Court Opinion

ID: 8264046
Source: CourtListenerOpinion
Date Created: 2022-10-16 15:58:41.059413+00
Date Added: 2024-06-11T16:43:16.853395
License: Public Domain

NORTONI, J.
(after stating the facts). — The familiar rule of law no doubt is that “if two persons enter into an executory contract and one of them pays earnest money on the agreed consideration and afterwards fails and refuses to fulfill the contract on his part, he cannot recover back the earnest money paid.” [Crews v. Garneu, 14 Mo. App. 511.] It is likeAvise true that where the proposed purchaser of property being sold at a trustee’s sale, makes the highest and best bid, and such bid is accepted by the trustee and the property is knocked down to him in accordance therewith, that thereby a contract relation is established between the parties which renders such bidder liable as purchaser, *368and in event of his failure or refusal to comply with the terms of the sale, and his bid, which constitutes the contract between the parties, he may be proceeded against on the contract for specific performance in a court of equity if the trustee desires to hold him to the bargain. [Dover v. Kennerly, 38 Mo. 469.] Or the trustee may proceed at law for damages on the breach of the contract. [Gardiner v. Armstrong, 31 Mo. 535.] In each of these cases, however, a state of fair dealing, also a contract whereby the minds of the parties meet upon the subject-matter and terms of sale is assumed to exist. The facts in this record do not bring the case within the application of those principles. We are of opinion that the doctrine pertaining to mutual mistake of the parties applies with great force to the facts here in decision. It is a fundamental rule of law that there can be no contract without a concurrence of the minds of the contracting parties by which their mutual assent is given to some particular thing. This assent must be entire and adequate, comprehending unconditionally the whole, and not merely a part, of the proposition suggested as a basis of the contract. [1 Parsons on Contracts, 476-477; 1 Wharton on Contracts, sec. 4.]
In the case at bar, it is palpable that there was a want of that essential meeting of the minds of the parties on the terms of the sale. It is shown that the appellant trustee dissuaded the respondent from purchasing other property and induced him to be present at the sale and bid thereat under an arrangement whereby he was to pay $100, and time or a loan was to be given for the remainder of the purchase price. Upon this understanding, the respondent investigated the property, called at appellant’s office on the date of the sale, and while there was not informed that the proposed terms could not be carried ont, but, on the contrary, was directed by appellant to go to the court house where the sale was to be had, presumably, of course, upon the same terms as theretofore agreed upon. This he did in due *369time. Upon reaching the court house, the sale was progressing, and it is true he heard appellant announce that the terms would he cash and $100 to he paid on knocking down the property. This $100 requirement seemed to coincide with his prior understanding. He made his bid, expecting the trustee to provide the remainder of the cash for him on the property, and treating the matter, of course, as a cash purchase, the cash to be furnished by the trustee, in accordance with his prior agreement. The evidence further shows that the trustee so understood the matter for he applied to Mr. Thompson immediately upon accepting and receipting for the payment, as follows: “Mr. Curry came to fix it with you for the balance of the money,” and that Mr. Thompson replied: “The balance must be coming in two hours or the property will be sold at two o’clock,” and then for the first time, the trustee refused to carry out the terms of the sale which he himself had proposed, or to make the loan as provided. Immediately thereupon, respondent disaffirmed the contract, as he had a right to do, for it is well-settled law that a mutual mistake in regard to a material matter connected with the subject-matter of the contract is a good ground for rescission by either party, and this applies with full force when such mutual mistake relates to the price to be paid or the terms on which the price or payment is to be made. [24 Am. and Eng. Ency. Law (2 Ed.), 1102; Revegno v. Deffarari, 40 Calif. 459; Wilkinson v. Williams, 76 Ala. 163; Rupley v. Daggett, 74 Ill. 351; Phillips v. Birtolli, 2 D. & C. 511.]
It seems to us that the better way to state the doctrine applicable here is, that either party can affirm that there is no contract inasmuch as there was no meeting of the minds upon one of the essential elements thereof, for to say that the contract can be disaffirmed by either party on the ground of mutual mistake, assumes that there was a contract in the case, where the *370evidence shows there was none. In order to have a disaffirmance of a contract, the contract upon which the disaffirmance is to operate must exist, and if there be mutual mistake between the parties in attempting to create the contract, then there is no contract, for it is well settled that there can be no contract unless there is present the aggregatio mentium always essential thereto. When this agreement of the minds is wanting, there is no contract to disaffirm. And that, in our opinion is the case here, for the respondent had in mind and made his bid contemplating a purchase whereby, upon payment of $100 down, he was to be furnished a loan by the trustee on the property for the remaining portion of the purchase price wherewith he could meet the terms of sale proposed at the auction, and the trustee had then in mind, not the contract he had theretofore proposed to respondent, but one involving different terms by requiring the payment of cash furnished by the bidder, without the loan.
In an English case, Phillips v. Bistolle, 2 B. & C. 511, the defendant was a foreigner who had been in the habit of attending plaintiff’s sales and purchasing. He did not fully understand the English language. There was knocked down to him as the highest bidder, certain earrings at the price of eighty-eight guineas. He accepted them without objection. After they had been in his hands about three or four minutes, the person who interpreted for him, said to the plaintiff that the defendant had bid for the lot in question under the mistaken idea that the price at which it was knocked down was forty-eight guineas. Plaintiff said the last bid had been mentioned three times. Defendant then returned the earrings, plaintiff refusing to take them back, but said he would keep them on defendant’s account. In a suit on the contract for the price, the lord chief justice referred it to the jury to find whether the defendant was mistaken in the price at the time when he bid eighty-eight guineas, the theory clearly being that if there was *371such mistake, then there was no contract of purchase. [See also Revegno v. Deffarari, 40 Calif. 549.]
So we are of opinion in this case that it was a question of fact for the trial court as to whether or not the bid and consequent payment of $80 by respondent was the result of mistake, induced by appellant in failing to inform him that he could not carry out his prior proposal as to terms, and the statement made at the sale that the terms were cash was not sufficient to inform respondent that the trustee would not furnish the cash as agreed. The learned trial judge having heard the evidence pro and con on this question, found the issues for the respondent, and there being substantial evidence to support the finding, we are not permitted nor are we inclined to interfere therewith. Upon the evidence adduced and in view of the finding of the trial court, the alleged contract appears here as one permeated with mistake, and in that posture there was no contract of purchase, for the reason that the minds of the parties failed to meet upon the terms of purchase, and appellant cannot be permitted to retain the moneys paid by asserting a contract, which was clearly not contemplated by the purchaser. It is obvious that respondent would not have made the bid of $925 when he had only $80 or $100 to pay thereon, unless he had relied upon the promise of the appellant to furnish the additional money. We are of the opinion that the evidence clearly shows a case of mutual mistake, brought about by the conduct of the trustee himself in inviting the respondent to be present and bid on the terms suggested, and permitting him to bid without informing the bidder that he would be unable to carry out his promise.
Entertaining these views, the ruling of the learned trial judge will be affirmed. It is so ordered.
Bland, P. J.} and Goode} J., concur.