Summary
In Wilson v. White, 161 Cal. 453, [ 119 P. 895], where there was found a discrepancy in value of one thousand dollars on a purchase price of fourteen thousand dollars, this court, declaring the rule to which we have adverted, the adequacy or inadequacy is to be determined by a consideration of all the circumstances, said that a mere difference of one thousand dollars on property worth fifteen thousand dollars "is perhaps not so large as to warrant a conclusion of inadequacy sufficient to justify a refusal of specific performance."
Summary of this case from Schader v. WhiteOpinion
L.A. No. 2771.
December 2, 1911.
APPEAL from a judgment of the Superior Court of San Bernardino County and from an order denying a new trial. Benjamin F. Bledsoe, Judge.
The facts are stated in the opinion of the court.
Eugene C. Campbell, for Appellants.
Halsey W. Allen, for Respondent.
This is an appeal by plaintiffs from a judgment in favor of defendant and from an order denying their motion for a new trial in an action brought by them for the specific performance of an alleged contract for the sale to them by defendant for fourteen thousand dollars cash, of certain real property in San Bernardino County, California, described in the complaint as being subdivision lot 1 in block 35, East Redlands, according to the plat thereof on record in the office of the county recorder of said county, together with ten shares of the capital stock of the East Redlands Water Company, a corporation, said property containing ten acres more or less and being planted to orange trees.
Defendant, the owner of the property, was a resident of the state of Texas, and during the whole period of the negotiations for a sale of the property was in that state. The plaintiffs during all of said period were in the city of Redlands, California, as were also John W. Gill and W.E. Rabbeth, the real estate brokers through whom the negotiations were had. Said Gill and Rabbeth had received a letter written by defendant to them on April 6, 1909, in reply to an inquiry on their part asking for a selling price on the property, in which he said he would sell this property for fifteen thousand dollars without the crop. Plaintiffs' negotiations with defendant for the purchase were entirely by means of letters and telegrams which will hereinafter be set forth. To these letters and telegrams we are confined in determining whether there was any contract between plaintiffs and defendant for the sale and purchase of the property.
During the whole period of the negotiations there was on the orange trees on said property about one third of the annual crop of oranges, the remainder having been harvested. This third of the crop was of the value, according to a finding of the trial court which is sufficiently sustained by the evidence, of twelve hundred dollars, and the same was not harvested until some time in May, 1909. The evidence was also sufficient to sustain the conclusion of the trial court that these oranges so remaining on the trees had not been theretofore sold by defendant, and that he was then the owner thereof.
On April 13, 1909, at the request of plaintiffs, who within a day or two thereof had been shown the property by Gill and Rabbeth and solicited to make an offer for the same, the following telegram was sent to defendant:
"4-13-09, REDLANDS, CAL.
"To J. LOWELL WHITE,
"Kingsville, Texas.
"Have offer 14,000 net to you half cash lower ten advise sale. Much scale in grove.
"GILL RABBETH."
On April 15, 1909, defendant answered this telegram by both telegram and letter. The telegram was as follows:
KINGSVILLE, TEX. Apr. 15-09.
"GILL RABBETH, Redlands, Cal.
"On terms named will not sell for less than fifteen thousand.
"J. LOWELL WHITE."
The letter was simply a confirmation of the telegram. This telegram was shown to plaintiffs and on the same day, at their request, another telegram was sent to defendant. It was as follows:
"REDLANDS, CAL., Apr. 15, '09.
"J. LOWELL WHITE, Kingsville, Texas.
"Cannot get fifteen. Client offers fourteen cash.
"GILL RABBETH."
On April 16th defendant replied by telegram as follows:
KINGSVILLE, TEXAS, Apr. 16.
"Gill Rabbeth, I accept fourteen thousand net cash to me for lower ten without crop.
"J. LOWELL WHITE."
On the same day defendant mailed a letter to Gill Rabbeth confirming the telegram, and saying he would be glad to hear further in regard to details of the sale, asking that they have their client deposit the money in First National Bank at Redlands for delivery on presentation of a satisfactory deed, and suggesting that the transfer be made on May 1st.
Before the receipt of the last named telegram, and on April 16th, one W.D. Bethell offered Gill Rabbeth for the defendant fifteen thousand dollars net cash for the property, without the crop, he (Bethell) to pay Gill Rabbeth the commission on the sale, and Gill Rabbeth accepted such offer, and received from Bethell three thousand dollars on account of such purchase price. Thereafter, on the same day, the telegram last quoted was received, and they showed the same to plaintiffs, and at the same time informed them that prior to its receipt they had sold the property to Bethell, without the crop, for fifteen thousand dollars net cash to defendant.
On April 17th, plaintiffs tendered to Gill Rabbeth fourteen thousand dollars and demanded a conveyance of the property, and this tender was rejected by said brokers.
On the same day plaintiffs sent directly to defendant, this being the first time they had communicated directly with him and the first time that the names of the proposed purchasers were communicated to him, the following telegram, viz.:
"Ar. 17.
"Mr. JOSEPH L. WHITE,
"Kingsville, Texas.
"On April 15 last, we offered by telegram sent through Gill Rabbeth to pay you fourteen thousand dollars cash for your sub. lot one, block thirty-five, East Redlands, San Bernardino County, California, and on April sixteenth last through Gill Rabbeth received your acceptance. Will you carry out and perform said contract of sale? If so, wire instructions concerning delivery of deed and payment of money. Wire answer.
"A.J. WILSON "R.C. WILLIS."
On the same day Gill Rabbeth telegraphed to defendant as follows:
REDLANDS, CAL., April 17, 1909.
"J. LOWELL WHITE,
"Kingsville, Texas.
"Before last telegram came we sold grove another party fifteen thousand. First party claims grove at fourteen. Full explanation by letter.
"GILL RABBETH."
and at the same time wrote to him an explanation of the situation.
On April 19th plaintiffs again telegraphed defendant as follows:
REDLANDS, CAL. April 19, 1909.
"J. LOWELL WHITE,
"Kingsville, Texas.
"Have deposited in your name $14,400, with Citizens National Bank of Redlands, California, and demand deed of sub. lot one, block 35, East Redlands. Letter follows.
"WILSON WILLIS."
On the same day defendant telegraphed plaintiffs that having had no negotiations with them, he regretted that he was unable to answer their message of the 17th, and on April 23rd he telegraphed the Citizens National Bank of Redlands not to accept for his account the money deposited by plaintiffs. This telegram of April 19th was apparently sent in reply to plaintiffs' telegram of April 17th, and so far as appears, before plaintiffs sent their telegram of April 19th.
One of the questions presented is whether, in view of these facts, a contract in writing for the sale of the property by defendant to plaintiffs was created.
The trial court, among other things, found that there was no understanding or agreement between plaintiffs and defendant as to the sale of the orange crop on the trees by defendant, or as to any disposition of said crop; that plaintiffs never accepted the counter proposition of defendant as contained in his telegram of April 16th as to the sale of the property "without crop," or agreed with defendant for the purchase of the property for fourteen thousand dollars net cash, without crop. It further found that plaintiffs never offered fourteen thousand dollars, or any sum, for the property here sought and that defendant never accepted in writing any offer of plaintiffs, and that the tender and demand of plaintiffs was for a conveyance of the premises "including the crop of oranges then growing on said property."
In determining the question thus presented it is necessary to consider certain additional facts which must be taken as established on this appeal in view of the record before us.
The trial court found, in response to an allegation of the complaint to that effect, which was denied by the answer, "That said Gill Rabbeth in sending and receiving the aforesaid telegrams and letters set out in paragraphs VI and VII of the amended complaint were acting as the agents of plaintiffs and were authorized by plaintiffs to despatch and receive said communications, by telegram and letter, from defendant for plaintiffs." The letters and telegrams referred to included all those of April 13th, 15th and 16th hereinbefore set forth. We regard this finding as most vital to plaintiffs. If Gill Rabbeth were lawfully acting as plaintiffs' agents in sending and receiving such letters and telegrams, it is obvious that the receipt by Gill Rabbeth of any such letter or telegram from defendant was a receipt thereof by plaintiffs, their principals, which rendered it unnecessary, in order to make the same effective as a proposition or acceptance, that the same should be communicated to plaintiffs by Gill Rabbeth. On the other hand, if Gill Rabbeth were not the agents of plaintiff in such matter, but were the agents of defendant, it is obvious that as long as any such letter or telegram from defendant was not communicated to plaintiffs for the purpose of carrying on the negotiations, it was no more effective as a proposal or acceptance than if it had remained in defendant's pocket in Texas. Being in the possession of his agent, it would still have been in his possession, undelivered. There was sufficient evidence to support this finding, and it must here be assumed that Gill and Rabbeth were the agents of plaintiffs in such matter. There was also evidence to support a conclusion that defendant knew that Gill Rabbeth were acting as the agents for a proposed purchaser in making the propositions for purchase, and not as his agent therein.
The trial court found that Gill Rabbeth on April 16, 1909, before the receipt of defendant's telegram of that date, acting as agents for defendant, sold the property to one Bethell for fifteen thousand dollars net cash, Bethell to pay the sale commission; that at that time Bethell paid Gill Rabbeth three thousand dollars cash on such purchase and took possession of the property and has ever since been in possession. This finding, except in so far as it states that Bethell paid Gill Rabbeth three thousand dollars on account of an attempted purchase by him, is entirely without support in the evidence. There was absolutely nothing in the evidence to warrant the conclusion that Gill Rabbeth had been authorized by defendant to make any contract on his behalf for the sale of any of his property, or that they were anything more than mere brokers with power merely to find a purchaser. (See Lambert v. Gerner, 142 Cal. 399, [ 76 P. 53]; Grant v. Ede, 85 Cal. 418, [20 Am. St. Rep. 237, 24 P. 890].) And there is nothing in the record to support a conclusion that defendant in any way ratified the attempted action of Gill Rabbeth in regard to a sale to Bethell prior to the sending or receipt by him of plaintiffs' telegram of April 19th, or did anything that would operate as an estoppel in Bethell's favor. So we must determine the question raised in regard to the matter of the orange crop without regard to the attempted action of Gill and Rabbeth in the matter of a sale to Bethell.
While for some purposes growing crops are considered personal property, it is practically elementary law that as between the vendor and vendee of real property having a growing crop thereon, such crop constitutes a part of the realty (unless there has been a constructive severance), and in the case of a voluntary conveyance of the land passes to the grantee unless specially reserved by the grantor. And while there are some authorities holding that an oral exception or reservation of the crop is effective is such a case, the weight of authority as well as the better reasoning are to the effect that where a writing is essential to the transfer of real property, such a reservation cannot be established by parol to impair the effect of the writing purporting to convey the land without reservation. (See 8 Am. Eng. Ency. of Law, 2d ed., pp. 303 and 306.) And this court appears to have committed itself to this doctrine in Fisk v. Soule, 87 Cal. 313, [25 P. 430], where it was substantially said that a written contract for the sale of land which did not contain any reservation of the crops bound the grantor to include the crops in his conveyance, notwithstanding an oral understanding that the crops were not to be included, "unless corrected on the ground that by mistake it was not in accordance with the agreement actually made." As we have already seen, the evidence was sufficient to support the conclusion of the trial court that the crop remaining on the trees on this property had not been sold at the time of these negotiations, and that there had been no constructive severance thereof from the land.
The first offer of plaintiffs to purchase the property was that of April 13th. So far as the matter of the crop was concerned it was clear and certain in its terms. It was an offer of fourteen thousand dollars net, half cash, for everything that would then pass by a grant of the land. This, as we have seen, necessarily included the crop on the trees. This offer having been rejected by defendant's telegram of April 15th, plaintiffs on April 15th made a second offer "of fourteen cash," the necessary implication of the language used being that it was an offer of fourteen thousand dollars net cash for the same property referred to in the telegram of April 13th, viz., the realty as it stood, without reservation or exception of any kind. To this, on April 16th, defendant answered by telegram "I accept fourteen thousand net cash to me for lower ten without crop." (The italics are ours.) His letter of the same day was simply a confirmation of this message, with expressions indicating that he was satisfied that the purchase would be proceeded with upon the terms stated by him.
It may be conceded that this telegram introduced a provision for a reservation in the proposed conveyance that was not contained in the written offer of plaintiffs, and that defendant's acceptance was, therefore, a qualified acceptance, which under our law constituted a new proposal. (Civ. Code, sec. 1585) When this new proposal was received by Gill Rabbeth it was, in legal effect, received by plaintiffs. There is nothing to indicate that it was revoked by defendant at any time before the receipt by him of plaintiffs' telegrams of April 17th and 19th. (Civ. Code, sec. 1587) Defendant's telegram of April 19th to plaintiffs was in no sense a revocation of his previous proposal. If either of these telegrams constituted an acceptance by plaintiffs of defendant's new proposal, the contract was complete so far as the matter of the reservation by the defendant was concerned. "A proposal may be revoked at any time before its acceptance is communicated to the proposer, but not afterwards." (Civ. Code, sec. 1586) We do not see how it can be held that plaintiffs' telegrams of April 17th and 19th can be considered otherwise than as an acceptance of defendant's proposition. Especially is this true of their telegram of April 19th, when read in connection with that of April 17th. It was an absolute compliance with the terms of the proposition made by defendant's telegram so far as the consideration named was concerned (the four hundred dollars additional being the amount of the agents' commission), and although silent on the question of reservation of crop so far as express words were concerned, it necessarily implied acquiescence in the making of such a reservation. No other construction could reasonably be given to the telegram, in the light of the other telegrams and letters that had passed between the parties, than that the same was an absolute and unconditional assent to the terms proposed by defendant. The demand therein for a deed was clearly, in effect, one for a deed of the property without the crop. It is not to be doubted in view of all the writings that plaintiffs could have been compelled to accept in full satisfaction of the contract a deed containing such a reservation. No condition having been provided by the proposer concerning the communication of the acceptance, any reasonable and usual mode could be adopted, and the consent must be deemed to have been fully communicated between the parties as soon as plaintiffs put their acceptance in the course of transmission to defendant. (Civ. Code, secs. 1582 and 1583.)
It may be said, in passing, that nothing could be clearer, in view of the evidence, than that it was the understanding of all parties that the crop was not to go with the land, but, as we have said, the agreement to this effect must be shown by the writings.
There is no force in any of the other points made against the validity of the alleged contract. Some of these claims rest upon the assumption that there had been a sale to Bethell before the contract with plaintiffs was perfected, an assumption that we have seen is not warranted. The series of letters and telegrams passing between Gill Rabbeth, acting for plaintiffs, and defendant, and between plaintiffs and defendant, contained all the essential elements expressed in such a way as to make a complete, certain, and definite contract between the parties. This is certainly true both as to the description of the property and the names of the purchasers, the matters as to which defendant makes his main contention. It cannot be disputed that the description of the property contained in the telegram of April 17th was certain and complete, and the court finds that it was understood by all the parties that the "lower ten" mentioned in the earlier telegrams "was the property described in paragraph II of the amended complaint," which included no other land than that described in the telegram of April 17th, as well as that of the 19th. It was shown that defendant owned no other ten-acre piece of land, and that he owned only one other parcel in San Bernardino County, one containing 14 7-10 acres. It cannot be disputed that plaintiffs themselves could effectually continue in their own names the negotiations theretofore carried on in the name of their agents.
Some claim is made based on the allegations of paragraph II of the amended complaint that the defendant is the owner of certain land (describing it), "together with ten shares of the capital stock of the East Redlands Water Company, a corporation," and on the prayer of such complaint by which plaintiffs asked that the defendant be required to execute a conveyance to them of the property hereinbefore described. We do not see how this in any way affects the question of the validity of the contract. It is apparent, of course, from what we have said, that if the water stock referred to in this allegation was not appurtenant to the land, and consequently was personal property, the contract made did not include it. If, on the other hand, it was appurtenant to the land, as is claimed in plaintiffs' brief, and therefore legally part of the land, it was covered by the contract.
We conclude, therefore, that there was a good and sufficient contract in writing between these parties for the sale of the land described in paragraph II of the amended complaint, and that the findings of the trial court to the contrary are not sustained by the evidence.
We are now brought to the remaining claims of defendant, which relate to the right of plaintiffs to have specific performance of the contract. It is unnecessary to consider his contention that the complaint fails to state facts showing that the contract should be specifically enforced, for we are satisfied that we cannot interfere with the action of the lower court denying such relief in view of its conclusion upon the question of the fairness, justness, reasonableness, and adequacy of the consideration. It is alleged in the amended complaint that at all the times mentioned fourteen thousand dollars "net cash was and is now a fair, just, reasonable and adequate price for the said property described in paragraph II." This was denied by the answer and it was alleged therein that said property was and is reasonably worth eighteen thousand dollars. As we read the findings, the trial court concluded that the value of the property as it stood at the time of the negotiations, including the crop then on the trees, was sixteen thousand dollars, and that the value without such crop was fifteen thousand dollars. The court further found "that the sum of $14,000, net cash, was and is not a fair or just or reasonable or adequate price for the property," without the crop. There was ample evidence to sustain the conclusion of the trial court as to the real value.
Our Civil Code (sec. 3391) provides that specific performance cannot be enforced against a party to a contract: "1, if he has not received an adequate consideration for the contract; 2, if it is not, as to him, just and reasonable." The claim of plaintiffs is that in view of the small difference between the true value and the consideration agreed on, it cannot be held that there was such an inadequacy in the price agreed on as to support the conclusion of the trial court, quoting Mr. Pomeroy to the effect that the rule is well settled that where the parties were both in a situation to form an independent judgment concerning the transaction and acted knowingly and intentionally, "mere inadequacy in the price or in the subject-matter unaccompanied by other inequitable incidents," is never of itself a sufficient ground for refusing the remedy of specific performance. It is clear, of course, that our statute has made inadequacy of consideration a separate ground for refusing specific performance. (Morrill v. Everson, 77 Cal. 114, [19 P. 190]; Cummings v. Roeth, 10 Cal.App. 144, [ 101 P. 434]. See, also, White v. Sage, 149 Cal. 613, [ 87 P. 193].) Clearly the difference between the true value and the agreed value may be such as, under our statute, to warrant the conclusion that specific performance should be refused on the ground alone of inadequacy of consideration. The question in such cases necessarily is, not whether the price agreed on was the highest price obtainable, but whether such price is a fair and adequate price "under all the circumstances." (Morrill v. Everson, 77 Cal. 114, [19 P. 190].) It is peculiarly a question of fact for the trial court to determine in the light of all the circumstances, and the conclusion of that court upon the question should not be set aside unless it is clear that it has no sufficient support in the evidence. A conclusion that the agreed price was not adequate means that it was not such as to be, under all the circumstances, a "fair, or just or reasonable" price to be paid by the vendee to the vendor, terms expressly embodied by the trial court in the finding in this case. While a mere difference in value of one thousand dollars on property worth only fifteen thousand dollars is perhaps not so large as to warrant a conclusion of inadequacy sufficient to justify a refusal of specific performance, something more was shown in this case. The vendor resided and was in the state of Texas, many hundreds of miles from the property, and was dependent upon those near the property for information as to its condition and value. On the other hand the plaintiffs were on the ground and were well informed regarding the value of orange groves in that vicinity and one of them had been engaged for eight years in buying and selling such orange groves. In their telegram of April 13th to defendant, Gill Rabbeth advised a sale on the terms then offered, stating that there was much scale in the grove. We cannot say in the light of these facts and the inferences that may be reasonably drawn therefrom, that the finding of the trial court that the consideration was not, under the circumstances, fair or just or reasonable or adequate as to defendant, is without sufficient support in the evidence. If the finding is sufficiently supported by evidence it follows that the judgment denying specific performance was correct.
Complaint is made that in any event, plaintiffs should have been awarded damages. It was generally alleged that by reason of the failure and neglect to convey on the part of defendant, plaintiffs had been damaged in the sum of two thousand dollars. This was denied and the court found that the plaintiffs had suffered no damage whatever. The measure of damage for breach of an agreement to convey real estate where no bad faith on the part of the vendor is alleged and shown, is prescribed by section 3306 of the Civil Code to be "the price paid, and expenses properly incurred in examining the title and preparing the necessary papers, with interest thereon." There was no evidence whatever to show any such expenditure by plaintiffs, no showing that would have sustained a conclusion of damage, in view of the provisions of section 3306 of the Civil Code.
The judgment and order denying a new trial are affirmed.
Shaw, J., and Sloss J., concurred.
Hearing in Bank denied.