R. F. Robinson Co. v. Drew

• Decision Date: 04 December 1928
• Parties: R. F. ROBINSON CO. v. DREW et al.
• Court: New Hampshire Supreme Court

144 A. 67

R. F. ROBINSON CO.

v. DREW et al.

Supreme Court of New Hampshire. Merrimack.

Dec. 4, 1928.

Exceptions from Superior Court, Merrimack County; Burque, Judge.

Bill in equity by the R. F. Robinson Company against William J. Drew and another. The court overruled defendants' demurrer, and dismissed the bill after hearing, and defendants except to order overruling demurrer, and plaintiff excepts to the order of dismissal. Defendants' exception overruled, and that of plaintiff sustained.

Bill in equity for specific performance of a clause contained in a lease, relating to the conveyance of real estate in Concord, and reading:

"And that in case of a sale of the block, by the lessors, the lessee shall have the preference as a purchaser."

During the term, the lessor, one of the defendants, decided to sell and offered the property to the plaintiff lessee at a price it declined to pay. Later he sold it at a lower price without first giving the plaintiff opportunity to buy therefor. The purchaser, another of the defendants, knew of the lease and its contents when he bought. He has received no deed. The defendants demurred on the grounds that the bill stated no cause for equitable relief, and that the clause was within the bar of the Statute of Frauds (Pub. Laws 1926, c. 327, § 1). The court overruled the demurrer, but after hearing dismissed the bill on the grounds the demurrer stated. The defendants and plaintiff, respectively, excepted to these orders.

Benjamin W. Couch, of Concord, Winthrop Wadleigh, of Milford, and Robert W. Upton, of Concord, for plaintiff.

Foster & Lake, of Concord, for defendant Drew.

Frank Goldman, of Lowell, Mass., and David F. Dudley, of Concord, for defendant Brams.

ALLEN, J. The defendant Drew appears to own the property, partly at least, as a trustee under a will. No question is made, however, of his authority to sell and convey, and it is taken for granted that his fiduciary ownership has no bearing on the plaintiff's rights. Also the clause in the lease around which the controversy centers expresses no time for the exercise of such option as it gives. The lease is for a term during which the exercise of the option is sought, and it appears to be conceded that such exercise is impliedly limited in time to the term of the lease.

While the defense to the enforcement of the option is stated to be upon the ground of its subjection to the statute of frauds, the real issue is whether the option clause contains all the essential elements of a contract So far as the parties made a contract, the lease set forth all its terms. Nothing they agreed upon was omitted. And the case is not one where new or different terms are sought to be made a part of the contract, but is one where the sufficiency of the terms to constitute a contract is under inquiry. Whether there is a contract at all is to be determined, and not whether the contract is unenforceable because of the statute. If there were no law requiring contracts about real estate to be in writing, the question presented would be the same. The basic claim is that the parties did not reach an agreement which is capable of enforcement, and that it amounted to nothing more than an agreement to make a future agreement whose terms could only be settled by it. All that the statute of frauds contemplates is that certain contracts shall be in writing. Its purpose is not to alter or affect the character and elements of contracts, but only to provide for methods and formalities of proving them.

A bargain or option of sale, either of real or personal property, and either oral or written, must contain for one of its terms some statement of the price. Otherwise it is an uncompleted negotiation without provision for its completion, and fails of effect because there is no contract. The parties have reached no agreement capable of performance. Such a situation is illustrated by the case of Conos v. Sullivan, 250 Mass. 376, 145 N. E. 529, in which a lease was subject to renewal at a rental to be based on any increase in the value of the property during the original term. As no way was pointed out in the lease for determining the increase, one of the "vital factors" of a contract was missing, and the renewal clause therefore lacked validity.

But, when it is said that a necessary term of a contract of sale is a statement of the price, that does not mean that the contract itself must fix the price or that the price may not be implied. If the contract prescribes a method which will necessarily result in the determination of the price, that is enough. A sale of land at a stated price per acre, the acreage to be determined by a survey, is the equivalent of a sale at a stated price for the whole. If the price as one of the terms of the contract must be stated in writing, such a contract when in writing may be enforced. Although the price is not shown, the terms of the writing show a price provided for and determinable. While parol evidence may not show the intent of the parties if the contract does not show it, such evidence may be used to show to what things and matters the contract refers. Also, if the implications show it, there may be a contract, although it contains no express reference to the price at all. An accepted order for goods having a market price implies a sale at such price if nothing is said about the price. But, by the general weight of authority, if the sale is at a price to be fixed by further negotiations, the uncertainty that the price may be agreed upon leaves the sale incomplete and no more than a preliminary negotiation without obligation, and a declaration of purpose to perform the contract if one is made. Such agreements, being merely arrangements to enter into negotiations, do not guarantee the success of the negotiations. Even in these cases, however, it is sometimes held that there is a sale on the theory that the real agreement is to sell at a reasonable price, to be determined by the courts if the parties fail to agree on one. Slade v. Lexington, 141 Ky. 214, 132 S. W. 404, 32 L. R. A. (N. S.) 201; Young v. Nelson, 121 Wash. 285, 209 P. 515, 30 A. L. R. 568; see, also, Joy v. St. Louis, 138 U. S. 1, 43, 11 S. Ct 243, 34 L. Ed. 843.

Whether the owner or others set the price is not important. All that is required is that the contract shall say who shall do it or how it shall be done. Neither the common law nor the statute of frauds makes such an arrangement void or unenforceable. Under an option to buy for the value of the property at the time of purchase as fixed by third parties, the method of determining the price is definite, and it is no less so when the price is to be settled by the...