condition precedent to his obligation to pay on the note, as set forth in the contract and the promissory note in question, had not occurred. Morris also counterclaimed, alleging that Jordan Financial tortiously interfered with his business relations with Alex Kallay, the ultimate purchaser under the contract, and North Dallas Bank & Trust Co., the escrow agent.

Trial was had before the court without a jury. The trial court awarded judgment for plaintiff in the face amount of the promissory note and denied defendant recovery on his counterclaim. The trial judge found, inter alia, that the condition precedent to defendant's obligation to pay the brokerage commission effectively occurred, but that, if it did not literally occur, plaintiff as broker was nevertheless entitled to recover the commission due him under the contract. Defendant duly perfected this appeal.

We affirm.

The facts are not in dispute. Plaintiff, Jordan Financial, entered into a contract of purchase and sale with defendant, Robert Morris, for the purchase of 396 acres of land in Collin County, Texas, for and in consideration of $1,667,150. Jordan Financial agreed to execute a promissory note to Morris in that amount and agreed to make an interest payment on the note in the amount of $120,868.37 on December 31, 1974. The contract between the parties provided that Jordan Financial was to be paid a 6% Realtor's commission; however, the contract contained a special condition that the payment of such commission was "contingent" on Morris's receiving the interest payment due on the note on December 31, 1974. Subsequently, Jordan Financial's contract of purchase and sale was assigned to Alex Kallay, who purchased the land under the terms of the contract. Kallay executed a promissory note (the "Original Note") to Morris in the amount of $1,667,150 with interest, in accordance with the contract of purchase and sale. Under the terms of the contract and the promissory note Kallay was obligated to make an interest payment to Morris on December 31, 1974, in the amount of $120,868.37.

After Kallay purchased the land, Morris executed and delivered to Jordan Financial a promissory note (the "Commission Note") in part payment of the brokerage fee as provided for in the contract. The note, which is the basis of the present suit, is in the amount of $50,164.49 and represents one-half of the commission due Jordan Financial under the terms of the contract of purchase and sale. The note recites as follows:

"This note is payable as follows:

On or before December 31, 1974, it being understood and agreed the maker hereof shall have no liability with respect to the payment of this note unless and until said maker shall have received the installment of interest due and payable on that certain promissory note of even date herewith executed by Alex L. Kallay, Trustee, and payable to the order of Robert Morris, in the original principal sum of $1,667,150."

Before the interest payment came due under the $1,667,150 note, Kallay notified Morris that he intended to default on the note. As a result, the parties executed on December 17, 1974, a Modification Agreement whereby Morris and Kallay agreed to amend the Original Note by reducing the principal amount to $1,180,431 and altering the payment terms. Jordan Financial was not a party to, nor did it consent to, the Modification Agreement.

Pursuant to the Modification Agreement, Kallay executed and delivered to Morris a promissory note (the "Modified Note") in the principal amount of $1,180,431, with interest payable beginning December 31, 1974. The Original Note was returned by Morris to Kallay. Under the terms of the Modified Note Kallay was obligated to pay, on December 31, 1974, the sum of.$82,823 in interest and the sum of $38,045 on the principal, totaling $120,868, which amount is only 37cents less than the amount due under the terms of the Original Note. Kallay made this aggregate payment of interest and principal on the due date, and such amount was deposited in escrow to North Dallas Bank & Trust Co.

Under his points of error nos. one and two defendant, Morris, contends that there is no evidence, or insufficient evidence, to support the trial court's finding that the condition precedent contemplated by the contract and the Commission Note had occurred. He argues that the aggregate payment of interest and principal received by him under the Modified Note did not satisfy the condition precedent to his obligation to pay the brokerage fee as specified in the contract and the Commission Note. He takes the position that under the provisions of both the contract of purchase and sale and the Commission Note his obligation for payment of the brokerage fee was conditioned on his receipt of the amount of interest due under the original $1,667,150 note executed by Kallay, i. e., that the condition could only have been satisfied when payment was made exclusively under the terms of the Original Note. Hence he maintains that since the funds received by him on December 31, 1974, represented payment under the terms of the Modified Note rather than the Original Note, and that the amount so paid was an aggregate figure of interest plus principal rather than interest only, the condition precedent specified in the contract and the Commission Note was not effectively satisfied. We cannot agree with this proposition.

The language of the condition precedent as expressed in the contract of sale and the Commission Note is clear and unambiguous. Defendant was to have no liability on the Commission Note unless and until he received the first payment on the Original Note on December 31, 1974. The first payment on the Original Note executed by Kallay was measured by the amount of interest due on December 31, 1974, in the sum of $120,868.37. The agreement to pay the brokerage fee was thus conditioned on Morris's having received $120,868.37 on December 31, 1974. The fact that such payment was measured by the amount of interest due on that date was of no real significance. The significant part of the agreement insofar...