Court Opinion

ID: 9629337
Source: CourtListenerOpinion
Date Created: 2023-08-22 09:40:51.543762+00
Date Added: 2024-06-11T18:07:18.000128
License: Public Domain

ELLETT, Justice
(dissenting).
I dissent.
The option provided that the payment was to be on terms to be negotiated. This is an agreement to agree and hence is no contract at all.
The case of Monahan v. Allen,1 is a case similar to the instant one. The court there said:
* * * Paraphrased, Allen’s offer is this: “I will sell you my ranch [de*146scribing it] for $43,800, payable $5,000 upon the execution of the deed, and $38,-800 upon such terms and subject to such agreements as we may hereafter make. * * * ” Such an offer is too vague, indefinite, and uncertain to form the basis for a contract.
This is clearly a case where terms were to be negotiated.
Another case to be noted is that of Howard v. Beavers,2 wherein Howard sought specific performance of a purported contract. The parties had agreed that Howard’s property was worth $14,800 more than that of Beavers. The agreement contained the following clause:
* * * and the said party of the first part will grant, bargain, sell, and convey back unto the party of the second part a mortgage on the property hereinabove described as the East 120 acres * * * for $14,800, being the balance due to and owed to the party of the second part as consideration for the within exchange of property, being the difference in the values of the properties * * *.
Howard being ready, willing and able to consummate the deal, offered to do so and submitted his abstract of title for examination. Beavers refused and Howard began an action for specific performance of the contract. The Colorado Supreme Court affirmed the trial court’s judgment refusing specific performance and in doing so said:
* * * If there had been a mortgage prepared according to the terms of the contract, then it would have been a document silent as to the time and terms of payment, therefore there was nothing to this contract that could be carried into a mortgage as, if, and when it might have been given. The trial court could not write a new contract for the parties, because the minds of the parties did not meet on this essential matter, and therefore the contract was incomplete and unenforceable in an action of specific performance. The trial court here could not determine by the contract what was to be done to constitute performance. The precise act that the court would say must be specifically performed does not appear in this contract. We then must say that since a clear degree of certainty is required for specific performance, clearer than is necessary to establish a contract as a basis of an action at law for damages, that the court here committed no error, nor abuse of discretion in denying specific performance and in granting such damages as the evidence would warrant. “A reservation to either party to a contract, of an unlimited right to determine the nature and extent of his performance, renders his obligation too in*147definite for legal enforcement. * * * ” 12 Am.Jur. p. 558, § 66.
In Huff v. Shepard,3 there was an agreement for the sale of real and personal property for a specified amount of money, the balance of the purchase money to be paid on such terms as should be agreed upon. On Appeal from a suit granting specific performance the Missouri Supreme Court said:
The circuit court undertook to compel performance of the final clause in this agreement, by rendering a judgment against the defendant for $1,300 and interest. This was not enforcing the defendant’s contract; for he never bound himself to any such cash liquidation without regard to time.- It was enforcing a new agreement, .made for him by the court and the plaintiff. So far as as the defendant had bound himself at all, it was upon an express stipulation that the terms of payment should be only such as he might thereafter consent to in a further agreement. * * *
Specific performance was denied in Rush v. Autry.4 There the contract provided for the total purchase price and the amount to be paid down. It then provided that the balance of $31,196 was “to be agreed on by” the parties. The Georgia Supreme Court held the alleged contract to be unenforceable.
An agreement for a warranty deed, which, after making provision for price and other matters, stated that the balance was to be “payable by future agreement” on or before a certain date was held in Bentzen v. H. N. Ranch, Inc.,5 not to give rise to an enforceable contract.
In Avalon Products v. Lentini,6 the price was agreed upon as was the amount of the down payment. The purported agreement then provided “method of payment to be agreed upon before delivery.” It was held that there was no contract at all. The court said:
* * * An agreement to enter into an agreement upon terms to be after-wards settled between the parties is a contradiction in terms. It is absurd to say that a man enters into an agreement until the terms of that agreement are settled. Mecham on Sales, Vol. I, sec. 234; Monahan v. Allen, 47 Mont. 75, 80, 130 P. 768. Although a greater degree of certainty is required in a contract which is sought to be specifically enforced, the general rule is that a provision in a contract which leaves open the terms of payment for future negotiation renders the contract incomplete and uncertain in one of its material features and for that reason unenforceable in equity. Morris v. Ballard, 56 App. D.C. 383, 16 F.2d 175, 49 A.L.R. 1464 *148and cases cited. In California the rule is the same and no action will lie to enforce the performance of a contract or to recover damages for its breach unless it is complete and certain.
In Bryant v. Clark,7 the contract provided for the payment of the deferred balance in IS annual installments with interest at 6% thereon. There was no provision as to when or how the interest was to be paid. The Texas Supreme Court affirmed the lower court’s ruling that specific performance would not lit. It said the time of paying interest was a material term of the purported contract, but was not agreed upon by the parties.
Roberts v. Adams,8 was a case involving an option to purchase real property for $85,000 “payable as mutually agreed by both parties.” In holding the purported agreement void for uncertainty, the court said :
* * * It is firmly established as the law of California that failure to specify or furnish a standard for determination of terms of payment and method of securing the unpaid balance of the purchase price of real or other property is fatal to its enforceability notwithstanding any desire of the courts to be liberal and helpful. * * *
Appellant’s counsel earnestly argues that he was prepared and offered to pay cash upon the exercise of the option, and that this fact cured any uncertainty about terms of payment that inhered in the option clause of the lease.
The court said the point had been ruled adversely in several cases.
In Westphal v. Buenger,9 it was said:
* * * An agreement in writing, which does not purport to give an absolute right, without further negotiation thereon, cannot be specifically enforced. Appellant contends that he is now ready and willing to pay the entire $16,000, but such is not of the terms of the contract. There were to be mortgages, and, while it might be generally considered more acceptable to have the actual cash than mortgages, the court will not make a new contract for the parties, because it appears that conditions claimed by one party, but not in the contract, might prove more beneficial to the other party.
In the matter now before us, the option contract provided that payment was to be on terms to be negotiated. Here there was no negotiating at all. The plaintiff demanded that he get the benefit of the two mortgages, one bearing interest at 5j4%> the other at 6%.
There is a valuable property right in having a mortgage at 5^4% interest when the going rate of interest on first mort*149gages is 8% or more. A mortgagee would undoubtedly discount such a debt in order to get the cash so as to be able to invest it at the higher rate of interest.
The right of the defendants to require a mortgage at the going rate of interest (8% or more) was within the terms of the agreement and was a material term thereof. If plaintiff could assume the mortgages and pay defendants some $5,000 cash, that would be all they could invest at the higher rate. If plaintiff could pay all cash, that would compel defendants to pay off the mortgages and still leave them only the $5,000 to invest. If they had negotiated a mortgage like the ones they had, except at 8% interest, the defendants could have made a profit of 2% or more on the total amount of the indebtedness.
The trial court made a contract for the parties which they never agreed to, and then undertook to enforce it. In doing so it erred and we should not compound the error.10
In the case of Pitcher v. Lauritzen,11 this court said:
Specific performance cannot be required unless all terms of the agreement are clear. The court cannot compel the performance of a contract which the parties did not mutually agree upon. See Bowman v. Reyburn, 115 Colo. 82, 170 P.2d 271.
In speaking of certain terms required for specific performance, the author in 49 Am.Jr., Specific Performance, Section 22, Qt page 35 uses this language:
“The contract must be free from doubt, vagueness, and ambiguity, so as to leave nothing to conjecture or to be supplied by the court. It must be sufficiently certain and definite in its terms to leave no reasonable doubt as to what the parties intended, and no reasonable doubt of the specific thing equity is called upon to have performed, and it must be sufficiently certain as to its terms so that the court may enforce it as actually made by the parties. A greater degree of certainty is required for specific performance in equity than is necessary to establish a contract as the basis of an action at law for damages.
I would reverse the case and award costs to the defendants.

. 47 Mont. 75, 130 P. 768 (1913).

. 128 Colo. 541, 264 P.2d 858 (1953).

. 58 Mo. 242 (1874).

. 210 Ga. 732, 82 S.E.2d 866 (1954).

. 78 Wyo. 158, 320 P.2d 440 (1958).

. 98 Cal.App.2d 177, 219 P.2d 485 (1950).

. 163 Tex. 596, 358 S.W.24 614 (1962).

. 164 Cal.App.2d 312, 330 P.2d 900, 902 (1958).

.324 Ill. 77, 154 N.E. 426, 427.

. The prevailing opinion relies upon the case of Continental Bank v. Bybee, 6 Utah 2d 98, 306 P.23 773. That case was an action for money based upon a note. It is not authority for this court to grant specific performance.

. 18 Utah 2d 368, 372, 423 P.2d 491