Kleinhans v. Jones

• Decision Date: 10 June 1895
• Docket Number: 274.
• Citation: 68 F. 742
• Parties: KLEINHANS et al. v. JONES et ux.
• Court: U.S. Court of Appeals — Sixth Circuit

68 F. 742

KLEINHANS et al. v. JONES et ux.

No. 274.

United States Court of Appeals, Sixth Circuit.

June 10, 1895

This case was originally brought in the chancery division of the Jefferson circuit court, in Kentucky, by petition. Subsequently the defendants, upon filing their proper petition and bond, procured the removal of the case into the circuit court of the United States for the district of Kentucky. In the latter court the complainants reformed their pleadings, and converted their petition into a bill in equity. The object of the suit was to obtain a decree to compel the specific performance of a contract for the sale of a lot and the building thereon in the city of Louisville known as the 'Mozart Hall Property,' of which, at the time of the making of the alleged contract, the defendant Samuel H. Jones was the owner; the other defendant names in the pleadings (Elizabeth Dunbar Jones) being his wife. The complainants were copartners engaged in business in Louisville under the firm name of Kleinhans & Simonson, and were citizens of Kentucky. The defendants were citizens of the state of Pennsylvania. One Curran Cope, a resident of Louisville, had for some time previously acted as the local agent of the defendants in the care and management of the Mozart Hall property. The defendants, having it in contemplation to make a sale of this property, had authorized Pope to receive, and communicate to them, any offer that might be made by an intending purchaser, and to receive from the defendants, and communicate to such party, the response which they might think proper to make such offer. At the time of the negotiations which are alleged to have resulted in the contract upon the basis of which the suit is brought, a firm by the name of Crutcher & Stark were in the occupation of the building. The supposed contract upon which the complainants rely was made by correspondence,-- by letter and telegram. The bill sets out the correspondence from which the contract is claimed to have resulted, and prays for a specific performance thereof. The substance of the answer of the defendants is that no contract was established by the correspondence set out by the complainants. Upon this issue the controversy mainly depends. The complainants, through John A. Stratton & Co., their agents, on the 2d day of October, 1893, submitted an offer to Pope for the Mozart Hall property, to be communicated by him to his principals. This offer was in the words and figures following:

"Will pay ................ $120,000

Cash .................... $10,000

1 year on or before ..... 11,000

2 years, on or before .... 11,000

3 years, on or before .... 11,000

4 years, on or before .... 11,000

5 years, on or before .... 11,000

6 years, on or before .... 11,000

7 years, on or before .... 11,000

8 years, on or before .... 11,000

9 years, on or before .... 11,000

10 years, on or before .... 11,000

'Will take up notes at the end of five years, if money can be gotten at six per cent. Will pay taxes for 1894. Will pay interest semiannually. Will insure for at least $25,000 for benefit of deferred payments. Will improve immediately. They want immediate possession within sixty days after deed is made. If any note or installment of interest is not paid within thirty days after maturity, all are due. This contemplates Mr. Jones paying comm.

'(Signed)

Kleinhans & Simonson.'

On the same day Mr. Pope assumed to communicate this offer to Mr Jones by the following telegram:

'Bona fide new party will give one hundred and twenty thousand for Mozart. Ten thousand cash, balance ten notes payable annually, with six per cent. interest payable semiannually. Privilege of paying all notes on or before five years. Agree, if money is easy, to pay all notes, if desired, at the end of five years. Will pay ninety-four taxes. Will improve at once, and insure to secure you. Possession to be given sixty days from date. This is the top notch, and parties better than gold. It is a paying, safe, solid investment. Answer at once.

'(Signed)

Curran Pope.'

Jones replied, postponing any definite answer to the proposition until he should get some further information and advice from another party in reference to the subject. No definite reply to the offer having been received by Pope from Jones, the complainants on the 10th day of October, 1893, submitted another form of offer for the property, which was in the words and figures following:

'Louisville, Ky., Oct. 10, 1893.

'John A. Stratton & Co., Agents: You are authorized to offer $120,000, payable $10,000 cash, balance in ten equal annual payments of $11,000 each, payable on or before maturity, to be secured by lien, and the premises to be insured for at least $20,000 for benefit of deferred payments, and notes bearing interest at the rate of 6 per cent., payable semiannually; and should any of the notes become due, and is unpaid, and remain unpaid for the space of sixty days, the whole amount, at the option of holder, to be deemed due. Possession to be given within thirty days after date of deed. We pay taxes for 1894, and seller to pay your commission for selling the property belonging to S. H. Jones, fronting 99 feet on east side of Fourth street, by a depth of 83 feet on Jefferson street, the south line of which binds on Jefferson street. Mr. Jones to make us a good title, and give general warranty deed, free of all incumbrances.

'(Signed)

Kleinhans & Simonson, 'Per John A. Stratton & Co., Agents.'

This communication does not appear to have been transmitted to Jones at the time. On the following day,-- that is to say, October 11, 1893,-- Jones telegraphed to his agent, Pope, as follows: 'I accept the offer in your telegram of October 2nd, provided the notes are properly secured on the property. (Signed) Sam. H. Jones. ' And on the same day Pope indorsed upon the complainants' offer of October 10th the following acceptance: 'Accepted. Sam'l H. Jones, by Curran Pope, acting under authority of telegram of October 11, 1893,'-- and attached the telegram, or a copy thereof, to his acceptance. At the time of the making of this acceptance the complainants paid to Pope, for Jones, as part of the purchase money, $1,000 in cash, which was receipted for by Pope, in the following form:

'Louisville, Ky., October 11, 1893.

'$1,000. Received of Kleinhans & Simonson one thousand dollars ($1,000) in part payment, as per contract, on $10,000 cash payment on 99x83 feet, northeast corner Fourth and Jefferson streets, for which I am to make a good title, free of all incumbrances, and give general warranty deed. If unable to make said deed, am to refund the one thousand dollars.

'Sam'l H. Jones, By Curran Pope, Agent.'

The possession of the property was not delivered, but continued in Crutcher & Stark. On the 21st day of October, 1893, the complainants addressed the following communication to Pope in reference to the occupation of the property:

'Dr. Curran Pope, Agent S. H. Jones-- Dear Sir: We agree to extend time for possession of property, 99x83 feet, northeast corner Fourth and Jefferson streets, to sixty days from date of deed, provided you cannot get possession in thirty days; but you must do all in your power, legally and otherwise, to get possession within the time originally agreed.

'Kleinhans & Simonson.'

But in the meantime Crutcher & Stark, without any communication with Pope upon the subject, sent a telegram to Jones offering $130,000 for the property, stating that they had been informed by his agent that it was not for sale. After some correspondence by letter and telegram between Jones and Pope in which the former complained of Pope that he had not obtained as good a price as he ought from Kleinhans & Simonson, and on the other hand, by Pope, that the offer of Crutcher & Stark was a dishonorable attempt at circumvention, and insisting that the agreement with Kleinhans & Simonson had been made in good faith, and that Jones was bound, in law and morals, to carry it out, Jones at length refused to perform the agreement of Pope with Kleinhans & Simonson, and entered into a contract for the sale of the property to Crutcher & Stark for the sum of $125,000, of which $25,000 was to be paid down. This last-mentioned contract was made on the 30th day of October, 1893, and on the same day Crutcher & Stark, with sureties, executed a bond in the penal sum of $25,000, which, after reciting the sale from Jones to Crutcher & Stark, and that Kleinhans & Simonson might set up a claim as prior purchasers of the property, and might institute suit for damages, or specific performance, and that Pope might demand commissions from Jones upon the sale of the property to Kleinhans & Simonson, obligated the makers of the bond to indemnify and hold Jones harmless against any loss or damage he might be put to by reason of any such suit, including any costs for attorney's fees and expenses incurred in defending it, that might be brought by Kleinhans & Simonson, or by Pope. On the 6th day of November following, Kleinhans & Simonson brought this suit for specific performance of the contract which they claim Jones had made with them for the sale of the property, by his telegram of acceptance, of October 11th, of their offer of October 2, 1893. Elizabeth Dunbar Jones demurred to the bill in the United States circuit court, alleging that it contained no equity upon which the court could give a decree to the complainants against her. By leave of the court the complainants' bill was amended on the 19th day of April, 1894, and the substance of that amendment was that it contained an allegation that the contract sought to be specifically enforced by complainants in their bill was that set forth in the communication from Pope to...