Shull v. Sexton, 20301

• Decision Date: 16 March 1964
• Docket Number: No. 20301,20301
• Citation: 390 P.2d 313,154 Colo. 311
• Parties: Herbert L. SHULL and Harriet C. Shull, Plaintiffs in Error, v. Earl SEXTON and Junior Lawrence Sexton, Defendants in Error.
• Court: Colorado Supreme Court

Page 313

390 P.2d 313

154 Colo. 311

Herbert L. SHULL and Harriet C. Shull, Plaintiffs in Error, v. Earl SEXTON and Junior Lawrence Sexton, Defendants in Error.

No. 20301.

Supreme Court of Colorado, En Banc.

March 16, 1964.

Crisjohn & Dyer, Cortez, for plaintiffs in error.

Dilts & Hancock, Cortez, for defendants in error.

FRANTZ, Justice.

A decree for specific performance of a contract, resulting from an election to exercise an option, entered by the trial court in favor of the Sextons, the optionee-purchasers, and against the Shulls the optionor-vendors, is the subject of review by writ of error issued by this Court on the application of the latter.

On August 5, 1957 the Shulls agreed in writing to convey certain realty to the Sextons upon payment of a $1500.00 balance on or before January 15, 1958, and in the agreement the following also appears:

'Sellers grant unto the buyers a further option to purchase an additional tract of land lying immediately contiguous to the North boundary of the land now being purchased under the above agreement and this option shall be valid for a period of two years from and after the date hereof. For the said option, buyers have paid and sellers acknowledge receipt of $10.00 and other good and valuable considerations.

'The purchase price for the additional land as herein described shall be in the entire amount of $750.00 to be paid in manner and form hereafter to be agreed upon in the event the option is exercised.'

Sometime thereafter and before April 1, 1958 there was executed an 'Amendment to Purchase and Sales Agreement with Option to Purchase.' Its avowed purpose was clarification of the option granted to the Sextons, and to this end it provided:

'The additional land from which the option is granted now described as being a tract of land lying along and adjoining the North boundary of the land heretofore purchased and being described as 50 feet wide by 300 feet long.

'The 50 feet by 300 feet property will join the front and rear lines of the property heretofore purchased.'

It is admitted that the Shulls received a letter from Sextons' attorneys, dated May 4, 1959, which, omitting formal parts, reads as follows:

'You are hereby notified that Earl Sexton and Junior Lawrence Sexton are ready, willing and able to exercise that certain option contained in the Purchase and Sales Agreement with Option to Purchase of August 5, 1957, and as amended, and are now ready, willing and able to pay the sum of $750.00 for the additional 50' X 300' strip of land adjoining the present front and rear lines of the property heretofore purchased.

'The Sexton Brothers agree to cause the strip of land to be surveyed at their own cost and expense.

'At the time the survey is completed and a proper description obtained, it will be necessary for you and Mrs. Shull to execute a Warranty Deed conveying the property.'

At the conclusion of Sextons' case the Shulls moved for dismissal, and advised the trial court that they would not present evidence, either in support of their defenses or their counterclaim. They then withdrew their counterclaim, and requested time in which to submit a brief in support of their motion to dismiss.

Briefs were filed, after which the trial court entered its decree directing the Shulls to specifically perform the agreement. The Sextons had filed a count in which they sought to recover for the drilling of a well on property of the Shulls. Judgment thereon in the sum of $170.00 was entered by the court and ordered credited on the $750.00 required to be paid for the realty, subject of the option.

Testimony to the effect that the Sextons had drilled a well for the Shulls, and that the parties had agreed that the charge therefor of $170.00 be credited to the Sextons on the option, was not challenged. The record discloses that the suit was filed on August 5, 1959, the day after the expiration of the two-year period allowed for exercising the option. Pursuant to leave granted by the trial court, the Sextons did on August 11, 1959 deposit $750.00 in the registry of the court for disposition in accordance with whatever directions it may ultimately make.

In their Summary of Argument the Shulls contend (first) that the agreement as amended is 'too vague, indefinite, incomplete and uncertain for specific performance to be granted in the following particulars:

A. The performance was insufficient.

B. The payment was left for future negotiation.

C. Description of the land was insufficient.'

Their second contention concerns the letter written by Sextons' attorneys; they say that it was neither a tender nor an exercise of the option, and was 'insufficient as a matter of law.'

Their third and fourth grounds for reversal are:

'3. The option is a unilateral contract and was not performed by the [Sextons] within the term of the contract and being a unilateral contract, specific performance can only be granted when all conditions are performed.

'4. The agreement is to be construed against [Sextons] due to the fact it was the [Sextons] agreement.'

Inadequacy of the provisions for performance is said to exist because of lack of specificity in respect to the manner, time and place of performance, and from a lack of legal description. And an engagement to pay $750.00 'in manner and form hereafter to be agreed upon in the event the option is exercised' is, it is argued, committing the terms for payment to future negotiation.

Continuing their argument, the Shulls reason that a contract so destitute of material detail cannot be the basis of a decree of specific performance without the court supplying the details which are missing, and this the court cannot do, for in so doing, the court would be making the contract for the parties.

Certain familiar rules should be mentioned as the backdrop for our disposition of this case. A contract must contain the essentials--parties, terms, subject-matter and consideration--, Ross v. Purse, 17 Colo. 24, 28 P. 473, and be reasonably certain in order to justify a decree of specific performance, Crumley v. Shelton, 71 Colo. 466, 208 P. 460; Hill v. Chambers, 136 Colo. 129, 314 P.2d 707. Courts cannot make contracts for parties and then order them specifically performed. Mestas v. Martini, 113 Colo. 108, 155 P.2d 161; Stout v. Porritt, 250 Mich. 13, 229 N.W. 409.

An option founded upon a consideration is a unilateral contract which is obligatory on the optionor and non-obligatory on the optionee until the latter makes an election to accept the offer contained in the option. 'Upon exercise of plaintiffs' option to purchase * * *, the agreement ceased to be an option and ripened into a mutually binding and mutually enforceable contract.' Stanton v. Union Oil Co. of California, 111 Colo. 414, 142 P.2d 285; Rude v. Levy, 43 Colo. 482, 96 P. 560, 24 L.R.A.,N.S., 91, 127 Am.St.Rep. 123.

Although a contract may be uncertain or incomplete in some respects, its specific performance may nevertheless be decreed where the uncertainty or incompleteness relates to matters which the law makes certain or complete by presumption, rule, or custom and usage. Ross v. Purse, supra; Cochrane v. Justice Mining Co., 16 Colo. 415, 26 P. 780; Bechmann v. Taylor, 80 Colo. 68, 249 P. 262; Pomeroy, Specific Performance of Contracts, 394, 396, §§ 154, 155.

'The general doctrine, however, has been formulated by eminent judges, that an agreement framed in general terms will be enforced where the law will supply the details * * *' Pomeroy, Specific Performance of Contracts, 394, § 154. Specific performance has been decreed in suits involving contracts in which resort has been made to terms which the law implies. Bechmann v. Taylor, supra; Miller v. Gordon, 296 Ill. 346, 129 N.E. 809; McAdam v. Leak, 111 Kan. 704, 208 P. 569; Lawson v. Mullinix, 104 Md. 156, 64 A. 938; Bennett v. Moon, 110 Neb. 692, 194 N.W. 802, 31 A.L.R. 495; Moran v. Fifteenth Ward Bldg. & Loan Ass'n, 131 N.J.Eq. 361, 25 A.2d 426

Is the contract resulting from the exercise of the option by the Sextons deficient in respect to the manner of performance? In our opinion, it is not; it requires the payment of money on the part of the Sextons and a conveyance on the part of the Shulls. Properly construed, the contract contains dependent covenants, i. e., the delivery of the deed and the payment of the purchase price, which are to be performed concurrently. Byers v. Denver Circle Railroad Co., 13 Colo. 552, 22 P. 951; Northern Ill. Coal Corp. v. Cryder, 361 Ill. 274, 197 N.E. 750, 101 A.L.R. 1420; Kottler v. Martin, 241 N.C. 369, 85 S.E.2d 314.

But the Shulls point out that the contract thus created lacks any provision for the time of performance. Courts have applied the doctrine of performance within a reasonable time where the contract fails to specify the time for the discharge of obligations. Penney v. Norton, 202 Ala. 690, 81 So. 666; Ullsperger v. Meyer, 217 Ill. 262, 75 N.E. 482, 2 L.R.A.,N.S., 221; Lawson v. Mullinix, supra; Trotter v. Lewis, 185 Md. 528, 45 A.2d 329; Swedish-American Nat. Bank v. Merz, Sup., 179 N.Y.S. 600. See Home Mut. Ins. Co. of Iowa v. Stewart, 105 Colo. 516, 100 P.2d 159. 'No exact date for the conveyance and payment being fixed, the law provides that the same shall be made within a reasonable time. Terms which the law implies by legal presumption need not be expressly stated.' Swedish-American Nat. Bank v. Merz, supra.

Reasonable time is measured by the circumstances of the case. Ullsperger v. Meyer, supra; Colorado Woman's College v. Bradford-Robinson Printing Co., 114 Colo. 237, 157 P.2d 612. 'Under such a contract the law would imply that it was to be performed within a reasonable time after entering into the same, and what would be a reasonable time would be a matter of proof under all the conditions and circumstances that might surround the case.' Ullsperger v. Meyer, supra. 'We have said that reasonable time may be such time as is necessary conveniently to...