Southern Parkway Corp. v. Lakewood Park Corp.

• Decision Date: 23 June 1960
• Docket Number: No. 15542.,15542.
• Citation: 281 F.2d 610
• Parties: SOUTHERN PARKWAY CORPORATION and Theodore N. Lerner, Appellants, v. LAKEWOOD PARK CORPORATION, Appellee.
• Court: U.S. Court of Appeals — District of Columbia Circuit

281 F.2d 610 (1960)

SOUTHERN PARKWAY CORPORATION and Theodore N. Lerner, Appellants, v. LAKEWOOD PARK CORPORATION, Appellee.

No. 15542.

United States Court of Appeals District of Columbia Circuit.

Argued April 8, 1960.

Decided June 23, 1960.

Petition for Rehearing Denied July 19, 1960.

Mr. James E. Hogan, Washington, D. C., for appellants. Messrs. Arthur J. Hilland and Stanley Klavan, Washington, D. C., were on the brief for appellants.

Messrs. David G. Bress and Leonard Braman, Washington, D. C., for appellees.

Before PRETTYMAN, Chief Judge, and EDGERTON and WILBUR K. MILLER, Circuit Judges.

WILBUR K. MILLER, Circuit Judge.

For the purpose of forming a subdivision near Fort Pierce, Florida, Lakewood Park Corporation divided certain acreage into thirteen units, divided each unit into blocks, and divided each block into lots. There were 3,900 lots in all. When only about 500 of the lots had been sold, Lakewood entered into a written contract with Southern Parkway Corporation dated October 22, 1956, by the terms of which Lakewood, as the seller, employed Southern as its exclusive agent — called broker — to sell in Maryland, Virginia and the District of Columbia. The following provisions appear in the contract:

"Whereas, the Broker is a duly licensed real estate broker, maintains an office in the District of Columbia, and is otherwise engaged in the sale of real estate in the States of Maryland, Virginia and the District of Columbia, and elsewhere; and

"Whereas, the Seller is the owner of tracts of land, and residences in various stages of construction, located in and known as Lakewood Park, a real estate subdivision of Ft. Pierce, Florida, said tracts of land to be subdivided into and sold as lots, or to be sold as lots with improvements thereon, in varying stages of construction, completed or to be completed; and

"Whereas, the Broker desires to sell the aforesaid land with improvements existing or to be built thereon and the Seller is desirous of engaging the services of said Broker for such purposes upon the terms and conditions hereinafter set forth,

"Now, Therefore, in consideration of the premises and of the mutual covenants, conditions and agreements herein contained and to be performed by the parties hereto, the said parties do hereby agree as follows:

"1. (a) The Seller does hereby irrevocably grant to the Broker the sole and exclusive right to sell the real estate described in unit and block numbers as from time to time to be furnished by Seller (a minimum, in any event, however, of 700 lots), all in said Lakewood Park Subdivision, Ft. Pierce, Florida. This exclusive agency does not apply to Seller in connection with sales made by Seller in Florida.

"This said exclusive right of sale shall begin upon the execution hereof and shall terminate upon the sale of the last of said lots and/or improvements, or on April 30, 1958, whichever date shall first occur.

"(b) In the event the properties aforesaid are not sold prior to the expiration of the term aforesaid, then and in such event the Broker shall be deemed to have a general listing for the sale of said properties and this listing shall be subject to prior sale and increase in price."

The parties seem to agree that the season for selling such real estate in the Washington area begins with January and extends through March and perhaps into April. In January, 1957, Southern began selling under the contract. On June 12, 1957, when Lakewood had "furnished" 1,750 lots and at least 900¹ of them had been sold by Southern, Lakewood wrote a letter² notifying Southern it was electing to terminate the latter's exclusive agency as of June 15, 1957. Thus it appears that, at the date of attempted termination, there were still listed with Southern from 650 to 850 of the 1,750 lots which had been furnished to it by Lakewood.

Lakewood claimed the right to terminate under its theory that, by the terms of the contract, the exclusive agency endured only until the minimum of 700 lots³ had been sold by Southern, even though more than the minimum had been furnished for sale. Southern, on the other hand, contended the contract should be construed as meaning its exclusive agency lasted until April 30, 1958, unless before that date it had sold all lots which had been furnished for exclusive sale — not only the minimum of 700 lots, but also the lots which had been furnished in excess of that number.

In October, 1957, Lakewood filed a complaint against Southern, which was amended June 24, 1958, in which it sought a declaratory judgment affirming its right to terminate the contract, not only because it claimed the contract gave it that right after 700 lots had been sold by Southern, but also because it claimed Southern had not performed its obligations thereunder.

Without receiving evidence on or even reaching the contention that Southern's conduct had justified termination, the District Court held the contract gave Lakewood the right to terminate the exclusive agency at any time after Southern had sold 700 lots, and so gave Lakewood summary judgment. Southern appeals. So, we have before us only a question of law: by the terms of the contract, when did the exclusive agency terminate?

It should be noted that the contract does not expressly give to either party the right to terminate the exclusive agency by giving notice of its intention to do so. The contract fixes the date of termination: it provides the exclusive agency "shall terminate upon the sale of the last of said lots and/or improvements, or on April 30, 1958, whichever date shall first occur." Obviously if "the last of said lots and/or improvements" were sold before April 30, 1958, the exclusive agency would end. Difficulty has arisen because the parties disagree as to the meaning of the contractual words, "said lots and/or improvements."

Lakewood contends that the words, "said lots and/or improvements," in the second paragraph of Section 1(a) of the contract, refer to the parenthesized words of the first paragraph of Section 1(a): "(a minimum, in any event, however, of 700 lots)."⁴ Lakewood is therefore arguing that the second paragraph of Section 1(a) should be construed as though it read:

"This said exclusive right of sale shall begin upon the execution hereof and shall terminate upon the sale of the last of 700 lots, or on April 30, 1958, whichever date shall first occur."

Construing the termination clause in that fashion, Lakewood argues that the exclusive agency terminated when Southern had been furnished, and had sold, 700 lots; more than that number having been furnished to and sold by Southern prior to June 12, 1957, Lakewood says it had the contract right to give notice — as it did that day — of termination on June 15, 1957.

We do not agree that the parenthesized words, "(a minimum, in any event, however, of 700 lots)," in the first paragraph of Section 1(a), constitute the antecedent of the words, "said lots and/or improvements," in the second paragraph of the section.

We think the language we initially quoted from the contract shows that the phrase, "the real estate described in units and block numbers as from time to time to be furnished by Seller," in the first paragraph of Section 1(a), is the antecedent of the words, "said lots and/or improvements," in the second paragraph of the section. This construes the second paragraph of Section 1(a) as though it read:

"This said exclusive right of sale shall begin upon the execution hereof and shall terminate upon the sale of the last of the lots furnished by Seller (a minimum of 700 lots must be furnished), or on April 30, 1958, whichever date shall first occur."

The only function of the parenthetical expression, "(a minimum, in any event, however, of 700 lots)," was, we think, to require that at least 700 lots be furnished...