Dixon v. Dixon , 92 Md. 432 ( 1901 )

The appeal in this case was taken from a decree passed by Circuit Court No. 2, of Baltimore City. The decree directs the specific performance of an alleged contract for the sale of land. The bill of complaint was filed by the appellees, who are the vendors. The defendants, who are the vendees and appellants, answered. To several paragraphs of this answer the appellees excepted. These exceptions were sustained and leave was given to answer further. Thereupon the appellants demurred to the bill upon the ground that the contract of sale set out therein was vague, indefinite and uncertain and not capable of being enforced. Testimony was taken and to much of it exceptions were filed by the appellants. Finally the demurrer was overruled, the exceptions to the testimony were disallowed and the decree appealed from was signed. It is apparent from this statement that it will be necessary at the outset to examine the averments of the bill and answer, because, from these averments the questions governing this controversy arise.

Upon turning to the bill it will be found that the third paragraph is the one which sets out the agreement. That paragraph is in these words: "Your orators further allege that they heretofore agreed to sell to the defendants, and the defendants did heretofore enter into a written agreement with the said William T. Dixon, dated the 30th day of March, 1899, and signed by them, by which agreement they did contract to purchase the said William T. Dixon's one-half interest in the said property, known as No. 34 Hopkins Place and 33 South Liberty street, Baltimore, at forty-two thousand five hundred dollars. And your orator files herewith a true copy of the said agreement, marked "Exhibit Agreement," the original of which was duly delivered to and is now in the possession of the said William T. Dixon." The exhibit to which reference is made reads as follows: "Baltimore, Md., Mr. William T. Dixon. We will accept your offer to buy your half interest in the property known as 34 Hopkins Place and 33 S. Liberty street, Baltimore, at $42,500, March 30th, 1899." Signed Julia B. Dixon, Robert B. Dixon.

This is the agreement relied on, and its sufficiency, certainty and mutuality are assailed by the demurrer. The paragraphs of the answer which were excepted to and were exscinded by the Court set forth, in substance, that the property in question had been owned by William T. Dixon and John B. Dixon as tenants in common; that they had been co-partners in business; that John B. Dixon died intestate, and upon his death his undivided interest in this property vested in his widow and son, the two appellants; that William T. Dixon, the surviving partner, undertook the settlement of the firm's business; that the father of William T. Dixon and John B. Dixon died leaving a considerable estate, to a portion of which John B. Dixon was entitled; that the settlement of that estate devolved upon William T. Dixon; that it was understood between the appellees and the appellants, and was in fact part of the terms of the agreement for the sale by the appellants of their undivided interest in the property in controversy to the appellees, that everything connected with and in anyway arising out of these different relations should be investigated and settled and that all things not heretofore accounted for in these matters should be adjusted before the appellants would be asked to pay the purchase price for the property, so that any funds to which they might be entitled from these sources could be used by them in paying for the property. The expurgation of this defense from the answer, and its consequent disallowace, is the second error of which the appellants complain. These two branches of the case present two distinct propositions; and these propositions are, first, that the contract set up in the bill cannot be specifically enforced because it is too indefinite and vague and is lacking in mutuality; secondly, that the facts recited in the answer, if true, show that it would be inequitable and unjust to enforce the contract by a decree of a Court of equity, and would justify that Court in remitting the parties complaining to a Court of law for redress. Of these in their order.

It is thoroughly well settled and perfectly understood that the granting of relief, by way of specific performance, is not a matter of right, but one which rests in the sound judicial as contradistinguished from the arbitrary discretion of the Court. This discretion is one which is regulated by fixed and established rules. The relief will be afforded or denied as the circumstances of each case may warrant. Kraft v. Egan,78 Md. 36; Semmes v. Worthington, 38 Md. 298. Amongst these rules there is probably none more familiar than that which requires every agreement to be fair, reasonable, bona fide, certain in all its parts, mutual and founded on a good or valuable consideration in order that it may merit the interposition of a Court of equity. We have no occasion to deal with any of these elements save those of certainty and mutuality. Now, what is meant by certainty and mutuality as applied to contracts which are sought to be specifically enforced? And how does the contract set up compare with the standard fixed by the adjudged cases? The contract must be definite and certain in its terms and must be free not only from all ambiguity, but likewise free from all shade or color of ambiguity. Miller's Eq. Pro., sec. 683 and cases in notes 1 and 2. It must be so clearly proven as to satisfy the Court that it constitutes the actual agreement between the parties. Horner v. Woodland, 88 Md. 512. If this were not the rule Courts might "enforce precisely what the parties never did intend or contemplate." Waters v. Howard, 8 Gill, 277. There must be a description of the property sold and the terms upon which it has been sold must be stated. These terms include not only the price to be paid, but ordinarily the time the payment is to be made; though it has been held that a contract to give a mortgage was not defective by reason of no time being named for the payment of the mortgage debt, because in such a case a reasonable time in the discretion of the Court would be allowed. Triebert v. Burgess et al., 11 Md. 463-4. Where all of the terms do not appear, or where it is manifest from the nature of the contract that there are or may be other terms not disclosed, there would be no such certainty as this doctrine of equity demands. The bill alleges that there was a written agreement between the parties, and it refers to the exhibit already quoted as the "said agreement." When that paper is read, whilst it sufficiently describes the property, Kraft and Winebrener v. Egan, 76 Md. 243, it reveals at once the fact that it is not an agreement, but simply an acceptance of an antecedent offer. When a contract is made by an offer and an acceptance both constitute the contract.Wills v. Carpenter, 75 Md. 84. Neither the one nor the other by itself will make the contract. The acceptance without the offer does not show the terms of the offer, and if both together form the contract, it is obvious that all the terms may not be disclosed by the acceptance alone. When it is apparent that the paper relied on as the evidence of the contract is merely an acceptance of a previous offer it cannot be said that the terms of the contract as set out are definite and certain, unless the acceptance purports to recite the contents of the offer. It is possible that the offer contains conditions which cannot be gathered from the acceptance. The decree in this case illustrates this. The decree requires the defendants to pay, not only the forty-two thousand five hundred dollars mentioned in the acceptance, but the further sum of one hundred and eighty-five dollars and twenty-four cents, said to be the purchaser's proper proportion of the taxes, water rent, insurance premiums and rent of the tenant. Does the offer made by the vendors contain a provision that the vendees are to pay any part of this sum of one hundred and eighty-five dollars? If it does not, but simply proposes to sell the vendors interest for forty-two thousand five hundred dollars flat, upon what principle can the decree be upheld? If the decree be affirmed requiring this sum to be paid might not an obligation be imposed upon the appellants which they never assumed? Can it be said that the acceptance, worded as it is, excludes the possibility of there being any conditions in the offer which have not been complied with? It was incumbent on the plaintiffs to show on the face of the bill a definite and certain contract. They show the acceptance of an offer at a named price, without showing what the offer contains. As both offer and acceptance taken together compose the contract the plaintiffs have obviously not stated the contract at all, but have only set forth a part of it. It was not the duty of the defendants to show that the contract as relied on is not definite and certain, but it was obligatory on the plaintiffs to set forth the whole agreement composed of the offer and acceptance so that the Court might see whether, as an entirety, it is definite and certain and such as ought to be specifically enforced. Did the offer stipulate that the appellees would convey an unincumbered title? The acceptance does not show. If the decree directs a fee-simple estate to be conveyed free of liens when the offer contemplated a different estate or one subject to liens, precisely what the parties did not contract to do would be decreed to be done. It is no answer to say that no such questions arise in the case at bar. We are dealing with the sufficiency of the contract as set out. The possibility that such questions could arise under the agreement as set out is sufficient to indicate that there is not that certainty in its terms which free it from every shade or color of ambiguity. As the bill does not state what the offer contained it does not in fact disclose what the contract of sale was; and in legal effect the plaintiffs ask not for the specific enforcement of a disclosed contract, but for the enforcement of the acceptance of an undisclosed offer.

It may be true when the offer and acceptance are brought together that a definite and certain agreement will be evidenced, but that is not the situation confronting us, because there is but part of the agreement relied on in the bill. That which is declared by the third paragraph of the bill and by the exhibit to be the agreement between the parties is manifestly vague and uncertain, and it is that agreement, and not some undivulged one, which the bill seeks to enforce.

If the contract relied on is lacking in mutuality it cannot be enforced. Wherever, as a general proposition, the contract is from any cause incapable of being enforced against one party, that party will not be permitted to enforce it against the other. Both parties must have a right to compel a specific performance at the date of the decree, or neither will have it. Welty v.Jacobs, 171 Ill. 624; s.c. 40 L.R.A. 98. Agreements upon a condition and options are within the rule, but when the condition has been performed or the option has been closed the right of the respective parties to demand specific performance becomes mutual. When there is an inequality of obligation it is proper to refuse a specific performance and the plaintiff should be left to seek compensation at law. Miller'sEq. Pro., sec. 685 and cases in note. Tyson v. Watts, 1 Md. Ch. Dec. 17. "A party not bound by the agreement itself, has no right to call upon the judicial authority to enforce performance against the other contracting party by expressing his willingness to perform his part of the agreement. His right to the aid of the Court does not depend upon his subsequent offer to perform the contract on his part when events may have rendered it advantageous to do so, but upon its originally obligatory character." Duvall v. Myers, 2 Md. Ch. Dec. 405; King v.Warfield, 67 Md. 249-250. Remembering that we are dealing only with the agreement embodied in the acceptance because that is the only agreement relied on in the bill; and bearing in mind that we are still considering the demurrer, what possible right would the appellants, the purchasers, have, under that acceptance, to compel the appellees, the vendors, to convey the property? Where in that acceptance is there any obligation or stipulation upon the part of the vendors binding them to convey the property or indicating what title or estate they should convey? Could the purchasers without having recourse to the offer, and without setting forth the offer as part of the agreement, but relying solely on the acceptance, compel the vendors to make a conveyance? There can be but one answer to this question, and that answer must be in the negative. If, then, this be so, how can the party not bound procure from a Court of equity a decree requiring the other party to perform? The want of mutuality in the contract, as that contract is relied on, presents an insuperable bar to its being specifically enforced. This defect of the want of mutuality may, however, be remedied by appropriate amendment if the offer to sell and the acceptance when taken together make a definite and mutually binding agreement.

The second proposition to be considered arises on the exceptions to the answer. It is undoubtedly true that an executory contract for the sale of land cannot be partly in writing and partly in parol; and it is equally true that a written contract cannot be added to by a verbal agreement. We do not understand the object intended to be accomplished by the averments of the answer to be an attempt to supplemement a written contract by a verbal one; but the allegations which were expunged were designed to show extrinsic facts connected with the making of the contract. The existence of those facts, whilst not varying the written contract, might furnish a valid reason for a Court of equity refusing to specifically enforce the agreement. The doctrine which lies at the root of this defense has been stated with great clearness by VICE-CHANCELLOR EMERY, of New Jersey. The learned Vice-Chancellor said: "A purchaser, in resisting a claim for specific performance of the contract, is entitled to show, by parol evidence or otherwise, circumstances making it unconscionable or unjust to grant this relief, which is purely equitable, and which entitles him to insist that the vendor must be left to his remedy at law on the contract." N.Y. Life Ins.Co. v. Gilhooly, 47 Atl. Rep. 494. It may well be that there is a binding contract, but if it has been entered into under conditions not affecting its validity though of such a character as to indicate that it would be inequitable to specifically enforce it, a case would be made where a Court of equity would not only be justified in leaving the complaining party to his remedy at law, but where a proper exercise of the admitted discretion, with which the Court is clothed in such cases, would be rightly exerted by denying the specific relief sought under the bill. This means "not that the Court may arbitrarily or capriciously perform one contract and refuse to perform another; but that the Court has regard to the conduct of the plaintiff andto circumstances outside the contract itself, and that the mere fact of the existence of a valid contract is not conclusive in the plaintiff's favor." Bamberger v. Johnson, 86 Md. 41.

Now, if it be true that there were unadjusted matters pending between the appellee, William Dixon, and the appellants, and growing out of the partnership referred to and connected with the settlement of the estate of Messrs. Dixon's father as alleged in the answer; and if, in fact, these matters were to be considered and brought to a final arrangement before the consummation of the sale, so that if any funds from these sources were due to the appellants, those funds could be used in paying the purchase price; it would, upon the plainest principles of justice, be inequitable to require the contract of purchase to be performed until these precedent conditions had been complied with. There is a broad difference between an attempt to vary by parol the terms of a written contract, and an effort to prove by parol the existence of extrinsic circumstances which, if true, would cause a Court to hesitate in ordering that contract to be performed. If the contract of sale was concluded in consequence of an understanding such as is set out in the answer, it would be manifestly inequitable to require the purchaser to comply until the conditions have been performed. The appellants should have been permitted to present evidence in support of the averments of their answer, not for the purpose of varying the contract but with a view of showing "circumstances outside the contract itself," so that the Court might see whether, regard being had to the surroundings, it would be just to grant the relief sought by the bill. If this be so, there was error in striking out those paragraphs of the answer to which exceptions were filed.

It follows, from the views we have expressed, that the decree appealed from ought not to have been passed. It will accordingly be reversed and the cause will be remanded for further proceedings.

Decree reversed with costs above and below, and causeremanded.

(Decided January 18th, 1901.)