Oliver v. Nugen

• Decision Date: 09 March 1957
• Docket Number: No. 40435,40435
• Citation: 308 P.2d 132,180 Kan. 823
• Parties: Virgil C. OLIVER and Ruth Marie Oliver, Appellees, v. Charles H. NUGEN and Betty Jo Nugen, Appellants.
• Court: Kansas Supreme Court

Page 132

308 P.2d 132

180 Kan. 823

Virgil C. OLIVER and Ruth Marie Oliver, Appellees, v. Charles H. NUGEN and Betty Jo Nugen, Appellants.

No. 40435.

Supreme Court of Kansas.

March 9, 1957.

Syllabus by the Court

1. Where an action upon a written contract is tried in the lower court upon the theory that the contract is ambiguous by both parties, held: That the appellants cannot change their theory on appeal and proceed on the premise that the written contract is free from ambiguity and thereby preclude the admission of oral testimony to determine its meaning.

2. Rule followed that questions of fact determined by a trial court on conflicting oral evidence are conclusive in the supreme court.

Lewis E. Nugen, Wellington, W. H. Schwinn, Wellington, on the brief, for appellants.

Earle N. Wright, Arkansas City, George Templar and Ted M. Templar, Arkansas City, on the brief, for appellees.

SCHROEDER, Justice.

This is an action for a declaratory judgment to construe the terms of an installment contract for the sale of real estate. The defendants appeal from a judgment in favor of the plaintiffs and from all other adverse rulings.

Throughout this opinion the appellants will be referred to as defendants and the appellees will be referred to as plaintiffs.

Material to the disposition of this appeal is a brief summary of the proceedings in the lower court. The record before this court discloses a petition, an answer and a trial to the court on the issues presented. During the trial, and at the close of the plaintiff's case, the defendants demurred to the evidence which the trial court promptly overruled. After the close of the defendants' case judgment was entered favorable to the plaintiffs on all issues. In due course, the defendants' motion for a new trial was overruled and the defendants appealed to this court from the judgment and all adverse rulings and so specified.

The plaintiffs' petition alleges that they were the owners of a certain tract of improved real estate described in the petition and that they entered into an installment real estate sale contract. They then specifically allege as follows:

'That at said time, plaintiff's had an F.H.A. loan and mortgage on said premises with the Albright Title & Trust Company of Newkirk, Oklahoma, which was payable in installments of $44.60 per month, said payments including payment on principal, interest, taxes and insurance. That on or about the * * * day of September, 1953, the plaintiffs agreed to sell said premises to the defendants, and the defendants agreed to buy said premises from the plaintiffs for the sum of $9,000.00 and the parties then and there entered into a written agreement, * * *'

The pertinent portions of the agreement incorporated in the plaintiffs' petition read as follows:

'The parties of the second part agrees to pay to the parties of the first part the full sum of $9,000.00, with interest from date hereof at the rate of 6 per cent per annum, purchase money and interest payable at the office of the Home National Bank of Arkansas City, Arkansas City, Kansas, in the following manner, to-wit:

'$2,000.00 cash, the receipt whereof is hereby acknowledged and the balance of $7,000.00 is to be paid at the rate of $65.00 per month, payable on the 1st day of each month hereafter commencing October 1, 1953, and continuing until the full amount of principal and interest are paid. It is understood that $4,978.23 F.H.A. loan is first lien on the premises, payable in installments of $44.60 per month which first parties agree to pay until they have received $2,021.77 with interest 6% on the deferred balance from date. When first parties have received $2,021.77 plus interest as aforesaid they agree to assign the balance of said loan to second parties and to deliver deed for their equity.

* * *

* * *

'The parties of the first part agrees to pay all taxes, assessments and impositions which may be levied, assessed or imposed upon said land and premises, and to pay the premiums on insurance policies to the amount of $7,500.00 Fire and $7,500.00 Tornado, to be renewed from time to time covering the life of this agreement, in some responsible insurance company doing business in the state of Kansas.

'It is further agreed that the parties of the second part has the privilege of paying $10.00 or any multiple thereof on the principal at any interest payment time thereby reducing the interest.'

The petition then further alleges that in April, 1954, the holder of the F.H.A. mortgage notified the plaintiffs that the F.H.A. payments were increased as of April, 1954, to the sum of $45.98 per month by reason of increase of cost of insurance on the improvements on the property covered by the loan, and further alleged that on or about the 22nd day of November, 1954, the holder of the F.H.A. loan notified the plaintiffs that said payments were increased to the sum of $48.10 per month by reason of the increase in real estate taxes against the property covered by said loan.

The plaintiffs then alleged in their petition that the increase in taxes and insurance was not contemplated by the parties when they executed their original contract and that the same should be paid by the purchasers of said property. They further allege that the defendants claim that all of said increases in said F.H.A. payments and all increases in taxes nd insurance on said premises should be absorbed by the plaintiffs out of the principal and interest which is due them under said contract.

The plaintiffs further allege that in the year 1954 they paid out the sum of $79.93 to cover the increased costs of taxes and insurance against said premises for the year 1954 over and above the money available in the F.H.A. insurance and tax account with the Albright Title and Trust Company.

The answer then admits, among other things, the quoted portion of the petition and agreement above, and further admits the increase in F.H.A. payments for taxes and insurance as alleged in the petition. Beyond this the answer alleges that the plaintiffs in their petition are seeking reformation of a written contract duly executed and entered into by both the plaintiffs and the defendants, 'the terms of which are clear and plain, and that the plaintiffs are not entitled to a declaratory judgment to vary the express terms of that contract.'

Consistent with the foregoing theory expressed in the defendant's answer are allegations concerning the written agreement set out in plaintiffs' petition.

The defendants then proceed to allege 'that the word 'second' was stricken from the contract where reference is made to taxes and insurance and after due contemplation, consideration and thought on the part of all parties concerned the word 'first' was substituted therefor in accordance with the agreement of the parties prior to the execution of the contract.' (Emphasis added.)

The defendants then deny the allegations in the plaintiffs' petition, concerning the existence of a controversy, that is whether or not it was within the contemplation of the parties when they executed the original contract which of the parties should be liable for the increase in taxes and insurance, 'and they specifically allege that the plaintiffs agreed to accept the liability of any increases that might come about in the future.' (Emphasis added.)

The evidence was conflicting. Considered in its most favorable aspects, and with all inferences applicable, the plaintiffs' evidence disclosed that the increase in taxes and insurance was not within the contemplation of the parties. The evidence of the defendants, considered under the same rules, disclosed that the increase in taxes and insurance was within the contemplation of the parties.

Upon all the evidence the trial court made the following findings as set forth in its Journal Entry of Judgment:

'1. That a real controversy exists between the parties and that the court has jurisdiction of the subject matter of this action and of the parties hereto.

'2. The court further finds all of the issues herein generally in favor of the plaintiffs and against the defendants.

'3. The court further finds that the defendants, Charles H. Nugen and Betty Jo Nugen, should not be required to increase their payments beyond the sum of $65.00 per month as provided in the contract of the parties.

'4. The court further finds that out of the proceeds of the payments made by the defendants, that the plaintiffs should pay all payments of principal, interest, taxes and the insurance on the F.H.A. loan in compliance with the terms of said loan and in compliance with F.H.A. Laws and Regulations relating thereto. That after the payment of such items, the balance of each monthly payment should be applied to the principal and interest owing to the plaintiffs for their equity in the premises.

'5. The court further finds that the sum of $79.93, paid by the plaintiffs on increased taxes and insurance prior to January 1, 1955, should be added to the balance due the plaintiffs on the installment contract of purchase, as of January 1, 1955.

'6. The court further finds that all payments on said real estate contract following January 1, 1955, should be credited on the basis of the F.H.A. payment required in the amount of $48.10 and that the Home National Bank of Arkansas City, Kansas, escrow agent, is authorized and hereby directed to credit all payments by first deducting the amount of the F.H.A. required payment for principal, interest, insurance and taxes, and by applying the balance to the principal and interest due on the equity of the plaintiffs.

'7. The court further finds that the costs in the amount of $14.50 should be assessed, one-half to the plaintiffs and one-half to the defendants.'

The decree entered by the court upon the foregoing findings was consistent with the findings.

Defendants present their case to this court on the theory that this is a written contract and cannot be altered by parol evidence. In the case...