Busching v. Griffin

• Decision Date: 06 March 1985
• Docket Number: No. 55465,55465
• Citation: 465 So.2d 1037
• Parties: Harold W. BUSCHING v. Margree GRIFFIN.
• Court: Mississippi Supreme Court

Page 1037

465 So.2d 1037

Harold W. BUSCHING v. Margree GRIFFIN.

No. 55465.

Supreme Court of Mississippi.

March 6, 1985.

David L. Reynolds, Reynolds, Prewitt & Bradley, Jackson, for appellant.

Steve H. Smith, Smith & Case, Ridgeland, for appellee.

Before ROY NOBLE LEE, P.J., and SULLIVAN and ANDERSON, JJ.

SULLIVAN, Justice, for the Court:

On January 6, 1984, the Chancery Court of Madison County, Mississippi, dismissed a claim for specific performance of a land option contract covering five acres in Ridgeland, Mississippi, under Mississippi Rules of Civil Procedure 12(b)(6) on the ground that the claim failed to state a cause of action upon which relief can be granted. On February 6, 1984, the chancellor dismissed appellant's motion under Mississippi Rules of Civil Procedure 59 and 60 for the chancellor to reconsider his opinion.

Appellant assigns as error:

1. Granting the motion to dismiss under Rule 12(b)(6).

2. Failing to recognize a valid contract between the parties.

3. Failing to grant specific performance.

On July 7, 1981, Griffin granted Busching an option for $500 to purchase five acres in Ridgeland, Mississippi, for $50,000. The expiration date of the original option was December 15, 1981, with a provision for extension. A proper legal description of the property was attached to the option.

Paragraph 4 of the option provides:

4. Purchase Price. The total purchase price for the property described shall be $50,000 to be paid by Busching if this option is exercised, the terms of such sale will be provided in an agreement to be exercised between Griffin and Busching. The sum paid for this option shall be credited on account of the cash payment to be made on the closing as will be provided in the agreement.

Paragraph 6 of the option states:

6. Exercise of option. If this option is exercised as herein provided, Griffin and Busching will respectively, as Seller and Purchaser, perform the obligations in the form of agreement to be made between them.

The option was signed by Griffin and recorded by Busching in the Land Records of Madison County.

On January 26, 1982, Griffin granted an extension of the option for one year or until the Chancery Court of Madison County decrees title to her, whichever is longer.

Busching paid Griffin $25 for the extension. This extension was also recorded.

On March 4, 1982, Busching paid $400 to Griffin for an extension of the option from the last extended date for one year to January 22, 1984. This option provided that the $400 would be deducted from the purchase price, when and if the option is exercised. This option was likewise recorded in the Madison County Land Records.

On July 8, 1983, Busching wrote Griffin through his attorneys notifying her that he understood that she had received clear title and he intended to exercise the option with closing requested to take place within ten days. Busching wrote Griffin directly on August 10, 1983, notifying her that he intended to exercise the option to purchase the property and requested that the closing take place within ten days. Griffin refused to perform the contract and Busching filed a complaint for specific performance based upon the above facts.

ACTION OF THE TRIAL COURT

The trial court's opinion sustaining the motion to dismiss under MRCP 12(b)(6) notes that the option to purchase did not on its face provide for the type of deed the defendant was to convey nor does it recite the terms of payment. The court noted that paragraph 4 of the option stated that the terms of the sale would be provided in an agreement to be exercised [executed] between Griffin and Busching. Paragraph 6, the court noted, also contemplated that the parties would perform their obligations in the form of agreement to be made between them. To be enforceable, the court concluded that the contract to enter into a future contract must specify all the material and essential terms and leave none to be agreed upon as the result of future negotiations. Although the court noted that the law may imply the intention of the parties as to the time of payment, it may not imply what the parties would agree upon as to other essential terms of the contract. Therefore the court concluded that even though the price of the property was settled the option expressly contemplated a future agreement. The court was concerned that the seller may want the total purchase price in cash upon closing or may want to take a certain cash amount, subject to agreement to be made, and finance the balance over a period of time for whatever reason. The court's opinion concludes: "that the mentions of a subsequent agreement as to the purchase price are not definite and certain and leaves this to be agreed upon future negotiations."

In his motion under MRCP 59 and 60, Busching asks the court to recognize that Griffin failed to come into court with clean hands in that she refused to comply with the option agreement after the property was freed from litigation. His affidavit states that he would pay the $50,000 in a lump sum or subject to any terms within the bounds of the law specified by Griffin. At the hearing on the motion, Busching argued there were matters the court did not consider in rendering its judgment in that it looked merely at the form of the option. Busching offered to testify regarding the facts set forth in his affidavit but the trial court sustained defendant's motion to exclude Busching's testimony and dismiss Busching's motions.

I.

DID THE COURT ERR IN GRANTING THE MOTION TO DISMISS THE

CLAIM UNDER RULE 12(b)(6)?

A motion to dismiss under MRCP 12(b)(6) tests the legal sufficiency of the complaint. As stated in Franklin County Co-Op v. MFC Services (AAL), 441 So.2d 1376 (Miss.1983), and Stanton & Associates, Inc. v. Bryant Construction Co., 464 So.2d 499 (Miss.1985) to grant this motion there must appear to a certainty that the plaintiff is entitled to no relief under any set of facts that could be proved in support of the claim. The chancellor's basis for granting the motion was that the option contract was fatally defective in that it depended upon a future agreement as to the method of payment. The chancellor noted that Griffin may have wanted cash payment in advance or partial cash payment with the balance to be financed. The chancellor apparently considered this issue dispositive, regardless of whether Busching could meet whatever terms of payment Griffin might demand.

In McGee v. Clark, 343 So.2d 486 (Miss.1977), this Court discussed the standard of specificity required for an option contract to be specifically enforced. The option provided for a down payment of two-thirds of the total purchase price, with the remaining third to be financed and secured by a deed of trust payable annually in specified installments at a specified interest rate. Id. at 491. This Court quoted Jones v. McGahey, 187 So.2d 579 (Miss.1966), which reads:

A contract is sufficiently definite if it contains matters which will enable the court under proper rules of construction to ascertain its terms, including consideration of the general circumstances of the parties and, if necessary, relevant extrinsic evidence. Having found a contract to have been made, an agreement should not be frustrated where it is possible to reach a reasonable and fair result. (citations omitted)

187 So.2d at 584. Also cited with approval in McGee was Burrow v. Timmsen, 223 Cal.App.2d 283, 35 Cal.Rpr. 668, 100 ALR 2d 544 (1963), in which the California court said that the essentials of a land sale contract include the amount of the debt and the terms of payment, including the interest agreed upon. Burrow states:

We have concluded that the agreement is not so uncertain as to be incapable of enforcement. The modern trend of the law is to favor the enforcement of contracts, to lean against their unenforceability because of uncertainty, and to carry out the intentions of the parties if this can feasibly be done. Neither law nor equity requires that every term and condition of an agreement be set forth in a contract. (citations omitted) The usual and reasonable terms found in similar contracts can be looked to, unexpressed provisions of the contract may be inferred from the writing, external facts may be relied upon, and custom and usage may be resorted to in an effort to supply a deficiency, if it does not alter or vary the terms of the agreement. (citations omitted).

35 Cal.Rpr. at 671, 100 ALR2d at 549. The court in McGee held that the option was sufficiently clear, definite and certain in its terms that it is capable of and required specific performance and affirmed the chancellor's order of specific performance. Id. at 490.

The trial court and appellee relied upon the principle of law found in Etheridge v. Ramzy, 276 So.2d 451 (Miss.1973), that where a preliminary contract leaves certain terms to be agreed upon for the purpose of a final contract, there can be no implication of what the parties will agree upon. If any essential term is left open to future consideration, there is no binding contract, and an agreement to reach an agreement imposes no obligation upon the parties thereto. Id. at 454. See 17 Am.Jur.2d Contracts, section 26, at 362 (1964).

The option in Etheridge, supra, was found by this Court to be fatally defective in that it required covenants to be drafted to provide for the maintenance of "adequate" net worth to liability ratios, as well as covenants to limit the payment of salaries and dividends in the sale of a corporation. The court concluded that it was obvious that further negotiations must have been contemplated on these terms and therefore the option was nothing more than a memorandum of intent.

The chancellor recognized that the option in the case sub judice was not fatally defective merely for its failure to specify what type of deed would be given. In Jones v. Hickson, 204 Miss. 373, 37 So.2d 625 (1948), this Court held that a contract to sell and convey real...