Opinion
No. 37509.
Filed June 19, 1970.
1. Contracts. The construction of a written contract is ordinarily a question of law. 2. ___. In construing a contract, the entire instrument must be considered and the words used given their ordinary and popularly accepted meaning. 3. ___. The interpretation given a contract by the parties themselves while engaged in the performance of it is one of the best indications of the true intent of the contract. Ordinarily, such a construction of the contract should be enforced. 4. ___. The modification of a contract which substantially changes the liability of the parties ordinarily requires mutual assent to be effective.
Appeal from the district court for Douglas County: RUDOLPH TESAR, Judge. Affirmed.
Crossman, Barton Norris, for appellant.
Krause, Inserra, Petersen Burkhard, for appellee.
Heard before WHITE, C.J., CARTER, SPENCER, BOSLAUGH, SMITH, McCOWN, and NEWTON, JJ.
This appeal involves the interpretation of a residency contract between the plaintiff and the defendant. At the close of the evidence the trial court directed a verdict for the plaintiff. The defendant has appealed.
In 1964 the plaintiff entered into a residency contract for a one-bedroom apartment in the apartment building operated by the defendant in Omaha, Nebraska. The contract provided that upon payment of an entrance fee of $5,000 the plaintiff was entitled to live in an assigned apartment for life, subject to the monthly payment of "a proportionate share of expenses, maintenance and amortization of loan," and subject to "the rules and regulations which will be adopted to govern the Manor." The right to live in the apartment was not assignable.
The contract further provided that "upon relinquishment of the apartment provided for herein and upon written demand of applicant * * *, ninety per cent of any payment on entrance fees is refundable as soon as the Masonic Manor secures another applicant for the apartment being released."
The plaintiff paid the entrance fee and moved into the apartment in 1964. On March 1, 1967, the plaintiff notified the defendant that the apartment would be vacated April 1, 1967, and demanded a refund of 90 percent of the entrance fee paid. The apartment was "resold" on September 15, 1968. The controversy is whether the plaintiff is liable for the monthly maintenance fees after he relinquished the apartment and before it was resold.
On March 19, 1967, after the plaintiff had notified the defendant that the apartment would be relinquished but before it had been vacated, the defendant's board of directors adopted a resolution providing that owners of resident tenancy contracts would be responsible for the monthly prorata payment whether the apartment was occupied or not. The directors also provided that a bulletin be sent to each tenant setting forth the action of the board and stating that a new contract was being prepared.
The entrance fee on the plaintiff's apartment was increased to $6,000 on October 1, 1965. The monthly maintenance fees were increased twice during the time that the plaintiff occupied the apartment. The plaintiff paid the monthly maintenance fees during the time that he occupied the apartment but the record does not show that he paid the increase in the entrance fee or that he was asked to do so by the defendant.
The plaintiff contends that he is entitled to $4,500 which is 90 percent of the entrance fee paid. The defendant contends that the plaintiff should receive 90 percent of $6,000 less $3,001.25 for the monthly maintenance fees charged between April 1, 1967, and September 15, 1968. The plaintiff recovered judgment for $4,500 in the trial court.
The construction of a written contract is ordinarily a question of law. Omaha Public Power Dist. v. Traveler's Indemnity Co., 178 Neb. 709, 135 N.W.2d 1. In construing a contract, the entire instrument must be considered and the words used given their ordinary and popularly accepted meaning. Long v. Magnolia Petroleum Co., 166 Neb. 410, 89 N.W.2d 245.
The defendant argues that the plaintiff was liable for the monthly maintenance fees until the apartment was resold because the plaintiff was entitled to live in the apartment during this time. The argument disregards the provision requiring relinquishment. Before the plaintiff was entitled to a refund of the entrance fee, he was required to relinquish the apartment and a new applicant was to be secured. The relinquishment was a surrender of the right to live in the apartment, and the plaintiff should not be liable for the monthly maintenance fees thereafter.
It is apparent that, prior to March 19, 1967, the defendant did not consider the owner of a residency contract liable for payment of the monthly maintenance fees if the apartment was not occupied. The interpretation given a contract by the parties themselves while engaged in the performance of it is one of the best indications of the true intent of the contract. Ordinarily, such a construction of the contract should be enforced. Lortscher v. Winchell, 178 Neb. 302, 133 N.W.2d 448.
The action of the defendant's board on March 19, 1967, was a modification of the contract which was not binding on the plaintiff without his consent. It was a modification that could not be effected by a rule or regulation solely within the control of the defendant. See Urick v. Western Travelers Accident Assn., 81 Neb. 327, 116 N.W. 48.
The judgment of the district court is correct and it is affirmed.
AFFIRMED.