Olen Real Estate & Inv. Co. v. L. A. Zieman & Co.

• Citation: 269 Ala. 106,110 So.2d 890
• Decision Date: 09 April 1959
• Docket Number: 1 Div. 755
• Parties: OLEN REAL ESTATE AND INVESTMENT COMPANY, Inc. et al. v. L. A. ZIEMAN & COMPANY.
• Court: Alabama Supreme Court

Page 890

110 So.2d 890

269 Ala. 106

OLEN REAL ESTATE AND INVESTMENT COMPANY, Inc. et al. v. L. A. ZIEMAN & COMPANY.

1 Div. 755.

Supreme Court of Alabama.

April 9, 1959.

W. B. Hand and Edmund R. Cannon, Jr., Hand, Arendall & Bedsole, Mobile, for appellants.

Stova F. McFadden and Robt. E. Hodnette, Jr., Tonsmeire & Hodnette, Mobile, for appellee.

GOODWYN, Justice.

This is an appeal from a decree of the circuit court of Mobile County, in equity, overruling the respondents' separate demurrers addressed to the bill of complaint as a whole and to each aspect.

The bill was filed by appellee, L. A. Zieman & Company, Inc., a corporation (hereinafter referred to as 'Zieman'), against The Olen Real Estate and Investment Company, Inc., a corporation (hereinafter referred to as 'Olen Real Estate'), and The Olen Company, Inc., a corporation (hereinafter referred to as 'Olen Company'), for specific performance of an alleged contract entered into by Zieman and Olen Real Estate for the conveyance of certain real property in Mobile and for cancellation of a deed executed by Olen Real Estate conveying the property to Olen Company, it being alleged that said deed was executed after the contract sued on was recorded in the office of the Judge of Probate of Mobile County.

The bill alleges that on May 9, 1956, Olen Real Estate contracted in writing with appellee to sell appellee a tract of land in Mobile County consisting of approximately 21 acres for the sum of $50,000 of which the sum of $2,500 was accepted by Olen Real Estate as earnest money.

A copy of the contract is attached to the bill as an exhibit and made a part thereof. Said contract is in the form of an offer by Zieman to Olen Real Estate and an acceptance by Olen Real Esate and bears the heading 'offer and acceptance.' It describes the property to be conveyed and states a sale price of $50,000, payable $14,000 in cash on delivery of the deed, with the balance payable over a period of ten years in quarterly installments, together with interest at 5% per annum on the unpaid balance and with the provilege of prepaying paying and saving interest. The contract further provides for crediting the $2,500 earnest money on the cash payment on consummation of the trade. It further provides for the proration of taxes and insurance, for delivery and possession of the property on date of delivery of the deed, for the conveyance to be made by vendor's lien deed with warranty, for affixing revenue stamps, and for furnishing by Olen Real Estate to appellee of an owner's guaranty of title.

The alleged contract contains the following provision:

'The acceptance of this offer is subject to the release and approval of Olen's contemplated mortgagee.'

The bill alleges the following with respect to this provision, viz.:

'* * * That at the time of the execution of the contract said respondent was negotiating for a loan from Liberty National Life Insurance Company, to be secured by a mortgage covering the property described herein in addition to other property owned by said respondent, and that in fact such loan was consummated and such mortgage made bearing date of June 18, 1956 and recorded on June 21, 1956 in mortgage Book 448, page 443, of the records in the office of the Judge of Probate of Mobile County, Alabama. That Liberty National Life Insurance Company was the 'contemplated mortgagee' referred to in paragraph one of said contract and that Liberty National Life Insurance Company not only agreed to release the property herein described from its mortgage but in fact released the mortgage in its entirety by instrument of release dated January 2, 1957, recorded January 8, 1957 in Miscellaneous Book 333, page 525, of said Probate records.'

In the bill Zieman 'offers to do such equity on its part as the court may deem and direct' and avers that 'it has partially complied with the terms of said contract and is ready, willing and able to carry out the balance of the terms of said contract and pay the balance due thereunder in accordance with the terms thereof.'

Appellants insist that the contract shows on its face that it violates the statute of frauds and is unenforceable because Olen Real Estate's acceptance of Zieman's offer was conditional, and because a material provision of the contract, viz.: 'The acceptance of this offer is subject to the release and approval of Olen's contemplated mortgagee', is so indefinite and uncertain as to call for parol evidence to explain it. It is insisted also that the bill is demurrable because it fails to allege 'approval' of said mortgagee.

It may be stated as a general rule that where a material provision of a contract is left open for future treaty or negotiation the contract is rendered incomplete and uncertain, and for that reason it is unenforceable in equity. In the contract here involved nothing is left for future treaty or negotiation. The only thing left undetermined is 'the release and approval of Olen's contemplated mortgagee.' Such 'release and approval' is a matter resting entirely with said mortgagee, not a party to the contract. That this is a condition to be fulfilled before Olen Real Estate can be required to perform the contract is not disputed. But such provision is not a condition affecting the validity of the contract to convey. Rather, it is a condition precedent to requiring performance by Olen Real Estate. Accordingly, if this condition precedent has actually occurred then it no longer stands as a barrier to requiring performance of the contract. As said in Williston on Contracts, Rev.Ed., § 666, p. 1911:

'The fact that no duty of performance on either side can arise until the happening of a condition does not, however, make the validity of the contract depend upon its happening.'

Cf. Citronelle Turpentine Co. v. Buhlig, 184 Ala. 404, 407, 63 So. 951, where it is said:

'* * * Where defendant cannot perform a contract without obtaining the consent of a third person, who is free to withhold his consent, and does withhold it, the decree will not be made. But it is no objection to the specific enforcement of a contract that consent of a third person is necessary to its performance, where it appears that he does or will consent. 36 Cyc. 573; Roquemore v. Mitchell, 167 Ala. 475, 52 So. 423, 140 Am.St.Rep. 52; Hurlburt v. Kantzler, 112 Ill. 482; Lyon v. Hardin, 129 Ala. 643, 29 So. 777. * * *'

It is generally held that specific performance of a contract may be had in equity even though the contract contains a condition precedent, provided such condition precedent has been fulfilled. Pomeroy's Specific Performance of Contracts, 3d Ed., § 335, p. 731; Corbin on Contracts, Vol. 5, § 1175, pp. 766, 767.

This brings us to the insistence that the condition precedent in the instant contract is so indefinite and uncertain as to require parol evidence to explain it and that, for this reason, the contract is rendered unenforceable. The general rule as to the admissibility of parol evidence to explain ambiguities in a contract is thus stated in 49 Am.Jur., Statute of Frauds, § 322, p. 636:

'A memorandum sufficient to satisfy the requirement of the statute of frauds must be complete in itself as to the parties charged with liability thereunder and the essential terms of the contract. The memorandum cannot rest partly in writing and partly in parol; that is to say a deficiency in the memorandum cannot be supplied by parol evidence. But parol evidence is admissible to explain ambiguities, and to apply the instrument to the subject...