Reed v. Wadsworth

Decision Date09 September 1976
Docket Number4551,Nos. 4550,s. 4550
PartiesRoss L. REED and Margaret D. Reed, his wife, Appellants and Cross-Appellees (Defendants below), v. Glen T. WADSWORTH and Fay T. Wadsworth, his wife, Appellees and Cross-Appellees (Defendants below), v. H. R. WAGSTAFF and Evelyn Wagstaff, his wife, Appellees and Cross-Appellants(Plaintiffs below).
CourtWyoming Supreme Court

Glenn Parker, Hirst & Applegate, Cheyenne, submitted briefs and appeared in oral argument with Doug Madison, Hirst & Applegate, Cheyenne, for appellants-cross-appellees-Reed.

Robert S. Campbell, Jr. and Robert D. Maack, Watkiss & Campbell, Salt Lake City, Utah, and John D. Troughton, Kemmerer, submitted briefs and Robert S. Campbell Jr., Salt Lake City and John D. Troughton, Kemmerer, appeared in oral argument for appellees-cross-appellants-Wagstaff.

Gary M. Greenhalgh, Greenhalgh & Bussart, Rock Springs, submitted brief and appeared in oral argument for cross-appellees-Wadsworth.


RAPER, Justice.

This appeal involves issues arising out of a claim by the buyers, Wagstaffs, of breach of a real estate contract by the sellers, Reeds, and a specific performance claim by the buyers as against subsequent purchasers, the Wadsworths. The trial was before the district court without a jury. The trial judge awarded $213,350.00 damages, as alternative relief to plaintiffs-appellees-cross-appellants Wagstaffs for breach of contract by defendants-appellants-cross-appellees Reeds, and denied specific performance as against defendants-cross-appellees Wadsworths. The validity of the land sales contract is the principal question. We will affirm the trial court.

With what has become tedious repetition, we remind the parties that we must assume that evidence in favor of the successful party is true, leave out of consideration entirely evidence of an unsuccessful party in conflict therewith and give to the evidence of the successful party every favorable inference which may be reasonably and fairly drawn from it. Tavares v. Horstman, 1975, 542 P.2d 1275, 1277, and the references there footnoted. We have been aided by the trial judge in this case in that he has made specific findings of fact related to the breach of contract by the Reeds. We are bound thereby and it would be improper for us to substitute our judgment for those findings; they are conclusive if supported by evidentiary facts and will not be disturbed on appeal. Wyoming Farm Bureau Mutual Insurance Company v. May, Wyo.1967, 434 P.2d 507, 511. See also Key No. 1010(1), Appeal and Error, 1 West's Wyoming Digest. With respect to the Wadsworths, the trial court made only general findings. In the absence of special findings of fact, the reviewing court must consider that a judgment carries with it every finding of fact which is supported by the evidence. Peters Grazing Association v. Legerski, Wyo.1975, 544 P.2d 449, 455, reh. den. 546 P.2d 189.

As the facts are outlined and mentioned in this opinion, those general appellate principles must be kept in mind because they will favor the prevailing parties, unless the contrary is noted. We shall accept the facts as stated by the appellees, when in conformity with the record, and supplement them from our own examination of the transcript of testimony, the exhibits, the trial judge's findings of fact and other parts of the district court file. While lengthy, we feel obliged to set out in some detail the surrounding circumstances because they fortify and justify our conclusions that a meaningful and valid contract was entered into between the parties.

The Wagstaffs, Utah residents, had a desire to purchase a ranch. Their inclinations took them into nearby Uinta County where in August, 1970, an inquiry at a service station about ranches for sale in the area directed them to the Reeds. They drove to the place, met Mr. Reed for the first time, whom they found working in a field. He advised the 7,000-acre ranch was for sale, had been listed for $450,000.00, but if he did not have to pay a realtor's fee, might accept a lesser amount. No proposal to purchase was made at that time. In the fall of 1970, the Wagstaffs, by letter, offered $300,000.00 to the Reeds. There was response to a follow-up letter, when in early March, 1971, Reed telephoned Mr. Wagstaff and asked him to come to Lyman, Wyoming, to negotiate a purchase and sale. At the meeting which followed, Wagstaff offered $350,000.00 on specified terms. Mr. Reed, by telephone, on March 15, 1971, told Wagstaff he intended to accept that offer. Later, however, Mrs. Reed told Wagstaff that while they intended to accept the offer, it would not include baled hay on the property or the farm and ranch equipment.

Wagstaff had his lawyer prepare a contract of sale in accordance with the negotiations. The Wagstaffs then drove to the office of the Reeds' lawyer in Evanston. The contract form was examined by the Reeds and their attorney. An additional paragraph and addendum were provided by the Reeds' counsel and signed by the parties in the changed form. No final date for closing was discussed or fixed at that time.

Generally, it provided for: an advance payment of $10,000.00, which the Wagstaffs paid to the Reeds at the time of execution (the check was negotiated three days later); the land was described by reference and the minerals were reserved in sellers; the purchase price was $350,000.00, $10,000.00 of which was represented by the deposit, $90,000.00 to be paid on delivery of a formal contract of sale, balance payable at the rate of $12,500.00 annually with 6% interest on the unpaid balance, commencing December 30, 1972. The sale included a reservoir, all water rights and BLM grazing permits and was subject to a mortgage to Travelers Insurance Company; taxes were to be prorated as of the date of possession; buyers to receive the sellers' share of 1971 crops and all unbaled hay on the premises; sellers to furnish abstracts and merchantable title, bank the earnest money for release to sellers on acceptance of title and place a deed in escrow. The earnest money receipt and final agreement were to be unassignable without consent; the residence to be insured; a grace period of 30 days for payments to be provided; and grazing permits to remain in sellers through the 1972 grazing season. A more formal agreement was contenplated. 1

The Reeds deposited, by banking, the $10,000.00, as agreed, and delivered the abstracts to the Wagstaffs, which were approved. Upon approval, Mr. Wagstaff directed his attorney to prepare the implementing documents for closing the sale.

Mr. Reed made various attempts to induce and encourage the Wagstaffs to cancel the contract. On one occasion, he called Mr. Wagstaff to tell him the basement of the home flooded when it rained and he would hire, at the Wagstaffs' expense someone he knew to dig an extensive drainage ditch to carry away the water. Wagstaff replied that he was a construction contractor and could take care of it himself with little or no trouble. On another occasion, Reed told him the furnace smoked and showed him the black on the chimney. Wagstaff saw that the black was caused by freshly smeared tar. In May, 1971, Wagstaff met Reed at the ranch and Reed told him the Bureau of Land Management had been holding some hearings and there would probably be a reduction in grazing rights. At this time, he told Wagstaff he would let him out of the contract if he so desired. Wagstaff investigated and could find no one in BLM who knew of any hearings regarding any reduction of grazing rights.

Shortly thereafter, Reed told Wagstaff he had another purchaser for the property at a price $100,000.00 higher than Wagstaff's price and he would split that amount with Wagstaff if he would release Reed from the contract. Wagstaff rejected the proposal and replied that he was happy with the ranch. In early June, 1971, Reed, for no satisfactory reason, drained about half of the water out of the reservoir. By that time, the spring run-off for the year was over and this created a serious water deficiency causing great concern to the sharecropper on the property. While upset, Wagstaff kept his cool, refusing to be aggravated into cancellation of the contract.

On June 25, 1971, Reeds' lawyer sent Wagstaffs' lawyer a strong, demanding letter, advising that if the sale was not closed by July 7, 1971, the Reeds would declare a forfeiture and retain the $10,000.00 paid by Wagstaffs. Immediately, the Wagstaffs made arrangements for a closing in the office of Reeds' lawyer on July 2, 1971. A business emergency for Wagstaff arose, so Mrs. Wagstaff appeared with all money and executed papers necessary to complete a closing. This had been cleared by Wagstaff with Reed the night before and was satisfactory with Reed.

Other than a few minor changes, which the Reeds' attorney started to make, all documentation was in good shape. As they were about to be signed, Mrs. Wagstaff asked how soon they could get the keys. The Reeds wanted to stay four or five months; the Wagstaffs wanted to move in that summer. Because of these differences, Mrs. Wagstaff telephoned her husband, explained the situation and put Reed on the line. The Wagstaffs attempted to work out some reasonable arrangement but Reed became infuriated, stating, 'I won't deal with you,' and slammed down the 'phone. He announced to everyone in the office that the 'deal is off' and told his attorney to make out a bill for his services. During his testimony, Mr. Reed also stated that on the occasion of his outburst, 'I asked him (Wagstaff) how he would like to go to hell.'

Shortly after the signing of the April 27, 1971 contract, Wagstaff entered the property and hired a contractor, under Wagstaff's supervision, to do earth work around the Reed Reservoir at a cost of $1,135.00. In addition, he obligated himself to Brinton, the resident sharecropper, for seed, phosphate,...

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