Case Title: Rhodes v. Haberstich

Citation: 326 P.2d 657

Docket Number: 

State: colorado

Court: Colorado Supreme Court

Date: 1958-06-09T00:00:00Z

Document:
326 P.2d 657 (1958) William J. RHODES, Eva Rhodes and Hotels, Inc., a corporation, Plaintiffs in Error, v. John HABERSTICH and Dorothy D. Haberstich, Defendants in Error. No. 18139. Supreme Court of Colorado, En Banc. June 9, 1958. Boyle & Witty, Salida, for plaintiffs in error. Sherman & Glaston, Denver, for defendants in error. DAY, Justice. The parties appeared in inverse order in the trial court. We will refer to them as they there appeared or as purchasers and sellers. *658 Plaintiffs John and Dorothy Haberstich instituted suit for the return of a $1,000 deposit made by them in connection with a purchase and sale agreement. Defendant Hotels, Inc. acted as broker in the transaction between the plaintiffs as purchasers and the defendants Rhodes as sellers of "the furniture, furnishings, equipment and business of the Hand Hotel of Fairplay, Colorado". The complaint alleged fraud and misrepresentation by the defendants as an inducement to the plaintiffs to enter into the agreement. Trial was to a jury. At the close of plaintiffs' evidence they were permitted, over objection, to amend their complaint by adding a second count alleging that the agreement for purchase and sale was void for lack of mutuality and want of consideration. Plaintiffs' counsel then moved for a directed verdict predicated upon the second count of the complaint as amended. The court did not rule on the motion until the defendants had presented their defense, but at the close of all of the evidence directed a verdict for plaintiffs, ruling that the contract was void for want of consideration and lack of mutuality and instructed the foreman of the jury to sign in a verdict for the amount of the $1000 deposit. Several grounds for reversal are urged by plaintiffs in error, among which are that the trial court erred in allowing an amendment to the complaint, and again in directing a verdict in favor of the plaintiffs. By this writ of error they seek reversal of the judgment against them. Since we are of the opinion that the court erred in its interpretation of the contract, we find it unnecessary to comment on the propriety of permitting the amendment to the complaint. The full text of the contract involved is as follows: "Agreement to Purchase and to Sell Plaintiffs contend, and the trial court held, that the next to the last paragraph of the contract rendered the entire document wholly lacking in mutuality. They argue that this paragraph gives defendants the absolute and unconditional right to refuse to close the deal according to the terms, but that the purchasers were bound, and if they failed to complete the deal they forfeited the $1000. An analysis of the paragraph standing by itself without more, might tend to support plaintiffs' contention and furnish a basis for the findings of the court. The agreement, however, must be read in its entirety. We cannot agree that the paragraph providing for the return of the $1000 to the purchasers in the event of default of the sellers relieved the sellers of *660 their obligations under the contract and permitted them to repudiate the contract at will. Obviously if the sellers failed to complete the deal, the buyers were entitled to the return of their money if they elected to pursue that remedy, and the embodiment of this right in the agreement does not render other portions of the contract unenforcible. Nor does this paragraph vitiate the rights the purchasers would have to compel performance of the contract according to its terms or to seek damages for the breach thereof. Nowhere do we find in the contract a provision that the sellers had the right at any time to refuse to consummate the deal without obligation or if they did that the contract would be null and void or of no force and effect. On the other hand we do find that the agreement by its terms expresses the unequivocal promise on the part of the defendants to sell and on the part of the plaintiffs to buy. In addition, the sellers agreed to do other things, to-wit: To lease the hotel building, which they owned, for a period of five years at an agreed rental, to include in the lease an option for renewal for five years at a rental to be determined prior to the renewal date, and to give the Haberstiches an option to purchase the hotel building for the sum of $25,000. They agreed not to reenter the hotel and restaurant business in Fairplay for a period of ten years. These promises are binding, and the provision of the contract that upon their failure to keep them the $1000 should be returned is not an exclusive remedy and does not relieve them of other obligations under the instrument. Thus the mutual promises of the parties constituted a good consideration. See Hoagland v. Murray, 53 Colo. 50, 123 P. 664, 665, wherein the counrt said: See also Stiles v. McClellan, 6 Colo. 89. The plaintiffs abandoned their claim of fraud, and a reading of the record discloses a total lack of evidence to support such claim even had it been submitted to the jury. The court having entered an erroneous judgment predicated upon an incorrect interpretation of the contract, nothing remains to be retried in this action, hence the judgment is reversed and the cause remanded to the trial court with directions to dismiss the complaint and to enter judgment for the defendants.