Wallace v. Cook

• Decision Date: 21 January 1921
• Citation: 190 Ky. 262,227 S.W. 279
• Parties: WALLACE v. COOK.
• Court: Kentucky Court of Appeals

227 S.W. 279

190 Ky. 262

WALLACE v. COOK.

Court of Appeals of Kentucky.

January 21, 1921

Appeal from Circuit Court, Garrard County.

Action by Oliver T. Wallace against W. R. Cook. From judgment dismissing the petition, plaintiff appeals. Affirmed.

Lewis L. Walker, of Lancaster, for appellant.

J. E Robinson, of Lancaster, for appellee.

THOMAS J.

On August 30, 1919, appellee and defendant below, W. R. Cook signed and delivered to appellant and plaintiff below, Oliver T. Wallace, a written contract authorizing the latter to sell the farm of the former situated in Garrard county and containing about 500 acres. The contract is in the nature of a letter addressed to plaintiff at his home in Wilmington N.C. It is on a printed form with blanks filled with pencil writing and interlineations and erasures made in the same way. In its completed form, omitting address and signature it reads:

"Being desirous of selling my land, same being below described, to wit, about 500 acres on Old Danville pike near Lancaster, Ky. I hereby place in your hands exclusively until 60 days with the understanding that you are to offer same for sale at auction, within before the 15th of September days from this date; you to do such advertising as you may deem necessary, in the way of prizes, newspapers, handbills, circular letters, posters, etc., to furnish advance man, auctioneer, and ground man to show prospective bidders the strong points of the lots or tracts, and endeavor to induce them to bid on same. You agree to do the necessary surveying, cleaning, staking, and diagraming, and to lend co-operation in making the sale a success. You are to furnish a man to superintend the developing of the property without any cost to me for said superintendence, and are to determine the size, number and character of the lots or tracts. Whenever a map or drawing is submitted showing the layout of the property I agree to place a minimum price on each lot or tract, the total minimum prices to aggregate $250 per acre. You are to sell the property subject to confirmation, and I agree to confirm the sales on the following basis: Any tract that brings the minimum price or above. On date of sale I agree to pay you one-third of all over minimum price any tract brings of the gross receipts arising from the sale out of which you pay all your expenses. I will make the following terms to purchasers: ______ cash, the balance in _____ years from date of sale, with interest on the deferred payments at the rate of ______ per cent. per annum, and will allow a ______. I agree to take at face value all notes and mortgages arising from the sale. Seeding privileges fall, 1919. Purchasers pay 1920 taxes. It is understood that I will have no by-bidders at this sale. This is the only agreement existing between the parties hereto relative to the sale of this land."

On the back of the contract defendant wrote and signed this stipulation:

"I agree that the minimum amount to be received by you in event of no sale shall be $250."

Among the written insertions in the printed form are the expressions "60 days" and "before the 15th of September." In the printed form of the contract it is stated that plaintiff might sell "privately or at auction," but the words "privately or" are stricken out with a pencil mark through them so as to make the contract provide for only a "sale at auction," and it must be "before the 15th of September." After the execution of the contract plaintiff fixed his auction sale for September 12, 1919, and pursuant to the right conferred upon him in the contract he divided the entire tract into seven separate parcels or lots and caused a plat to be made showing the various subdivisions, together with the number of acres in each, and after this was done, and before the sale, defendant placed a minimum price per acre on each of the seven lots or subdivisions of his farm so as to make an average minimum price of its entire acreage, the sum of $250 per acre as stipulated in the contract. The minimum price of lots Nos. 1, 2, 3, and 4 was $275 per acre, and on lots Nos. 5, 6, and 7 $210 per acre. Lot No. 3 contained the residence of defendant and upon the adjoining lot No. 2 was located a barn and other outbuildings on the farm. Lot No. 1 on the day of the sale was offered first, and it sold for $285 per acre, and then lot No. 3, upon which was located the dwelling, was offered, and it sold for $277.50 per acre. No bid for either of the other lots amounted to a sum equal to the minimum price fixed thereon by defendant; but he, in the exercise of what he claimed to be his right under the contract, accepted and confirmed the highest bids offered for the last five lots, notwithstanding they were under the minimum price, and the aggregate thereof plus the more than the minimum price offered on lots Nos. 1 and 3 equaled a total sum of $119,097.40 for the whole farm, which was an average of $238.12 instead of $250 per acre. After the sale a dispute arose between the parties over the amount due plaintiff as commission for his services under the contract; the defendant claiming that he was entitled to only the sum of $280.91 (being one-third of the excess above the minimum price of $275 which lots Nos. 1 and 3 sold for, and which one-third of such excess exceeded $250), while plaintiff insisted that he was entitled to 3 per cent. of the gross amount of the sales of all the lots ($119,097.40), which per centum amounted to $3,572.92, and he brought this suit against defendant to recover the latter sum.

In his petition he alleged that on the day of the sale and before it was commenced or before it was completed (it does not appear which) he and defendant entered into an oral agreement to the effect that, if defendant should confirm and accept the sale of any lot or lots for which the highest bid was less than the minimum price fixed thereon, then and in that event plaintiff was to receive 3 per cent. of the entire amount of the sales in lieu of "all over minimum price any tract brings" as stipulated in the written contract. A demurrer was sustained to the petition, and plaintiff filed two amendments, the substance of which was that, when the writing was executed, defendant stated that he did not intend to confirm or accept any sale below the minimum price which he might fix on any tract or lot, and that on the day of sale he notified plaintiff that he had changed his mind and he intended to exercise what he claimed to be his right under the contract to accept any bid which he saw proper, whether it equaled or exceeded the minimum fixed price or not, and that thereupon the oral contract sued on was entered into. A demurrer filed to the petition as thus amended was likewise sustained, and the court gave judgment for the sum of $280.91, the amount to which plaintiff was entitled under the written contract, and dismissed his petition in so far as it sought a recovery for any other sum, and to reverse that judgment plaintiff appeals.

There can be no doubt of the legal proposition that it is competent for parties to vary, alter, or modify a prior written contract by a subsequent oral agreement in all cases where the contract is not one required by law to be in writing. This is a fundamental doctrine with reference to contracts. John King Co. v. L. & N. R. R. Co., 131 Ky. 46, 114 S.W. 308; Shadwick v. Smith, 147 Ky. 159, 143 S.W 1027; and Murray v. Boyd, 165 Ky. 625, 177 S.W. 468. But it is equally true (a proposition sustained by all the authorities as well as by the reason and logic of the law) that the orally substituted contract, or the oral modification, must conform to the principles of the law relating to the execution of valid and enforceable contracts; i. e., such oral agreements must be supported by a valid consideration, otherwise no rights accrue thereunder. It...