Court Opinion

ID: 9884348
Source: CourtListenerOpinion
Date Created: 2023-10-06 02:53:48.728743+00
Date Added: 2024-06-11T07:48:37.842713
License: Public Domain

Mr. Justice Bristow, also dissenting: I must respectfully dissent from the majority opinion in this case. I disagree with the premises set out in the opinion and the conclusions of law based thereon. This case comes to us on the motions of the defendant corporation and of the defendant Charles L. Conroy, the president and general manager of the corporation, to dismiss plaintiff’s amended complaint for specific performance, or, in the alternative, money damages against Conroy alone, on an alleged contract between the plaintiff and the defendants. The original complaint was for specific performance only. It was predicated solely upon the five letters subsequently relied upon in the amended complaint, four of which are mentioned in the majority opinion. The plaintiff alleged that the first four letters between the parties, under date of February 20, February 29, March 14, and April 16, 1956, constituted “a contract between defendants and plaintiff for the sale of the assets of defendant Anchor.” It was to the original complaint that defendant Pritsch filed an answer, in effect joining in the complaint without costs to him. To that complaint the separate motions to dismiss by the corporation and Conroy, individually, were sustained. The trial court held that the plaintiff had failed to allege a contract capable of specific performance, and, therefore, did not decide the further question as to whether such a contract, if completed, could be enforced against the corporate defendant. Plaintiff thereafter filed its amended complaint. It appears from the record that Pritsch filed no pleading whatsoever to this amended complaint which is before us now. The trial court again sustained the separate motions of the corporation and the defendant Conroy to dismiss the amended complaint for specific performance, including the alternate count for money damages, on essentially the same grounds that the motions were sustained to the original complaint. By defendants’ motions to dismiss the amended complaint the following contentions, among others, are made: (1) There was no meeting of the minds between the parties to the alleged contract; (2) the Statute of Frauds and the parol evidence rule excluded the oral conversations pleaded; (3) specific performance will not lie to compel sale of the corporation’s assets on the alleged contract of the two individual controlling stockholders. It is conceded by the plaintiff, and recognized by the majority opinion, that there is no binding contract between these parties except as the same may be established by parol evidence in explanation of the correspondence. For the purpose of this dissent, it is necessary to set out the substance of these letters from which I conclude that their literal and legal interpretation does not warrant the conclusion that there was ever a meeting of the minds of the parties or that an agreement was ever entered into in writing by the defendants or either of them. This is clearly demonstrated by the language of these letters: Their import and meaning may be summarized: Plaintiff’s letter of February 20, 1956, to the corporate defendant Anchor is a proposal to purchase for $100 a sixty-day option to buy all of Anchor’s assets on the conditions therein set out. To this letter is added an acceptance clause: “The memorandum of agreement set forth above, granting you for 60 days an option to acquire all of our business and assets on the terms and conditions set forth, are hereby accepted and agreed to by Anchor Coupling Company, Inc., and receipt of your check for $100.00 is hereby acknowledged.” This option proposal was never accepted or executed. The letter of Conroy and Fritsch to plaintiff, under date of February 29, 1956, is explicit: “We are unwilling to enter into a formal option with your company as proposed in your letter of February 20th, 1956.” This letter which was on the letterhead of the corporation, but signed by Conroy and Fritsch, individually, reads: “You may consider this as a letter of intent authorizing you to make the survey you deem necessary to make your offer a firm and binding one;” and requires the investigation to be kept secret from everyone at Anchor, and in Anchor’s trade, except Conroy and Fritsch. Then it assures plaintiff that should it make a “firm offer” within 50 days from this date, Conroy and Fritsch would be willing to enter into a contract with plaintiff for $4,025,000 on certain terms and conditions taken from the earlier refused option proposal, but subject to foúr specific additional terms and provisions, referred to as “exceptions” which are set out in the court’s opinion as exceptions (a), (b), (c), and (d). Plaintiff’s letter of March 14 to Conroy and Fritsch acknowledges receipt of their letter of February 29, assures them that its investigation and audit would be on the required confidential basis, and then points out two “minor matters” for clarification, the first of which is so distorted in the majority opinion that it is set forth here: “1. You indicate that our offer on the basis outlined will be accepted if made ‘within fifty days from this date.’ The date of your letter was February 29, but as you will recall you held off mailing it to us until the- following Wednesday, March 7. For this reason we were not able to start the survey as eqrly as we otherwise might have, and while every effort will be made to complete it within even a shorter period, it seems to us that the fifty days should date from March 7 and will therefore expire April 26 * * * we will proceed on the understanding that we may mail our offer to you within: the terms of your letter on April 26.” The second matter on which clárification was sought was price. The letter of February 29 mentioned a flat price of $4,025,000. The letter of February 20 sought an option for $4^23,500, plus $500 each to support restrictive covenants from Conroy, Fritsch, and one Leubkeman. Leubkeman was eliminated from the restrictive covenant by exception (c), so the price suggested was $4,024,000, plus $1,000 to support the restrictive covenants of Conroy and Fritsch. Conroy and Fritsch agreed to these clarification by initialing and returning a carbon of the letter, as requested by plaintiff. The substance of plaintiff’s letter to the defendant, under date of April 26, 1956, is set out in the majority opinion, but, as I view it, the essence of this letter has been misapprehended. Pleaded as a part of plaintiff’s amended complaint is Borg-Warner’s letter under date of July 12, 1956, addressed to Conroy, which letter is not alluded to in the majority opinion. Although this letter is a self-serving declaration, it is interesting to note that (1) it shows that negotiation was being carried on to reach agreement as to exceptions (a) and (b); and (2) that agreement on these open required terms had not yet been reached. For example, as to exception (b), Conroy’s employment, it says “if any question remains in your mind, I am sure it can be answered.” As to exception (a), retention of lower level executives, it says: “although there are two or three questionable cases, you felt no unsurmountable problems remained as to the lower level executive personnel. We * * * believe we can mutually develop a fair basis for their continuing employment. * * * As to two or three salaries where you felt some further consideration should be given, I told you that we were open-minded and would be glad to go into this with you further.” Most certainly this letter does not establish a completed agreement on April 26, 1956, but just the contrary. In analyzing this correspondence, the court concludes that Conroy and Fritsch’s letter of February 29 was a counteroffer, because it “varied the terms of plaintiff’s offer” of February 20. This infers plaintiff’s proposal to purchase an option was, in fact, an offer to purchase Anchor’s assets, which it plainly was not. The proposal to purchase an option was explicitly rejected by Conroy and Fritsch. Then the court reasons that Conroy and Fritsch’s letter of February 29 is to be construed as an offer in and of itself. This reasoning is based on the use of the phrase “firm and binding” offer in the paragraph wherein the controlling stockholders authorize plaintiff to make the survey, without which plaintiff would not consider making an offer to purchase Anchor’s assets. This letter, in my opinion, is not an offer nor a counteroffer but merely an invitation to plaintiff to make an offer. The paragraph wherein the phrase is used, “firm and binding” offer, is clear and explicit, and this phrase is employed merely to differentiate the offer invited from the plaintiff — one to purchase the assets — from plaintiff’s previous offer to purchase an option. Indeed, in the only paragraph of the letter of February 29 expressing contractual intent, the offer invited from plaintiff was expressed as “a firm offer,” — “you are assured that should you make a firm offer within 50 days * * * we are willing to enter into a contract with you.” I can find nothing in the letter of February 29 from Conroy and Fritsch to warrant the statement in the majority opinion that this letter is ambiguous. Most of the text of this letter is set out in the opinion. In it, Conroy and Fritsch spell out the terms on which they are willing to contract. There can be no question but that this letter is the starting point of the alleged contract, because the option proposal made by the letter of February 20 was categorically rejected, thus putting an end to it. The only purposes the letter of February 20 here serve are as a background circumstance and to supply certain terms that were from it incorporated into Conroy and Fritsch’s letter of February 29. The record here is explicit that Conroy and Fritsch would contract only if: “(a) That suitable assurances are given for the retention of the lower level executive personnel; (b) that mutually satisfactory arrangements are made for the continued employment of Charles L. Conroy.” There is no ambiguity in these explicit requirements. It is patent on this record that the parties have never agreed on these two conditions. The only “ambiguity” or uncertainty that can arise is in the determination of these requirements in the absence of mutual agreement by the parties themselves. The majority opinion lifts a quote from plaintiff’s letter of March 14, “You indicate that our offer on the basis outlined will be accepted if made ‘within 50 days from this date.’ ” The most that can be said about this letter is that it asks for an extension of time to April 26 and that the purchase price be adjusted to $4,024,000, which clarifications were accepted by Conroy and Fritsch when they initialed this letter as requested. The letters of February 20, February 29, March 14, and April 26 are made a part of paragraph 5 of plaintiff’s amended complaint by reference. This paragraph contains the further allegations that Conroy and Fritsch, in response to an inquiry, assured plaintiff, by their agent, that the plaintiff had “in effect an optionand that with the letter of April 26 “thereby a completed contract came into being.” The majority opinion intimates that these allegations, if proved, “are sufficient to support a finding that a completed contract came into existence at the time plaintiff submitted its formal offer on April 26.” The court considers plaintiff’s letter of April 26 to be an “acceptance.” If it be construed as an “acceptance” or as a “formal offer” in either case plaintiff is bound by its terms. The letter says “Please consider this our formal offer, therefore, to enter into an agreement in accordance with our lettrs to you of March 14th, and February 20th, and your letter to us of February 29th.” This, then, is plaintiff’s formal offer and it explicitly says it is made in accordance with the three earlier letters,— not in reliance upon any oral utterances pleaded. This “formal offer” of plaintiff is explicit that plaintiff will “enter into an agreement in accordance with our letters to you of March 14th, and February 20th, and your letter of February 29th,” and not upon any oral utterances by the defendants or their agent. Indubitably the law is: “All conversations and parol agreements-between the parties prior to the written agreement are so merged therein that they cannot be given in evidence for the purpose of changing the contract or showing..an intention or understanding different from that expressed. in -the written agreement. (3 Jones’ Com. on Evidence, sec. 434.)” (Armstrong Paint and Varnish Works v. Continental Can Co. 301 Ill. 102, 106.) “This is hornbook principle and requires no citation of authority, though much is available.” Clubine v. Citro, 238 Ill. App. 479, 481. The majority opinion fails to apply this firmly established rule of law to the present case. Applying it, any conversations leading up to the formal offer are embodied in this writing, and oral utterances of these defendants, or their agent, prior thereto, are not competent evidence in this case. It follows that the conversation of March 1, 1956, between plaintiff and the agent of Conroy and Fritsch is incompetent as a basis of an allegation and as testimony in this case. The two later conversations on May 8 and July 10 seek to show a meeting of the minds by parol evidence. There is no question but that the Statute of Frauds is applicable here and that parol evidence and allegations based upon such evidence must be excluded. This court has decided too many times for the rule to be questioned: “to enable a party to a contract for any interest in land to enforce the specific performance of it the contract must be in writing, and this means that the whole contract must be written, so that all its terms and provisions can be ascertained from the writing itself, without the necessity of a resort to extrinsic evidence.” (Daytona Gables Development Co. v. Glen Flora Investment Co. 345 Ill. 371, 394; Gronowski v. Jozefowicz, 291 Ill 266, 277; Sallo v. Boas, 327 Ill. 145, 149; Westphal v. Buenger, 324 Ill. 77, 79; Peiffer v. Newcomer, 326 Ill. 189, 194; Kopprasch v. Satter, 331 Ill. 126, 128; Hanlon v. Hayes, 404 Ill. 362, 368.) Moreover, a contract within the Statute of Frauds cannot be partly in writing and partly oral. Whitelaw v. Brady, 3 Ill.2d 583, 591; Hanlon v. Hayes, 404 Ill. 368; Daytona Gables Development Co. v. Glen Flora Investment Co. 345 Ill. 371, 394; Kopprasch v. Satter, 331 Ill. 126, 127. Over and beyond these applications of the statute, is the further one that in contracts for the sale of land not only must the entire contract be in writing but the agent’s authority to make the contract must also be in writing. (Kopp v. Reiter, 146 Ill. 437, 444, 445; Kozel v. Dearlove, 144 Ill. 23, 25, 26; Lipkin v. Koren, 392 Ill. 400, 407; Leach v. Hazel, 398 Ill. 33, 37, 38.) Nothing is shown in the amended complaint that the agent whose conversation of March 1, 1956, is pleaded had authority in writing, either from Conroy and Fritsch, or from Anchor. The rigidity with which we have applied the Statute of Frauds is shown in Western Metals Co. v. Hartman Ingot Metal Co. 303 Ill. 479, 484. There we held that unsigned writings cannot be connected to a signed writing, unless expressly referred to in the one so signed. We there said that if we went further “then the contract becomes partly oral and partly written, and we have then introduced all the mischiefs which the Statute of Frauds and Perjuries was intended to prevent. * * * We think the established rule a wise one and will not depart from it.” Such rigidity applies with equal reason to oral extrinsic proof as to connecting writings. In reaching their decision the majority have said “it is impossible to place great reliance on other cases except insofar as they state general principles of law.” This expression can only serve to bewilder those who look to the reviewing courts to establish precedent. Unless we, ourselves, are guided by precedent how else can we arrive at our decisions ? And unless we establish precedents in given factual situations, how else can the trial judge and lawyer, or the scrivener, find guidance in the accomplishment of their daily tasks ? Contrary to what the majority says, there is a mass of precedent governing the factual situation presented here, compelling the conclusion that no contract was formed. For example, omitted from the majority’s quotation from Prof. Corbin (1 Corbin on Contracts, 1st ed., 1950, sec. 29, p. 66) is this statement: “Communications that include mutual expressions of agreement may fail to consummate a contract for the reason that they are not complete, some essential terms not having been included. Frequently agreements are arrived at piecemeal, different terms and items being discussed and agreed upon separately. As long as the parties know that there is an essential term not yet agreed on, there is no contract; the preliminary agreements on specific items are mere preliminary negotiation building up the terms of the final offer that may or may not be made.” And in Whitelaw v. Brady, 3 Ill.2d 583, 590, we said: “It is not unusual, however, for negotiations for a contract on any subject matter to be a series of proposals and counter-proposals each narrowing the differences between the parties on certain matters and leaving open others for future determination.” A similar statement appears in Upsal Street Realty Co. v. Rubin, 326 Pa. 327, 192 Atl. 481: “It is not unusual for persons to agree to negotiate with the view of entering into contractual relations and to reach an accord at once as to certain major items of the proposed contract and then later find that on other details they cannot agree. In such cases no contract results.” Prof. Corbin says further (1 Corbin on Contracts, sec. 22, p. 54) : “In the process of negotiation a party may use words that standing alone would normally be understood to be words of ‘contract,’ at the same time limiting them in such a way as to say that a subsequent expression of assent on his part is required. In such case the expression is neither an operative offer nor an operative acceptance; it is preliminary negotiation. Thus, a written proposal stating many terms may be made ‘subject to agreement’ on another specified matter; or it may be said: ‘I reserve final determination for tomorrow.’ Words such as these will in nearly all cases be held to show that an operative assent has not satisfactorily been given.” (See, too, 1 Corbin on Contracts, sec. 24, p. 58.) Like expressions appear in Williston (1 Williston on Contracts, Rev. ed., sec. 45, p. 131,) and the Restatement (Restatement of the Law. of Contracts, chap. 3, sec. 25, pp. 31, 32.) There are numberless cases involving facts similar to those involved here, holding that no contract was formed. Some of them are: Ansorge v. Kane, 244 N.Y. 395, 397-400; St. Regis Paper Co. v. Hubbs & Hastings Paper Co. 235 N.Y. 30; P.R.T. Inv. Corp. v. Ranft, 363 Mo. 522, 252 S.W.2d 315-19; Peiffer v. Newcomer, 326 Ill. 189, 195, 197; Springer v. Campbell Co. 174 Ill. App. 278, 281. It is well established that the province of a court in a specific performance suit is to enforce a contract as made by the parties and not to make a contract for them and then to enforce the contract thus made. (White v. Lang, 401 Ill. 219; Morris v. Goldthorp, 390 Ill. 186; and Shaver v. Wickwire, 335 Ill. 46.) As a basis for specific performance there must be not only a binding contract but said contract must be complete in itself without the necessity for further negotiations or agreement. Young v. Kowske, 402 Ill. 114; Peiffer v. Newcomer, 326 Ill. 189; and Westphal v. Buenger, 324 Ill. 77. It also seems to appear well established that a court will deny specific performance of a contract involving the furnishing of personal services, especially where the service requires the exercise of mechanical skill, intellectual ability or the exercise of judgment, and that a court will not, by a decree of specific performance, compel ah employer to hire or an employee' to work against his will. Barker v. Hauberg, 325 Ill. 538; Clark v. Truitt, 183 Ill. 239, affirming Truitt v. Clark, 81 Ill. App. 652; Wollensak v. Briggs, 119 Ill. 453, affirming 20 Ill. App. 50; Cowen v. McNealy, 342 Ill. App. 179; Ledford v. Chicago, Milwaukee, St. Paul and Pacific Railroad Co. 298 Ill. App. 298. In my opinion the principles concerning specific performance of a contract involved in this case are clearly announced and properly applied in the recent decision of this court in Cefalu v. Breznik, 15 Ill. 2d 168. The court there recognized that the question of part performance of a contract or the existence of a valid contract was not the question to be resolved in a specific perfomance case, but that the sole question was whether or not the agreement alleged was sufficiently definite and certain in its terms to be specifically enforceable. The admitted facts in the present case establish that there was the necessity for further negotiations or agreement including, among other things, terms of personal employment. It is my opinion that the majority opinion in this case reaches a result contrary to long established principles of law.