Schermer v. Wilmart

Argued November 28, 1924. Defendant appeals from a decree of the court below, awarding specific performance of the contract detailed in the following receipt:

"February 9th, 1923

"Received from D. Schermer the sum of $40. on a/c of the purchase price of property 3711 Powelton Av. the full consideration of selling price of the above property is $8750., a further deposit of $210. to be paid on the 12th day of February 1923. Possession of the property to be given on or before June 8th, 1923, at which time final settlement is to be made.

"A regular agreement of sale for the selling of the above mentioned property to be made on the day the additional $210. are paid.

"J. M. Wilmart"

We decided in Sylvester v. Born, 132 Pa. 467, that we would decree specific performance of an agreement thus evidenced, if all the essential terms are set forth in the paper; because, in that event, not only is a meeting of the minds shown, but also everything required by the statute of frauds appears in the written evidence of the contract: Briggs v. Logan Iron Steel Co., 276 Pa. 326. The mere fact that the receipt contemplated a more formal document to be drawn in the future, does not alone defeat the right. On the general subject the rule is well stated in 13 Corpus Juris 290, as follows: "An agreement to make and execute a certain written agreement, the terms of which are mutually understood and agreed on, is in all respects as valid and obligatory as the written contract itself would be if executed. If, therefore, it appears that the minds of the parties have met, that a proposition for a contract has been made by one party and accepted by the other, that the terms of this contract are in all respects definitely understood and agreed on, and that a part of the mutual understanding is that a written contract embodying these terms shall be drawn and executed by the respective parties, this is an obligatory agreement which dates from the making of the oral agreement." To the same effect is Smith v. Kaufman, 30 Pa. Super. 265, and Park v. Kansas City Southern Ry. Co.,58 Pa. Super. 419. On the issue of fact regarding the binding effect of the contract in the receipt, the court below found, on ample evidence, that "both parties to the agreement regarded themselves bound by it from the moment that the $40 and the receipt therefor were exchanged."

Accordingly, our single question is: Does the receipt fully set forth all essential provisions? Appellant says it does not, for the following reasons: (1) Because nothing is said as to whether or not the purchaser is to take the perpetual fire insurance policies on the property, if any. The evidence does not disclose any, but, if there are, it is a matter of no moment, since such policies are not part of the real estate. (2) Because the receipt does not provide whether or not fixtures are included in the sale. If there are any, — on which point the evidence is silent, — and they form part of the real estate, they are, of course, included in the sale; otherwise they are not. (3) Because the receipt does not provide who shall pay for the internal revenue stamps required to be put on the deed. The Act of Congress of November 23, 1921, ch. 136, section 1102, (42 Stat. at L. 302) makes it a criminal offense for any one to sign a deed "without the full amount of the tax thereon being duly paid"; hence, as the statute requires the tax to be paid at or before the signing, and necessarily before the deed is ready for delivery, it was the vendor's duty to pay it, in the absence of an agreement to the contrary. (4) Because the receipt does not specify whether the city taxes and water-rents for the current year are to be apportioned between the vendor and vendee, or to be paid wholly by the former. By statute both are payable as of the beginning of the year, the taxes being, in addition, a lien on the land, as of that date. It necessarily follows that the vendor would be obliged to pay them (Densmore v. Haggerty, 59 Pa. 189: Theobald v. Sylvester,27 Pa. Super. 362, 365), but for the custom in this city that, unless it is agreed otherwise, they shall be apportioned: Moore v. Taylor, 147 Pa. 481, 484. (5) Finally, it is claimed the agreement is defective because nothing is said in it as to whether or not the purchaser is to take subject to an existing mortgage of $1,500. This matter, however, is settled by Hannan v. Carroll, 277 Pa. 32, 39, where we said that the vendor, even in the case of a known encumbrance, must pay it unless the evidence shows the vendee assumed liability for it. In the instant case the court below properly found that "both parties understood that the sum of $8,750, was fixed upon the basis of a title clear of incumbrances."

If the circumstances required it, a court of equity would decree specific performance of the last sentence in the agreement, namely "A regular agreement of sale for the selling of the above mentioned property to be made on the day the additional $210 are paid." As this sum was to be paid within three days after the receipt was signed, it is obvious that to decree, in the first instance, only a specific performance of that clause, would result in extending the time for final settlement far beyond the date specified in the agreement. Appellant knew this when he repudiated his contract, before the three days had expired, and hence he cannot be heard to complain because a court of equity, having acquired jurisdiction of the subject-matter, proceeds, in the one action, to round out the entire circle of controversy (Tide Water Pipe Co. v. Bell, 280 Pa. 104, 110), by decreeing specific performance of the contract exactly as would have been done if the "regular agreement of sale" had been made. By this course appellant gets his purchase price, which is all that a "regular agreement of sale" could have made certain, and circumlocution, delays and unnecessary expenses, each of which chancery abhors, are thereby avoided.

The decree of the court below is affirmed and the appeal is dismissed at the cost of appellant.