Opinion
July 20, 1928.
1. CONTRACT: To Sell Real Estate: Incomplete: Enforcement. A court of equity will not make a contract for the parties, nor enforce by specific performance a contract for the sale of real estate which is indefinite, uncertain or incomplete in any of its essential terms.
2. ____: ____: Deferred Payments: Demand Obligation. Where the contract for the sale of real estate calls for a deferred interest-bearing payment to be secured by a deed of trust on the property, the purchaser has no right to treat the deferred payment as a demand obligation, or to require the vendor to receive full payment of the purchase price in cash.
3. ____: ____: ____: ____: Statute: Application. The statute (Sec. 794, R.S. 1919) declaring that an instrument in which no time for payment is expressed is payable on demand, has no application to the terms of a contract which is the subject-matter of a suit for specific performance.
4. CONTRACT: To Sell Real Estate: Judgment for Right Party. If the judgment for the defendant in a suit to enforce by specific performance an incomplete contract for the sale of real estate was for the right party, it will be affirmed on plaintiff's appeal, although the trial chancellor based his decision on a pleaded defense different from the one on which this court holds it was an incomplete and non-enforcible contract.
Corpus Juris-Cyc. References: Contracts, 13 C.J., Section 485, p. 524, n. 30. Specific Performance, 36 Cyc., p. 587, n. 75; p. 588, n. 76; p. 597, n. 9, 10; p. 598, n. 12. Vendor and Purchaser, 39 Cyc., p. 1575, n. 76.
Appeal from Circuit Court of City of St. Louis. — Hon. Victor H. Falkenhainer, Judge.
AFFIRMED.
Henry H. Oberschelp for appellant.
(1) Annie L. Bradley executed the contract long before she was declared a person of unsound mind. Therefore plaintiff is not affected by that probate court adjudication. Rhoades v. Fuller, 139 Mo. 179. (2) Previous to a probate court adjudication of insanity a person is presumed to be sane. There was no need of plaintiff proving Annie L. Bradley was sane when she executed the contract. Chadwell v. Reed, 198 Mo. 359; Rhoades v. Fuller, 139 Mo. 186. (3) The burden was on defendants to prove that she was mentally incapable of executing the contract in question. Chadwell v. Reed, 198 Mo. 359; Rhoades v. Fuller, 139 Mo. 179; Cutler v. Zollinger, 117 Mo. 92. (4) The mental test was her capacity to understand the particular matter in hand and the effect of that transaction. Chadwell v. Reed, 198 Mo. 359; Rhoades v. Fuller, 139 Mo. 179; Cutler v. Zollinger, 117 Mo. 92; Brann v. Mo. State Life, 226 S.W. 50. Defendant failed to prove defendant Annie L. Bradley was at the time mentally incapable of executing the contract in question according to said test. (5) Even if Annie L. Bradley had been proven to be thus mentally incapable at the time of executing that contract, it was also necessary for defendant to prove the charge in defendant's answer, "that at said time plaintiff well knew that defendant was a person of unsound mind," to defeat plaintiff's rights. Rhoades v. Fuller, 139 Mo. 188. That charge was not proven. Plaintiff believed defendant Annie L. Bradley was of sound mind, and that she knew what she was doing. (6) This being an equity suit, this appellate court will examine the entire case anew for itself and render its own judgment. Chadwell v. Reed, 198 Mo. 359; Rhoades v. Fuller, 139 Mo. 179; McClure v. Bank, 263 Mo. 128. (7) Appellant is entitled to a judgment and decree in his favor enforcing the contract. Chadwell v. Reed, 198 Mo. 359; Rhoades v. Fuller, 139 Mo. 179; Cutler v. Zollinger, 117 Mo. 92.
Oliver J. Miller and Holland, Lashly Donnell for respondents.
(1) The option contract attempted to be enforced is wholly incapable of enforcement by specific performance because of the uncertainty of the terms of the deferred payment. Lackawanna Coal Co. v. Long, 231 Mo. 605; Krum v. Chamberlain, 57 Neb. 220; Moon v. Gallupo, 65 N.J. Eq. 194; Barry v. Wortham, 96 Va. 87; Schmeling v. Kriesel. 45 Wis. 325; Henry v. Adkins, 194 S.W. (Mo.) 264; Heller v. Jentzich, 260 S.W. (Mo.) 979; 36 Cyc. 597. (2) The contract coming within the terms of the Statute of Frauds parol evidence is not admissible to piece out the incomplete writing. Kelley v. Thuey, 143 Mo. 436; Ringer v. Holtselaw, 112 Mo. 519; Reigard v. Coal Co., 217 Mo. 160. (3) The only evidence attempted to be introduced to explain or piece out the written instrument herein was given by the other party to the contract, who was incompetent at the time to testify because of the insanity of Annie L. Bradley. Sec. 5410, R.S. 1919; McClure v. Clement, 161 Mo. App. 23; Hunter v. Briggs, 254 Mo. 28; Allen Estate v. Boeke Sons, 254 S.W. 864. (4) In specific performance there must be a strict correspondence between the alleged terms of the contract in the petition and the proof by which it is sought to be established. Variance will not be tolerated. Wendover v. Baker, 121 Mo. 290. (5) The court below found Annie L. Bradley to be a person of unsound mind and capacity. There was sufficient evidence upon which such a finding could be made. It is the rule in equity cases to defer to the decision of the lower court on issues of fact, since the court below faced the witnesses and was in a better position to judge the credit to be given them. Gibson v. Shull, 251 Mo. 480; Becker v. Fillingham, 209 Mo. 583. It is only when a result is manifestly wrong that this court will set aside the finding of fact of the trial court. Tinker v. Kier, 195 Mo. 203; Huffman v. Huffman, 217 Mo. 182; McKensie v. Donnell, 151 Mo. 461. (6) Where the contract is wholly executory, the reluctance of the courts to void a contract where one party is mentally incompetent because of the uncertainty of placing the parties in status quo has no application. Matthews v. Nash, 151 Iowa 125; Achatz v. Bailey, 187 N.W. 641; Wirebach v. First Natl. Bank, 97 Pa. 543. (7) The option contract is wholly incapable of enforcement by specific performance, because of the uncertainty of the terms of the deferred payment. Terry v. Michalak, 3 S.W.2d 703. Henry H. Oberschelp for appellant in reply.
(1) Respondent is in error in claiming the contract provided for a deferred payment with uncertainty as to maturity. As there was no time for payment expressed it was payable on demand and thus enforcible as a demand obligation. Collins v. Trotter, 81 Mo. 275. (2) Therefore, the contract can be specifically enforced. No parol evidence is needed, and it is unnecessary to determine whether or not plaintiff could testify with reference thereto. (3) In alleging in the petition that the money was payable in three years with semiannual interest the attorney drafting the petition must have been relying on the custom in such real estate transactions making that the usual time and believing the parties were bound by that custom. 17 C.J. 467, sec. 30; 23 C.J. 61. (4) The attorney's view of the subject does not change the contract or the parties' rights thereunder. There was only one contract, the execution of which is admitted by respondent, the same which respondent set forth and sought to annul in the answer and cross-bill. Under these circumstances there should be no claim of variation. Certainly no substantial rights were in anywise affected thereby. If the court deems advisable correction can readily be made to satisfy and criticism. Secs. 1276, 1277, R.S. 1919. The contract being binding and enforcible, appellant is entitled to its enforcement. Chadwell v. Reed, 198 Mo. 383; Rhoades v. Fuller, 139 Mo. 179; Cutler v. Zollinger, 117 Mo. 102.
This is a suit in equity, filed in the Circuit Court of the City of St. Louis, for the specific performance of a written contract, dated August 19, 1922, covering an optional purchase of certain real estate. The suit was filed on July 19, 1923, and on September 25, 1923, Annie L. Bradley, the original defendant, was adjudged to be a person of unsound mind, and William H. Corcoran was appointed as the guardian of her person and estate, by the Probate Court of the City of St. Louis. In her answer and cross-bill, filed by her guardian, the defendant, among other defenses, pleads her mental incapacity at the time of the execution of the alleged contract, and prays that the same be canceled and for naught held. The reply admits the appointment of defendant's guardian and his authority to act as such, and denies all other affirmative allegations of the answer and cross-bill. The chancellor, after hearing evidence on the issues as framed by the pleadings, dismissed the plaintiff's petition and the defendant's cross-bill, and rendered judgment accordingly. In compliance with plaintiff's request, the chancellor filed his findings of fact and conclusions of law, in which he says, in substance, that he finds that the defendant was mentally unsound and incapable of making the contract in question, and that he, therefore, concludes that the plaintiff's petition is without merit. The case is here for review on plaintiff's appeal from the adverse judgment on his petition. The defendant requested no special findings of fact on her cross-bill, and took no appeal from the judgment rendered against her thereon. Since the granting of plaintiff's appeal, the death of Annie L. Bradley, the defendant, has been suggested and the cause revived, in this court, in the name of William II. Corcoran, executor of her estate, and the executor has entered his appearance herein.
The contract which plaintiff seeks to have specifically performed will be quoted in full, as follows:
"PLAINTIFF'S EXHIBIT A. Selling Option.
August 19, 1922.
Received of Emmett Baldwin the sum of One Dollar in consideration of which I agree to sell to him real estate situated in the City of St. Louis, State of Missouri, described as follows:
Northwest corner of Kingshighway and Garfield Avenue, 133' 6 5/8" on Garfield Avenue by 156' 0 5/8" on Kingshighway Boulevard, at purchase price of Fifteen thousand ($15000) Dollars net. Terms of sale as follows:
Five thousand dollars ($5000) cash less the amount above receipted for, and the remainder as follows:
Ten thousand ($10,000) dollars first deed of trust with interest at six per cent.
I agree to convey the property to him, or his assigns by warranty deed, free from all liens and encumbrances, except taxes adjusted to date of sale.
Said Emmett Baldwin is allowed one year time in which to have the title investigated and to close purchase of the property on the above terms. In the event he fails to close said purchase within that time, this agreement shall be null and void without further notice from the undersigned, and without any further right whatever on his part to a return of the money herewith receipted for. Emmett Baldwin.
MRS. A.L. BRADLEY." (Italics ours.)
While the only reference made in the contract to the deferred payment on the purchase price is the provision for "ten thousand ($10,000) dollars first deed of trust with interest at six per cent," the plaintiff, in his petition, alleges that the contract provided for the payment of "the remainder by a note, payable three years after date of sale, secured by a first deed of trust on said property, drawing interest from the date of sale at the rate of six per cent per annum, said interest to be evidenced by interest notes due and payable in six, twelve, eighteen, twenty-four, thirty and thirty-six months after date, and which said interest notes were also to be secured by said first deed of trust." And the plaintiff was permitted to testify in support of these allegations of his petition, although the defendant made timely objections to his competency as a witness, because of the insanity of the defendant, and to the competency of such testimony, because of the variance between the terms and provisions of the contract pleaded and the written contract offered in evidence. In the trial court and in his original brief in this court, the plaintiff insisted on his right to enforce this contract, as written and as supplemented by his testimony. In two separate reply briefs, he has completely abandoned this position, and shifted to the position that, inasmuch as the contract failed to specify the time of the deferred payment, it was payable on demand and enforceable as a demand obligation, thus eliminating the question of his competency as a witness, as well as the question of the competency of his testimony in this connection. However, it seems perfectly clear that the plaintiff cannot succeed in this suit, on any theory.
I. It is apparent at once that the contract sought to be enforced is silent as to how or when the deferred payment of $10,000 on the purchase price was to be made, as to the terms of the promissory obligation or obligations to be given Incomplete as evidence thereof, and as to the terms and Contract. conditions of the deed of trust to be given as security therefor. In all of these essentials, the contract is incomplete, and it is the ancient and accepted rule that a court of equity will not make a contract for the parties, nor enforce by specific performance a contract which is indefinite, uncertain or incomplete in any of its essential terms. [36 Cyc. 587, 597; Pomeroy's Spec. Perf. of Contracts (3 Ed.) secs. 145, 159; Mastin v. Halley, 61 Mo. 196; Lackawanna Coal Iron Co. v. Long, 231 Mo. 605, 133 S.W. 35; Henry v. Adkins (Mo. Sup.), 194 S.W. 264; Terry v. Michalak (Mo. Sup.), 3 S.W.2d 701.] "The same equity that does nothing by halves will not perform blindly. Before it acts, it must see what is contracted to be done and do that, no more nor no less, or do nothing." [Lackawanna Coal Iron Co. v. Long. supra, 231 Mo. l.c. 612.]
II. It is equally well settled that the express provisions of the contract control, and that where, as in this case, the contract calls for a deferred interest bearing payment to be secured by a deed of trust on the property, the Deferred purchaser has no right to treat the deferred payment Interest- as a demand obligation, or to require the vendor to Bearing receive full payment of the purchase price in cash. Of Payments. course, such contracts are made for the benefit of the vendor as well as the purchaser, and the investment of a portion of the purchase price is a right on which the vendor may insist. Indeed, such investments often induce vendors to enter into contracts of this character. [39 Cyc. 1574-1575; 27 R.C.L. 535; Terry v. Michalak, 3 S.W.2d 701.] Let it suffice to say that the provision in Section 794, Revised Statutes 1919, that "an instrument is payable on demand, in which no time for payment is expressed," and the cases relied on by plaintiff, relate to bills and notes, and have no application to the terms of a contract which is the subject-matter of a suit for specific performance.
In the recent case of Terry v. Michalak, supra, this court was confronted with practically the same situation, and, in that case, SEDDON, C., reviews, quite extensively, the authorities in this and other jurisdictions, on the propositions Judgment presented for our decision in this case. For that for Right reason, we see no occasion for extending the length of Party. this opinion by a further discussion of these propositions. And, in view of the conclusions above stated, it becomes unnecessary to consider the other questions presented by the record and in the briefs of counsel.
The judgment rendered against the plaintiff below is manifestly for the right party, and it is accordingly affirmed. Higbee and Davis, CCC., concur.
The foregoing opinion by HENWOOD, C., is adopted as the opinion of the court. All of the judges concur.