Hartmann v. Windsor Hotel Co.

• Decision Date: 15 February 1949
• Docket Number: C. C. No. 741.
• Citation: 52 S.E.2d 48,132 W.Va. 307
• Parties: HARTMANN v. WINDSOR HOTEL CO. et al.
• Court: West Virginia Supreme Court

52 S.E.2d 48

132 W.Va. 307

HARTMANN v. WINDSOR HOTEL CO. et al.

C. C. No. 741.

Supreme Court of Appeals of West Virginia.

February 15, 1949

Syllabus by the Court.

1. A person for whom compensation for services is provided under a contract made by others, to which contract he was not a party, is a creditor beneficiary thereunder, and may, in a suit in equity, recover under the same, even though such contract was not made for his sole benefit.

2. An offer in writing to purchase real estate subject to the terms of an existing lease thereon, which offer is accepted in writing, subject to the lease mentioned in the said offer, creates a contract for the sale of such real estate, subject only to the terms of the lease in respect to which such offer and acceptance were made, and subject to such lease, is binding and enforceable by either party to such contract.

3. Where the owner of real estate receives a written offer for its purchase, subject to the terms of an existing lease hereon, and accepts such offer in writing, and the lease referred to in such offer and acceptance provides: 'It is agreed by the parties hereto that should the Lessor receive a bona fide offer for the purpose (purchase?) of the property hereby leased at any time during the term of this lease, then said offer shall be immediately communicated to the Lessee and the Lessee shall have thirty (30) days in which he may purchase said property under the terms and conditions in said offer', the lessee is not entitled to purchase the property covered by his lease, nor is the owner fred to sell the same to him, except under the terms and conditions contained in said offer of purchase first above mentioned and if the owner sells for a sum less than that mentioned in said offer, he breaches the contract of sale effected by the offer and acceptance aforesaid, and becomes liable to those entitled to the benefits of the contract based on said original offer to purchase.

Handlen, Carden, Matthews & Hess, G. Alan Garden and James P. Clowes, all of Wheeling, for plaintiff.

Goodwin, Nesbitt, Spillers & Mead, of Wheeling, for defendants.

FOX Judge.

On the 9th day of July, 1946, the Windsor Hotel Company, a corporation, was the owner of what is known as the Windsor Hotel property in the City of Wheeling, which it appears it contemplated selling as early as May 31, 1940, on which date it entered into a lease with Vernon B. Derrickson by which it leased the said property for a term of five years, with the privilege of an extension for an additional five years. The lease appears to have been extended beyond the five year period. That lease contained the following provision:

'It is agreed by the parties hereto that should the Lessor receive a bona fide offer for the purpose (sic) (purchase?) of the property hereby leased at any time during the term of this lease, then said offer shall be immediately communicated to the Lessee and the Lessee shall have Thirty (30) days in which he may purchase said property under the terms and conditions contained in said offer.'

Sometime prior to July, 1946, the Hotel Company entered into negotiations for the sale of its hotel property with one DeWitt B. Bayer, and these negotiations progressed to the point that on July 9, 1946, the said Bayer addressed to the Hotel Company a letter, the pertinent provisions of which, so far as this litigation is concerned, read as follows:

'The undersigned hereby offers to purchase the Windsor Hotel property, including all buildings, equipment, furniture, furnishings and personal property of every kind, nature and description, contained in said buildings or used in the operation of said hotel property or any of the leased portions thereof for the sum of Three Hundred and Fifteen Thousand Dollars ($315,000.00).

'In connection with said purchase, you will pay a brokerage commission of Fifteen Thousand Dollars ($15,000.00) to Charles Hartmann, of Wheeling, West Virginia, which is the full and complete brokerage commission in connection with the sale of this property; should said brokerage commission exceed the sum of Fifteen Thousand Dollars ($15,000,00) the undersigned will pay any excess. * * *

This offer shall be open for acceptance by you subject to the terms of that certain Lease dated the 31st day of May, 1940, by August 1, 1946, and shall be subject to complete acceptance by you on or before August 15, 1946; otherwise, at the option of the undersigned, said offer shall become null and void and the earnest money tendered herewith shall be forthwith returned to the undersigned.'

This offer also contained a statement that Bayer had caused to be deposited with a bank in Wheeling, the sum of $10,000.00 as earnest money, and an agreement to deposit with said bank an additional sum of $15,000.00 within three days after the acceptance of the offer, and that the balance of the purchase price would be deposited within eight days after notification of the acceptance of the offer.

On July 29, 1946, The Windsor Hotel Company wrote to Bayer the following letter:

'A Special Meeting of the Stockholders of The Windsor Hotel Company was held today at the Windsor Hotel to consider your offer of purchase of the property of that Company, dated July 9, 1946, for the sum of $315,000.00 which amount includes a brokerage commission of $15,000.00 and an equivalent offer, if made, by Vernon B. Derrickson.

'Your offer was read in open meeting and carefully considered and more than 60% of the stock voted in favor of accepting your offer, subject to the terms of the Lease dated the 31st day of May, 1940, by the terms of which Lease the Lessee, Vernon B. Derrickson, is given the right and privilege of purchasing said property of the Company within 30 days after notification under the same terms and conditions. (Italics ours.)

'You may, therefore, consider your offer accepted, subject to the rights of Vernon B. Derrickson under his said Lease, and may act accordingly.

'We shall advise you on or before August 15, 1946, of the action of Vernon B. Derrickson in making an equivalent offer.'

On August 1, 1946, The Windsor Hotel Company addressed a letter to Bayer which reads as follows:

'This is to notify you that Vernon B. Derrickson, lessee of the Windsor Hotel in this City, whose Lease is dated May 31, 1940, has elected to purchase all of the property of The Windsor Hotel Company under the same terms and conditions of your offer dated July 9, 1946, and, as you know, Vernon B. Derrickson, as lessee, has that right and privilege under the terms of his said Lease.

'This Company, therefore, advises you that it cannot make complete acceptance of your offer and, under the circumstances, must accept the offer of Vernon B. Derrickson. Mr. Derrickson has been advised of the acceptance of his offer and you are now at liberty to withdraw the earnest money of $10,000.00 deposited by you with the Half Dollar Trust & Savings Bank, of this City.'

Vernon B. Derrickson had, on July 1, 1940, assigned benefit of his lease agreement with the Hotel Company to Derrickson Hotels, Inc. On September 10, 1946, The Windsor Hotel Company conveyed said property to Derrickson Hotels, Inc., the consideration named in said deed being $10.00 and 'other good and valuable consideration'; but the grantee assumed the payment of the outstanding bonds against the said hotel property, stated in the Bayer offer aforesaid to be $166,000.00. It is admitted in brief of counsel for the Hotel Company that the amount which was actually paid for the property by Derrickson Hotels, Inc., was the sum of $300,000.00.

Plaintiff herein being of the opinion that he was entitled to recover the sum of $15,000.00, stipulated to be paid to him under the offer and acceptance made by Bayer and the Hotel Company, aforesaid, instituted this suit in the Circuit Court of Ohio County, naming as defendants The Windsor Hotel Company, a West Virginia Corporation, DeWitt B. Bayer, Vernon B. Derrickson, Derrickson Hotels, Inc., a West Virginia Corporation, and The Blades Corporation, a West Virginia Corporation, to which latter corporation the hotel property had been conveyed prior to the institution of said suit.

The bill of complaint filed that the August Rules, 1947, set up the matters above stated, and prayed that the 'proper defendants, and each of them, may be decreed to pay unto the plaintiff all sums * * * this Honorable Court shall find to be due and payable unto this complainant from said defendants, or any of them, together with legal interest thereon, and that the complainant may have such further or other relief in the premises as the nature of the circumstances of this case may require, and to this Honorable Court shall seem meet.' With the bill is exhibited the lease agreement aforesaid, and the assignment thereof; the deed from The Windsor Hotel Company to Derrickson Hotels, Inc. dated September 10, 1946; and also the deed from Derrickson Hotels, Inc. to The Blades Corporation, a corporation, dated September 20, 1946.

On September 8, 1947, the defendants named in the bill, other than DeWitt Bayer, appeared and filed their joint and several demurrer to the bill of complaint, assigning seventeen separate grounds. We do not deem it necessary to set out these grounds in this opinion because we will attempt to deal with them, in a general way, in our discussion of the case. On November 28, 1947, the trial court sustained said demurrer, and the court, on its own motion, certified the matters of law arising thereon to this Court. The matters were certified in the exact form as the points were raised in the demurrer to the bill aforesaid. On such certification, we docketed the case for hearing.

It must be apparent that the claim of plaintiff is based...