Kier v. Condrack ( 1970 )

CROCKETT, Chief Justice.

Plaintiff James Kier sued for specific performance of a contract to purchase the home property of the defendants Condraclc at about 4900 South on the west side of Washington Boulevard in Ogden, Utah. The defense relied upon at the trial, and persisted in on this appeal, is that the option was unenforceable because it was (a) given without consideration, (b) not properly exercised, and (c) not definite as to terms. Upon a plenary trial, the district court found the issues in favor of the plaintiff and ordered the defendants to convey him the property upon the payment of the price ($23,500) stated in the contract, less some deductions not material to the issues raised here.

Although this court may review the facts in this case in equity, it should be kept in mind that we may do so in the light of the evidence as believed by the trial court, and not necessarily as urged upon us from the point of view of the defendants.¹

Plaintiff Kier is a contractor who desired to build apartments in the area of defendants’ property. In December of 1967 the parties entered into a contract whereby he purchased the west 120 feet of the Cond-racks’ property for the sum of $3,000. In connection therewith the parties discussed the sale of the remainder of the defendants’ property, which would include their home and involve considerable more money. The plaintiff was hesitant, stating that he “did not want to bite off more than he could chew,” but asked if they would give him an option, which they agreed to do. The parties simply dispute each other as to whether the transaction was so integrated that the entering into the mutual obligations of the contract and the payment of the $3,000 for the west tract was also consideration for the option on the east tract.

For the purpose of analyzing defendant’s first contention, that no consideration was given for the option, we assume for the moment the correctness of their contention that the contract is uncertain. The trial court could then look to the circumstances and the testimony of the parties to ascertain what appeared to be their intent and determine their obligations based thereon.² In addition to their own testimony, the strongest point in defendants’ favor on this first contention is that the plaintiff acknowledged on cross-examination that the price for the west tract was $3,000 and that he would have bought it for that price alone. Nevertheless, he insisted that in connection with the purchase of the west tract, the parties discussed his desire to buy, and the defendants’ willingness to sell, the east tract; and that the whole deal including the option thereon was regarded by the parties as one transaction for which the signing of the contract and the payment of the $3,000 was consideration.

This finds corroboration in the further fact of significance here: that the transaction was all included in the one contract, which recited the mutual promises the parties made to each other, and which contains this provision:

Sellers grant to Buyer the option to purchase the balance of sellers’ property, 85 feet by 150 feet approximately, contiguous to the above land for the sum of $23,500.00' on payment and terms to be negotiated provided the same is exercised by June 1, 1968.

For the reasons stated above we do not see anything unreasonable about the trial court’s conclusion that there was consideration for the option.

On May 15, 1968 (thus 15 days prior to the expiration of the option), plaintiff Kier sent a registered letter to the defendants stating, "Please be advised that the undersigned exercises said option.” Plaintiff offered to pay tlie defendants what would amount to a “cash-out” of their equity, by paying them $5,302.37 in cash, plus assuming the balance on two mortgages on the property, which would aggregate the $23,500. The defendants indicated no willingness to accept this proposal. They contend that the letter was not an exercise of the option, but rather a counter-offer because plaintiff therein proposed a method of payment.of the purchase price. This is not necessarily so. The agreement stated that the payment was to be made “upon terms to be agreed upon.” There was nothing wrong in plaintiff suggesting a method of payment. The letter was unequivocal in stating that the plaintiff exercised the option, and it did not condition the exercise of the option upon the acceptance of the terms proposed by the plaintiff. On or about May 31, the parties met to discuss the matter. The defendants themselves made several proposals. The basis of each was that they would retain title for a period of 12 to 24 months, with payments of installments plus interest; or they would accept the “cash-out” for their equity as proposed by the plaintiff, but on the condition that they could continue to occupy their home for 24 months with free rental. Plaintiff refused these offers on the ground that they would impede his development plans and/or would compel him to pay more than the $23,500 which the defendants had agreed to take for the property.

We recognize the validity' of the rule relied upon by the defendants that to be enforceable a contract must be suffC ciently definite in its terms that the parties know what is required of them.³ But like all rules, which are necessarily stated in generality, it is only applicable in the proper circumstances, where the justice of the case requires: as a shield to protect a party from an injustice, and not as a weapon with which to perpetrate an injustice. Under the evidence and the particular facts of this case, we are not convinced that we should disagree with the view of this matter which it is apparent was taken by the trial court: when the parties had reached agreement and committed themselves on the major aspects of the transaction, that is, that the defendants would sell and the plaintiff would buy at the agreed price of $23,500, if the plaintiff exercised the option within the time specified, reserving only the “terms” of payment, they should be obliged to act in good faith in keeping their promises.⁴ It would seem inequitable and unjust to permit a seller to simply refuse unreason-ingly to perform and seek specious excuses in an attempt to justify his refusal. The reference to terms of payment could well be regarded in this particular situation as incidental details, to be handled in a manner agreeable to the parties, to give the buyer a reasonable opportunity to obtain the money, and to assure the sellers they would get the amount of money promised. But neither party should be permitted to use the reservation of “terms” to get more than they had promised: the plaintiff to get more land, or the defendants to get more money, nor either to renege on the bargain, as it appears that the trial court believes was done here.

The plaintiff testified that the defendants had later told him that they just didn’t want to sell, “he [Mr. Condrack] told me that his wife just wasn’t interested in selling the house. * * * ”

Mr. Condrack himself testified:

We were concerned at that time. We had one boy on a mission and .we were planning on another boy going on a mission and we were trying to make sure that we had a home for them to come home to.

and further:

Q. Will you take $23,500.00 cash?

A. No, sir.

Q. Will you take $23,500.00 on a contract of sale that givfes Kier the option to prepay it at any time without penalty? A. No, sir.

Q. What penalty do you want to exact from Mr. Kier?

A. No penalty.

Q. What is it you want in addition, Mr. Condrack?.

A. All I want is a monthly payment. ‘ This can be taken over twenty years.

Q. You want him to pay?

A. Under this condition we will give possession within 90 days.

Q. Give us title?

A. No, sir; we will hold title, and Mrs. Condrack testified:

A. At the time we just sent our boy on a mission and I had my girl to finish high school and, well, she is kind of funny, she does not like to be torn up over night, you know.

We do not overlook the possibility that there may be some situations where an extended installment contract might be something particularly desired by the seller, nor that if such appears to be the case, his interests should be properly safeguarded. However, in this instance there was nothing in the negotiations nor in the contract to suggest that that factor was to be considered in this transaction until after the defendants had changed their minds. In the absence of any such indication, it seems a fair assumption that the plaintiff’s offer to pay the sellers the “cash-out” of their .interest in .the property would have satisfied any reasonable person who was willing to fulfill his commitment. Moreover, when the plaintiff offered to pay the entire purchase .price .in-cash, that is, to pay off the defendants’ equity, and to pay off the mortgages, and the defendants refused, making the statement that “This can be taken over twenty years,” the trial court was justified in believing that the defendants were not acting in good-faith but were simply offering excuses to justify - their refusal to honor the plaintiff’s exercise of the option because they had changed their minds about their agreement. It was therefore within his prerogative as a court of equity to decree what equity and good conscience required: the specific performance of the contract.

Affirmed. Costs to plaintiff (respond ent).

TUCKETT, J., concurs.

1 . Utah Const. Art. VIII, See. 9, providing for appeals “ * * * in equity eases the appeal may be on questions of law and fact. * * * ” See Nokes v. Continental Mining & Milling Co., 6 Utah 2d 177, 308 P.2d 954.

2 . See Continental Bank & Trust Co. v. Bybee, 6 Utah 2d 98, 306 P.2d 773, and authorities therein cited.

3 . See Pitcher v. Lauritzen, 18 Utah 2d 368, 423 P.2d 491; and Cf. Ansorge v. Kane, 244 N.Y. 395, 155 N.E. 683.

4 . See Morris v. Ballard, 56 App.D.C. 383, 16 F.2d 175, 49 A.L.R. 1461 ; Volk v. Atlantic Acceptance & Realty Co., 139 N.J.Eq. 171, 50 A.2d 488, 68 A.L.R.2d 1230.