Opinion
December 30, 1947. Rehearing Denied January 14, 1948.
1. — Contracts. In order to constitute a "contract," there must be a mutual understanding of facts entering into such contract and nothing can be left to conjecture.
2. — Appeal and Error. Where trial court sits as a jury, the facts, as found by trial court, where there is any evidence to support such findings or reasonable deductions from the facts in evidence, are accepted by appellate court as the facts in the case.
3. — Vendor and Purchaser. Evidence authorized findings that both payments of $500 by plaintiff to defendant were for 30-day options on a hotel and that defendant was entitled to retain the amount paid when purchase of hotel was not consummated.
4. — Principal and Agent. Declarations of agency by alleged agent are inadmissible as against principal unless alleged principal has done something or said something which may properly be construed as an acknowledgment of such agency.
5. — Contracts. The law's abhorrance of a forfeiture cannot prevail when facts establishing such forfeiture are clearly shown.
6. — Vendor and Purchaser. Where failure of consummation of sale of hotel, was due to purchaser and not to vendor, even if the $1,000 paid by purchaser was considered as earnest money instead of an option, purchaser could not recover in light of evidence that vendor was ready, willing, and able to go on with the sale for agreed price.
Appeal from the Circuit Court of Butler County. — Hon. Randolph H. Weber, Judge.
AFFIRMED.
W.A. Brookshire, Columbia, Missouri, Attorney for appellant.
There was no option contract entered into between the appellant and the respondent on March 2, 1944, for the reason that there was no meeting of the minds of the parties on a time limit for the sale of the Hotel or for forfeiture or liquidated damages in the event a sale was not ultimately consummated, and in that there was no definite agreement of any character to show the terms of a final agreement. For that reason the money deposited with the Bank was for the purpose of showing the appellant's good faith and intention to buy the Hotel when and if her farm was sold for $30,000.00. 13 C.J. 263 and 264; 66 C.J. 490 and 493; Levine v. Humphreys 297 Mo. 555; Real Estate Co. v. Spellbrink 211 Mo. 671; Huggins v. Safford 67 Mo. App. 469. The payment of the five hundred dollars to R.H. Purvis by the appellant on April 6, 1944, did not constitute an option for the reason that all of the facts show that this payment was made after the appellant was assured that both that payment and the former payment would be refunded to her in the event the farm was not sold for $30,000.00 within six weeks from that date, and in the event the purchase of the hotel was not consummated, and for the further reason that there was no time limit involved at that time for the purchase of the hotel, and no meeting of the minds between the appellant and the respondent as to liquidating damages, a forfeiture or definite terms of the ultimate transaction. 13 C.J. 263 and 264; 66 C.J. 490 and 493; Haddow v. St. Louis Public Service Co. 36 S.W.2d 284; Huggins v. Safford 67 Mo. App. 469; Dezell v. Fidelity Casualty Co. 176 Mo. 253, l.c. 265. Forfeitures are abhorred both in law and in equity, and will not be enforced unless there is a definite, explicit agreement for a forfeiture. There can be no forfeiture in this case for the reason that there is no evidence to show that there was a meeting of the minds, first as to facts that would constitute an option; secondly, for the reason that at no time on March 2, 1944, or on April 6, 1944, was there any agreement or understanding that either party would be entitled to liquidated damages or forfeiture in the event that the proposed transactions would be finally consummated. Dezell v. Fidelity Casualty Co. 176 Mo. 253, l.c. 265; Huggins v. Safford 67 Mo. App. 469; 13 C.J. 263 and 264; 66 C.J. 490 and 493; Turner et al. v. Hall et al., 104 S.E. 861; Asia Inv. Co. v. Levin 204 P. 808. There is no evidence in the record to warant the findings and verdict of the Court sitting as a jury in this case, in favor of the respondent. Sooy v. Winter 188 Mo. App. 150; Dezell v. Fidelity Casualty Co. 176 Mo. 253, l.c. 265; Huggins v. Safford 67 Mo. App. 469; 13 C.J. 263 and 264; 66 C.J. 490 and 493. The findings of the Court are inconsistent with each other, in that the first part of the findings attempts to show an option in each case for thirty days, whereas the second part clearly shows a payment of earnest money on a definite purchase agreement. The second part would not warrant but would be destructive of the finding further on that there had been a forfeiture in each case. The findings are further inconsistent in that the Court finds: "By reason of the actions of the plaintiff the plaintiff has forfeited the five hundred dollars paid on one occasion, and the five hundred dollars paid on a latter occasion." This finding would be inconsistent with every other finding for the reason that before a forfeiture can be invoked there must be a finding that a forfeiture was provided for. 12 C.J. 263 and 164; 66 C.J. 490 and 493; Dezell v. Fidelity Casualty Co. 176 Mo. 253, l.c. 265; Huggins v. Safford 67 Mo. App. 469; Dunaway v. Day 163 Mo. 415, l.c. 426.
Tedrick Tedrick and Phillips Phillips, Poplar Bluff, Missouri, Attorneys for respondent.
The plaintiff had a cause of action for $1,000.00 against Purvis on his obligation contained in Exhibit No. 3. His obligation was based on a valid consideration to-wit, the continuation of his employment to sell the Dent County Farm for $30,000.00 which was to be turned in on the purchase price of the hotel for the sale of which he would receive $2,000.00. Purvis' conduct according to plaintiff's testimony, was responsible for her not buying the hotel. If he brought buyer and seller together and they consummated the deal then he would have earned his commission, but he got mad and "blew up" and spoiled the deal. What plaintiff did was to buy and pay for two options to purchase the hotel. There is no question of forfeiture in the case. The $1,000.00 which she paid to the Bank was the purchase price of the two options. If it had not been for the conduct of Purvis she no doubt would have bought the hotel and the bank would have credited her with the $1,000.00 on the purchase price. The defendant granted to the plaintiff the option or privilege to buy the hotel for $40,000.00 at any time from March 2, to April 2, 1944 for the sum of $500.00 and an additional 30 days from April the 6th for an additional $500.00. The property was certain, the selling price was certain and the time of the option or privilege was certain, and defendant carried out its part of the contract by taking the hotel off the market for 60 days. 66 C.J. p. 485, No. 12. "Whether a particular instrument is an option or contract for the purchase of land is to be determined by the intention of the parties." 66 C.J. p. 450, No. 13. The witnesses, Abington, Saracini and Purvis all testified that the $1000.00 was paid for an option and plaintiff admitted it in her deposition. Plaintiff did not exercise her option in the time agreed on and hence forfeited the money she paid for the option. "Upon failure of the optioneer to exercise his option within the time alloted, he forfeits the money he paid for the option." 66 C.J. ___ 496, No. 19 N86, Citing; Sooy v. Winter (Mo. App.), 193 S.W. 845. This Sooy case is very much like the case at bar. The $1,000.00 deposit in that case was made under very similar circumstances to this case. The opinion did not have to be in writing. Plaintiff paid for the option and defendant carried out its agreement by holding the property off the market for 60 days. The option contract was carried through by both parties; plaintiff by paying the money, defendant by withholding the hotel from the market for 60 days. Reed vs. Crane, 89 Mo. App. 670; Sooy v. Winter, supra. The contract in this case between the plaintiff and the defendant is merely an option contract and not a contract of sale. The term "option" means privilege. In other words the money paid to the defendant was paid in order to induce the defendant to keep the property in question off the market for a period of sixty days and she had a right to at any time exercise her privilege to buy the property at the price quoted. Yountz v. McVean 217 S.W. 1000 l.c. 1001; Lively et al. v. Tabor et al., 107 S.W.2d 62, l.c. 66, 66 C.J. 497, No. 21. On March 2nd, plaintiff paid $500.00 for this privilege for a period of thirty days, and renewed it on April 6th for a like period and paid an additional $500.00. The defendant held the property off the market for the sixty day period, therefore, the defendant got what she paid for and cannot recover back the money so paid. Lively et al. v. Tabor et al. 107 S.W.2d 62 l.c. 66. Time is of the essence of an option contract and prompt performance by the holder of the option must be tendered. Cantwell v. Johnson 139 S.W. 365 l.c. 375. The failure of the plaintiff to exercise her option within the time allotted forfeited the money which she paid for the option. 66 C.J. p. 496, No. 19; Sooy v. Winter 175 S.W. 132 also 193 S.W. 945. The defendant's officers testified that they were ready, willing and able to deliver a good and sufficient warranty deed to the hotel property at any time during the sixty day period and would have done so if the plaintiff had requested it, but when the plaintiff specifically told the defendant that she did not intend to purchase the property this relieved the defendant of the necessity of making a tender of a deed. Tender of a deed to the purchaser who definitely refuses to perform is not required. Massey v. Butts, 221 S.W. 153; In Re First National Bank of Adrian; Dalton v. Cauthon, 230 S.W. 358; Mo. Dig. (Vendor and Purchaser) Key No. 147-148. The burden of proof in this case is upon the plaintiff to prove the allegations of her petition by a preponderance or greater weight of the credible testimony and if she has failed to do so then the judgment in this case should be for the defendants. Handlan v. Miller 122 S.W. 751; Mo. Dig. (Trial Key No. 237, 3, 4, 5). Upon cross examination the plaintiff admitted that in her deposition she had testified that the original $500.00 paid to the defendant was for an option on the hotel building. This admission made by Mrs. Sample, the plaintiff is binding on her an she is concluded thereby. Haddow v. St. Louis Public Ser. Co., 38 S.W.2d 284; McCoy v. Home Oil and Gas Co., 60 S.W.2d 715 l.c. 724; Delorme v. St. Louis Public Ser. Co., 61 S.W.2d 247; Madden Red Line Ser., Inc., 76 S.W.2d 435; Mo. Dig. (Evidence) key No. 211. There was no evidence from any source which tended to prove that Purvis was acting as an agent of the Bank when he received the additional $500.00 on April 6, 1944, and entered into an agreement with the plaintiff to return the $1,000.00 in the event he (Purvis) failed to sell her farm, therefore what Purvis or the plaintiff said or did on the occasion can not be binding on the defendant, but all the evidence was that he was not an agent for the Bank, but was "free lancing" in the transaction. Agency cannot be established by a statement of an agent to a third person. Handlan v. Miller, 122 S.W. 751. On trial the plaintiff testified that the money paid to the defendant was "earnest money" but this could not be possible for the reason earnest money is never paid unless there is a contract of sale and there is no evidence in this case to show that the deal was ever closed. On the contrary, all the testimony shows that the plaintiff never did make up her mind to purchase the property until the last time she came to Poplar Bluff and then it was due to the fact that the defendant offered to take less than his original offer and even then, after she paid $4,000.00 on the purchase price she went back inside an hour and told them she had decided not to take it and requested a return of her $4,000.00 which was promptly returned to her. Even if the $1,000.00 paid to the defendant is taken and considered as "earnest money" still the plaintiff would not be entitled to recover because she is the one who refused to go on with the contract for the testimony shows that the defendant was at all times ready, willing and able to perform its part of the agreement and would have done so had not the plaintiff definitely advised defendant that she did not intend to purchase the property. In Re First National Bank of Adrian; Dalton v. St. Louis Crematory and Mausoleum Co., 80 S.W.2d 721; Wigley v. King, 168 S.W. 285.
The issues in this case are well defined by the pleadings. On August 10, 1945, plaintiff (appellant here) filed her petition and alleged that she had paid $500.00 to defendant (respondent here) on March 2, 1944, and $500.00 on April 6, 1944, and that defendant "agreed to return to the plaintiff said sums six weeks after date."
The answer, filed August 25, 1945, admitted that defendant had received said sums at such times; but alleged that the original sum of $500.00 was paid to defendant by plaintiff for an option for thirty days on certain real estate (a hotel) in Poplar Bluff, Missouri, to purchase said hotel for the sum an price of $40,000.00, and that the second $500.00 was paid to defendant by plaintiff for an extension of time on such option for thirty days more; and that, if plaintiff paid said sum of $40,000.00, then said sum of $1000.00 was to apply on the purchase price of such hotel; and that if plaintiff failed to purchase said hotel for $40,000.00, defendant could retain said $1000.00.
Defendants further alleged that plaintiff afterwards informed defendants that she would not purchase said hotel and, thereupon, defendant became entitled to retain said $1000.00.
There are allegations concerning another and subsequent deal on the same hotel, which will be mentioned later in this opinion, but we do not think such later negotiations had a bearing on the $1000.00, except as they tended to show that plaintiff did not then expect said $1000.00 to be returned to her.
The reply of plaintiff denied specifically that she paid defendant the $1000.00 under the conditions alleged in defendant's answer, and claimed that it was agreed that she would but said hotel only on condition that she sold a farm for $30,000.00.
The cause was sent to Ripley County, Missouri, on change of venue, but was returned to Butler County on stipulation afterwards and it was continued.
The case came on for trial before the Judge of the Butler County Circuit Court, sitting as a jury. It was then agreed that plaintiff might put on her evidence first, with certain testimony to be heard at a later date. The testimony of defendant was offered on May 14, 1946.
At the close of all the testimony, plaintiff was given ten days to plead further, if she desired. The petition seems not to have been amended in any respect, and plaintiff evidently did not take advantage of such leave.
On August 13, 1946, the trial court made its finding of facts and entered judgment for defendant and dismissed plaintiff's petition. After an unsuccessful motion for new trial, plaintiff duly appealed to this Court.
We have painstakingly gone over the 218 pages of record or transcript on appeal in this case, in order to see if the trial judge, sitting as a jury, made any error in the trial of the case.
His rulings on veidence, if anything, were favorable to plaintiff. At least, plaintiff can have no complaint on that score, and makes none in her brief.
Plaintiff says that there was no option contract between herself and defendant on March 2, 1944, when the first $500.00 was paid, for the reason that there was no meeting of the minds of plaintiff and defendant's president and cashier, and because the money put up then and later "was for the purpose of showing the appellant's good faith and intention to buy the Hotel when and if her farm was sold for $30,000.00." And she cites, on this point, 13 C.J. 263 and 264; 66 C.J. 490 and 493; Levine v. Humphreys, 297 Mo. 555; Real Estate Co. v. Spellbrink, 211 Mo. 671; Huggins v. Safford, 67 Mo. App. 469, and Dezell v. Fidelity Casualty Co. 176 Mo. 253, l.c. 265.
We have examined each of the authorities and cases cited. They hold that, in order to constitute a contract, there must be a mutual understanding of the facts entering into such contract and nothing can be left to conjecture. There is no dispute about such being the law, and those cases need not be noticed further.
But this was a case before the court, as the trier of the facts, and, in such case, the facts, as found by the trial court, where there is any evidence to support such findings, or reasonable deductions from the facts in evidence, are accepted by the appellate court as the facts in the case. Broderick v. Lucas' Ex'r, 182 S.W. 154; Idalia Realty Development Co. v. Norman's Southeastern Ry. Co. 219 S.W. 923; Leavitt v. Taylor, 163 Mo. 158, 63 S.W. 385; Craig v. State of Missouri, 29 U.S. 410; 7 L.E.D. 903.
There was ample evidence to support such findings as to both sums of $500.00 paid to defendant. Plaintiff and her son Truman insisted that the $500.00 was put up as earnest money and not for an option, and that the second $500.00 was put up for the same purpose; but the trial judge did not so find.
On the other hand, defendant's testimony tended to show that the original $500.00 was put up by plaintiff for a thirty-day option on the Gibbons Hotel in Poplar Bluff, and that the second $500.00 was put up by plaintiff for an extension of time of thirty days more, for plaintiff to purchase said hotel for $40,000.00, and that defendant bank then took said hotel off of the market for the full time and did not try to sell it to anyone else during that period of time. Defendant concededly was in a position to give plaintiff a good and sufficient warranty deed, at any time.
The findings of the court are quite interesting and are here set out in full:
"The Court finds that plaintiff deposited with defendant the sum of five hundred dollars ($500.00) on two (2) occasions for the purpose of holding the Gibbons Hotel, owned by the defendant, off of the open market for two (2) periods of thirty (30) days each; that the further agreement was that the defendant would convey said hotel to the plaintiff by good warranty deed for the sum of forty thousand dollars ($40,000.00) with the sums deposited to be applied on the purchase when the deal was consummated.
"The Court further finds that one R.H. Purvis, mentioned in evidence, acted as an agent for the plaintiff in the sale of her farm mentioned in evidence and also acted in his individual capacity as a real estate dealer to sell the Gibbons Hotel; that said R.H. Purvis did not at any time act as the general agent of the defendant but to the contrary entered into the transaction between plaintiff and defendant for his own personal gain and profit as a real estate agent.
"The Court further finds that the defendant held the hotel property in question open for the plaintiff for a period of more than sixty (60) days and subsequently tried to consummate the agreement for the sale of said property to the plaintiff but that plaintiff failed or refused to close the purchase agreement or pay the balance due therefor; that by reason of the actions of the plaintiff, plaintiff has forfeited the five hundred dollars ($500.00) paid on one occasion and the five hundred dollars ($500.00) paid on a latter occasion."
As before stated, the findings of the trial court, sitting as a jury, when supported by the evidence or reasonable deductions therefrom, must be accepted as the facts in the case, and it must be admitted that there was ample evidence to justify the findings of the court.
After the proposed purchase of the hotel for $40,000.00 fell through, there is some evidence that plaintiff made a new deal to buy the same hotel for $37,500.00, thereby cutting out the agent's commission, and making some adjustment as to a new roof and the insurance, on the hotel building. The testimony further shows that she put up a $4,000.00 check on this new deal. This deal was not consummated either, for some reason, not now important. Plaintiff demanded, and got back from defendant, the $4,000.00 check. She said nothing at that time about the $1000.00 previously paid by her, and did not request at that time that such $1000.00 be returned to her. It does seem reasonable to us that, if plaintiff really felt that defendant owed her the $1000.00, she would have demanded its return, at that time, as that terminated all deals for the hotel.
Another thing, that appears to us as supporting the trial court's finding that defendant's story was true, was the giving of Exhibit 3, whereby Purvis bound himself personally to repay to plaintiff this $1000.00, in case he did not sell plaintiff's farm in Dent County, within a specific time. In order that this may be better understood, we quote Exhibit 3:
"4/6/44
"Mrs. E.A. Sample having put up $1000.00 Earnest Money on purchase of Hotel Gibbons in Poplar Bluff, at $40,000.00 Finished (furnished) as of March 1st. I agree to repay Mrs. E.A. Sample $1000.00 in case I do not sell Mrs. E.A. Samples Farm in Dent County, Missouri for $30,000.00 i — (in) next six weeks.
Signed, R.H. Purvis
Witness T.A. Gardner"
Abington and Saracini of defendant bank, and Purvis testified that Purvis was not the agent of the bank, in signing said agreement, or at any other time. The testimony of such agency came from plaintiff and her son and depended almost entirely on alleged statements of Purvis, which were clearly inadmissible to establesh such agency. Declarations of agency are inadmissible, as against the principal, unless the alleged principal has done something or said something, which may properly be construed as an acknowledgment of such agency. 2 C.J. Section 692, page 935; State ex rel. v. Bland (Mo. Sup.) 194 S.W.2d 42; Beyer v. Bottling Co. 75 S.W.2d 642.
Evidently, the trial court did not believe the statements of agency testified to, as being made in the presence of Abington and Saracini, officers of defendant bank. The testimony of subsequent statements of Purvis was therefore clearly inadmissible to establish such agency.
All of plaintiff's authorities depend upon a finding that there was no meeting of the minds. We think the evidence ample to show this. However, let it be admitted that the law abhors forfeitures. But when the facts, establishing such forfeitures, are clearly shown, as in this case, such abhorrence can no longer prevail. 25 C.J. Section 53, page 1172.
The testimony of defendant, accepted by the trial court, as the trial court had the clear right to do, tended to show that plaintiff twice put up the sum of $500.00, to keep the bank from trying to sell the hotel to anyone else during such time. The failure of plaintiff to sell her farm kept her from going on with the hotel purchase. The evidence clearly shows that defendant bank was in no wise interested in the sale of the farm and was at all times ready, able and willing to convey the title to plaintiff, when she complied with her part of the contract.
There is another suggestion in defendant's brief that appeals to us strongly, that:
"Even if the $1000.00 paid to the defendant's is taken and considered as `earnest money' still the plaintiff would not be entitled to recover because she is the one who refused to go on with the contract for the testimony shows that the defendant was at all times ready, willing and able to perform its part of the agreement and would have done so had not the plaintiff definitely advised defendant that she did not intend to purchase the property."
Even if the $1000.00, paid by plaintiff, be considered as "earnest money," instead of as an option, still plaintiff is not entitled to recover from defendant, because the evidence clearly shows that the failure of the consummation of the sale of the hotel was due to plaintiff, and not to defendant. Had the plaintiff, at any time within the specified time, paid for or arranged for the payment of, said hotel, defendant was ready, able and willing to go on with such sale, for the price mentioned.
Earnest money, where there is no agreement for its return, cannot be recovered where the fault is that of the purchaser and not that of the seller. There is not the slightest question, under this record, that the plaintiff was not ready, able and willing to go on with her alleged agreement with the bank, because of the failure on her part to realize sufficient money from the sale of her farm. The bank was ready, able and willing at all times to convey the property to plaintiff by good and sufficient warranty deed. She, therefore, is in no position to recover even "earnest money."
In Quigley, et al. v. King, 182 Mo. App. 196, 168 S.W. 285, Judge FARRINGTON, for this Court, said:
"The plaintiffs' petition in the first count states a cause of action for the recovery of money paid provided they could prove the facts there alleged — that they were ready, willing, and able to perform the contract at all times, but that the defendant refused to make a deed conveying good title to the land."
In Doerner v. St. Louis Crematory Mausoleum Co., 80 S.W.2d 721, BENNICK, Commissioner, speaking for the St. Louis Court of Appeals, said:
"Now it is at once apparent that an action by the purchaser to recover purchase money must proceed upon the theory of a rescission of the contract; and in this connection it is necessary to bear in mind the fundamental principle of law that a party to a contract, who is himself at fault in its performance, cannot maintain a suit for its rescission or the equivalent thereof."
In Norris v. Letchworth, 152 S.W. 421, Judge JOHNSON, speaking for the Kansas City Court of Appeals, said:
"The rule is well settled, and springs from the most elemental principles of justice that a party to a contract himself at fault in its performance cannot maintain an action for its rescission."
For the reasons given, we feel that the judgment of the trial court was fully justified, and must be affirmed. It is so ordered. Fulbright, P.J., not sitting. Vandeventer, J., concurs.