Beall v. Beall

• Decision Date: 11 September 1981
• Docket Number: No. 50,50
• Citation: 434 A.2d 1015,291 Md. 224
• Parties: Cecelia M. BEALL v. Carlton G. BEALL.
• Court: Maryland Court of Appeals

Page 224

291 Md. 224

434 A.2d 1015

Cecelia M. BEALL v. Carlton G. BEALL.

No. 50.

Court of Appeals of Maryland.

Sept. 11, 1981.

Steven Rosen, College Park (Willoner, Calabrese & Rosen, P. A., College Park on the brief), for appellant.

J. Frederick Garner, Oxon Hill (Lancaster & Garner, Oxon Hill, on the brief), for appellee.

Argued before MURPHY, C.J., and SMITH, DIGGES, ELDRIDGE, COLE, DAVIDSON and RODOWSKY, JJ.

COLE, Judge.

In this case we are called upon to decide, after a brief discussion of the reasons a purported option to purchase land does not satisfy the requirements of the statute of frauds, a question of first impression: ¹ whether a bare offer by husband and wife to sell land held as tenants by the entirety survives the death of one of the tenants.

We summarize the facts. Calvin and Cecelia Beall were husband and wife, who in 1956 purchased as tenants by the entirety a 1/2 acre parcel of land, from John and Pearl Beall, Calvin's father and mother. The rectangular parcel is the subject of this dispute and is bound on three sides by a much larger plot of land (130 to 145 acres in size), at that time also owned by Calvin's parents and known as the Beall farm. Calvin had worked the Beall farm since leaving high school and had shared the fruits of his labor with his parents.

In February of 1968, Carlton Beall, a second cousin to Calvin, contracted to purchase the Beall farm from Pearl Beall, then widowed. At about the same time, Carlton obtained a written, three-year option to purchase Calvin and Cecelia's parcel for $28,000. This option recited consideration of $100.00 which was paid by check to Calvin. In February of 1971 the parties executed a new option for five years, on the same terms as the first, which again recited consideration of $100.00. Carlton never exercised either option, but in 1975 four lines were added to the bottom of the 1971 agreement which purported to extend it for three additional years. Calvin and Cecelia signed this addendum, which reads as follows:

As of October 6, 1975, we, Calvin F. Beall and Cecelia M. Beall, agree to continue this option agreement three more years February 1, 1976 to February 1, 1979.

/s/ Calvin Beall

/s/ Cecelia Beall

Calvin died in 1977.

In May of 1978, Carlton advised Cecelia by letter that he was accepting the offer to sell and would be in a position to settle within thirty (30) days. Cecelia responded that she was unwilling to sell for $28,000. In September of 1978, Carlton again notified her of his intent to purchase and advised her of the settlement date. Again Cecelia refused and declined to attend the settlement. Thereafter, Carlton filed suit in the Circuit Court for Prince George's County seeking specific performance. That court granted Cecelia's motion to dismiss on the ground that the 1975 agreement was unsupported by consideration and was therefore unenforceable. Carlton appealed to the Court of Special Appeals, which reversed and remanded the case for a new trial directing the circuit court to determine whether there was a valid, unrevoked offer to sell the property in dispute and, if so, whether there was a proper acceptance of that offer sufficient to create a contract specifically enforceable in equity. 413 A.2d 1365. We granted Cecelia's petition for certiorari to decide the important issues presented.

The first question we must address is whether there arose a binding agreement between Carlton on the one hand and Calvin and Cecelia on the other. An option is a continuing offer to sell by the optionor which cannot be withdrawn by him during the stated period. Straley v. Osborne, 262 Md. 514, 278 A.2d 64 (1971); accord, Diggs v. Siomporas, 248 Md. 677, 237 A.2d 725 (1968); Blondell v. Turover, 195 Md. 251, 72 A.2d 697 (1950). An option is not a mere offer to sell, however, but a binding agreement if supported by consideration. Blondell v. Turover, supra. The optionee has what is termed a power of acceptance, and when he accepts the offer in the prescribed manner, the option is thereby exercised and a binding bilateral contract of sale is created. Straley v. Osborne, supra. Moreover, when the optionee indicates his intention to exercise the option and tenders the amount of the purchase price, he has performed under the option and is entitled to specific performance. Straley v. Osborne, supra; Diggs v. Siomporas, supra; Blondell v. Turover, supra.

It is conceded in the instant case that the only offer Calvin attempted to accept was the offer made in the extension agreement of 1975. The key, then, to deciding whether Carlton may require Cecelia to convey to him depends upon whether a binding option contract was formed in 1975 or whether, if not, there was nevertheless a valid offer to sell outstanding at the time he attempted to effect his acceptance in 1978.

Cecelia maintains that enforcement of the alleged contract of 1975 is barred by the statute of frauds. The statute is codified in Maryland Real Property Code (1974, 1980 Cum.Supp.), § 5-104, which provides that

(No) action may be brought on any contract for the sale or disposition of land or of any interest in or concerning land unless the contract on which the action is brought, or some memorandum or note of it, is in writing, and signed by the party to be charged or some other person lawfully authorized by him.

An option to purchase land concerns the sale of land and is, therefore, governed by the statute of frauds. See Farley v. Null, 244 Md. 567, 224 A.2d 448 (1966); Bank v. Hurst Estate, 187 Md. 333, 50 A.2d 133 (1946). To render a contract enforceable under the statute of frauds, the required memorandum must be

(1) a writing (formal or informal);

(2) signed by the party to be charged or by his agent (3) naming each party to the contract with sufficient definiteness to identify him or his agent;

(4) describing the land or other property to which the contract relates; and

(5) setting forth the terms and conditions of all the promises constituting the contract made between the parties.

Forsyth v. Brillhart, 216 Md. 437, 440, 140 A.2d 904 (1958); Sinclair v. Weber, 204 Md. 324, 332, 104 A.2d 561 (1954). In sum, we have stated that the statute of frauds requires a memorandum for the sale of real estate to contain all the elements of a valid contract. London v. Riebel, 189 Md. 376, 379, 56 A.2d 34 (1947). See Miller v. Herrmann, 230 Md. 590, 595-96, 187 A.2d 847 (1963 ).

The chancellor below observed, and we agree, that reference to the various agreements between the parties readily provides most of the elements not contained in the 1975 addendum. The property to be sold was ascertainable; the parties involved were identifiable; the duration of the option was specified; and the purchase price was certain. Thus, the memorandum of agreement, by itself or by reference to earlier agreements, contained all the elements of a valid option contract except one: consideration for Calvin and Cecelia's extension of the offer to sell.

It is fundamental that in order for a contract to be binding it must be supported by consideration. Totally absent from the 1975 memorandum is any recitation of consideration for Calvin and Cecelia's extension of their offer to sell for three additional years. It would appear, therefore, that the memorandum does not fulfill the requirements of the statute and that the underlying agreement is unenforceable. Carlton argues, however, that the extension contract is nevertheless enforceable in his action for specific performance under the equitable doctrine of part performance. He asserts that the consideration for the extension was his forbearance upon exercising his 1971 option, which, in October 1975, was good until February 1976.

It has generally been accepted in Maryland that forbearance to exercise a legal right is sufficient consideration to support a promise. Erie Insurance Exchange v. Calvert Fire Insurance Co., 253 Md. 385, 252 A.2d 840 (1969); O'Neill v. Frederick Trading Company, 223 Md. 301, 164 A.2d 537 (1960), and cases cited therein. However, when forbearance is offered as evidence of part performance sufficient to escape the operation of the statute of frauds it must be such as would not ordinarily have taken place in the absence of the alleged contract and therefore is not reasonably explicable on some other ground. If the part performance asserted consists wholly of forbearance to act, the fact is less likely to be evidential in character than when it consists of affirmative action. 2 Corbin, Contracts § 430, at 473-74.

This Court has stated that part performance is adequate to remove the bar of the statute of frauds when there is "full and satisfactory evidence" of the terms of the agreement and the acts constituting part performance. Hall v. Hall, 1 Gill 383, 393 (1843); see Serio v. Von Nordeck, 189 Md. 388, 391-92, 56 A.2d 41 (1947). Furthermore, we have held that the part performance itself "must furnish evidence of the identity of the contract; and it is not enough that it is evidence of some agreement, but it must relate to and be unequivocal evidence of the particular agreement...." Semmes v. Worthington, 38 Md. 298, 326-27 (1873) (emphasis added); accord, Kline v. Lightman, 243 Md. 460, 221 A.2d 675 (1966).

Here Carlton offered the following testimony as evidence of his forbearance:

BY MR. GARNER:

Q. Now, Mr. Beall, would you tell the Court, what were the circumstances under which the October 6th, 1975, the four lines on the bottom left-hand corner of Exhibit 9 were signed?

....

A. It was my mutual agreement that the contract be continued, and a mutual agreement of Cecelia as well as Calvin and myself. And this was added and executed by them to continue this agreement. And for that reason in 19 this this four lines were written by my wife, she typed it in.

Q. Prior to the execution of the October 6th, 1975 those four lines on October 6th, 1975, had you expressed your intention to exercise your option?

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