E.S. Preston Associates, Inc. v. Preston

• Decision Date: 14 May 1986
• Docket Number: No. 85-1354,85-1354
• Citation: 24 Ohio St.3d 7,492 N.E.2d 441,24 OBR 5
• Parties: , 24 O.B.R. 5 E.S. PRESTON ASSOCIATES, INC., d.b.a. ESPA, Appellee, v. PRESTON, Appellant.
• Court: Ohio Supreme Court

Page 7

24 Ohio St.3d 7

492 N.E.2d 441, 24 O.B.R. 5

E.S. PRESTON ASSOCIATES, INC., d.b.a. ESPA, Appellee, v. PRESTON, Appellant.

No. 85-1354.

Supreme Court of Ohio.

May 14, 1986.

Metz, Bailey & Spicer and Kenneth J. Spicer, for appellee.

Rankin M. Gibson Co., L.P.A., Lucas, Prendergast, Albright, Gibson & Newman and Rankin M. Gibson, for appellant.

PER CURIAM.

This court is now asked to review the construction by the lower courts of the various contracts executed by appellant and appellee. It is well-settled that contracts must be given a just and reasonable construction in order to carry out the presumed intent of the parties. Germania Fire Ins. Co. v. Schild (1903), 69 Ohio St. 136, 139-140, 68 N.E. 706; First Natl. Bank of Van Wert v. Houtzer (1917), 96 Ohio St. 404, 178 N.E. 383.

The first issue for our consideration involves appellant's liability on the promissory note in which he promised to pay, on demand, the cash value of the insurance policies plus any amounts advanced by appellee for payment of the insurance premiums. Appellant argues that the payment on demand language in the note conflicts with the permissive language in the contemporaneous insurance agreement of January 31, 1978 which states that appellant "may, at his option any time before his death pay to the Company the sum of the cash values of the policies * * *." It is important to note, however, that Preston admitted at trial that he owed appellee the cash value of the policies as of the date of transfer of ownership, January 31, 1978. As such, a just and reasonable construction of the note and agreement is that in signing the demand note, appellant exercised his option to pay the cash value before his death.

Appellant also contends that he is not liable to reimburse appellee for the premium payments it made on the "key man" insurance policies. Appellant argues that appellee was aware that the beneficiary of these policies was not changed after ownership was transferred and that appellee voluntarily made the premium payments in consideration for retaining its status as beneficiary. The referee, however, specifically found that appellee was unaware that it remained as beneficiary on the policies. Further, the insurance agreement of January 31, 1978 states that if the company makes any premium payments it "will be reimbursed therefor" by appellant. (Emphasis added.) The agreement recites appellant's "intention to maintain the policies by paying the premiums when they are due or by reimbursing the Company for any premiums paid by it." There is thus no ambiguity in the agreement regarding appellant's liability for the premiums. Where the terms of a contract are clear and unambiguous, this court cannot find a different intent from that expressed in the contract. Alexander v. Buckeye Pipe Line Co. (1978), 53 Ohio St.2d 241, 246, 374 N.E.2d 146 . The determination of the lower courts that appellant is liable on the note for the cash value of the policies and for the premiums paid by appellee is supported by competent and credible evidence and will not be reversed by this court. C.E. Morris Co. v. Foley Construction Co. (1978), 54 Ohio St.2d 279, 376 N.E.2d 578 , syllabus. We therefore affirm the court of appeals' judgment that appellant is liable on the note for the full amount demanded by appellee.

The next issue for our consideration concerns appellant's counterclaim seeking to halt appellee's further use of his name. Appellant contends that the employment agreement as amended January 10, 1978 is severable in that the $120,000 deferred compensation was consideration for his past services to appellee, while the five hundred dollar a month payment was to be for his future services and for appellee's right to continue using his name.

We cannot agree that this is a just and reasonable construction of the employment agreement. The agreement provides that "[t]he Company, at its option and for as long as the Company desires, may continue the use of Preston's name." It further states that "[a]s consideration for the agreement herein contained and for services previously rendered, Preston shall receive deferred compensation from the Company in the amount of $120,000 * * *." The agreement reflects that the deferred compensation was paid in consideration for, inter alia, the right to continue using appellant's name. That compensation has been paid in full. There is no mention in the agreement of payment to appellant of five hundred dollars a month for...