Court Opinion

ID: 9655337
Source: CourtListenerOpinion
Date Created: 2023-08-23 19:08:13.082118+00
Date Added: 2024-06-11T18:13:17.852654
License: Public Domain

Mr. Justice Calvert,
joined by Justices Smith and Walker, dissenting.
The holding of the majority that the judgment of the Court of Civil Appeals must be reversed and that of the trial court affirmed because of ambiguity in the contract between the par*413ties gives this case a most peculiar turn. It will no doubt come as a complete surprise to the parties as well as to the courts below.
The presentation of the case in this Court on this occasion is the sixth time it has been before a court, and never before has it even been suggested that the contract was ambiguous. It was first presented to the trial court on motions by both parties for summary judgment. Those motions contained no hint by either party that the contract was thought to be ambiguous. The summary judgment entered by the trial court did not suggest ambiguity in the contract. Neither party suggested it on appeal from that judgment, either in the Court of Civil Appeals or in this Court.
When, after remand, the case was tried on its merits, neither party pleaded that the contract was ambiguous. Contrary to intimations in the majority opinion, no special issues were submitted for the purpose of resolving an ambiguity or which were calculated to do so. The special issues submitted the law question of whether the contract was in fact an open or an exclusive listing, whether a fraud was practiced by the defendant on the plaintiff, whether a fraud was practiced by the plaintiff on the defendant, and whether the parties were mutually mistaken as to the meaning of the contract they signed. The only proper issue for resolving an ambiguity in the instrument, if any, was one inquiring whether the parties intended by their contract to create an exclusive agency. No such issue was submitted. If the contract was ambiguous and the plaintiff failed to discharge its burden of pleading the ambiguity and of offering evidence to resolve it, the defendant was entitled to an instructed verdict. But the defendant did not even present a motion for instructed verdict. Instead, he sought to defeat the plaintiff’s right of recovery only by securing findings supporting his affirmative defenses. It was not suggested by either party on the second appeal to the Court of Civil Appeals that the contract was ambiguous. The absence of any such suggestion in that court is reflected by the briefs of the parties and by the following statement in the opinion of the Court of Civil Appeals: “There is no contention that the contract is ambiguous; and the construction of an unambiguous contract is for the court.” 314 S.W. 2d 384, 387.
The application for writ of error filed in this Court by the defendant contains no point of error or argument that he is entitled to prevail on the ground that the contract is am*414biguous and the plaintiff failed to plead the ambiguity and failed to tender evidence and secure findings to resolve it. On the contrary, defendant asserts again and again in his application that it is the duty of the court to disregard or “chop off” the title of the contract, and that the meaning of the contract is then found in “the plain and unambiguous language of the body” of the instrument which, when he signed it, he thought was in “clear and understandable language” and in which he states “there is not even the ambiguity present in the Pate [Pate v. Goyne, 212 Ark. 51, 204 S.W. 2d 900] case.” It was not until defendant replied to plaintiff’s answer to his application that he suggested that if the contract was ambiguous the plaintiff had failed to discharge the burden which the law required that it discharge before it was entitled to a recovery.
In reversing the judgment of the Court of Civil Appeals and affirming the judgment of the trial court on the ground that the contract is ambiguous the majority have thus violated the rule stated in this language in 3-B Texas Jur. 275, Appeal and Error, Sec. 872: “It is well established that the case on appeal or writ of error must be decided on the same theory as that on which it was tried in the court below.” The rule is as applicable to defendants who undertake to inject a new theory on appeal as it is to plaintiffs who attempt to do so, Estes v. Hartford Accident & Indemnity Co., Texas Civ. App., 46 S.W. 2d 413, 416, writ refused, and is as applicable to one who seeks to sustain a trial court judgment as to one who seeks to overthrow one. Sargent v. Williams, 152 Texas 413, 258 S.W. 2d 787. The Commission of Appeals has put the rule in these words: “The law forbids the assumption of an attitude on appeal inconsistent with that taken at the trial, and on appeal litigants are restricted to the theory upon which the cause was prosecuted or defended in the court below.” Boatner v. Providence-Washington Ins. Co., 241 S.W. 136, 140.
Assuming, however, that we are justified in affirming the trial court’s judgment on a new theory, is the contract ambiguous? The precise basis of the majority’s holding that the contract is ambiguous is difficult to ascertain from the opinion. Three possible reasons are suggested, none clearly.
The quotation from Bailey v. Mullens, Texas Civ. App., 313 S.W. 2d 99, 103, citation of Pate v. Goyne, 212 Ark. 51, 204 S.W. 2d 900, and the statement that a quit claim deed may not be metamorphosed into a general warranty deed nor a promissory note into a deed of trust by labeling them, respectively, *415as such seem to indicate that ambiguity is achieved by following the defendant’s suggestion that the title, “Exclusive Listing Agreement,” should be disregarded or “chopped off” of the contract. But it is then admitted in the opinion that that type of judicial surgery would result in leaving in the contract only language which created an open or non-exclusive agency as a matter of law, an interpretation of the contract which we rejected on the first appeal of this case and which is now res adjudicata. And of course that conclusion is sound. A contract which merely authorizes an agent to sell property and imposes an obligation to pay him a commission creates a non-exclusive agency as a matter of law. A broker’s contract creates a nonexclusive agency as a matter of law unless there is language in the contract which “either expressly and unequivocally or by clear and necessary implication” creates an exclusive agency. 12 C.J.S. 219, Brokers, Sec. 94. See also Alley v. Griffin, Texas Civ. App., 215 S.W. 479, no writ history.
Moreover, we have no right to disregard or “chop off” the title of this contract. The parties selected it deliberately. The rule of interpretation which requires rejection of the title of an instrument when it and the body of the instrument are at war and cannot be harmonized, as was the case in Bailey v. Mullens, supra, is a sound rule. We have no such instrument here. When the title of an instrument is not in necessary conflict with its other parts but may be harmonized with them we are governed by the rule announced by this Court in E. H. Perry & Co. v. Langbehn, 113 Texas 72, 252 S.W. 472, 474-475, in which we said:
“The title, like every other portion of a contract, may be looked to in determining its meaning. * * * In fact, the purpose of giving a person or thing a name is to distinguish that person, or thing, or class from others.”
The opinion seems next to suggest that ambiguity is achieved by considering the title and the body of the instrument separately, thus disjointing it into conflicting parts taken out of context. The idea seems to be that if the title stood alone it would create an exclusive agency, whereas if the “contractual clauses” stood alone they would create a non-exclusive agency, and thus an ambiguity necessarily exists. That type of reasoning is in clear violation of sound rules of interpretation. Guardian Trust Co. v. Bauereisen, 132 Texas 396, 121 S.W. 2d 579, 583; 10-A Texas Jur. 344, Contracts, Sec. 171. It is our duty to harmonize all of the provisions of a contract wherever that is possible. 10-A *416Texas Jur. 341, 381, Contracts, Sections 171, 189; Woods v. Sims, 154 Texas 59, 273 S.W. 2d 617, 620-621; McMahon v. Christmann, 157 Texas 403, 303 S.W. 2d 341, 344. Associate Justice Nor veil at a time past stated the rule in this language in Alderman v. Alderman, Texas Civ. App., 296 S.W. 2d 312, 315:
“It is axiomatic that, ‘An agreement should be interpreted as a whole and the meaning gathered from the entire context and not from particular words, phrases, or clauses. In fact the entire agreement is to be considered to determine the meaning of each part. All provisions should, if possible, be so interpreted as to harmonize with each other.’ 12 Am. Jur. 112, Contracts, Sec. 241.”
When under the rule of E. H. Perry & Co. v. Langbehn, supra, the title of an instrument is to be considered in interpreting the instrument it should not be disjointed from the other provisions in the instrument in order to create an ambiguity.
Finally, the opinion seems to suggest that ambiguity results when the legal import of the title is read into the body of the instrument. This seems the most likely basis for the holding of ambiguity, and seems to stem from the statement that there is a distinction and a necessary repugnance and conflict between a provision of a contract which reads: “I hereby grant and give you the sole and exclusive agency to sell,” and a provision which reads: “I, (or we) agree to pay A.A.A. Realty Co. 7% of the sale price, (if they sell said property) * * I respectfully submit that that is precisely the contract we have before us and that its provisions are not in conflict and it is not ambiguous when subjected to the proper legal test.
A listing of property with a real estate broker has a well understood meaning. It imports the granting of an agency to sell property. Farquharson v. Lightner, 96 Kan. 117, 150 Pac. 565. The legal effect of a listing is to write into the contract between the parties the words: “I hereby appoint broker my agent to sell,” and that is all that is imported into the contract when the agreement is titled merely “Listing Agreement.” When the agreement is titled “Open Listing Agreement,” the title necessarily imports into the contract the words: “I hereby appoint broker a non-exclusive agent to sell.” When the agreement is titled “Exclusive Listing Agreement,” the title, by the same token, necessarily imports into the contract the words: “I hereby appoint broker my exclusive agent to sell.” We must *417either give it that meaning or give it no meaning at all, and if we give it no meaning at all we are back in this case with a contract which the majority admits is not ambiguous but creates a non-exclusive agency as a matter of law.
The printed form of contract used by the parties to this suit was obviously prepared for use in creating any type of agency the parties might agree upon, the nature of the agency actually created to be indicated by elimination of the inapplicable title and retention of the applicable title. When the property was first listed by the defendant with the plaintiff on June 30, the parties eliminated the title, “EXCLUSIVE LISTING AGREEMENT,” and retained the title, “OPEN LISTING AGREEMENT.” The legal effect of that act, importing the meaning of the title into the contract, was to make it read as follows:
“I, (or we) hereby appoint A.A.A. Realty Co. a non-exclusive agent to sell the Catalina Motel and agree to pay them 7% of the sale price, (if they sell said property), and to protect them on their prospects or anyone they are instrumental in property being sold to.”
No one would doubt that that agreement created a nonexclusive agency, with the possible added right in the defendant to a commission if the property were sold to one of its prospects.
When the parties entered into a new contract on August 19 they eliminated the title, “OPEN LISTING AGREEMENT,” and retained the title, “EXCLUSIVE LISTING AGREEMENT.” The legal effect of that act, importing the meaning of the title into the contract, was to make it read as follows:
“I, (or we) hereby appoint A.A.A. Realty Co. my exclusive agent to sell the Catalina Motel and agree to pay them 7% of the sale price, (if they sell said property) and to protect them on their prospects or anyone they are instrumental in property being sold to.”
That, then, is the contract before us. Does it contain an irreconcilable repugnancy or conflict? Obviously not.
A provision that an agent will be paid a commission only if he sells listed property does not necessarily mean that the right is reserved to appoint other agents. Nor does it necessarily mean that the owner will not be held to respond in damages if *418he breaches his contract by selling through another agent. The plaintiff in this case might not have sold the property in the six months’ period, but the agreement to pay it a commission if it did sell it is not inharmonious with an exclusive right to try to sell it in that period. Having appointed plaintiff an exclusive agent to sell and having agreed to pay it 7% of the sale price of the property, the law would have imposed liability for the commission if they sold the property, whether the parenthetical words were in the contract or out of it. The words may therefore be harmonized with the other language creating an exclusive agency by giving to them in the context in which they appear the operative effect of confirming an obligation which the law would imply. Parties often put into written contracts express legal obligations which in their absence the law would imply. The exclusive or non-exclusive nature of the agency is not determined by the presence or absence of an agreement to pay a commission if the agent sells the property. It is determined by the presence or absence of an agreement that the broker shall have an exclusive agency for a stated period in which to sell the property. If such a provision is in the contract, expressly or by necessary implication, an exclusive agency is created. If it is not in it, a non-exclusive agency is created. Putting in an additional provision that the broker will be paid a commission no matter who sells the property, as in the Knapton contract, does not add to the exclusiveness of an agency already made exclusive by express language. It simply gives the broker a right to sue on the contract if the property is sold through another in addition to his remedy by way of damages for its breach.
Actually, the words, “if they sell said property,” may be harmonized with the other language creating an exclusive agency in another important particular. They expressly prevent the instrument from granting an exclusive right to sell the property and thus expressly preserve to the owner his own right to sell1 without incurring liability for a commission, except perhaps as that right may be limited by the language which follows.
If the printed contract form had incorporated the words appearing in the title in what the majority term the “operative contractual clauses,” the contract would read as follows:
“I, (or we) grant A.A.A. Realty Co. an exclusive listing— an-open-listing — (strike one) of the described property, and agree to pay them 7% of the sale price, (if they sell said prop*419erty), and to protect them on their prospects or anyone that they are instrumental in property being sold to.”
There could be but little doubt that the contract in that form would create an exclusive agency. And yet the parties would have selected their language with no more care than they did in the instrument before us, the instrument would still contain the words, “if they sell said property,” and the form of the contract would have been just as susceptible to the charge that it “might result in a device that could lead to the perpetration of frauds or injustices upon unsuspecting contracting parties.”
The test for determining whether a contract is ambiguous is expressed in Universal C.I.T. Corp. v. Daniel, 150 Texas 513, 243 S.W. 2d 154, 157, where it is said:
“In a fairly recent case this court said that ‘if a written contract is so worded that it can be given a certain or definite legal meaning or interpretation, it is not ambiguous.’ (Cases cited). The converse of this is that a contract is ambiguous only when the application of pertinent rules of interpretation to the face of the instrument leaves it genuinely uncertain which one of two or more meanings is the proper meaning. * * * In other words, if after applying established rules of interpretation to the contract it remains reasonably susceptible to more than one meaning it is ambiguous, but if only one reasonable meaning clearly emerges it is not ambiguous.”
The real question in this case then is whether after the application of settled rules of interpretation the contract is subject to two reasonable meanings, one of which is that it creates an exclusive agency and the other that it creates an non-exclusive agency. The analysis of the contract made in the light of sound rules of interpretation, supra, should leave no doubt that it may reasonably be said to create an exclusive agency. But may it reasonably be interpreted to create a non-exclusive agency? I submit that it cannot be. When the title is given meaning and that meaning is imported into the contract, I can conceive of no theory on which it may be said that it can reasonably be interpreted as creating a non-exclusive agency.
The thesis of the majority opinion seems to be that the contract is ambiguous because upon looking at it one would have some doubt of its meaning. That thesis is inherent in the statement that “* * * it seems that one reading the operative con*420tractual clauses of the contract before us in connection with its label, ‘Exclusive Listing Agreement,’ would be assailed by doubt as to the meaning of the contracting parties * * *.” It is inherent also in the statement that there is “suggested repugnancy” and a “seeming contradiction” between the title and the body of the instrument. The rule of the Daniel case imposes on the Court the duty to resolve repugnancies and contradictions when that may reasonably be done. The majority recognize the rule of the Daniel case but decline to apply it. Only by declining to apply the rule of the Daniel case and by adopting the philosophy of Wigmore that “standards of interpretation [must] continue to be mobile, subjective and individual” is the majority able to find ambiguity, in the instant contract. I respectfully suggest, Wig-more to the contrary notwithstanding, that rules of interpretation are unsound which permit a court to use rules so “mobile, subjective and individual” as to decide one case by one rule and another case by a different rule. In McMahon v. Christmann, 157 Texas 403, 303 S.W. 2d 341, we recognized that separate provisions of an oil and gas lease were in “obvious conflict,” but we did not hold the lease ambiguous. On the contrary, we used rules of interpretation to harmonize the “obvious conflict.” If we are now to hold ambiguous all contracts which contain suggested repugnancies and seeming contradictions, making no effort to resolve or harmonize them, the rule of the Daniel case is a dead letter. It cannot be kept alive by recognizing it while at the same time we decline to apply it.
The majority undertake to support their position by quoting certain testimony and a letter of the defendant indicating that plaintiff’s agent represented to the defendant that an exclusive listing meant that the plaintiff would receive a commission only if it sold the property or the property were sold to one of its prospects and that the defendant believed the representation to be true. The representation, even if made and believed, would not make the contract ambiguous. A misunderstanding by the parties of the meaning of language used in writing a contract does not make it ambiguous, and parol evidence is not admissible to show that the parties intended that the language used mean something other than what it clearly imports. Jackson v. Richards, Texas Civ. App., 157 S.W. 2d 982, writ refused; Davis v. Davis, 141 Texas 613, 175 S.W. 2d 226. The representation that plaintiff would get a commission only if it sold the property or if the property was sold to one of its prospects was literally true. An exclusive listing also gives rise to a right to damages for breach of the contract by the owner, whether or not the parties understood that to be true.
*421If by referring to the evidence mentioned the majority intend to imply that the plaintiff perpetrated a fraud on the defendant, that implication is negatived by the specific finding of the jury in answer to Special Issue No. 24 that the plaintiff’s agent did not represent to the defendant that it did not intend to claim a commission unless it sold the property or it was sold to one of its prospects. If the majority intend to imply that the parties were mutually mistaken as to the meaning of the language they used, defendant’s remedy, if any, was in reformation of the contract. He did not seek reformation. Reformation should not now be accomplished through the legal device of holding the contract ambiguous. See Jackson v. Richards, supra, and cases there cited; 10-A Texas Jur. 334, Contracts, Sec. 168.
I would hold that the contract before us creates an exclusive agency as a matter of law, and, finding no other reason for reversing the judgment of the Court of Civil Appeals, I would affirm that judgment.
Opinion delivered February 18, 1959.
Rehearing overruled March 25, 1959.

. — For the distinction between an exclusive right to sell and an exclusive agency to sell, See Baker v. Skipworth, Texas Civ. App., 244 S.W. 2d 299,300, writ refused.