Bunnell v. Bills

• Decision Date: 07 February 1962
• Docket Number: No. 9505,9505
• Citation: 368 P.2d 597,13 Utah 2d 83
• Parties: d 83 Carol R. BUNNELL, Plaintiff and Respondent, v. Wilford Lester BILLS, Rhoda I. Bills, J. Ervin Stevens, Violet M. Stevens, Lynn H. Coombs, Lois B. Coombs, J. Armont Willardsen, Dorothy B. Willardsen, and Willardsen Motor Lodges, Inc., a Utah corporation, Defendants and Appellants.
• Court: Utah Supreme Court

Page 597

368 P.2d 597

13 Utah 2d 83

Carol R. BUNNELL, Plaintiff and Respondent, v. Wilford Lester BILLS, Rhoda I. Bills, J. Ervin Stevens Violet M. Stevens, Lynn H. Coombs, Lois B. Coombs, J. Armont Willardsen, Dorothy B. Willardsen, and Willardsen Motor Lodges, Inc., a Utah corporation, Defendants and Appellants.

No. 9505.

Supreme Court of Utah.

Feb. 7, 1962.

Kirton & Bettilyon, Salt Lake City, for appellants.

Romney, Boyer & Ronnow, Salt Lake City, for respondent.

CALLISTER, Justice.

Plaintiff brought this action seeking specific performance of a contract, or, in the alternative, damages for the breach thereof. The trial court, sitting without a jury, denied specific performance, but awarded plaintiff damages in the sum of $5,000 against defendants, Stevens, Bills and Coombs, who appeal. The action against Willardsen Motor Lodges was dismissed.

On November 3, 1959, defendants, Bills and Stevens, entered into a Uniform Real Estate Contract whereby Bills was to sell to Stevens the Alta Motor Lodge, Salt Lake City, together with certain personal property and furnishings. Title was to be conveyed upon payment of the full purchase price. The purchase price of $274,446, without interest, was to be paid in annual installments of $14,000, after a down payment of $10,000. At trial this price was agreed to be the equivalent of a purchase price of $175,000 at 6% interest on the unpaid balance.

November 20, 1959, Stevens entered into a 'Commercial Listing' and 'Sales Agency Contract' with Realty Inc., through its agent, Schmidt, wherein Realty Inc. was given exclusive right to sell the Alta Motor Lodge and certain personal property used in the operation of the Alta. Realty Inc. was given authority to execute, in Stevens' name, a preliminary contract of sale, and Stevens agreed to execute the necessary papers for conveyance of the property to a buyer.

On November 23, 1959, plaintiff Bunnell deposited a check for $9,500 with Schmidt and signed an 'Earnest Money Receipt and Offer to Purchase' (hereafter called 'receipt') agreeing to purchase the Alta Motor Lodge and personal property designated on an attached list for a price of $175,000 at 6% interest. The down payment was to consist of Bunnell's property at 904 East 1st South, Salt Lake City, 'valued at $15,000' along with the aforesaid deposit of $9,500. Bunnell agreed to pay $7,000 in 1960 and $14,000 each year thereafter until the full purchase price was paid. The receipt was signed by both Stevens and Bunnell.

On February 5, 1960, a written agreement was entered into whereby Bills and Stevens released each other from all responsibility and liability incurred under their Uniform Real Estate Contract of November 3, 1959. On this same day, Bills, through a Uniform Real Estate Contract, sold the Alta Motor Lodge with its personal property to Willardsen Motor Lodges. The purchase price of $180,000 at 6% interest was to be paid in annual installments of $12,000 after a down payment of $16,500 had been made.

The facts surrounding each of these transactions will be brought out in the discussion of the points raised by appellants.

From the trial court's judgment for $5,000 jointly and severally against defendants, Stevens, Bills and Coombs, they have appealed, asserting that the trial court erred in finding:

I. That Bunnell and Stevens had entered into a valid and binding contract;

II. That Bunnell had been damaged by Stevens' nonperformance of the alleged contract; and

III. That Coombs and Bills had conspired with Stevens to cause a breach of the alleged contract.

I.

That an 'Earnest Money Receipt and Offer to Purchase' may constitute a binding contract, has often been recognized by this court, ¹ and is not now disputed by defendants. Defendant Stevens contends, however, that he is not bound by this receipt because there had been no meeting of the minds of the parties. In support of this contention Stevens argues, first, that the receipt must be interpreted to mean that, as consideration for the transfer of the Alta Motor Lodge, Bunnell was to transfer her property located at 904 East 1st South by a Uniform Real Estate Contract, and because the receipt fails to set forth certain provisions of such contract, it was merely an agreement to agree. Secondly, defendant contends that because the receipt fails to set forth the personal property which was to be transferred with the Alta and which was to be transferred with Bunnell's property, the whole agreement was too indefinite to constitute a meeting of the minds.

A binding contract can exist only where there has been mutual assent by the parties manifesting their intention to be bound by its terms. ² Furthermore, a contract can be enforced by the courts only if the obligations of the parties are set forth with sufficient definiteness that it can be performed. ³

Is there substantial evidence to support the trial court's finding that the defendant, Stevens, had manifested an intention to be bound by the terms that were offered by Bunnell? ⁴ And if so, in light of the circumstances under which the agreement was entered, can the intention of the parties be ascertained with reasonable certainty? ⁵

Stevens claims that Realty Inc., represented by Schmidt, was acting as Bunnell's agent for the purpose of procuring a sale of the Alta, and for this reason the instrument in question was drafted by Schmidt as her agent and must be construed most strongly against her. The fact that three days prior to the execution of the receipt Stevens had entered into a 'Commercial Listing' and 'Sales Agency Contract' with Realty, Inc., makes the validity of the contention that Realty, Inc., acted as Bunnell's agent extremely dubious. Usually the real estate agent is considered to be the agent of the seller. ⁶ It is possible that Realty, Inc., was acting as the agent of both Stevens and Bunnell, but there is no evidence to show that it was the agent of only Bunnell. In any event, if the intention of the parties can be ascertained with reasonable certainty it must be given effect, and the rule of construction presented by Stevens will not be applied. ⁷

Stevens contends that because of the provision concerning Bunnell's property at 904 East 1st South, the receipt was at most an agreement to agree. Stevens argues that because the receipt did not set forth the 'price, terms, interest, etc.' relating to the Bunnell property, it was to be handled as a separate transaction. However, when the receipt is interpreted under the circumstances that existed at the time of its creation, and in light of the conduct and statements of the parties, ⁸ it is clear that the transfer of Bunnell's property was intended as part of the whole agreement. The fact that part of the performance is that the parties will enter into a contract in the future does not render the original agreement any less binding. ⁹ The transfer of Bunnell's property was no more a separate transaction than were the cash payments that Bunnell had agreed to make in the future. The receipt provides that 'all rights and interest in (Bunnell's) property (are) * * * valued at $15,000' and are to be transferred to Stevens 'on delivery of deed (to the Alta Motor Lodge) * * * which shall be on or before January 1, 1960.' When Stevens contracted to buy the Alta from Bills there was no provision as to any interest to be charged. At trial he had no doubt the binding effect of that contract. There was no question that the parties, by failing to provide for interest in the contract, intended that no interest was to be charged. However, Stevens now asserts that by failing to include an interest provision, his contract with plaintiff is incomplete. Stevens also argues that the receipt fails to set forth the price and terms relating to Bunnell's property, even though the receipt expressly states that such property has an agreed value of $15,000, and that it is to constitute part of the consideration for the Alta. Furthermore, the receipt sets forth the time and the type of instrument to be used for the transfer of Bunnell's property. Stevens' contention that the provision relating to the transfer of Bunnell's property is merely an agreement to agree and that the receipt is therefor not binding, is nothing more than an attempt to evade the obligations of a valid contract. As this court pointed out in Moody v. Smith, ¹⁰ a party to a contract cannot seek to alter a portion thereof under the guise of attacking the existence of such portion as a separate contract.

Stevens' further attack upon the contract is to the effect that there was no meeting of the minds as to the personal property that was to be included with the transfer of the Alta and with the transfer of Bunnell's property. As to the personal property to be included with the Alta, the receipt recited 'as listed,' but when the receipt was entered as evidence at trial no list was attached. The only evidence of the items of personal property was presented by Bunnell. She testified that she had made a copy of the list that was intended by the parties to be included in the agreement. Because the receipt clearly shows that personal property was to be included in the transfer of the Alta, Bunnell's written copy was admissible to clear up the ambiguity created by the absence of an attached list. When the receipt is read along with Bunnell's copy of the list, the intention of the parties is made clear.

The weakness of Stevens' attack upon the agreement becomes even more apparent when considering his contention that personal property was to be included in the transfer of Bunnell's property. The receipt contains no indication that Bunnell was to transfer personal property, but Stevens now claims the agreement was incomplete because it contained no such provision. On its face the receipt is clear. Stevens was a businessman who was familiar with property transaction. If personal property was to be included, it should have been so stated in...