Shea v. Second Nat. Bank, 8234.

• Decision Date: 30 November 1942
• Docket Number: No. 8234.,8234.
• Citation: 76 US App. DC 406,133 F.2d 17
• Parties: SHEA v. SECOND NAT. BANK OF WASHINGTON.
• Court: U.S. Court of Appeals — District of Columbia Circuit

76 US App. DC 406, 133 F.2d 17 (1942)

SHEA v. SECOND NAT. BANK OF WASHINGTON.

No. 8234.

United States Court of Appeals for the District of Columbia.

Decided November 30, 1942.

Mr. John J. Wilson, of Washington, D. C., with whom Mr. Roger J. Whiteford, of Washington, D. C., was on the brief, for appellant.

Mr. D. C. Colladay, of Washington, D. C., with whom Mr. E. F. Colladay, of Washington, D. C., was on the brief, for appellee.

Before MILLER, VINSON, and EDGERTON, Associate Justices.

MILLER, Associate Justice.

A lease from John J. Bowles to Eugene E. Sykes, conveying property at 1701 Kalorama Road, N. W., in Washington, D. C., contained the following provision: "It is also understood and agreed that the party of the second part shall have the first refusal to purchase the property, provided he exercises said privilege to do so within three days after the receipt of notice from the party of the first part stating that a bona fide offer to purchase property has been made by another source acceptable to the party of the first part." On July 26, 1941, appellee, as successor in interest to Bowles, delivered to Sykes, a letter, dated July 23, 1941, which contained the following notice: "Accordingly, you are hereby notified that a bona fide offer to purchase said property has been made by another source acceptable to the undersigned as party of the first part. The amount of said offer is $121,250.00, all cash at the date of conveyance, which is to be made within 30 days from the date of acceptance of the offer or as soon thereafter as a report on the title can be secured if promptly ordered. A deposit of $5,000.00 has been received by the undersigned with the said offer and a similar deposit will be required by you to accompany your acceptance, if you decide to exercise your `first refusal to purchase the property' at said price and on said terms. As stated in the quoted provision of the lease, you must exercise your privilege, if at all, within three days after the receipt of this notice." On July 29, 1941, Sykes delivered to appellee a letter, dated July 28, 1941, containing the following language: "I, the undersigned, hereby give notice to the Second National Bank, Trustee under the Will of the late J. J. Bowles, that I elect to exercise my right of first refusal contained in an agreement of lease dated the 30th day of October, 1937, and made between said J. J. Bowles, deceased, as party of the first part, and myself as party of the second part, and purchase the premises demised to me by said lease agreement. Herewith is deposit of Five Thousand Dollars ($5,000.00) in form of a cashier's check of the Hamilton National Bank, Washington, D. C. Out of the purchase price, a commission in the amount of Three Thousand Seven Hundred Thirty-seven Dollars and Fifty Cents ($3,737.50) shall be payable to the real estate office of J. Dallas Grady and Son, in which John D. Mattingly is a salesman." It is agreed that the letter of July 28th was a timely response to the letter of July 23d, within the three-day requirement of the option clause in the lease. But appellee denies that it constituted an effective exercise of the privilege of first refusal.

Other negotiations and communications which took place thereafter between the parties failed to bring them together. Appellant, who claims as successor in interest to Sykes, then brought this action for specific performance. The trial court concluded that Sykes had failed to exercise his privilege of first refusal and gave summary judgment for appellee on the ground that there was no genuine issue as to any material fact.

Appellant stands upon Sykes' letter of July 28, 1941. He contends that this constituted an acceptance of the offer contained in appellee's letter of July 23d and "made a contract between the parties which, from a pure legal standpoint neither required nor expected supplement or complement." Appellee answers that appellant's acceptance was conditional, because of its requirement that a full commission be paid to J. Dallas Grady and Son, hence that it was ineffective to consummate a contract. To this appellant replies that assuming the acceptance to have been conditional, nevertheless, it imposed no burden upon appellee which did not already exist; hence it constituted a condition which would be implied by law; consequently "is mere surplusage and in the circumstances may be treated as though it had not been written."

The general rule is that an acceptance is not inoperative as such merely because it imposes a condition, if the requirement of the condition would be implied from the offer, though not expressed therein.¹ As Williston points out, such a condition is sometimes inserted from abundance of caution. If it expresses, merely, what would be implied, in fact² or in law,³ from the offer, then it constitutes no qualification of the acceptor's assent. Some of the cases which seem to take a contrary position can be reconciled by careful analysis. Thus, in Phoenix Iron & Steel Company v. Wilkoff Company,⁴ the condition imposed required a further agreement upon a point which, if nothing had been said about it, would have been implied as a matter of law.

The cases relied upon by appellee,⁵ do not even discuss the question whether the inclusion, in an acceptance, of a condition implicit in the offer, invalidates the acceptance. Instead, they are cases in each of which, except one, the reply attempted to vary the terms of the offer and hence, at best, constituted merely a counteroffer. In the other case, that of Strong v. Moore, the court assumed, for the purpose of its decision, that the acceptance was complete; and impliedly recognized that, as a matter of law, an acceptance may properly impose a condition implied in the offer.⁶ In another Oregon case, the Supreme Court of that State expressly adopted the rule as stated by Williston.⁷ Except for suggestive dicta, the question is one which has not been decided for the District of Columbia,⁸ but we see no reason why the rule as generally applied should not be effective here.

Appellee contends that if the Grady firm had a right to recover a commission, in event of purchase by Sykes, it was a right against appellee; hence no concern of Sykes or appellant; consequently, that inclusion of the requirement in the acceptance should invalidate the acceptance. But this contention misses the point. Ordinarily, no doubt, if a buyer inserted qualifying language in an acceptance it would relate to his own interests. But in the application of the rule of law with which we are now concerned, it makes no difference to whom the obligation is owed. If the offeror is bound to perform it, then the inclusion, in the acceptance, of a requirement that he do perform it, is surplusage so far as concerns completeness of the acceptance. An example of this kind is found in a Missouri case,⁹ where the acceptor specified that the present occupants of the property should be given a reasonable time to vacate.

Was the requirement that a commission in the amount of $3,737.50 should be payable to the Grady firm, one which was implied, in fact or law, from the offer as it was made by appellee to Sykes? The trial court found, and it is not disputed: "The regular rate of commission fixed by the Washington Real Estate Board upon this sale involving a purchase price of $121,250 is $3,737.50." This court has on a number of occasions upheld brokers' contracts for the payment of such commissions.¹⁰ If no more were involved here, we would have no difficulty in saying that the requirement imposed by Sykes was implied in the offer.

But an additional problem arises from the following facts: (1) Prior to the date of appellee's letter to Sykes, it had granted to the Grady firm the exclusive right to offer and advertise the Kalorama Road property for sale, for a period of sixty days from June 4, 1941, and submit any offer or offers obtained. (2) Within this sixty-day period, namely on July 21, 1941, the offer to which appellee referred in its letter to Sykes was presented to appellee by the H. L. Rust Company. This offer, which was made on behalf of Thomas G. Slater, contained the provision that the commission should be divided equally between the Rust Company and the Grady firm. (3) Upon receipt of the Slater offer appellee notified Rust that the provision for divided commission on the sale was in conflict with the exclusive right which had been given to Grady; Rust then invited return of the offer; whereupon appellee notified Grady of the situation, and on July 23, 1941, that firm authorized in writing, under its exclusive agreement, the acceptance of the Slater offer and payment of the sales commission in accordance therewith. (4) On July 23, 1941, the bank notified Rust that the Slater offer was accepted subject to Sykes' privilege of first refusal; (5) at the time of his acceptance on July 29, 1941, Sykes had been informed that Grady had the exclusive agency for sale of the property. (6) But he was not informed of Grady's agreement to split the sales commission with Rust until July 31, 1941, two days after the date of his acceptance. Consequently, so far as Sykes knew when he sent his letter of acceptance on July 29th, Grady's exclusive agency was in full force and effect, without limitation or qualification of any kind. However, it is not what Sykes understood, but the situation as it actually existed, in fact, on July 29, 1941, and the legal implications arising therefrom, which will conclude the rights of the parties.

Specifically, the important question is what, if anything, was Grady entitled to receive as a sales commission, upon a purchase by Sykes, resulting from the latter's exercise of his option. If, in such an event, the former was entitled to receive the full commission, then Sykes' insertion of the condition into his acceptance, added nothing beyond what was implicit in the offer, and the acceptance was good; if, on the other...