Barling v. Horn

• Decision Date: 10 December 1956
• Docket Number: No. 1,No. 45381,45381,1
• Citation: 296 S.W.2d 94
• Court: Missouri Supreme Court
• Parties: Stephen D. BARLING and Audrey K. Barling, Appellants, v. Harold H. HORN and Olive A. Horn; and S. John Smith and Marion Smith; and City Bond & Mortgage Company, a Corporation, Respondents

Page 94

296 S.W.2d 94

Stephen D. BARLING and Audrey K. Barling, Appellants, v. Harold H. HORN and Olive A. Horn; and S. John Smith and Marion Smith; and City Bond & Mortgage Company, a Corporation, Respondents.

No. 45381.

Supreme Court of Missouri, Division No. 1.

Dec. 10, 1956.

Henry M. Shughart, Harry P. Thomson, Jr., Kansas City, Shughart & Thomson, Kansas City, of counsel, for appellants.

William W. Cochrane, Jr., Kansas City, Gordon & Cochrane, Kansas City, of counsel, for respondents S. John Smith and Marion Smith.

VAN OSDOL, Commissioner.

This is an action for specific performance of a clause in a lease whereby the lessees, plaintiffs, in the event the lessors desired to sell the leased premises prior to the expiration of the term, were to have the first opportunity to purchase the premises. The trial court denied specific performance on the ground that the lease stated no price or method for determining the price at which plaintiffs were to have the right to purchase, and, consequently, 'the alleged option is indefinite and uncertain and unenforceable in equity.' Plaintiffs have appealed.

April 27, 1953, defendants, Harold H. Horn and Olive A. Horn, were the owners of a described tract of land situate on Wornall Road in Kansas City, and on that day they as lessors entered into a written contract leasing the land and a store building (to be built thereon) to plaintiffs, Stephen D. Barling and Audrey K. Barling, lessees, which contract of lease stipulated a term of five years at a rental of $225 per month. As indicated, the lessors had undertaken to construct a building on the described tract; and the lessees, plaintiffs, entered into the possession of the property, consisting of the described tract and the new store building erected thereon, on December 7, 1953, and there conducted their business as partners in sales of floor coverings.

Under those paragraphs of the contract of lease entitled 'Agreements of Lessors,' the lessors agreed to 'furnish the Lessees, subject to the requirements heretofore set forth, the option of renewal of this lease on the same terms and conditions for a succeeding term of five years' on the following condition (among others),

'd. The Lessors have not notified the Lessees in writing of their desire to sell the building and the premises prior to the expiration of this term, in such event the Lessees shall have the first opportunity to purchase the premises.'

September 1, 1954, plaintiffs Barling learned that defendants Horn were thinking of selling the property, and on September 9th defendant, Harold H. Horn, verbally informed plaintiff, Stephen D. Barling, that the property was going to be sold; and on the same day, September 9th, defendants Horn wrote plaintiffs that the property was for sale and that plaintiffs were by the letter notified thereof, and given the first opportunity to purchase. The letter further advised plaintiffs that the 'price on the above property is $30,000. The present loan is $11,134.27, which is held by the City Bond and Mortgage Company. This property will immediately be offered for sale to others if you are not interested.'

The plaintiffs Barling did not accept the $30,000 offer; and an advertisement offering the property for sale appeared in the Kansas City Star of Sunday, September 12, 1954. That same afternoon or evening defendant, S. John Smith, met with defendant, Harold H. Horn, and, after inspecting the premises, offered to buy the property at a price of $26,000.

On Friday, September 17th, defendant Harold H. Horn came to the Barling store and during the ensuing interview Barling offered the Horns $26,134.27 for the property, the offer being $15,000 cash and the assumption of the mortgage in the amount of $11,134.27; but Horn wanted Barling to waive any refund of the sum of $675, which the contract of lease had required the lessees, the Barlings, to advance as rent for the last three months of the five-year term. Barling did not agree to waive the refund, and the parties discussed an alternative whereby Barling might install some floor coverings at cost at the Horn home as a part of the purchase price. Horn asked Barling if he would sign a contract of sale on that basis; Barling stated that he would; but Horn left the Barling store without further comment.

Thereafter, the Barlings were negotiating for a loan to be secured on the Barling home and the store building and premises for an amount which would enable them to consummate a purchase of the demised property.

Near noon on Friday, September 24th, plaintiff, Stephen D. Barling, called the Horn home by telephone and told defendant, Olive A. Horn, wife of defendant Harold H. Horn, that he had 'the money for the property.' He was informed the property had been sold. A warranty deed from defendants Horn to defendants Smith was in fact executed and delivered in the afternoon of that day, pursuant to a contract of purchase and sale entered into between defendants Horn and defendants Smith on September 18th. By the contract of sale and the warranty deed from the Horns to the Smiths, the property was to be and was conveyed for the sum of $26,000, less the unpaid balance of the secured note held by the City Bond & Mortgage Company of $11,288.55 and less the additional amount of $675, being the deposit made, as stated, by plaintiffs-lessees as rent for the last three months of the term of the lease. It is clear from the evidence that defendants Smith had actual as well as constructive notice of the terms and conditions of the lease, including the clause 'd' quoted supra, prior to the execution of the contract of purchase and sale of September 18th and the execution and delivery of the warranty deed of September 24th. Counsel for defendants, the Horns and the Smiths, waived any issue as to plaintiffs' ability to buy the property on the terms and conditions as those of the sale undertaken by defendants Horn to defendants Smith; and the trial court correctly found the fact that, at the time of the execution of the contract of sale between the Horns and the Smiths and at the time of the consummation of the sale and at the time of trial, 'the plaintiffs were ready, willing and able to purchase the property in issue upon the same terms and conditions as of the sale' by defendants Horn to defendants Smith.

Neither of the defendants Horn ever in any way communicated any offer to plaintiffs or afforded plaintiffs an opportunity to buy the property at the price and terms of sale by defendants Horn to defendants Smith. The trial court was justified in finding and specifically found that 'the defendants and each of them failed to give the plaintiffs the opportunity to purchase the premises and real estate in question upon the same terms and conditions as those upon which the sale of said real estate and premises was made by Harold H. Horn and Olive A. Horn to the defendants, S. John Smith and Marion Smith.'

Directing our attention to the clause 'd' of the contract of lease giving plaintiffs the first opportunity to purchase the premises, we see that the clause in its setting in the contract of lease does not even purport to be a completed bilateral contract for the sale of the described property. Nevertheless, defendants-respondents Smith would have us treat with the clause as if it were intended to constitute a contract of sale and apply the universal rule that a contract to be specifically enforceable must be complete in its essential and material terms and capable of being enforced without adding to its terms.

It is true that the stipulation of a price, or a method of determining it, is essential to the enforceability of a contract of sale. The contract should be sufficiently definite and certain in its essential terms to enable a court to decree specific performance. A court of equity will not make a contract and then decree its performance. Rayburn v. Atkinson, Mo.Sup., 206 S.W.2d 512; Baldwin v. Corcoran, 320 Mo. 813, 7 S.W.2d 967. So if the clause 'd' were considered as if it were intended to be, in itself, a completed contract of purchase and sale, it was incomplete, indefinite and uncertain, and consequently unenforceable.

But, as we have said, the quoted clause of the lease does not even purport to be a contract of purchase and sale of the property, although it clearly contemplated that defendants Horn might decide to sell the property. In such event, plaintiffs were to...