Rognrud v. Zubert, s. 40842

• Decision Date: 21 February 1969
• Docket Number: 41252,41253,Nos. 40842,s. 40842
• Citation: 165 N.W.2d 244,282 Minn. 430
• Parties: Dan ROGNRUD, dba Dan Rognrud Realty, et al., Respondents, v. Julia H. ZUBERT, et al., Appellants.
• Court: Minnesota Supreme Court

Page 244

165 N.W.2d 244

282 Minn. 430

Dan ROGNRUD, dba Dan Rognrud Realty, et al., Respondents, v. Julia H. ZUBERT, et al., Appellants.

Nos. 40842, 41252, 41253.

Supreme Court of Minnesota.

Feb. 21, 1969.

Syllabus by the Court

1. A party is not entitled to a jury trial as a matter of right on the fact issues involved in an equitable cause of action for specific performance of a contract to convey real property.

2. Whether the agreement involved in this case was a contract with performance subject to conditions precedent or a mere option when entered, it became a binding, specifically enforceable contract when all of the contingencies were satisfied.

3. The trial judge was correct in concluding that under all of the facts and circumstances of this case a 2 3/4-month break in communications between the parties, standing alone, could not, as a matter of law, support a finding of abandonment.

4. A description of the purchaser in a written agreement as 'Oliver R. Ogdahl or assigns' is not so indefinite as to prevent specific performance of the agreement.

James L. Donaghue, Minneapolis, for appellants.

Fudali, Remes & Fudali, Minneapolis, for respondents.

Heard before KUNTSON, C.J., and NELSON, ROGOSHESKE, SHERAN and FRANK T. GALLAGHER, JJ.

OPINION

ROGOSHESKE, Justice.

Defendants appeal from an order dismissing the jury, and from a judgment granting plaintiff Oliver R. Ogdahl specific performance of an agreement to convey real estate and awarding plaintiff Dan Rognrud $2,500 for a real estate broker's commission.

In May 1964, after observing a 'For Sale' sign on a vacant lot on the southwest corner of 75th Street and Cedar Avenue in the city of Richfield, Rognrud telephoned Mrs. Julia H. Zubert--who substantially owned and controlled Zubert Construction Company, the record owner of the lot--and discussed its availability with her. On June 4, 1964, pursuant to a request by Mrs. Zubert, Rognrud brought her a written offer executed by Ogdahl to purchase the property for $25,000, subject to certain contingencies. This offer was accompanied by a $500 earnest money note payable at 'Closing Date' to Rognrud as Mrs. Zubert's agent. This was in accord with what the undisputed testimony establishes as the customary practice of real estate brokers acting for sellers of real property.

Mrs. Zubert rejected this offer but authorized Rognrud to draft a counteroffer to sell the property to 'Oliver R. Ogdahl or assigns' for $30,000. On June 30, 1964, she signed this counteroffer, which was drawn on a printed standard 'PURCHASE AGREEMENT' form. Subsequently, Ogdahl also signed this agreement and redelivered the earnest money note to Rognrud.

By the terms of this agreement, Mrs. Zubert promised to sell the property and Ogdahl promised to buy it subject to four contingencies, three of which were substantially identical to those in Ogdahl's June 4th offer and the fourth of which was added at Mrs. Zubert's request. These were:

'1. Subject to the buyer obtaining a special use and building permit to construct at least a 22 unit apartment building from the Village of Richfield.

'2. Subject to the buyer obtaining satisfactory financing for said 22 unit apartment building.

'3. Subject to normal soil conditions, meaning no extra footings, foundations or piling will be necessary to construct said 22 unit apartment building.

'4. This offer is subject to purchaser completing the contingencies mentioned above on or before August 1, 1964, after which time this contract shall become null and void unless renewed by Purchaser.'

Each of these contingencies could be satisfied by 'purchaser and agent.'

On July 1, Rognrud and Mrs. Zubert entered a separate written agreement providing that she would net $27,500 of the purchase price and that Rognrud would be paid the remaining $2,500 as his commission.

On July 29, when it had become apparent that plaintiffs would be unable to satisfy all of these contingencies within the original 30-day period, Mrs. Zubert signed an agreement extending the time for performance by 30 days. Plaintiffs testified that all of the conditions were satisfied before this extension expired, and it is undisputed that Mrs. Zubert provided Ogdahl with a Torrens certificate number on the property in early September. At this point, however, the parties' versions of what transpired diverge. Plaintiffs contend that Rognrud tried a number of times during September, October, and November to get Mrs. Zubert to close the transaction but that she refused to do so unless Ogdahl would pay her an additional $1,600, claiming that she had the 'prerogative' to change her mind. Mrs. Zubert, on the other hand, testified in her case in chief that such conversations never took place. On crossexamination, however, she testified that she could not recall whether or not they occurred. She claimed that she heard nothing from plaintiffs from mid-September until mid-December, when Rognrud appeared at her office to arrange a date for closing. Mrs. Zubert testified that then, and only then, did she refuse to go through with the agreement.

In this action against Mrs. Zubert and Zubert Construction Company, Ogdahl seeks specific performance and Rognrud seeks recovery of his brokerage commission. After the pretrial hearing, plaintiffs amended their complaint to include claims against Mrs. Zubert for damages resulting from her misrepresenting herself as authorized to sell this property for the company, defendants having raised that defense to the original action. Plaintiffs also filed a separate complaint against Zubert Properties, Inc., the actual owners of the land under an unrecorded conveyance, seeking specific performance and payment of the brokerage commission.

The case was tried before a jury, but at the close of evidence the trial judge dismissed the jury, ruling that the evidence had not raised any jury questions, and ordered judgment for plaintiffs. By implication the trial court found that Mrs. Zubert had authority to act for Zubert Properties, Inc., and defendants do not challenge that finding on appeal.

They make four basic arguments: (1) That they were entitled as a matter of right to a jury trial on the fact issues in this case; (2) that the June 30 agreement was not in fact a binding contract but was really a mere option which was never properly exercised by Ogdahl and therefore could not be specifically enforced as a contract; (3) that the trial judge erred in finding that there was no abandonment by Ogdahl as a matter of law; and (4) that the agreement cannot be specifically enforced because the identification of the buyer as 'Oliver R. Ogdahl or assigns' is too indefinite.

1. Rule 38.01, Rules of Civil Procedure, provides:

'In actions for the recovery of money only, or of specific real or personal property, or for a divorce on the ground of adultery, the issues of fact shall be tried by a jury, unless a jury trial be waived or a reference be ordered.'

Defendants argue that an action for specific performance of a contract to convey real property is an action 'for the recovery of * * * specific real * * * property' within the meaning of the rule, and that, therefore, they were entitled to a jury trial as a matter of right.

We have often held that the only actions in which Minn.Const. art. 1, § 4, ¹ the statutory predecessor of Rule 38.01, ² and Rule 38.01 itself guarantee the right to a jury trial are those which were conceived of as 'legal,' so that such a right existed with respect to them, at the time the Minnesota Constitution was adopted. E.g., Indianhead Truck Line, Inc. v. Hvidsten Transport, Inc., 268 Minn. 176, 128 N.W.2d 334; Breimhorst v. Beckman, 227 Minn. 409, 35 N.W.2d 719; Morton Brick & Tile Co. v. Sodergren, 130 Minn. 252, 153 N.W. 527; Whallon v. Bancroft, 4 Minn. 70 (109).

The language of Rule 38.01 is merely an attempt to list those actions which were then, and are now, thought of as 'legal' as distinguished from 'equitable.' ³ Thus, the words 'actions for the recovery of * * * specific real * * * property' were intended to describe a cause of action to recover specific real property which raises issues which are historically 'legal,' such as ejectment, ⁴ rather than a cause of action for specific performance of a contract to convey land, which has long been regarded as entirely equitable. ⁵ We hold, therefore, that defendants were not entitled to a jury trial of right on any of the fact issues involved in the cause of action for specific performance. ⁶

As previously noted, plaintiffs amended their complaint to include a cause of action for damages against defendant Julia Zubert on the ground of misrepresentation. Recovery by plaintiffs on this cause of action, however, was contingent upon Ogdahl's failure to obtain speecific performance of the agreement, since an award of both specific performance and the requested damages would amount to a double recovery. ⁷ Because this additional claim potentially raised issues historically 'legal' in character, the trial court quite properly impaneled a jury. ⁸ At the close of the trial, having determined that plaintiffs were entitled to specific performance, the trial judge correctly dismissed the jury as the 'legal' issue of damages was then moot.

2. Defendants argue that, because Ogdahl's obligation to buy was subject to four contingencies, the June 30 agreement was not a binding contract but rather was a mere option, which, if unexercised, cannot be specifically enforced.

The fact that performance by one party is conditional on the occurrence of certain events does not necessarily mean that the agreement is an option and not a contract. ⁹ However, whether this agreement was a binding contract on June 30, 1964, with performance subject to conditions precedent, or whether it was then an option, the testimony clearly shows that all of the contingencies were satisfied within the specified period as enlarged by the extension executed by Mrs. Zubert...