Mercer v. Payne & Sons Company

• Decision Date: 12 April 1927
• Docket Number: 24475
• Parties: NELSON S. MERCER ET AL., APPELLEES, v. PAYNE & SONS COMPANY, APPELLANTS
• Court: Nebraska Supreme Court

213 N.W. 813

115 Neb. 420

NELSON S. MERCER ET AL., APPELLEES, v. PAYNE & SONS COMPANY, APPELLANTS

No. 24475

Supreme Court of Nebraska

April 12, 1927

APPEAL from the district court for Douglas county: CHARLES A. GOSS JUDGE. Reversed, with directions.

REVERSED.

William Baird & Sons, for appellants.

John P Breen and William H. Herdman, contra.

Heard before ROSE, DEAN, DAY, GOOD, THOMPSON and EBERLY, JJ. ROSE J., dissenting.

OPINION

DEAN, J.

This is the second appearance of this suit in this court. In the former opinion it is pointed out that the suit had its origin in a written instrument, which is referred to as a "preliminary agreement" for a more formal contract to be thereafter made between the parties. The preliminary agreement, as construed by the parties, contemplated future negotiations for the making of a formal 99-year leasing contract between plaintiffs, as lessors, and defendants as lessees, for three improved building lots in Omaha, located at the northwest corner of Farnam and Twenty-seventh streets. The lots are owned by plaintiffs. At the first trial the district court sustained a demurrer to the petition on the ground that the contract is indefinite and uncertain in its terms. Thereupon plaintiffs appealed, the judgment was reversed and the cause was remanded regularly for trial. Mercer v. Payne & Carnaby Co., 110 Neb. 28, 192 N.W. 951. Subsequently, new pleadings having been filed by the parties, the case was tried on the merits, and the district court rendered a judgment in favor of plaintiffs, from which the defendants have appealed. The law of the case rule prevails in this state. It follows that, under the rule, the former judgment constitutes the law of the case, so far as it is applicable to the facts and the amended pleadings and the record now before us. Hayden v. Frederickson, 59 Neb. 141, 80 N.W. 494.

It is proper here to observe that, owing to certain changes in personnel, the defendants now consist solely of the Payne & Sons Company and, except as herein otherwise designated, the company will be referred to as the defendants.

The above mentioned "preliminary agreement" which contemplated the future negotiations between the parties, as above noted, is in words and figures following:

"Omaha, Nebraska, February 11, 1920.

"Received of Payne & Slater Company twenty-five hundred dollars ($ 2,500) as earnest money on the following proposition:

"Payne & Slater Company agree to enter into a ninety-nine year (99) lease on lots six (6) seven (7) and eight (8) block six (6), Boggs & Hill's First addition and to pay the sum of fifteen thousand dollars ($ 15,000) cash, of which the above twenty-five hundred dollars ($ 2,500) is a part, and to pay as rent the sum of six thousand dollars ($ 6,000) net per year for the first ten years of the lease, the sum of sixty-nine hundred dollars ($ 6,900) net per year for the second ten years of the lease, and the sum of eight thousand dollars ($ 8,000) net per year for the last seventy-nine years of the lease; all payments to be made quarterly in advance.

"Complete abstract to be furnished, showing good title, and the property leased free and clear of all taxes, except the taxes for the year 1920, and subject to the existing lease now on the property. Insurance now on the property to be paid for pro rata.

"The lease to contain the usual conditions of a ninety-nine year (99) lease and to contain an option to purchase said property during the year 1930 for the sum of one hundred fifteen thousand dollars ($ 115,000) in addition to the above on payment of thirty-five thousand dollars ($ 35,000) or more in cash, thirty-five thousand dollars ($ 35,000) on or before three years from date of purchase and forty-five thousand dollars ($ 45,000) on or before five years from date of purchase. The said lease to contain a further option to purchase said property during the second ten years of the lease for the sum of one hundred thirty thousand dollars ($ 130,000) on payment of one-third cash and one-third on or before three years and one-third on or before five years from date of purchase. All deferred payments on both options to bear interest at the rate of 6 per cent. payable semi-annually. Said lease to contain an agreement that a building costing at least fifty thousand dollars ($ 50,000) be erected on said property on or before ten years from date of lease.

"Lease to be completed and signed and balance of fifteen thousand dollars ($ 15,000) paid on or before sixty days from date thereof.

"It is understood that all necessary insurance clauses and provisions for bond when the present buildings are torn down before the new building is constructed, and other necessary provisions for the protection of the owner to be included in the lease.

"Harry A. Tukey.

"Payne & Slater Company hereby agree to enter into the above lease and to fulfil conditions of the above receipt.

"Payne & Slater Company, by E. M. Slater.

"I hereby authorize Harry A. Tukey to sign said lease, the form of the lease to be approved by me.

"N. S. Mercer."

Did the negotiations between the parties bring about a meeting of the minds in respect of the subject-matter here involved so as lawfully to compel the defendants to execute a 99-year lease as lessees of the plaintiffs, as they contend? That there was such a meeting of the minds and that defendants are therefore bound to execute such lease is the contention of the plaintiffs.

On the contrary, the defendants contend that the weight of the evidence, fairly considered, shows that the minds of the parties never met in respect of the material terms of a 99-year leasing contract, and that there is now, and always has been, such a lack of mutuality of agreement between them, in respect of the subject-matter, that a contract never could at any time have been consummated, and never was consummated, between the parties, and that mainly for these, and other reasons hereinafter noted, no obligation ever at any time rested on defendants to execute a 99-year lease as contended by plaintiffs.

The "preliminary agreement" for the execution of a 99-year lease expressly provides that the lease is "to be completed and signed * * * on or before sixty days from date thereof." Incidentally, it may be added that the parties construe the word "thereof" to mean "hereof" as it plainly, and for obvious reasons, can refer only to the preliminary agreement. And it is in accord with the usual custom that the moving party, in point of time, is ordinarily charged with the duty of tendering a duly signed conveyance to the grantee. We do not think the signing of the preliminary agreement excuses plaintiffs from complying with the 60-day period, for signing the lease, which expired on or about April 15, 1920. The fact is that the grantors never signed or tendered a signed lease at any time before or at the trial, nor does the decree so require.

Section 2451, Comp. St. 1922, provides: "No estate or interest in land, other than leases for a term of one year from the making thereof, nor any trust or power over or concerning land, or in any manner relating thereto, shall hereafter be created, granted, assigned, surrendered, or declared, unless by operation of law, or by deed of conveyance in writing, subscribed by the party creating, granting, assigning, surrendering or declaring the same."

In Irish v. Pulliam, 32 Neb. 24, 48 N.W. 963, it was held that a certain agreement, which had to do with a building contract, "was to be reduced to writing and signed by the parties before it took effect." It was there held that until it was signed the contract was not complete. It has been held that such signing is imperative. 24 Cyc. 958; Mather v. Scoles, 35 Ind. 1. Soper v. Gabe, 55 Kan. 646, 41 P. 969, holds that the rule applies to contracts for "the sale and conveyance of land." To the same effect is Counce v. Studley, 81 Me. 431, 18 A. 288; Howe v. Huntington, 15 Me. 350. Where the execution of a deed is involved, an offer "of readiness at all times to make it will not do." Klyce v. Broyles, 37 Miss. 524; Lanyon v. Chesney, 186 Mo. 540, 85 S.W. 568.

In respect of their contractual duties, the conduct of plaintiffs was so dilatory that it practically amounted to an abandonment of the negotiations "for a contract." That they did not exercise even ordinary diligence is in very large part established by their own evidence. Their first substantial move was not undertaken until about a week after defendants served a written demand on them for, first, a return of the $ 2,500 earnest money, and, second, a notice that they, the defendants, had "withdrawn from any further negotiations." The lack of diligence by plaintiffs is disclosed, in part, in the following facts: Dr Mercer left for Europe March 30, 1920, and did not return to Omaha until September 7, 1920. This was almost five months after the prescribed date for the execution of the 99-year lease. Harry A. Tukey, an Omaha real estate dealer of 23 years' experience and, according to his own evidence, an associate party plaintiff, was in California from about the first of August, 1920, and did not return to Omaha until about five months after the required date for signing, though authorized to sign for Mercer. It also appears that, under plaintiffs' theory of the case, Dr. Mercer's wife was a necessary signatory party, and she was therefore caused by plaintiffs to sign and acknowledge a power of attorney wherein her husband was authorized to sign the proposed 99-year lease in her behalf. This power of attorney was executed, and acknowledged by Mrs. Mercer in Surrey county, England, but not until October 9, 1920, which was almost six months after the required 60-day period and almost eight months after the date of...