Russell v. Russell

• Decision Date: 09 May 1978
• Docket Number: No. 12232,12232
• Citation: 99 Idaho 151,578 P.2d 1082
• Parties: Howard E. RUSSELL and Cora A. Russell, husband and wife, Plaintiffs-Appellants, v. John R. RUSSELL and Gertrude Russell, husband and wife, Defendants-Respondents.
• Court: Idaho Supreme Court

Page 1082

578 P.2d 1082

99 Idaho 151

Howard E. RUSSELL and Cora A. Russell, husband and wife, Plaintiffs-Appellants, v. John R. RUSSELL and Gertrude Russell, husband and wife, Defendants-Respondents.

No. 12232.

Supreme Court of Idaho.

May 9, 1978.

Lary C. Walker, of Walker & Sanders, Weiser, for plaintiffs-appellants.

Iver J. Longeteig, of Runft & Longeteig, Boise, for defendants-respondents.

DONALDSON, Justice.

Howard Russell (hereafter seller), the plaintiff-appellant in this suit, owns a 200-acre farm near Emmett. He listed this farm under a sales agency contract with Baldwin Realty of Boise, also a plaintiff in this action. John Russell (hereafter buyer), the defendant-respondent (no relation), expressed an interest in purchasing the farm and visited and inspected the property several times. On Wednesday, May 29, 1974, both parties signed an earnest money agreement providing that John would buy the property for $191,000. The document enumerated $10,000 as earnest money and a partial payment, assumption of an $84,000 loan, $85,000 to be financed by a loan company, and $12,000 to be paid upon the happening of a later event. Buyer gave seller a check for $5,000 and a personal note for $5,000 to cover the earnest money required. The earnest money agreement also provided that possession was to be delivered 30 days after closing of the sale.

The earnest money agreement gave the following description of the property involved: "Full legal attached of Howard Russell Property located on Beacon Road, Emmett, Idaho consisting of approx. 200 acres." A legal description of the farm was placed in the broker's file with the earnest money agreement.

On Sunday, four days after the signing, buyer approached seller and requested that possession be delivered immediately. Seller refused. On Monday, the real estate broker presented the earnest money check, but it was dishonored for insufficient funds. Buyer testified that he made sure the check would "bounce" when seller refused to deliver immediate possession.

Seller and Baldwin Realty brought the present suit for the $10,000 earnest money as well as lost commission, damages and attorney's fees. At trial, buyer contended the earnest money agreement did not embody what was orally agreed to by the parties. Buyer testified that he was to take over the milking of the cows immediately.

Seller testified that he grossed about $5,000 a month from the milking operation and that he was not going to give up that money until he had certain assurances that the sale would be closed.

Over seller's objection, evidence was received to show attempts made by counsel to get the parties back together.

The trial court ruled for buyer (the defendant) and directed defense counsel to prepare findings of fact and conclusions of law which basically were:

(1) The earnest money agreement did not contain a legal description of the property, and therefore was invalid,

(2) the contract was not carried out and the parties entered into negotiations to resolve their problems, and

(3) these negotiations constituted a mutual abandonment of the earnest money agreement.

Seller ¹ appeals to this Court, raising two issues:

(1) whether the trial court erred in ruling the earnest money agreement invalid for lack of a legal description, and

(2) whether the trial court erred in ruling that the negotiations constituted a mutual abandonment of the earnest money agreement.

I

At trial, buyer argued that the earnest money agreement was invalid because it did not contain a sufficient legal description of the farm and by reason thereof the statute of frauds was violated and parol evidence was not admissible. The trial court agreed and held that the earnest money agreement lacked a sufficient legal description and was therefore invalid. The trial court refused to admit into evidence the legal description because that description was on a sheet of paper which contained a description of some other land not involved in this transaction.

In his brief, buyer supports the trial court's finding that the earnest money agreement is inadequate because it does not describe "the property in sufficient detail to satisfy the statute of frauds." I.C. § 9-503. ²

In Murphy v. Livesay, 34 Idaho 793, 796, 197 P. 536 (1921), this Court said: "(I)n order to comply with the requirements of the statute the contract must state the essential terms thereof, one of which is the description of the property involved . . . ."

However, this is not to say the statute of frauds invalidates all contracts with imperfect legal descriptions. "The statute is not pressed 'to the extreme of a literal and rigid logic.' " Jennings v. Ruidoso Racing Association, 79 N.M. 144, 441 P.2d 42, 44 (1968). (citation omitted)

The earnest money agreement referred to the property involved as: " Howard Russell property located on Beacon Road, Emmett, Idaho consisting of approx. 200 acres." Further, it provided a "Full legal" description was attached. An accurate legal description accompanied the earnest money agreement, albeit on a separate sheet of paper which was not stapled or otherwise physically attached.

It is not contended that buyer was in any way confused as to the boundaries or location of the farm. In fact buyer had been shown the farm several times. Buyer's only reason for raising a question about the legal description was an attempt to absolve himself of a contract he had signed.

"The statute of frauds is intended to protect against fraud; it is not intended as an escape route for persons seeking to avoid obligations undertaken by or imposed upon them." Keirsey v. Hirsch, 58 N.M. 18, 265 P.2d 346, 352, 43 A.L.R.2d 929, 935 (1953). Further, it would be pure semantics to say that although the legal description was referred to in the earnest money agreement, it was not part of the contract because it was not attached by a staple. Attachment does not require any specific physical act. The legal description was always with the earnest money agreement. The broker testified that the legal description was kept side by side with the earnest money agreement in the broker's files. It was clear that no other description was intended by the earnest money agreement.

It was error for the trial court to hold the earnest money agreement invalid for lack of a sufficient legal description. The earnest money agreement had a legal description on another sheet of paper. No magic form of physical attachment is required here where the legal description was alluded to in the earnest money agreement and was always together with the earnest money agreement.

II

The trial court received as evidence a series of four letters between counsel constituting attempts to get the parties back together. Although the trial court had decided the earnest money agreement was invalid, it also ruled these settlement negotiations constituted a mutual abandonment, relying on Jensen v. Chandler, 77 Idaho 303, 291 P.2d 1116 (1955). The trial court based this ruling on "offers and counter-offers were made and rejected, entirely different from the terms of the original agreement."

A contract may be mutually abandoned. The question here is whether seller intended to abandon the earnest money agreement when he tried to negotiate a settlement. The facts do not indicate such intent. Seller's testimony shows that he thought he had a valid contract.

Of the four letters received as evidence constituting the negotiations, three of these letters were from buyer's attorney, making various offers of lesser amounts to purchase the farm. The fourth letter was from seller's attorney and was sent to buyer. This letter clearly indicates that seller considered the earnest money agreement binding and fully expected buyer to "live up to" it. No abandonment can be found on these facts. Jensen id., allows for abandonment of a contract where "the acts of one party inconsistent with its existence are acquiesced in by the other party." Id. at 307, 291 P.2d at 1118. No such acquiescence was shown here. The ruling of abandonment by the trial court is not supported by substantial or competent evidence.

III

The trial court erred in finding the contract invalid and abandoned. We reverse and remand for new trial. Costs to appellants.

SHEPARD, C. J., and BAKES, J., concur.

BISTLINE, Justice, concurring specially.

On the understanding that the majority opinion is confined to a simple holding that the failure to physically "attach" to the body of the earnest money agreement the sheet of paper setting forth the legal description did not vitiate the agreement, I concur.

To my mind, cases cited by Justice McFadden in his dissent seem to support the result reached by Justice Donaldson. Those cases stand for the proposition that a separate writing can be incorporated into a contract by reference, but that the relation or connection between the two writings must appear facially, i. e., that resort to parol evidence is not permissible to establish such a relation or connection. Thus, if the language "full legal attached" had not been a part of the earnest money agreement reference to "Howard Russell property located on Beacon Road, Emmett, Idaho, consisting of approx. 200 acres," my vote would have been with Justice McFadden. As the dissent intimates, this Court should not enforce "incomplete and informal land sale contracts." ¹ On its face, however, "full legal attached" establishes that there is another sheet of paper which supplies the complete legal description. That sheet of paper, as the majority observes, "accompanied" the earnest money agreement at all times pertinent to this case.

The dissent argues, nonetheless, that the legal description was "insufficiently incorporated" because it was not physically attached to the earnest money agreement itself. Though the dissent does not specify what type of physical attachment would be required in order to gain validity, it would hold that, just as the war was lost...