Boyd v. Head

• Decision Date: 02 July 1968
• Docket Number: No. 10072,10072
• Citation: 92 Idaho 389,443 P.2d 473
• Parties: L. A. BOYD, Plaintiff-Appellant and Cross-Respondent, v. W. N. HEAD and Viola N. Head, husband and wife, Defendants-Respondents and Cross-Appellants.
• Court: Idaho Supreme Court

Page 473

443 P.2d 473

92 Idaho 389

L. A. BOYD, Plaintiff-Appellant and Cross-Respondent, v. W. N. HEAD and Viola N. Head, husband and wife, Defendants-Respondents and Cross-Appellants.

No. 10072.

Supreme Court of Idaho.

July 2, 1968.

Goodman & Duff, Repert, for appellant.

Rayborn, Rayborn, Webb & Pike, Twin Falls, for respondents.

McQUADE, Justice.

This action arose out of an agreement executed March 14, 1963, between the parties concerning the sale of ranch property owned by respondents and cross-appellants W. N. and Viola Head. Generally, the agreement provided that if the property was not 'sold' for a price of $73,000.00 or more 'by' September 14, 1965, Heads had to sell it to appellant and cross-respondent Boyd who was obliged to buy the property for $63,000.00 (Boyd terms this arrangement a 'must-buy option.') Simultaneously with execution of the agreement, Boyd loaned Heads $16,000.00, payable with eight per cent interest in three years, to enable them to redeem their ownership interest under Sometime after September 14, 1965, there still had been no completed sale of the property. Boyd then insisted unsuccessfully that Heads convey the property to him and upon their refusal he brough the present action for specific performance of Heads' obligation under the agreement. Heads answered that (1) the property had been sold within the terms of the agreement before September 14, 1965, and (2) the agreement was tainted with usury and so could not be enforced in equity. Heads also counterclaimed for usury penalties.

a previously foreclosed mortagage on the ranch property.

The district court found that (1) there had been no 'completed sale' prior to September 14, 1965, and (2) the agreement was not tainted with usury. But the court further found that the 'must-buy option' was part of a joint venture agreement between Boyd and Heads to attempt to sell the property to some third party for $73,000.00 or more within the allotted time and if successful to share equally in the overplus above $63,000.00. And although both parties would profit upon such a sale, the court found:

'there is some evidence that the plaintiff (Boyd) did not cooperate as fully as he might (sic) with Mr. Head in working out a sale under the terms of their joint adventure agreement.'

and the court concluded that in the circumstances it would be 'inequitable to construe' the agreement 'to require that all details of sale be completed and the sale closed and the purchase price paid prior to September 14, 1965.'

Implicitly finding that certain contractual arrangements for sale of the property entered into just before September 14, 1965, between Heads and a third party satisfied the court's equity-fashioned interpretation of the Boyd-Heads agreement, the court ordered that Heads have ninety (90) days from March 24, 1967, (original judgment is dated April 6, 1967) to 'complete a sale' of the property. In its findings supporting the order the court stated: 'the actions of the parties subsequent to September 14, 1965 had prevented final closing of said sale.' In this regard, Boyd admitted he had let it be known to all interested parties that he considered himself the rightful owner of the property as of September 14, 1965, and that he intended to assert his rights. This of course clouded the title.

Boyd appeals, contending the district court erroneously refused to grant unconditional specific performance in accord with his complaint; Heads cross-appeal, assigning error to the court's findings regarding usury. Finding no error in either determination, we affirm the district court's judgment.

Although certain points involved in the usury question are pertinent also to the specific performance issue, for clarity the appeal and cross-appeal will be separately discussed. A more detailed statement of pertinent facts will be presented in each discussion.

SPECIFIC PERFORMANCE

Boyd's appeal questions whether the order extending Head's time beyond the agreement date to complete a sale of the property was within the district court's equity powers.

The Boyd-Heads agreement, termed an 'Agreement and Option' was dated March 14, 1963. It states in pertinent part that if Heads' ranch property was 'not sold, as herein provided, by the 14th day of September, 1965,' Boyd was obliged to purchase it ('hereby agrees to purchase') and Heads were obliged to sell it to him ('hereby agree to sell') for $63,000.00 cash less assumable encumbrances and the loan created debt of $16,000.00 (plus accrued interest) owed to Boyd by Heads. Besides property description, the only terms of sale 'herein provided' were: the property 'will be listed for sale for a sum agreed upon ¹ by the parties hereto and in an amount not less than $73,000.00. The parties of the first part (Heads) agree that they will, upon receipt of a bona fide cash offer of the said $73,000.00, or more, on or before the 14th day of September, 1965, sell said property.' Upon such a sale, the agreement further provided, Boyd and Heads would divide equally the net proceeds exceeding $63,000.00.

At the end of summer 1965, W. N. Head pursued negotiations with William R. Burt, president of the Deer Creek Company that operates a ranch at Hailey, Idaho, and with another Hailey-Bellevue area rancher, named Arkoosh. But was interested in purchasing property owned by Arkoosh and Arkoosh desired to acquire Heads' ranch property. These three-W. N. Head, Burt, and Arkoosh-had several discussions at the end of summer 1965 concerning the how and on what terms to accomplish the contemplated exchanges. It was determined that technically Burt would purchase Arkoosh's property and then Arkoosh would use the funds received from Burt to buy Heads' property.

It appears from the record that a few days before September 14, 1965, probably on September 9, 1965, W. N. Head, Burt, and Arkoosh reached some agreement on the final details of the three-way sale or exchange and these final arrangements were transcribed stenographically and the stenographer's pad was then initialed by the Heads, Burt, Arkoosh and perhaps also by some other persons. The initialing of this agreement was not acknowledged before a notary. Just before September 14, 1965-perhaps only the day before-Boyd received a handwritten letter from W. N. Head informing that Head had sold the property for an amount exceeding $73,000.00.

Boyd evidently was not convinced that Heads had sold the property within the requirements of the Boyd-Heads agreement. For shortly-if not immediately-after September 14, 1965, Boyd inquired of the persons interested in the purported three-way sales agreement for sale entered on September 9, 1965, concerning the terms of that agreement. In these discussions and in other ways Boyd unmistakably let it be known that he thought he had paramount right to Heads' ranch property and that he would insist upon enforcing that right. Boyd's testimony contains the following:

'Q. Did you suggest * * * that you might bring a lawsuit to enforce your right to acquire this property?

'A. Well I think it was pretty common knowledge. We notified anybody that was connected with the thing of our intention to consummate this contract (the Boyd-Heads agreement) and file suit accordingly.'

September 16, 1965, Boyd posted a cashier's check payable to Heads for $5,000.00 with a real estate agent who then advised Heads that Boyd was prepared to consummate a purchase under the Boyd-Heads agreement of March 14, 1963. Heads refused and several months later Boyd commenced legal action to force conveyance of the property by Heads to him.

From the record it appears that the September 9, 1965 Heads-Burt-Arkoosh agreement, which the district court termed a 'sales agreement for sale,' detailed thoroughly and precisely the terms and conditions of that intended transaction. Burt testified (by deposition) that the substance of the transaction had been negotiated and detailed terms drafted by attorneys before September 9, 1965, and on that day Heads, Burt, and Arkoosh met in the Gooding, Idaho, office of the attorney, Charles C. Shaw, 'for the purpose of signing the documents.' 'Two or three points, * * * very minor' caused disagreement, Burt said, but these points were soon resolved and Burt dictated this accord, those present signing the stenographer's book. 'Considering together the draft of the contract which had previously been prepared and the (dictated) notes,' but said, all details of the three-way agreement for sale were included: 'there was nothing undecided-nothing.' W. N. Head testified similarly. The formal agreement of exchange was typewritten sometime after the September 9, 1965 meeting (apparently before December 1965) but it refers back to the earlier agreement: 'THIS AGREEMENT, entered into as of the 9th day of September, 1965, * * *.' The initialed stenography book was not introduced in evidence, but there was testimony that it had been lost.

The district court found:

'Head(s) waited until the last possible day to work out a sales agreement for sale under the joint adventure agreement' and that there was no 'completed sale of the property prior to September 14, 1965.' But the court further found:

'some evidence that the plaintiff (Boyd) did not cooperate as fully as he might with Mr. Head in working out a sale under the terms of their joint adventure agreement * * *.

* * *

* * *

'That each of the parties acted without due consideration of the joint adventure and that under the circumstances of the cases (sic), it would be unequitable and unconscionable to require a strict compliance of a completed sale by September 14, 1965.'

The court concluded:

'That because of the actions of the parties and all of the circumstances of this case, it would be inequitable to construe the language in the Agreement and Option entered into between the parties in such a manner as to require that all details of the sale be completed and the sale closed and the purchase...