Court Opinion

ID: 9548195
Source: CourtListenerOpinion
Date Created: 2023-08-07 17:59:13.147812+00
Date Added: 2024-06-11T15:18:36.351524
License: Public Domain

Finley, J.
This is an action for damages for an alleged breach of an earnest-money receipt or contract, relating to the sale of certain real and personal property.
There seems to be no significant dispute as to the facts. Mildred Hurd listed a rental duplex with several realtors, including the Square Deal Realty. Mr. and Mrs. Hedges became interested in the property. The realty firm, using a printed form, prepared a document entitled Earnest Money Receipt and Agreement. Mr. Hedges signed as purchaser. Mildred Hurd signed as seller. The document also was signed by a representative of Square Deal Realty, osten*684sibly as agent for the seller. The Hedges deposited two hundred dollars with the realty firm and, subsequently, put four hundred fifty dollars (balance of the down payment) in escrow.
The seller received a better offer for the property from a third party, and requested the Square Deal Realty to obtain a release from the Hedges. The latter refused to give a release. On advice of counsel, the seller offered to convey the property to the Hedges upon prompt payment by them of the entire purchase price. The Hedges apparently were not financially able to accept this offer. The seller gave a note to Square Deal Realty in payment of a real-estate commission on the transaction with the Hedges. Thereupon, the seller signed an earnest-money receipt and an agreement to convey the property to a third party.
The purchasers instituted this suit for damages for a breach of contract. The trial court held the parties had entered into a valid and binding contract. Judgment was entered awarding one thousand dollars in damages to Mr. and Mrs. Hedges. The seller, Mildred Hurd, appealed.
We think her assignments of error raise only two significant questions: (1) whether the earnest-money receipt and agreement, signed by the parties, constituted a valid and binding contract for the sale of real estate; (2) whether the seller breached the contract.
Appellant contends that the earnest-money receipt and agreement calls for the execution of a second contract to convey the property to the Hedges by warranty deed; that the terms of the second contract had not been agreed upon by the parties; that, consequently, the earnest-money receipt did not contain all of the terms to be agreed upon by the parties and, therefore, was not sufficiently definite to create legal obligations enforcible in the courts. Appellant further contends that any obligation on her part was discharged when she offered to convey to the Hedges, if the full purchase price was promptly paid by them. In support of the above contentions, appellant relies principally on the decision in Hubbell v. Ward, 40 Wn. (2d) 779, 246 P. (2d) 468.
*685Respondents contend that the earnest-money receipt and agreement contained all of the necessary elements for a simple but valid and binding contract respecting the sale of the real and personal property described therein; that appellant breached the provisions of the earnest-money agreement in refusing to complete the transaction with the Hedges and in contracting with a third party for the sale of the property. Respondents point out that damages rather than specific performance is the relief sought in the instant case; that this aspect of the matter distinguishes it from Hubbell v. Ward, supra. We are inclined to agree with the respondents.
There is a tremendous volume of real-estate transactions in our state. They vary in size and importance, financially and otherwise. They are consummated in a variety of real-estate offices, both large and small, located in practically every section of the many communities in the state. In a high percentage of the transactions, printed forms, tailored to suit the particular occasion and known generally as earnest-money receipts, are used rather than more detailed contracts covering a variety of contingencies or possibilities that may or may not subsequently be of some legal or other significance to the seller and the purchaser of real estate.
There is a practicable reason for the widespread use of the relatively simple earnest-money receipt. It lies in the real-estate practice that has grown up, or the manner in which sellers and buyers nowadays consummate a sale or conveyance of real estate. Usually a seller lists property with a real-estate broker. The property is shown to various prospects by the real-estate broker. The seller may or may not see or contact a prospect or purchaser until after a deal is consummated. Ordinarily, no one is particularly interested or has the time to work out a contract (covering a variety of contingencies of some possible future interest to the parties) in minute detail. At this stage, the parties are interested only in the execution of a simple agreement which will have some effective legal significance as to both. They anticipate that the execution of an earnest-money receipt and agreement is not without some legal significance and effect.
*686The earnest-money receipt and agreement in the instant case adequately describes the subject matter of the sale as certain real estate and a few items of personal property. There is no problem as to the competency of the parties, the adequacy of the consideration, misrepresentation or fraud, or whether there is a memorandum or writing sufficient to satisfy the statute of frauds. The purchase price is stated, and clearly, as seven thousand dollars. A down payment of six hundred fifty dollars is specified, with a balance of $6,-350, payable fifty-five dollars, or more, per month, at the purchaser’s option, including interest at five per cent per annum on the deferred balance; title insurance to be furnished as soon as procurable by the seller, or this may be waived by the purchaser. The earnest-money agreement provided that the sale was to be closed fifteen days after the furnishing of title report or insurance by the seller, that the purchaser would get possession on the date of closing, that taxes, rents, insurance, interest, water and other utilities were to be prorated as of the closing date; furthermore, that all necessary legal documents or instruments and money or funds relative to the transaction were to be deposited in escrow with the Lawyers’ Title Insurance Company, and the escrow cost was to be shared equally.
In Hubbell v. Ward, supra, the court stated, quite clearly, that the earnest-money receipt and agreement constituted a valid and binding contract, but emphasized the fact that the remedy sought there was specific performance of a provision of the contract calling for the execution of another contract for the conveyance of the real estate involved. It was pointed out that little or nothing was said as to what the terms of the second contract were to be; that there were at least thirteen matters (enumerated by the court in the Hub-bell case) which might be included quite properly in a contract of conveyance for the protection of the interests of the buyer or the seller, or of both parties. However, in the instant case, as mentioned heretofore, specific performance is not the relief sought in court by the purchaser.
We now come to this question: What elements are essential to a simple, valid and binding contract for the sale *687of land in an action for damages for breach thereof ? As indicated above, the earnest-money receipt herein involved contained an adequate description of the property. It specified the total purchase price, the method of payment of principal and interest; provision was made for prorating taxes, insurance, and liens; for payment of water and other utilities, for possession, and for the deposit in escrow of the balance of the down payment by the purchasers, and a warranty deed by the seller. In view of what was said as to the earnest-money receipt in the Hubbell case, supra, we are convinced that the aforementioned things constitute and embrace all of the essential elements of a simple, binding contract for the sale of land, and that the earnest-money receipt or contract in the instant case was breached by the appellant in the instant case.
Now as to the remedy of damages rather than specific performance. In 49 Am. Jur. 38, 39, § 25, we find the following statement:
“It is often said that a greater degree of certainty is required in the terms of a contract which is to be specifically enforced in equity than is necessary in one which is to be the basis of an action at law for damages. A contract expressed in very general terms may be the basis of an action for damages for its breach, although entirely too loose and inexact to warrant a decree for specific performance. . . . Where the relief sought is specific execution, it is essential that the contract itself be specific. In other words, the certainty required must extend to all the particulars essential to the enforcement of the contract. But where there has been an entire breach, and compensation is asked in damages, it may be sufficient if there is certainty only as to the general scope and stipulations of the contract.”
In Restatement of Contracts 633, 635, § 358 (1) e, we find the following:
“e. Specific performance is not available as a remedy unless there is a contract to be enforced. The requirements of a contract, as defined in the Restatement of this Subject, are the same, irrespective of the remedy that is being sought; but the various remedies are not available under the same circumstances. A judgment for damages will be given in many cases in which a decree for specific performance is not *688available; and the refusal of the latter remedy may be for other reasons than the non-existence of a contract.”
And in the same text at p. 673, § 370, b., we find:
“b. If the uncertainty is so great as to prevent the giving of any legal remedy, direct or indirect, there is no contract. But there may be cases in which it is just to refuse the remedy of specific performance on the ground of uncertainty, even though it is not unjust to give a judgment for damages or restitution.”
An earnest-money agreement was not involved in the case of Gulbenkian v. Gulbenkian, 147 F. (2d) 173, 158 A. L. R. 990. However, the court was confronted with the question of whether a contract too indefinite for specific performance could still be the basis for an award of damages. The court referred to the sections of the Restatement, quoted hereinbefore, and said:
“But even though an agreement may be too indefinite in its terms to be specifically enforced, it may be certain enough to constitute a valid contract for breach of which damages may be recovered. A. L. I., Contracts, § 370 Comment (b); Van Siclen v. Mather, 134 Misc. 629, 631, 235 N. Y. S. 589, affirmed 227 App. Div. 790, 237 N. Y. S. 913.”
We think the instant case is distinguishable from Hubbell v. Ward, supra, for the reasons indicated herein, and that the judgment of the trial court should be affirmed. It is so ordered.
Mallery, Rosellini, Weaver, and Ott, JJ., concur.