Case Name: J. B. STREETER, Respondent, v. CHARLES E. ARCHER and Hattie Archer, Appellants
Court: North Dakota Supreme Court
Jurisdiction: North Dakota
Decision Date: 1920-02-11
Citations: 46 N.D. 251
Docket Number: 
Parties: J. B. STREETER, Respondent, v. CHARLES E. ARCHER and Hattie Archer, Appellants.
Judges: Lobinsón and Bronson, JJ., concur.
Reporter: North Dakota Reports
Volume: 46
Pages: 251–267

Head Matter:
J. B. STREETER, Respondent, v. CHARLES E. ARCHER and Hattie Archer, Appellants.
(176 N. W. 826.)
Specific performance — denied where contract without adequate consideration or one obtained by misrepresentations, etc.
In an action by plaintiff to compel specific performance of an alleged optional contract for the sale of land it is held: Specific performance should be denied it appearing there was no consideration for the cóntract; and for this and other reasons set forth in the opinion specific performance is denied.
Opinion filed February 11, 1920.
Rehearing denied March 9, 1920.
Appeal from the District Court of Ramsey County, Honorable (7-W. Butts, Judge.
Judgment reversed.
L. J. Wehe, for appellants.
A voluntary executory agreement is not enforced in equity, and the fact that the memorandum of the contract states' a consideration is immaterial; the fact that no consideration exists may always be shown. 36 Cyc. 544, 608; Comp. Laws 1913, § 5872.
There must be some consideration for the option to render it more than an offer revocable before acceptance, but the amount of the consideration is generally immaterial. 36 Cyc. 626; 9 Cyc. 309; 13 O. J. p. 312.
There is no mutuality of obligation where one party’s obligation is ' not definite and certain. Comp. Laws 1913, § 5857; 1 L.R.A. (N.S.) 445; 9 Cyc. 327; Raster v. Mason, 13 N. D. 107, 99 N. W. 1083.
Cuthbert & Smythe, for respondents.
“Specific performance may be'eompelled though contract signed only by one.” Biddow v. Flage, 22 N. D. 53, 132 N. W. 637; Nier v. Had-den, 148 Mich. 488, 111 N- W. 1040; Morgan v. Russell, 24 N. D. 490, 43 L.R.A.(N.S.) 1150, 144 N. W. 99.
The defendants claim they entered into the contract, Ex. 1, by mistake or misapprehension; they must prove this by evidence that is “clear, convincing, and satisfactory.” See 34 Cyc. 984; Fritz v. Fritz, 94 Minn. 264, 102 N. W. 705; Einvon v. Cunningham, 146 Mich. 430, 109 N. W. 675; Wilcox v. S. Wicker, 129 Iowa, 151, 105 N. W. 392; Misses v. Baldwin, 262 111. 48, 104 N. E. 195; Metropolitan Loan Asso. v. Esche, 75 Cal. 513, 17 Pac. 675.

Opinion:
Grace, J.
This is an action to compel the specific performance of a certain alleged contract, relative to certain real property. On account of the uncertainty as to the real nature and meaning of the contract, it is deemed advisable to set it forth in full. It is as follows:
"For and in consideration of the sum of $1 to ine in hand paid, and other valuable consideration received by me from the second party, I, the subscriber, as first party, hereby offer to sell and convey by warranty deed or by contract for deed to J. B. Streeter, of Devils Lake, North Dakota, as second party, the following described premises for the sum of $11,000, purchase price, on the following terms, viz.: Two thousand dollars upon acceptance of this option by second party, balance payable, $2,000, ninety days after date of first payment, and balance of $7,000, if desired, can be on one half of the crop contract now held by me on within described land, which contract provides that I •shall turn in one half the crop each year until the land is paid for and draws 7 per cent interest; to wit, the south half of the northeast quarter and lots one and two of section 4, and the west half of the northwest quarter of section No. 3, in township No. 153, N., of range No. 65, in Ramsey county, North Dakota, together with all crops on above-described lands, should first party harvest the crop on within land, said second party or the purchaser of the land is to pay him for work of harvesting, hauling, or whatever work is done by first party in caring for the harvesting and marketing of all said crop.
"An abstract of title to said above-described property showing marketable title in first party, at his own cost and expense, shall upon request be furnished at once to second party.
The said second party shall have at least six.months within which to accept this proposal, and thereafter until said first party shall give second party written demand that said proposal be accepted within ten days from date qf the service of such demand upon said second party, and unless so accepted this proposal shall become null and void, provided that said abstract, if so requested, shall have been furnished at the time (showing good and marketable title) or prior to such demand.
"On account of second party being to continually large expense in •advertising and maintaining his organization and general expenses in his business of getting his proposed buyers for land, said first party agrees to maintain to prospective purchasers the asking price said second party may put on within described property, and to help along said second party's sale of same.
"All payments of purchase price shall be made under this optional offer at the offices of J. B. Streeter, Inc., and as soon as made shall-be construed to be an acceptance of this offer by the second party without •further notice.
"The second party on making the payment of purchase, as aforesaid, may deduct therefrom the amount of whatever is required to pay off call encumbrances against said premises, and the first party agrees to execute at once and deliver to the said J. B. Streeter, Inc., to be delivered to the second party, together with said abstract, a warranty deed or contract for deed of said premises, or to whomsoever second party shall direct, as grantee, the consideration expressed in which deed or contract for deed shall be such sum as second party shall direct, and turn over the possession of the same to the second party or his assigns. Said first party also agreeing to assign without cost any and all insurance there may be on within-described px-operty at date of this option or taken out subsequent thereto, assigning same to whoever said second party may direct, and delivering all said insurance papers or policies with the deed or contx-act as above provided for.
"On acceptance of this offer by the second party, and on furnishing the abstract of title showing good and marketable title in first party, and executing the deed of conveyance by the first pax-ty, as aforesaid, and not before, the said J. B. Streeter, Inc., shall pay over to the first party the money paid it as pxxrchase price as aforesaid.
Dated this twenty-eighth dav of May, 1918.
"Witnesses:
"Charles E. Archer,
"E. W. Cunningham.
"Hattie Archer."
"C. A. Stotlar."
The defendants' had purchased, by contract for deed, from George Meiklejohn, in the year 1912, the land ixx controversy, for $12,000, $4,700 of which was to be paid down, and $7,300, the balance, to be paid by the delivery to Meiklejohn, of one half of the crops to be raised upon the land in the succeeding years. It was further provided that the defendaxxts could make no valid assignments of tho premises or any part thereof, or of said contract, unless the consent of the first party (Meiklejohn) should be indorsed on or attached to the contract or pledge, if any, etc.
J. B. Streeter is a real estate dealer, residing at Devils Lake. There wex-e two corporations bearing his name; namely, J. B. Streeter, Inc., and The J. B. Streeter Corporation.
The alleged contract in controversy is between Charles E. Archer and Hattie Archer, his wife, and J. B. Streeter as an individual. It is signed by the defendants only.
The defendants claim it was procured from them, by the plaintiff, through fraud and trickery. The defendants, who lived on the farm and farmed it for more than six years, claim that, in May, 1918, while the defendant was seeding, J. B. Streeter, the president and general manager of the two corporations, organized for the purpose of dealing in real estate, came to his farm to list the same for sale. At that time, there was no agreement made. Archer claimed that he told them he would sell the farm for $12,000, and pay commission of $1,000, for sale of the same.
On May 28, 1918, J. B. Streeter sent out one of the employees of the corporation, and got Mr. Archer to come into the office. They went into Streeter's private office, where Archer again told Streeter the terms upon which he would sell. The defendant claims that J. B. Streeter yjas carrying on a campaign for the sale of real estate, in the name of j. B. Streeter, Inc.; that there was a large electric sign out in front, with that name on it, and the name appeared in large letters on the windows.
lie claims from that, and from what Streeter had told him, he thought he was dealing with J. B. Streeter Corporation. Nothing was said as to the time the listing contract would expire. Streeter drew up and prepared a contract, and procured Mr. Archer's signature to it without bim reading it over, and on the same day the wife signed it without reading it over. No consideration of any kind was paid at the time of the signing of the contract. The defendant received no copy of the same, and thought he was signing a listing contract.
Sometime prior to July 15, 1918, Archer went to see Streeter, and no buyer for the land, up to that time, had been procured. Between the 15th and 20th of July, 1918, Cunningham and Stotlar, employees of the corporations, brought out the first party to look at the land, neither of whom wished to buy it. It was during some of the conversation, in regard to the price of the land, between these prospective purchasers, and the agents of the corporations, in the presence of Archer, that he became convinced there was something wrong in regard to the listing contract, which he had signed; that is, he claimed they were getting different prices than those agreed to by him.
He claims that he thought he was dealing with J. B. Streeter Corporation, and that Streeter so told him, at the time he signed the con 'tract; that he was deceived as to the character of the contract, and as to with whom he was dealing with.
On about August 10, 1918, J. B. Streeter, as an individual, served notices upon the defendant, that he elected to purchase the farm, and •exercise the alleged option, in the alleged contract, to purchase, and at that time, served a notice of an alleged deposit having been made by «I. B. Streeter as an individual, with J. B. Streeter, Inc., in the sum of $2,000; that the alleged deposit was made by J. B. Streeter as an individual, with J. B. Streeter as president and general manager of the J. B. Streeter, Inc., by depositing the same in the safe belonging to ,J. B. Streeter,'Inc.
Streeter was the only party in possession of the combination of the safe. If the money were deposited in the safe, it did not remain there all the time; J. B. Streeter took it out, at different times.
J. B. Streeter Corporation kept a separate set of books, but no record or entry was made in any of the books of that corporation, nor is there .any evidence, nor entry of any kind in writing, that such deposit had been made with J. B. Streeter, Inc. No other deposit of any kind was made, nor any offer to pay the Archers the expense of harvesting and cutting the crop.
One Pd chard son claims to have purchased the premises from J. B. .Streeter Corporation, under the terms of exhibit 4. The alleged option •contract was with J. B. Streeter personally, and it was not assigned to either of the corporal ions. The Archers had no dealings with jRichard:Son, and refused to have anything to do with him.
Shortly after August 10, 1918, after notice had been served upon Mr. Archer, Meiklejohn, from whom he purchased the land, came to sec him, and procured his consent to go in and see if Streeter would deposit $2,000 in some bank, and then go through with the matter. Archer •consented to this, and they went to Streeter's office, and Mr. Meiklejohn, the holder of the title of the land, told Streeter, if he would deposit the money in some bank in Devils Lake, they would close the deal. Mr .Streeter refused to do this. Meiklejohn refused to have any further dealings with Streeter, and refused to make transfer of the contract, or allow Archer to transfer it. It clearly appears there was no ratification of the contract..
After Archer had finished threshing the crop upon the land, which amounted to more than $8,000, Streeter commenced this action to enforce specific performance of the alleged contract, J. 33. Streeter was not financially responsible, and the corporations were not in much bettor financial condition than he, though it appears that one of them did havo some office furniture and fixtures, and perhaps some other small property,—all of which was mortgaged.
A detailed list of the debts owing by the J. 33. Streeter Corporation appears in the testimony. It appears that the safe and adding machine were mortgaged to some of the creditors; it appears that a suit was brought by one Jorgenson against Streeter personally and J. 33. Streeter Corporation, and garnishment and attachment proceedings as well; it further appears that one Sheldon went to Streeter, and said that he heard he was going to pieces; that he said, there was the electrical sign, and that he was going to take it, unless he got the difference, meaning, perhaps, what was owing him. He did take the sign. There is no need to refer specifically to all the evidence in regard to the financial condition of J. P>. Streeter and the corporations.
We are of the opinion, for several reasons, that specific performance should not be granted.
Section 7198, Comp. Laws 1913, provides, in substance, "that specific performance of the contract cannot be enforced against a party to it. if he has not received an adequate consideration; if it is not, as to him, just and reasonable; if his assent was obtained by misrepresentation, concealment, circumvention, or unfair practice of any party to whom .performance would become due under the contract; or, by any promise of such party, which has not been substantially fulfilled, or if his assent was given under the influence of mistake, misapprehension, or surprise."
All of such provisions are applicable to this contract.
The defendants, at the time they signed the contract, received no consideration, and there is no sufficient showing that they received any other valuable consideration. There was no consideration for the contract.
The plaintiff had agreed to do nothing; had in no manner legally bound himself by signing the contract, or agreeing to any of its provisions, in such a manner as to be bound thereby.
The testimony is clear that the defendants agreed to list the land for $12,000. That was their price, while the contract shows it to be $11,000. The defendants had a perfect right to state the amount which they were willing to take for their land, and also the amount which the plaintiff should have for selling the same. Thus, this prior parol agreement was really the inducing and moving cause of the alleged written contract.
In the case of Erickson v. Wiper, 33 N. D. 206, 157 N. W. 596, there was quoted with approval, the following language, which appeared in the decision of the case of De Rue v. McIntosh, 26 S. D. 42, 47, 127 N. W. 532, as used by the supreme court of that state, in construing a statute of South Dakota, identical with § 5889, Comp. Laws 1913.
"This provision of our Code embodies the common law upon the subject of written contracts, and, while the execution of the contract, in writing, whether the law requires it to be written or not, supersedes all oral negotiations or stipulations concerning its matter, which preceded or accompanied the execution of the instruments, nevertheless, as contended by the appellant, there are exceptions to the rule. And one of the exceptions seems to be that agreements or representations made prior to the written contract, under which the party was induced to sign the contract, may be shown; in other words, where the parol contemporaneous agreement was the inducing and moving cause of the written contract, or where the parol agreement forms part of the consideration for a written contract, and where he executed the written contract, upon the faith of the parol contract or representation, such evidence is admissible."
From the testimony of the defendant, it is clear he thought he was signing a listing contract, whereas, the alleged contract which he did sign is of the nature of an option contract, and, while laboring under this mistake, he signed the alleged contract, believing it to contain the terms which had been agreed upon.
The plaintiff must have well known that defendant intended a listing agreement, and it was an unfair practice, concealment, and circumvention on the part of the plaintiff, to procure the alleged contract, in view of what the defendant had stated to him, as to the terms upon which the land might be sold, and as to the commissions which he would be willing to pay the plaintiff in case he sold upon those terms.
The alleged contract which plaintiff procured from defendant must be held to be of no effect or validity, either as an option contract or listing agreement; for, though defendant may have intended to give a listing agreement, none was executed, and hence there was no listing of the land, as an option contract it was wholly invalid for the reasons above stated.
It thus was signed -under a mistake of fact, and hence there was no free or mutual consent of the defendants to .the contract.
Section 5842, Comp. Laws 1913; Orth v. Procise, 38 N. D. 580, 165 N. W. 557.
The office of J. B. Streeter and J. B. Streeter, Inc., and J. B. Streeter Corporation was all one. All the business, if any, was transacted in the one office. In this office, there was a safe used by J. B. Streeter, Inc., and J. B. Streeter. Streeter is the only one who had the combination of the safe. In it, Streeter kept part of his personal papers, lie claims he had $2,000; that he called Mr. Smythe down to show it to him, but that Smythe did not count the money; that Streeter put it in an envelop and put it in the safe of J. B. Streeter, Inc., for the purpose of complying with the terms of the alleged contract.
There is testimony to show that the money, if it ever were placed there, did not remain in the safe all the time; that Streeter took it out two or three times, and put it in his pocket, but claims to have returned it.
Smythe testified that, before the commencement of this suit, the $2,000 was turned over to him; that he had brought it with him into court.
J. B. Streeter, Inc., has no record of the transaction in any of its books. No other record seems to have been kept of it, except that it is claimed to have been placed in the safe by J. B. Streeter, as above stated.
We are of the opinion that the evidence, as a whole, shows there was no deposit, in good faith, of the money, with J. B. Streeter, Inc., and we hold there was none. We think it fully appears, from the record, that J. B. Streeter, Inc., J. B. Streeter Corporation, and J. B. Streeter, were all, practically speaking, insolvent.
This bad faith is further demonstrated by the fact that defendant and Meiklejohn were refused the deposit of the money, as above shown.
The testimony further clearly shows that, long before Streeter sought to exercise his alleged option, the defendant had repudiated and canceled it. He testifies that, on the 20th day of July, 1918, he went to the-office of J. H Streeter, Inc., and asked to see the contract; that he saw Streeter and got the contract and read it over, and told him he would like to have a copy of the contract, which he gave him; and that he then told Streeter that that is not the agreement I signed, or that he entered into; that he then told him that he would not be bound by it, and that Streeter said, "All right; " and that he, defendant, understood, from that time, there was not any agreement. We are of the opinion the alleged contract was thus, by the mutual consent of the parties, canceled and terminated. Afterward, when Streeter came out to the place, defendant ordered him off, and also ordered his men off the place. This took place sometime in August.
The testimony shows that nothing more was heard from Streeter until plaintiff had practically harvested the crop and had it practically all threshed, when the written notice was- served, by Streeter, upon defendant, notifying him of the alleged deposit of money, and demanding performance, etc.
The trial court, in its memorandum opinion, has placed much stress upon the alleged written contract and the failure of the defendants to road it over, they both being familiar with the English language.
As we view the matter, there was no contract. Where there is no consideration, there is no contract. The minds of the parties never met in a contract. The defendants' assent to the contract was given under mistake and misapprehension, as more clearly appears from what has been stated above. Specific performance of such a contract may not be enforced.
Streeter agreed to nothing in the contract. He did not agree to pay a down payment of $2,000, nor the $2,000 ninety days after the date of the first payment, nor did he agree to assume the balance of $7,000, under the contract. He, in no manner, bound himself absolutely by the payment of any money, or by the making of any promise, in writing or otherwise.
The most that can be said of it, if it had been drawn so as to contain the contemporaneous parol agreement of the parties, with reference • to the terms upon which' such land might be sold, as testified to by Archer, is that it would then have been an offer to sell, and.to pay the plaintiff a stated sum for making the'sale.
The rule is well settled that where written contract is entered into between the parties, and each agree to the matters therein contained, the contract being for a sufficient consideration, and having been entered into without any fraud, deception, circumvention, or deceit having been practised by either party, and where no contemporaneous parol agreement was the inducing cause of the written contract, and which, is not therein contained, and where the parties can read, and have opportunity to do so, and thus understand the contract, and where such contract is not void for want of mutuality or free assent of the will-to its terms, and where it is complete and its terms unambiguous, it constitutes the highest evidence of the terms of the agreement, and, as a -general rule, parol testimony will not be admitted for the purpose of varying the terms of the written instrument.
The plaintiff cannot be heard to assert, against the defendants, the principle of estoppel. The alleged sales of the land by plaintiff, to other parties, in no manner concern defendants, for they were not a party to them, and had no connection with them.
The plaintiffs in this case, after procuring the alleged contract, in the manner above stated, in which he in no manner bound himself to do anything, never attempted to do anything, with reference to making a binding contract, until several months after the date of the alleged contract, when a magnificent crop, of the value of more than $8,000, was securely harvested and threshed by the defendants, and when it was apparent that the crop would be equivalent in value to the greater share of the purchase price mentioned in the alleged contract. It was then, and then only, that he became active, in serving notice that he elected to purchase the land, and became active in the making of the alleged deposit.
The doing of these things, however, as we have seen, availed nothing and this for the reasons above stated. It is clear, for all the reasons above stated, that specific performance of the contract should be denied.
It is denied. The judgment of the District Court appealed from is reversed and the case is remanded, and such action should be dismissed. It is so ordered.
The appellant is entitled to statutory costs and disbursements on appeal.
Lobinsón and Bronson, JJ., concur.