Case Title: Hoth v. Kahler

Citation: 74 N.W.2d 440

Docket Number: 

State: north-dakota

Court: North Dakota Supreme Court

Date: 1956-01-17T00:00:00Z

Document:
74 N.W.2d 440 (1956) Lester E. HOTH, Plaintiff and Appellant, v. Alma KAHLER, Defendant and Respondent. No. 7491. Supreme Court of North Dakota. January 17, 1956. *441 M. S. Byrne, Bowman, Strutz, Jansonius & Fleck, Bismarck, for plaintiff and appellant. Amundson & Amundson, Bowman, Mackoff, Kellogg, Muggli & Kirby, Dickinson, for defendant and respondent. SATHRE, Judge. The plaintiff Lester Hoth brings this action against the defendant Alma Kahler for specific performance of an alleged contract of sale of real estate by the defendant to the plaintiff. The complaint alleges that on February 29, 1952, the defendant sold to the plaintiff the E½ of Section 15, Township 131, Range 101, County of Bowman, State of North Dakota, at the agreed price of $5,000 payable in cash and that the defendant agreed to convey the same by warranty deed to plaintiff; that under the terms of said sale plaintiff agreed to and with the said defendant to deposit $5,000 in the First National Bank of Bowman, North Dakota, in escrow for the benefit of said defendant and to be remitted to said defendant upon delivery to plaintiff or to the bank of abstract of title and warranty deed conveying the said described land to the plaintiff and that the defendant agreed forthwith *442 to forward to said bank the said abstract of title and warranty deed. That thereafter and on the 29th day of February 1952 and in accordance with the terms of sale of said described premises plaintiff did deposit in the First National Bank of Bowman, North Dakota, the sum of $5,000 in escrow to be paid to the defendant upon delivery to plaintiff or to the said bank of abstract of title to the said described premises and warranty deed duly executed by the defendant and conveying said premises to the plaintiff. The plaintiff then alleges that the said defendant has failed and refused and still refuses and neglects to convey the real property described, though requested to do so and has failed and refused to carry out the terms and covenants of said sale in violation of and contrary to the terms and obligations of said contract of sale. Plaintiff alleges further that he has performed all of the conditions, covenants, stipulations and provisions of said contract of sale but that the defendant has refused and still refuses to execute a deed to plaintiff of the said described premises and has failed and refuses to execute a deed to plaintiff to the said described premises and has failed and refused and neglected to carry out the terms under said contract of sale; that the plaintiff is ready, willing and able and in fact has tendered the sum of $5,000 the purchase price of the said described premises under the terms of said sale by placing said sum in escrow at the First National Bank at Bowman, North Dakota, to be delivered to said defendant upon delivery of the abstract of title and the properly executed warranty deed to the plaintiff and that the said sum of $5,000 is still in escrow in the First National Bank of Bowman, North Dakota. The complaint further alleges that the plaintiff is now ready, able and willing to tender the said amount of said sale to-wit: the sum of $5,000 to the defendant upon compliance with the terms of said contract of sale. The complaint then demands judgment that the defendant specifically perform the provisions, covenants, and obligations of said contract of sale and for such other and further relief as the court may deem just and equitable. The amended answer of the defendant admits that she was the owner of the premises described in the complaint on the 29th day of February 1952 but denies each and every other allegation contained in the complaint. As a further defense the answer alleges that the alleged agreement for the sale of the land described in the complaint is invalid as the same is not and never was in writing subscribed by the defendant or by her agent and that there never was at any time a note or memorandum thereof in writing subscribed by the defendant or by her agent. For a further and separate defense the defendant alleges that the supposed contract, if there was a contract, was induced by mistake and fraud; that said fraud consists of fraudulent and material misrepresentations made by the plaintiff to the defendant and on which the defendant, believing them to be true relied, to the effect that the land was no longer wanted by the defendant's tenant; that the land was poor and run down, and that by reason of said mistake and fraud the alleged contract, if any, is null and void and the defendant is not bound thereby. Judgment is then demanded for dismissal of the action. The facts and circumstances giving rise to this action are as follows: On February 22, 1952, the plaintiff wrote to the defendant the following letter: "Dear Madam: *443 I owned the land and used soil building practices for years. On February 28, 1952, the plaintiff not having heard from the defendant, either he or his secretary called the defendant by long distance telephone at Grand Island, Nebraska. Plaintiff's testimony in reference to this telephone conversation is as follows: A letter from the defendant to the plaintiff dated February 27, 1952, plaintiff's exhibit 5, in answer to his letter of February 22, was already in the mail when he called her by telephone. This letter is as follows: "Dear Sir: On February 29, 1952, the First National Bank of Bowman sent to the defendant a wire, plaintiff's exhibit 2, as follows: "Feb. 29, 1952 On February 29, 1952, the defendant sent to the First National Bank of Bowman a wire as follows: Plaintiff's exhibit 1: "First National Bank, Bowman, North Dakota. "I am sending abstract for examination a letter will follow On February 29th, the defendant also wrote a letter to the First National Bank of Bowman, which is as follows: "The First National Bank, Bowman, North Dakota. "Dear Sirs: On March 3rd the First National Bank of Bowman sent a telegram to the defendant Plaintiff's exhibit 4, which is as follows: "Alma Kahler March 3, 1952 418 North Carry Ave. Grand Island, Nebraska On March 6, 1952, the defendant wrote to the First National Bank of Bowman the following letter, defendant's exhibit A, which is as follows: "First National Bank, Bowman, North Dakota. On March 6, 1952, the defendant wrote to her tenant Edgar Hilton the following letter, defendant's exhibit D: "Mr. Edgar Hilton, Bowman, North Dakota. "Dear Mr. Hilton: "P.S. All taxes are paid and everything is free and clear." On March 29, 1952, a firm of attorneys at Grand Island, Nebr., wrote the following letter, defendant's exhibit B, to the First National Bank of Bowman, North Dakota. "First National Bank, Bowman, North Dakota. "Gentlemen: Defendant's exhibit C is a letter from the First National Bank to Cunningham, McDermott & Cunningham, dated March 31, 1952 and is as follows: "Cunningham, McDermott & Cunningham Cowton Building, Grand Island, Nebraska "Attention: B. J. Cunningham "Dear Sir: *446 The case was tried in district court, Sixth Judicial District, Bowman County, before the Hon. J. O. Wigen without a jury. The plaintiff contended that the correspondence and telegrams constituted a valid contract for sale by the defendant of the land described in the complaint. The defendant contended first, that the correspondence relied upon by the plaintiff was not sufficient as a note or memorandum under the statute of frauds; and, that even though the correspondence was sufficient as a memorandum in writing, nevertheless the defendant was induced to enter into an agreement through fraud and misrepresentation on the part of the plaintiff made in his letter to the defendant of February 22, 1952. The district court decided in favor of the defendant principally on two grounds; 1st, that there had been misrepresentation on the part of the plaintiff when he stated that the tenant Mr. Hilton was not interested in farming the land any longer, and 2nd, even if there had been a valid contract of sale there was an abandonment by plaintiff because of the fact that the bank had returned the abstract to the defendant's attorneys in response to their letter of March 29, 1952, requesting the return of the abstract to them. The plaintiff appealed and demanded a trial de novo in this court. The first question for consideration is whether the correspondence, telegrams and other communications between the parties are sufficient to constitute a complete and valid contract of purchase and sale. The negotiations between the parties were initiated by plaintiff's letter, plaintiff's exhibit 9, to the defendant, dated February 22, 1952, in which he stated he was interested in buying the land in question and asked for a "hard cash" offer. On February 28th not having received a reply to his letter of February 22nd, he called the defendant by long distance telephone and was told by defendant that a reply to his letter was in the mail and that the asking price of the land was $5,000. He advised the defendant that he would put up the money in the bank the next morning. Defendant's reply to plaintiff's letter of February 22nd, plaintiff's exhibit 5, was received by him on February 29th. In this letter defendant stated that her price was $5,000. The letter contained a detailed statement of the proceeds of the crops raised on the land during the years 1947, 1948, 1950 and 1951, and that the total value of the crops during those years was $19,065.72. The purpose in making this detailed statement of the value of the crops raised during the four years was undoubtedly in answer to plaintiff's statement that the land "produces very poorly." On February 29, 1952, the First National Bank of Bowman sent to defendant a telegram, plaintiff's exhibit 2, advising that the bank held $5,000 in escrow from the plaintiff subject to receipt of deed and abstract, and asked for privilege of title examination. The check was introduced in evidence as plaintiff's exhibit 8, dated February 29, 1952, payable to First National Bank, Bowman and had this notation: "Deed and abstract, E½-15-131-101, Alma Kahler." On the same day, February 29th, the defendant wired the bank that she was sending abstract for examination and stating that letter would follow. On the same day defendant wrote the bank acknowledging receipt of its telegram and enclosing abstract and asked to whom deed was to be issued. On March 3rd the bank sent a telegram to defendant, plaintiff's exhibit 4, stating that title was approved and that deed was to be issued to Lester Hoth, and that remittance would be made on approval of deed. It is admitted that in all these transactions the bank was agent of the plaintiff. Meanwhile the defendant had communicated with Hilton and found that he was willing to buy the land. Defendant offered the land to Hilton for $7,000 but finally agreed to sell it to him for $6,000. Defendant then wrote the letter of March 6th, defendant's exhibit A, to the Bowman Bank explaining why she had repudiated the sale to the plaintiff advising the bank that Hilton was to deposit $6,000 in the bank to be sent to her upon approval of deed and" *447 abstract. On the same date she wrote a letter to Edgar Hilton in which she sought to explain why she had repudiated the sale to the plaintiff and in which she stated among other things: "as soon as things are straightened out to everyone's satisfaction I will send the deed made out in your favor." It seems clear from the correspondence, telephone conversation and telegrams between the parties that there was an offer by the defendant to sell the land in question for $5,000 and an acceptance of the offer by the plaintiff. There was no disagreement as to the terms of the sale. The defendant sent the abstract of title to the bank. The bank advised defendant that the title was approved and directed her to issue deed to Lester Hoth, the plaintiff. There was full compliance of the sales agreement by the plaintiff. The money was on deposit in the bank for payment to defendant on receipt of the deed. There was no ambiguity as to the conditions to be performed by the seller or the buyer. No objection was made by the defendant that the plaintiff had not fulfilled his part of the agreement. Defendant was advised by the bank that the title was approved and that the purchase price would be paid on receipt of deed to plaintiff. The party to be charged in the instant case is the defendant and we think that the letters and telegrams sent by her to the plaintiff and to the bank constitute sufficient writing and memoranda to satisfy the statute of frauds. In the case of Goetz v. Hubbell, 66 N.D. 491, 266 N.W. 836, 838, this court said: We are of the opinion that the correspondence, telegrams and transactions had between the parties were sufficient to satisfy the statute of frauds and to establish a valid contract for the sale and purchase of the land described in the complaint. *448 The next question for consideration is whether the defendant was induced to enter into the agreement to sell through fraud and misrepresentation on the part of the plaintiff. The misrepresentation complained of by the defendant is that the plaintiff stated in his letter to the defendant of February 22, 1952, that Mr. Hilton, defendant's tenant, did not care to farm the land in question any longer and that he suggested that plaintiff farm the land. We quote from the letter: It will be noted that plaintiff did not say that Hilton did not wish to buy the land. The defendant's reply to this letter would indicate that she did not believe the land was "run down". She produced figures showing that during the years 1947, 1948, 1950 and 1951 the land in question had produced crops to the total value of $19,065. Then she writes, "I rec'd ¼ of this amount which amounts to $4766.43 and Mr. Hilton's share was $14,299.29, so that the average take per year for the 4 years mentioned above amt. to $466.43 which is only $233.57 less the asking price of this land which is $5000.00. You see I live in the heart of the grain belt and there is no land here that can produce its purchase price in a single yr. like this land has done and there is less then 2/3 of it being farmed at that, so it is like you say if this land is built up a little would make a pretty good farm." She stated further: "The only reason I want to sell this land is because it is so far away from here. But of course if I don't sell it and no one wants to rent it I think I will lease it to an Oil Co." It is evident from what defendant said in this letter that she was not much impressed with plaintiff's statement that the land "produced poorly". She discussed the good qualities of the land and was demonstrating its productivity. In other words her statements were in the nature of a "sales talk" by one who has property for sale. With reference to the alleged misrepresentation made by plaintiff in his letter of February 22, 1952, plaintiff's exhibit 9, the plaintiff testified on cross-examination as follows: Plaintiff's father, Henry Hoth, who was present during the conversation with Hilton, testified as follows: The testimony of Hilton relative to the said conversation is that in the fall of 1951 he was "in the pool hall or one of those places." He testified that "the only time I remember was a couple of years ago when I said it was kind of getting run down." He was asked on cross-examination, "You don't remember stating you wanted the plaintiff and his father to rent it? A. I don't remember, I don't believe so. I am sure I didn't." With reference to the alleged misrepresentation in plaintiff's letter of February 22, 1952, plaintiff's exhibit 9, the defendant Alma Kahler testified as follows: On cross-examination defendant testified further as follows: It is quite clear from defendant's testimony that although she testified that "we had always had Edgar (Hilton) in mind," she seized the first opportunity to sell her land to the plaintiff. If she were so interested in selling to her tenant she could just as easily have communicated with him before she made the sale to the plaintiff as after she made the sale. The clear inference from her conduct is that she wanted to make sure she had a buyer. She was evidently negotiating with Hilton for sale of the land after she made the deal with the plaintiff. She first asked Hilton $7,000 as a purchase price, and when he agreed to pay $6,000 she attempted to repudiate her sale to the plaintiff. The sale to the plaintiff was completed on March 3rd when the Bowman bank wired defendant that title was approved and asking that deed be made in favor of Lester Hoth. The letter of the defendant to the Bowman bank in which she repudiated the sale to the plaintiff was not written until March 6th. In this letter she gives direction to the bank that Hilton is to place $6,000 in the bank to be sent to her upon approval of deed and abstract. She is not convinced, however, that she has been fair to the plaintiff, for she says, "I hope this meets Mr. Hoth's approval. I am sorry it turned out this way. * * * So please let me know when everything is ready and we will go on with the deal." In defendant's exhibit D, the letter from the defendant to her tenant, Hilton, dated March 6th, she stated: But although she became suspicious because "he wanted to close the deal so quick", she nevertheless made an offer to sell the land to the plaintiff for $5,000 cash and which plaintiff accepted before she, the defendant, communicated with her tenant. The conduct of the defendant would indicate that her main interest was to secure a buyer for her land. She admitted that she was definitely in a mood to sell it. She did not contact her tenant until after she had agreed to sell the land to the plaintiff, and she did not attempt to repudiate the sale to the plaintiff until her tenant offered to buy the land for $6,000 or $1,000 more than the price for which she agreed to sell it to the plaintiff. We come to the conclusion therefore that the sale to the plaintiff was not induced through fraud or misrepresentation on his part. Defendant further contends that there was an abandonment of the contract by the plaintiff for the reason that the Bowman bank, upon request by a firm of attorneys in Grand Island, Nebraska, returned the abstract of title to the land involved here. The letter written to the bank by said attorneys did not mention the land deal. It simply stated that Alma Kahler had requested them to ask the return of the abstract sent to the bank some time ago. The fact that the bank returned the abstract as requested certainly cannot be considered as an abandonment of plaintiff's agreement to buy the land. The claim of abandonment by the plaintiff is therefore without merit. The cashier of the bank testifying in this matter admitted that he returned the abstract, but he stated that the bank still held the sum of $5,000 for payment to defendant. During the trial in district court it was stipulated that plaintiff's account in the First National Bank of Bowman, the bank where the $5,000 check was held in escrow for defendant, that plaintiff's balance was less then $5,000 until March 10, 1952. However the cashier of the bank testified that the bank was obligated to pay and would pay the $5,000 to defendant upon receipt of the deed; he testified further that *451 plaintiff had wheat on hand which he would sell to replenish his account and would sell same within a few days. The defendant never questioned plaintiff's financial ability to pay the purchase price. The bank wired defendant on February 29th that the purchase price of $5,000 would be sent to her upon approval of the title and receipt of deed. She was duly notified by the bank on March 3rd that title was approved and that remittance would be made upon receipt and approval of the deed. The defendant-respondent argues in her brief that there is uncertainty as to the form of deed that defendant was to furnish under the terms of the agreement between the parties because the following telegram from the Bowman bank to the defendant does not specify the form of deed to be furnished: The defendant never raised any question as to the form of deed she was to furnish and it was not an issue in the case. Her refusal to make the sale was based on other grounds. However, the general rule in such cases is stated in 55 Am.Jur., Vendor and Purchaser, page 747, Section 315, as follows: Section 47-1019, NDRC 1943, defines covenants implied in the use of the word "Grant" as follows: In the case of Skinner v. Stone, 144 Ark. 353, 222 S.W. 360, 11 A.L.R. 808, Syllabus 2, states the rule as follows: In the case of Petre v. Slowinski, 251 Wis. 478, 29 N.W.2d 505, 507, The Supreme Court of Wisconsin said: It is also contended by the defendant that she could not give a warranty deed because her tenant's farm lease of the land had a year to run. We think this fact is of no consequence because plaintiff had full notice of the unexpired lease before he entered into the purchase agreement and therefore was aware of the rights of the holder of the lease. We conclude that the record and the evidence establish a valid agreement of purchase and sale between the parties of the real state here involved; that the plaintiff has performed his part of the agreement and is entitled to a decree requiring specific performance by the defendant. The judgment is reversed and the case remanded to the district court with directions to enter judgment in conformity with this opinion. BURKE, C. J., and MORRIS, JOHNSON, and GRIMSON, JJ., concur.