Francis v. Garlow ( 1924 )

Redick, District Judge.

This is an action by the vendor for the specific performance of a contract of purchase and sale of 160 acres of land, the petition having been filed September 10, 1921. The contract was made out upon a printed form and contains the usual provisions, and provided for a sale at $275 an acre, of which $1,500 was to be paid in cash, and the remainder on March 1, 1920, when the purchaser was to be given possession. The following provisions are also found in the contract:

“All liens and incumbrances existing at that time (March 1, 1920) to be deducted.” “It is mutually agreed that time is an essential element in this contract, and it is further agreed that in case either of the parties hereto shall fail to perform the stipulations of this contract, or any part of the same, shall pay the other party of this contract the sum of - dollars, C. J. Garlow to forfeit the $1,500 in full, as damages for nonfulfilment of contract.”

The answer of defendant set up two defenses: (1) that the contract was a mere option; and (2) that at or about the time fixed for performance defendant notified plaintiffs that he would not take the land, and that thereafter plaintiffs went upon the land, and erected buildings thereon, and leased portions of the premises, collecting rents, and on May 5, 1920, executed a mortgage on the lands to the Columbus State Bank for the sum of $3,000, and about August 1, 1921, executed another mortgage to Garlow & Long for $587.40, wherefore defendant alleges that plaintiffs are estopped from seeking specific performance of said 'contract.

Plaintiffs replied, admitting the facts set up in the answer, but alleging in explanation thereof that such acts and doings by plaintiffs were upon the advice of defendant Garlow, who was acting as plaintiffs’ attorney at the time. Defendant offered no evidence, but at the close of plaintiff’s case the trial court rendered a finding and decree in favor of defendant, dismissing the petition, and plaintiffs appeal.

With reference to the first defense, it will be noted that the contract is somewhat peculiar in that it provides for the forfeiture on the part of defendant of the $1,500 as damages for nonfulfilment of the contract, but contains no corresponding provision in case the plaintiffs should fail to perform, and defendant takes the position that the contract was a mere option which he might exercise or not, in which 'latter event he should forfeit the $1,500, which he is willing to do, and the contract would be at an end. We do not deem it necessary, however, to determine this question.

The plaintiffs testified that they had lost their copy of the contract, and that the.words providing for the forfeiture were written in the copy retained by defendant after the contract was signed and delivered. They also testified that, although the copy of the contract produced by defendant appeared to have been witnessed by Long and acknowledged by plaintiffs before Long as a notary public, they never acknowledged it, and that Long never actually witnessed their signatures. • Robert Francis also testified that, after defendant refused to complete the contract, he placed improvements upon the land, consisting of house, outbuildings and fences to the value of about $1,500 to $2,500, and that defendant told him that was the proper thing for him to do; that the defendant and Grover Long were law partners, and that Long advised him to give the $3,000 mortgage to the bank as security for a prior indebtedness, and thus prevent the bank joining in an application to declare the witness bankrupt; that Long also advised him to give the other mortgage, which in fact represented an indebtedness of witness to Garlow & Long for legal services in the sum of $418, and a claim of Hoagland- & Company against the witness for $169.40. After March 10, 1920,'and after defendant had refused to complete the contract, the plaintiffs moved upon the land in controversy and resided thereon, and, in addition to the acts of ownership already mentioned, leased the land to the father of Robert Francis for the year 1921 and collected the rent therefor.

From the above statement it will be seen that the real question for determination is whether or not the contract was abandoned by plaintiffs, and whether or not by their conduct with reference to the land they have waived their right to insist upon specific performance. The facts do not present a question of technical estoppel, because it does not appear that the defendant has altered his pbsition in any way in reliance upon the acts of plaintiffs; but they do present the question of fact whether or not the plaintiffs abandoned the contract, and whether or not they are now in position to perform the contract as made. While there is frequent reference in the testimony to the fact that Gar-low was a member of the firm who had represented plaintiffs in a number of legal matters, no inference may properly be drawn that plaintiffs were overreached or deceived in consequence of such relation, and the matters referred to were mainly conducted by Long, and had no reference to the present controversy. The trial court, which heard the witnesses and observed their manner of testifying, was in a better position to properly weigh the evidence and determine the truth of their statements, upon which some matters appearing in the evidence would seem to cast some doubt, and we do not feel justified in disturbing the conclusions of the court on those matters. We think the court might very properly infer, as it presumably did, that plaintiffs had accepted the refusal of the defendant to. complete the contract and had abandoned the same. Furthermore, the contract provided for the deduction, from the final payment of only such liens and incumbrances as existed on the property March 1, 1920, whereas it appears that two mortgages had been placed thereon after that time, and that two leases had been made for 1920 and one for 1921, during the existence of which plaintiffs were not in position to comply with their contract to give possession March 1, 1920.

Upon a careful consideration of the entire record, we conclude that plaintiffs were not entitled to specific performance, and the judgment of the district court was right.

Affirmed.

Note — See Specific Performance, '36 Cyc. p. 720.