Lanna v. Greene

• Decision Date: 25 July 1978
• Citation: 399 A.2d 837,175 Conn. 453
• Parties: Vincent T. LANNA et al. v. Harold GREENE et al.
• Court: Connecticut Supreme Court

Page 837

399 A.2d 837

175 Conn. 453

Vincent T. LANNA et al. v. Harold GREENE et al.

Supreme Court of Connecticut.

Argued March 9, 1978.

Decided July 25, 1978.

Norris L. O'Neill, Hartford, for appellants (plaintiffs).

Miles F. McDonald, Jr., for appellees (defendants Harold and Jean R. Greene).

Before COTTER, C. J., and LOISELLE, BOGDANSKI, LONGO and SPEZIALE, JJ.

LONGO, Associate Justice.

The plaintiffs, Vincent T. Lanna and Robert G. Hayduk, complained that the defendants Harold and Jean R. Greene wilfully breached a contract to convey real estate to them; that by leasing the premises to the defendant Mutual Tennis, Inc., hereinafter Mutual, the Greenes conspired with Mutual to encumber the premises and prevent the plaintiffs from acquiring title; and that the lease to Mutual was invalid. The plaintiffs sought punitive and compensatory damages, a decree setting aside Mutual's lease and enjoining Mutual from use of the premises, and a decree that the Greenes specifically perform the purchase and sale contract to the extent of their ability to convey. From a state referee's judgment in favor of the defendants, the plaintiffs have appealed to this court.

The referee found the following: The Greenes were the owners of land in Stonington consisting of six and one-half acres. On or about June 18, 1973, the Greenes granted an option to lease about three and one-half acres of the premises to Cross Court- Mystic Associates, a business one and the same as Mutual for all practical purposes. The option agreement included a lease executed by the Greenes which was to have full force and effect if executed by Mutual in the exercise of the option. The option was recorded in the Stonington land records on December 21, 1973, about the time that the plaintiffs began negotiating with Harold Greene to purchase the property for development of tennis facilities. The plaintiffs were aware that there was an option to lease the property and that the option was effective through February 28, 1974. Mutual submitted a zoning application for tennis facilities to the Stonington authorities on January 16, 1974. The application was a matter of public record and the plaintiffs could have seen it had they gone to the building department and inquired.

On February 27, 1974, Mutual's president telephoned the Greenes' office and notified an employee that Mutual was exercising its option to lease and was sending a letter and a check in accordance with the terms of the option and the lease. Harold Greene received the letter and enclosed check on March 2, and returned them to Mutual on March 11 because he felt that the option had expired. On or about March 12, the plaintiffs and the Greenes executed a purchase and sale agreement which provided that if the Greenes were unable to deliver good and marketable title by September 1, 1974, subject to a thirty-day extension to cure, the plaintiffs could elect either to accept title subject to encumbrances with no reduction in the purchase price, or to reject title and recover their deposit. ¹ Mutual's lease was recorded on March 18, but the Greenes continued to treat it as invalid. On April 1, Mutual commenced suit for specific performance against the Greenes, who informed the plaintiffs of this problem. After receiving advice from counsel that the lease was valid, in May the Greenes notified the plaintiffs' attorney and the Stonington authorities that they would honor the lease.

Contrary to the provisions of the purchase and sale agreement, the plaintiffs did not furnish the Greenes with drawings and plans for a tennis complex, did not attempt to obtain a building permit, did not apply for a mortgage commitment, and did not conduct a title search or notify the Greenes in writing of a defect in the title. It appears that the Greenes were willing to sell the premises to the plaintiffs at the purchase price, subject to whatever rights Mutual had, but that the plaintiffs were unwilling to buy on those terms. The plaintiffs brought this suit when Mutual began to construct tennis facilities on the property.

From the foregoing findings, the referee concluded that the Greenes' inability to convey good and marketable title to the plaintiffs was not due to their fault or collusion or bad faith; that the parties had a right to rely on the remedies provided by contract if the Greenes were unable to deliver good and marketable title; that under the circumstances the contractual remedies were exclusive and the plaintiffs were not entitled to damages or to specific performance in whole or in part; and that the plaintiffs lacked standing to attack the validity of the lease to Mutual.

The plaintiffs' first claim on appeal is that the referee erred in expressing the opinion, in the memorandum of decision, that the contract had been rescinded by the acts of the parties, when that defense was not pleaded or raised at trial. See Practice Book, 1963, § 120; Pawlinski v. Allstate Ins. Co., 165 Conn. 1, 6, 327 A.2d 583. There is no merit to this claim. While we may properly consult the memorandum of decision to ascertain the grounds upon which the referee acted, it establishes no facts and cannot take the place of a finding. Schnier v. Commissioner of Transportation, 172 Conn. 427, 428, 374 A.2d 1087. In the event of conflict between a memorandum of decision and a finding, the latter must always prevail. Silver v. Silver, 170 Conn. 305, 307, 365 A.2d 1188. The referee's judgment should stand if it is responsive to the issues and supported by the finding, notwithstanding the reference to rescission. Malone v. Steinberg, 138 Conn. 718, 723, 89 A.2d 213; Maltbie, Conn.App.Proc. § 36.

We next consider whether the referee properly decided that under the circumstances the plaintiffs were limited to their contractual remedies and had no right to specific performance or damages for breach of the contract. In a proper case a vendee is, of course, entitled to damages for breach of a contract to convey land. Gray v. Greenblatt, 113 Conn. 535, 537, 155 A. 707; Makusevich v. Gotta, 107 Conn. 207, 210, 139 A. 780. A vendee may elect in the alternative to have the contract specifically performed to the extent of the vendor's ability to comply, with an abatement in the purchase price if appropriate, subject to the qualification that specific performance is a form of equitable relief which rests in the sound discretion of the court. Schneidau v. Manley, 131 Conn. 285, 289, 39 A.2d 885; see Texaco, Inc. v. Rogow, 150 Conn. 401, 411, 190 A.2d 48. It is also fundamental, however, that vendor and vendee may contract to limit their remedies for breach. Ritucci v. Brandt, 134 Conn. 364, 366, 57 A.2d 728.

Relying on this rule of law, the Greenes maintain that under the circumstances of this case the remedies provided by the contract are the only remedies available to the plaintiffs. The plaintiffs deny that the contractual remedies are exclusive, chiefly on two grounds: (1) they are solely for the protection of the buyer and may, therefore, be waived by the buyer; (2) even if the contractual remedies are for the benefit of both buyer and seller, they may not be invoked by the seller if he has failed to disclose an encumbrance on the property, or if he has encumbered the property subsequent to the execution of the contract.

The general rule is that a party for whose benefit a provision in a contract is intended may waive his rights under such provision. 3A Corbin, Contracts, § 761. We do not agree, however, with the plaintiffs' contention that the remedies provided in this contract were intended solely for their benefit. A real estate contract, like any other agreement, must be considered as a whole and each part of it must be given effect if possible. The words used by the parties must be accorded their common meaning and usage where they can be sensibly applied to the subject matter of the agreement. If the terms of the contract are fairly susceptible of two or more interpretations, the one which is the more equitable, reasonable and rational is to be preferred. Texaco, Inc. v. Rogow, 150 Conn. 401, 408, 190 A.2d 48. Here, the contract provides that in the event that the Greenes are unable to deliver good and marketable title at closing, the plaintiffs are to have two options each prefaced by the mandatory word "shall." The plaintiffs could either (a) pay the full purchase price and accept title with the encumbrance, or (b) reject title and obtain a refund of their deposit. The plain intention of the contract is to compel the plaintiffs to choose between those remedies and no others. This...