Shannon v. Freeman

• Decision Date: 10 October 1921
• Docket Number: 10737.
• Citation: 109 S.E. 406,117 S.C. 480
• Parties: SHANNON v. FREEMAN ET AL.
• Court: South Carolina Supreme Court

109 S.E. 406

117 S.C. 480

SHANNON v. FREEMAN ET AL.

No. 10737.

Supreme Court of South Carolina

October 10, 1921

Appeal from Common Pleas Circuit Court of Greenville County; J. W DeVore, Judge.

Suit by W. H. Shannon against Alice E. Freeman, individually and as trustee, and others. From a decree for plaintiff, defendants appeal. Affirmed.

The master's report was as follows:

The master, to whom this case was referred to take the testimony and to hear and determine all issues of fact and law and report the same to the court, respectfully reports that he has had several references herein, and has taken the testimony which is reported herewith.

This is an action by the purchaser against the seller for specific performance of a contract of sale of real estate. The complaint alleges that on December 2, 1919, the plaintiff and the defendant Alice E. Freeman, as trustee, entered into a contract whereby plaintiff agreed to buy for the price of $10,000, and said defendant, as trustee, agreed to sell, a certain lot of land in Greenville, S. C.; that said defendant held said land as trustee for herself and her four children the other defendants herein; that in a deed conveying to her the said lot of land the said trustee was authorized to sell at private sale provided 1/3 of the price was paid in cash that the plaintiff has at all times been, and is now, ready and willing to comply, and either to pay the full amount of the purchase price in cash, or to pay 1/3 cash and secure the balance by purchase-money mortgage, but that the defendant Alice E. Freeman at the time fixed for the performance refused and still refuses to convey.

The defendant Lidia M. Schwartz filed a separate answer. The other defendants filed a joint answer. The defenses set up by one or the other of these answers and argued before me may be stated as follows: (1) A general denial; (2) that the price was grossly inadequate; (3) that the contract is void, in that it provides for a cash payment of less than 1/3 of the price, while the trustee had power to sell only upon payment of at least 1/3 of the price; and (4) that the contract is void, in that the trustees had power only to sell outright, and not to contract to sell.

The master finds the following to be the facts in this case:

The allegations of the complaint are substantially true, being sustained by undisputed testimony. The defendants formerly owned certain real estate in the city of Greenville. This was sold in 1913, and in part payment they took the property in question. By a contract entered into at that time between all the defendants it was agreed that for their mutual convenience in selling and conveying the property in question title should be taken in the name of Alice E. Freeman, as trustee, who should sell it and divide the proceeds among all the defendants. Accordingly, the deed was made, conveying this property to her "in trust to sell said land at public or private sale to such person or persons as she may deem advisable for cash or upon such other terms as may seem proper, provided at least 1/3 cash is paid thereon."

On December 2, 1919, Alice E. Freeman, as trustee, entered into a contract with the plaintiff, which provided that, "Said Freeman as trustee has bargained and sold and will convey or have such conveyance as may be necessary to give good title to said Shannon to all that lot of land," described by metes and bounds. "The purchase price for said lot is $10,000, of which $500 is paid at the signing and sealing of these presents, and the remainder to be paid as follows: $2,000 January 15, 1920, and the balance in one, two and three years at 7 per cent. or with privilege to pay all the amount at any time." It further provided that time is of the essence, and that should Shannon fail to make payment at the time stated, the money paid up to such failure should be retained by Mrs. Freeman as liquidated damages, and that upon payment of the $2,000 referred to deed should be executed and delivered to Shannon. At the time of the signing of this contract Shannon paid to Mrs. Freeman the sum of $500.

On November 14, 1919, prior to the execution of the above contract Schwartz (the husband of the defendant, Lidia M. Schwartz, and son-in-law of Alice E. Freeman), purporting to act as agent, had listed this property with W. R. Tabor, a real estate agent or broker, authorizing him to sell it for $10,000 net; that is, he was to collect his commission from the purchaser in addition to this sum. Tabor, having found a purchaser in the person of the plaintiff, prepared in duplicate the above-described contract in accordance with terms designated by Schwartz. Both copies were executed by Shannon and delivered to Schwartz, who presented them to Mrs. Freeman for her signature. Mrs. Freeman signed both, and Schwartz returned one copy to Shannon. On the day this contract was signed, Mrs. Freeman left Greenville for a visit to her daughter in Baton Rouge, La. She did not return until January 28, 1920, eight days after the date fixed by contract for the payment of the money and delivery of the deed.

Neither Shannon nor Tabor had any conversation with Mrs. Freeman with reference to this contract either before or after execution; all their dealings being had through Schwartz.

After making the contract with Mrs. Freeman, Shannon determined to sell the property, and accordingly placed it in Tabor's hands. About the latter part of December or early part of January, Tabor made the sale to Mr. Pete Hodges, who was acting for his wife, Eva S. Hodges, for the price of $12,500.

Some time prior to January 15, the date fixed for delivery of the deed and payment of the money, Shannon notified Schwartz that he was ready to close the matter, at the same time telling him about the resale to Mrs. Hodges, and suggesting that deed should be made either to Mrs. Hodges or to him. Schwartz stated that it would be satisfactory to make the deed direct to Mrs. Hodges, and that he would attend to it. Accordingly Schwarz had his attorney, Jas. H. Price, prepare a deed conveying the land to Mrs. Hodges. This deed Schwartz undertook to execute under a written power of attorney from Mrs. Freeman. Oscar Hodges, Esq., who at the time was examining the title and representing Mrs. Hodges in the transaction, refused to accept a deed signed by Schwartz. At the same time he advised that, in view of the provisions in the deed to Mrs. Freeman, at least 1/3 of the price should be paid in cash. Accordingly a check for 1/3 was left with Mr. Hodges, who thereupon prepared a new deed, as well as a note and mortgage to be signed by Mrs. Hodges. This deed Schwartz forwarded to Mrs. Freeman in Baton Rouge, La. On January 13th, Shannon wrote Mrs. Freeman at her Greenville address, giving formal notice that he was ready to close the matter. On January 23, Mrs. Freeman returned to Greenville, bringing with her the deed which had been prepared, but which she had not signed. It was not until after her return that the parties in Greenville had any intimation that she would not convey. It seems that upon her return she learned that Shannon was making a profit in the sale to Mrs. Hodges. Thereupon Shannon was informed by Schwartz that Mrs. Freeman was not satisfied with the price. Shannon offered to pay the full amount in cash, but was informed that Mrs. Freeman would not convey for $10,000. Subsequently Mr. McSwain, as attorney for Mrs. Freeman, tendered back to Shannon the $500 which he had paid and which Mrs. Freeman had retained.

The case was exhaustively argued by counsel for both sides and the master has given careful consideration to the questions of law and fact suggested by the argument. In addition to the points indicated by the answers, counsel for defendants relied largely upon the fact that the plaintiff had made no tender of the purchase price. The master is of the opinion that the defendants are not in a position to take advantage of this and to defeat plaintiff's right to specific performance upon this ground.

The master is satisfied from the testimony, and finds as a matter of fact, that the plaintiff was at all times ready, willing and anxious to perform, and that he exercised due diligence in the matter. He had dealt with Mrs. Freeman only through Schwartz. In ample time he notified Schwartz of his readiness to close. Schwartz agreed to furnish the deed promptly. When Shannon relied upon this, he did no more than any reasonably prudent business man would have done. It is perhaps true that Mrs. Freeman, being a trustee, could not delegate her duties to Schwartz, nor give him a valid power of attorney to represent her, but it is equally true that all the parties to this transaction did, in fact, think that Schwartz did have authority to represent Mrs. Freeman in this matter. Mrs. Freeman had dealt through Schwartz; she had recognized the sale made by the agent selected and authorized by Schwartz; she had signed the contract prepared in accordance with Schwartz's dictation and presented to her by Schwartz, and by Schwartz she had returned the signed contract to Shannon. She had executed a power of attorney, purporting to authorize Schwartz to act for her, which the parties themselves evidently thought to be valid as is shown by the fact that Schwartz had his attorney prepare a deed, which he signed pursuant to this power of attorney and delivered to Mr. Oscar Hodges for approval. When Shannon learned that Schwartz did not in fact have power to execute the deed, and that Mrs. Freeman was without the state, he did all that could reasonably have been required of him. He relied upon Schwartz's statement that he would forward the deed to Mrs. Freeman for her signature. At the same time he mailed a letter to Mrs. Freeman at her home...