Dohrman v. Sullivan

• Court: Kentucky Court of Appeals
• Writing for the Court: STANLEY, Commissioner.
• Citation: Dohrman v. Sullivan, 310 Ky. 463, 220 S.W.2d 973 (Ky. Ct. App. 1949)
• Decision Date: 27 May 1949
• Parties: DOHRMAN et al. v. SULLIVAN et al.

220 S.W.2d 973

310 Ky. 463

DOHRMAN et al. v. SULLIVAN et al.

Court of Appeals of Kentucky

May 27, 1949

Appeal from Circuit Court, Kenton County, Criminal, Common Law and Equity Division; Joseph P. Goodenough, Judge.

Suit by Howard F. Sullivan and another, against Heer Dohrman and another, for specific performance of a contract to convey realty. From an adverse judgment, defendants appeal.

Judgment affirmed.

Sawyer A. Smith, Covington, H. G. Hightower Cincinnati, Ohio, for appellants.

Barbour & Bassmann, Newport, for appellees.

STANLEY Commissioner.

The judgment directs specific performance of a contract to convey real estate. The question is whether there was a completed contract or merely negotiations in contemplation by both parties to enter into a formal contract which was never in fact executed.

The appellants, Heer Dohrman and Charlotte Dohrman, owners of residence property in Covington, had placed it in the hands of a Cincinnati real estate broker for sale under a written contract which expired, after extension, on March 5, 1946. But the agent kept the key to the house and continued its sign on the premises. Through a Covington real estate agent, Howard F. Sullivan and his wife procured the key examined the property, and on March 29 executed a written offer to buy the property. It was addressed to the Cincinnati agent, a corporation, which sent a telegram to the owners who were in Florida, advising them it had sold the property to the Sullivans for $10,250 cash and asked confirmation and for certain information for preparation of the deed. On the same day the owners by mail acknowledged the telegram, congratulated the brokers on obtaining a purchaser, expressed the hope that all arrangements would be completed and the sale effected. They gave definite information about the size of the lot and the title and stated they would see that the broker had all information should the sale go through. There was an exchange of several letters regarding taxes, expenses, etc. All of these things were eventually agreed upon. Of particular importance is this statement in Dohrman's letter of April 10: 'If the answers are to our satisfaction, we will immediately forward the sales contract which we have prepared which contains the terms of the agreement. This of course would act as a confirmation of the sale. If a sale is confirmed, I shall forward the deed. I have decided to draft it myself.' Finally, on April 17 Dohrman wrote the agent enclosing three copies of a formal sales contract for the 'prospective purchasers' to sign. This instrument stated that Heer Dohrman and Charlotte Dohrman had 'bargained and sold' the described property to Howard F. and Agnes Sullivan for the agreed price of $10,250 to be paid in cash and also the agreement as to the taxes and time of possession. In this letter Dohrman requested that when the Sullivans had signed the acceptance, which he had written on the instrument, 'we will sign them, retain one for ourselves and return to you a copy for them and a copy for your company's record.' The acceptance provision of the sales contract was promptly signed by the Sullivans and returned to Dohrman in Florida on April 19 by the agent. In its letter transmitting the acceptance reference was made to the examination of the title by an attorney and that he had called attention to the absence of a record of payment of inheritance taxes on the estate of Dohrman's mother from whom he had inherited the property. The question is whether this letter and the acceptance by the Sullivans constituted a complete and binding contract, for the Dohrman's never did sign the formal sales contract or return any copy of it to the agent or to the Sullivans. Dohrman merely advised his agent that when the matter of inheritance taxes had been investigated he would communicate further with him. To this the agent replied that the purchaser's attorney had advised it would be agreeable to close the transaction at once, paying over the net proceeds less $300, which could be put in escrow until the inheritance tax question should be settled. A few days later the agent telegraphed Dohrman that the purchaser was complaining about the delay in closing the deal and asked about his intention to do so. Dohrman replied that he did not agree to withholding $300 and that he did not intend to convey the property until his title or right to do so was completely vested in himself and that he did not care to be worried unduly about the transaction. Finally, on May 10 Dohrman wrote his agent that circumstances had arisen which prevented him disposing of his house and that he intended to return to Covington and occupy it.

The Chancellor was of opinion that the defendants' letter of April 17, above described, with which was enclosed the formal sales contract was a sufficient memorandum under the statute of frauds to bind them through the written acceptance of the other parties; that this constituted an offer to sell and an unconditional acceptance. The court pointed to portions of the defendants' previous letters of April 10 and 17, above quoted, with the return to them on the 19th of the signed contract as sufficient to bind them. We think this was the proper construction of the transaction. There was no condition attached, and it was not necessary that they should have in addition signed their own proposal to sell the property after it had been accepted and have transmitted a copy of that signed proposal to the purchaser.

Preliminary negotiations leading up to the execution of a contract are distinguishable from the contract itself; likewise, a mere agreement to reach an agreement, which imposes no obligation on the parties thereto. It is sometimes a close question whether correspondence between parties constitutes final and complete mutual assent or meeting of minds, essential to the creation of a contract. The correspondence may constitute only negotiation and but evidence their intention ultimately to form or to execute a contract. The question of whether there was a consummated contract is to be determined from the consideration and practical construction of all the separate letters or telegrams that make up the whole correspondence. Shaw v. Ingram-Day Lumber Co., 152 Ky. 329, 153 S.W. 431, L.R.A. 1915D, 145; 17 C.J.S., Contracts...