Weiss v. Anderson, 10438

• Decision Date: 23 November 1983
• Docket Number: No. 10438,10438
• Citation: 341 N.W.2d 367
• Parties: Bill WEISS, d/b/a Century Commercial Park, Plaintiff and Appellee, v. Clifford D. ANDERSON a/k/a C.D. Anderson, d/b/a Import Repair, Defendant and Appellant. Civ.
• Court: North Dakota Supreme Court

Page 367

341 N.W.2d 367

Bill WEISS, d/b/a Century Commercial Park, Plaintiff and Appellee, v. Clifford D. ANDERSON a/k/a C.D. Anderson, d/b/a Import Repair, Defendant and Appellant.

Civ. No. 10438.

Supreme Court of North Dakota.

Nov. 23, 1983.

Wheeler, Wolf, Peterson, Schmitz, McDonald & Johnson, Bismarck, for plaintiff and appellee; argued by Steven Latham, Bismarck.

E.J. Rose, Bismarck, for defendant and appellant; argued by E.J. Rose, Bismarck.

ERICKSTAD, Chief Justice.

Clifford D. Anderson appeals from a judgment entered by the District Court of Burleigh County, dated February 1, 1983, entitling Bill Weiss, doing business as Century Commercial Park, to recover from Anderson rents due under the terms of an oral lease in the amount of $10,386.55 plus costs and disbursements. We affirm.

On or about September 1, 1979, Anderson, in need of a building within which to operate his automobile repair business, contacted Nola Weiss, a licensed real estate broker, and to her indicated his interest in certain real property advertised for rent and owned by Nola's father, Bill Weiss. Both Nola and Bill were involved in negotiations with Anderson concerning the terms of a lease to the property, which consisted of a lot and building located in Bismarck, North Dakota. The parties agreed, shortly thereafter, that in exchange for monthly rental payments, Bill Weiss would give Anderson temporary possession of the property. The specific terms of the oral lease are now in dispute.

From September, 1979, to October, 1981, Anderson issued numerous checks, made payable to and accepted by Bill Weiss, which represent rental payments made by Anderson while in possession of the property. Anderson's initial payment in September, 1979, consisted of a check drawn on an account entitled "Capital Rentals & Import Repair," in the amount of $1,800. From October, 1979, through April, 1980, Anderson issued seven checks, each in the amount of $1,850, one drawn on the account mentioned above and six drawn on an account entitled "Import Repair Self Service, Inc." Anderson's automobile repair business, known at the time of trial by the name of Import Repair & Body Shop, Inc., a North Dakota corporation, was not incorporated in this state, however, until February 27, 1980.

From May, 1980, through October, 1981, Anderson's monthly rental payments to Bill Weiss varied in amount from $1,000 to $1,500, with the exception of a payment made by check on December 6, 1980, in the amount of $2,000 which Anderson contends was issued by an individual not authorized to do so. Nola Weiss sent Anderson several statements alleging he owed additional money for rent due under the terms of the oral lease. These statements indicated that Anderson's monthly rent obligation under the lease was $1,850.

Bill Weiss initiated this action on June 8, 1981, by service of summons and complaint, which complaint alleged that he leased, from month-to-month, the premises to Anderson at a monthly rental of $1,850, and that he had made demands upon Anderson for payment of rent due under the lease which Anderson refused to pay. On September 17, 1981, Anderson was served with notice to vacate the leased premises. He did so on October 15, 1981.

The case was tried to the trial court on January 28, 1983, after which the court issued its findings of fact, conclusions of law, and order for judgment. The pertinent findings of the trial court read as follows:

"I.

"That the plaintiff Bill Weiss, and the defendant Clifford D. Anderson entered into an oral lease agreement on or about September 1, 1979, with rental payments to be made by the defendant in the amount of $1,850.00 per month.

"II.

"That at the time of the entry into the oral lease agreement between the parties, there was no corporation of the defendants in existence and the plaintiff had no knowledge that the defendant was acting in any other than a personal capacity.

"III.

"That the defendant incorporated the business being conducted in the premises leased from the plaintiff on February 27, 1980, but there was no renegotiation of the lease agreement or substitution of parties.

"IV.

"There was never any agreement between the parties to reduce the monthly rental rate from $1,850.00."

Based upon its findings, the trial court made the following conclusions of law:

"I.

"As there was no disclosure made by the defendant, C.D. Anderson as to the existence of any corporation that would be a party to the lease agreement, the defendant is personally liable for the rental payments.

"II.

"The subsequent incorporation of the business located in the building leased by the defendant did not change the landlord/tenant relationship of the parties.

"III.

"Payment by the defendant of monthly rental payments less than $1,850.00 did not alter the oral lease agreement between the plaintiff and the defendant."

Following the issuance of the trial court's findings of fact, conclusions of law, and order for judgment, a judgment in favor of Bill Weiss and against Anderson for unpaid rent in the amount of $10,386.55 plus costs and disbursements was entered. Anderson appeals from that judgment and contends that the trial court erred in its determination that he entered into the lease as an individual and not as a corporation and that the rental rate under the lease was $1,850 per month.

We consider first Anderson's contention the trial court erred in finding the parties agreed to a rental rate of $1,850 per month. Rules of construction relating to contracts generally apply in the construction of a lease. Hager v. Devils Lake Public School District, 301 N.W.2d 630, 633 (N.D.1981); Anderson v. Blixt, 72 N.W.2d 799, 804 (N.D.1955). The trial court's construction of the terms of the oral lease, that Anderson was to make rental payments in the amount of $1,850 per month, is a finding of fact governed by Rule 52(a) of the North Dakota Rules of Civil Procedure. See North Central Jobbers v. Snortland, 329 N.W.2d 614, 616 (N.D.1983); Tallackson Potato Co., Inc. v. MTK Potato Co., 278 N.W.2d 417, 422 (N.D.1979). We have often stated that a finding of fact is clearly erroneous only when, although there is some evidence to support it, the reviewing court on the entire evidence is left with a definite and firm conviction that a mistake has been made. See, e.g., Ned Nastrom Motors, Inc. v. Nastrom-Peterson-Neubauer Company; N.P.N., Inc., 338 N.W.2d 64, 67 (N.D.1983); In re Estate of Elmer, 210 N.W.2d 815, 820 (N.D.1973).

Upon review of the record in this case, we conclude that the trial court's finding that Anderson was to make monthly rental payments in the amount of $1,850 under the terms of the lease is not clearly erroneous. Both Bill and Nola Weiss testified that the parties agreed to the $1,850 figure and that it was not agreed that Anderson's rental payments would fluctuate. Nola Weiss testified that Anderson agreed to pay $1,850 per month and "at times when it got tough" he would pay what he could but would make up any balance due when he could. Anderson testified that he entered into the lease at $1,850 per month on a six-month "trial basis" and that thereafter the monthly rent was to be adjusted according to his ability to pay.

Anderson now asserts the acceptance by Bill Weiss of monthly rentals for less than $1,850, even after the commencement of this action, indicates the trial court was mistaken in finding the parties agreed to a rental rate of $1,850 per month. In Hoge v. Burleigh County Water Management District, 311 N.W.2d 23, 28 (N.D.1981), we said:

"The trial court's findings are to be given the same weight as a jury verdict and, in reviewing those findings, the evidence must be viewed in a light most favorable to the findings. On appeal it is not the function of this court to substitute its judgment for that of the trial court. We must give due regard to the opportunity of the trial court to judge the credibility of witnesses, and, unless clearly erroneous, the findings of fact of the trial court, sitting without a jury, are binding upon appeal. Questions of fact decided by the trial court upon conflicting evidence are not subject to reexamination by this court. The mere fact that we might have viewed the facts differently if we had been the initial trier of the case does not entitle us to reverse the lower court." [Citations omitted.]

It is evident the trial court was presented with substantial evidence upon which its decision might have gone either way. A choice between two permissible views of the weight of evidence cannot be clearly erroneous. In Re Estate of Elmer, supra. Accordingly, we do not disturb the district court's finding that Anderson, under the terms of the oral lease, was to make monthly rental payments in the amount of $1,850.

Anderson also contends the trial court erred in concluding that he is personally liable for rent due under the terms of the oral lease rather than Import Repair Self Service, Inc. He proposes, relying upon Gray v. Elder, 61 N.D. 672, 240 N.W. 477 (1932), that the resolution of this issue is "simply a question as to whether or not Bill and Nola Weiss knew they were dealing with a corporation." In Gray, supra, the following principle, as summarized in the court's syllabus, was set forth:

"The managing officer of a corporation is liable as principal, even though acting for the corporation, when he deals with one ignorant of the existence of the corporation and of the relation between the officer and the corporation, and when such officer fails to inform the other party to the contract that he is acting for and on behalf of the corporation.

In Gray, supra, the parties entered into a contract at which time there existed a corporation known as the Elder Horse Sales Company for which Elder was the manager and agent. The action from which the case arose was brought by Gray against Elder as an individual, whereupon Elder contended the contract had been made with the corporation. The court, in ...