Wilcox v. Wyandotte World-Wide, Inc.

• Decision Date: 22 January 1972
• Docket Number: No. 46190,INC,WORLD-WID,46190
• Citation: 493 P.2d 251,208 Kan. 563
• Parties: Frank WILCOX, Appellant, v. WYANDOTTE, a Kansas Corporation, Appellee.
• Court: Kansas Supreme Court

Page 251

493 P.2d 251

208 Kan. 563

Frank WILCOX, Appellant, v. WYANDOTTE WORLD-WIDE, INC., a Kansas Corporation, Appellee.

No. 46190.

Supreme Court of Kansas.

Jan. 22, 1972.

Syllabus by the Court

1. An option agreement to sell and convey land becomes absolute and binding when the option is accepted by the vendee within the time and on the terms specified. Such an agreement will be specifically enforced if it is fairly made and for a sufficient consideration.

2. A court of equity may and, where equity requires it, will grant partial specific performance of a contract for the sale of real estate by enforcing the contract as to only a part of the land contracted for, and apportion the contract price. This may be done notwithstanding no apportionment is provided for in the contract.

3. Specific performance of an option contract for the sale of land is not ipso facto prevented where a portion of the land is taken by condemnation before the option is exercised provided the option is subsequently exercised within the time specified for its exercise.

4. Whether equity will decree the specific performance of a contract rests in sound judicial discretion and always depends on the facts and circumstances of the particular case.

5. Ordinarily there is no equity in releasing a party from a fair and reasonable contract into which he freely entered unless the facts and circumstances of the case require it.

6. The record in an action for specific performance of an option contract for the sale of real estate is examined, and as fully set forth in the opinion, it is held: The trial court erred in granting summary judgment in favor of the appellee and on the undisputed evidence erred in failing to enter a decree of specific performance as to the land remaining after condemnation with an abatement of the purchase price in the amount of the condemnation award previously paid to the appellee.

Wayne H. Phillips, of Phillips & Kiely, Kansas City, argued the cause, and M. Patricia Kiely, Kansas City, was with him on the brief for appellant.

Clarence H. Wood, of Rice & Baska, Kansas City, argued the cause, and James L. Baska, Kansas City, was with him on the brief for appellee.

PRAGER, Justice:

This is an action for specific performance which arose out of a transaction between the appellant, Wilcox and the appellee, Wyandotte World-Wide, Inc., involving the purchase of two tracts of land. The two tracts of land for purposes of convenience have been designated as Parcel B and Parcel C and are located in Wyandotte County, Kansas. To describe the parcels briefly it can be stated that Parcel B was a hill and Parcel C was a low lying area filled with a number of draws and a creek bed. It appears from the record that Parcel C was also covered with timber. Wilcox was a grading contractor and Wyandotte World-Wide was engaged in the business of developing real estate for building construction. It is clear from the depositions of Wilcox and of Jack W. Bertoglio, president of the appellee, that the agreement between the parties contemplated an immediate sale of Parcel B and a two-year option to purchase Parcel C. From the discussion between the parties it is obvious that Wilcox intended to remove the dirt and rock from Parcel B and deposit it on Parcel C thus hoping to create two level pieces of property which might be available for building purposes. Pursuant to their discussion Wyandotte World-Wide sold Parcel B to Wilcox and a deed was given for the land. At about the same time Wyandotte World-Wide gave to Wilcox an exclusive option to purchase Parcel C for a period of two years. At the time the transaction was consummated Wilcox advised Bertoglio that Wildox intended to commence work on Parcel B to remove the dirt and that he also intended to prepare Parcel C to make it a buildable piece of land. At the time the option was given to Wildox, Parcel C consisted of a total of 36.27 acres. The agreed purchase price on exercise of the option was to be $70,000.00. The option contract involving Parcel C was executed on August 18, 1967. Shortly thereafter Wilcox began work removing dirt from Parcel B and moving it to Parcel C. In addition to this Wilcox began site grading and preparation on Parcel C by clearing the timber, making necessary fills to make the land level and changing the creek channel. This work was performed by Wilcox during the two years subsequent to the execution of the option. The problem in this case arose in July 1968. On July 31, 1968, condemnation proceedings were commenced by the Board of Trustees of the Kansas City, Kansas, Junior College by which the Board of Trustees condemned 6.85 acres of Parcel C. This left a remainder of 29.42 acres in Parcel C. Wilcox was named along with Wyandotte World-Wide as a defendant in the condemnation proceeding. The condemnation award was in the amount of $25,690.00 less special assessments and prorated taxes which was accepted. In November 1968, a check was issued in the amount of $23,634.97 payable to Wyandotte World-Wide, to the Fidelity State Bank, which held a mortgage on Parcel C, and also to Frank Wilcox. This check was signed by Bertoglio as president of Wyandotte World-Wide and delivered to Al Pearson, Wyandotte World-Wide's banker at the Fidelity State Bank. Frank Wilcox went to the bank and endorsed his name on the check and the check was deposited to the account of Wyandotte World-Wide. Wilcox testified that at the time he endorsed the check he was assured by Al Pearson that the amount of the check would be applied toward the purchase price under the option contract for the sale of Parcel C. In his deposition Bertoglio denied any knowledge of the conversation between Al Pearson and Wilcox, and stated he had given no specific instructions or authority to Al Pearson to bind Wyandotte World-Wide in the application of the proceeds of the check. Bertoglio did testify in his deposition that Al Pearson had authority to endorse Wyandotte World-Wide's signature on the check and that Al Pearson has authority to act for Wyandotte World-Wide in connection with the transfer of real property on specific directions from him. The deposition of Al Pearson as to the extent of his authority was not taken and it, of course, is not included in the record.

It should be noted that at the time the condemnation award was paid Wilcox had not exercised his option to purchase Parcel C. The two-year period during which the option could be exercised did not expire until August 18, 1969. Wildox exercised his option by notifying Bertoglio, as registered agent of Wyandotte World-Wide, by a letter dated August 13, 1969, which was received by Wyandotte World-Wide on August 14, 1969. In the letter Wilcox states specifically that he exercises the option for the sum of $70,000.00 cash which he has placed in escrow with the Title Company less the amount Wyandotte World-Wide had received from the condemnation award. Stated in other words it is undisputed in the record that Wilcox paid to the escrow agency the sum of $43,575.04 by a cashier's check drawn on the Fidelity State Bank representing the total purchase price of $70,000.00 less the condemnation award and prorated taxes for the year 1969. Wyandotte World-Wide declined to accept the exercise of the option in the manner suggested by Wilcox. Wyandotte World-Wide submitted a counter offer to Wilcox to convey the remainder of the tract of 29.42 acres to Wilcox for a total of $55,191.43. This figure was arrived at by attempting to compute a proportionate amount of the original purchase price based upon the acreage remaining after the condemnation compared with the original amount of acreage. At the time the deposition of Bertogilo was taken it was stipulated by the parties that the amount submitted by Wyandotte World-Wide in its counter offer was in error and that it should have been more than that if it had been properly computed or calculated. The parties could not agree and were at loggerheads.

On October 3, 1969, Wilcox filed this action against Wyandotte World-Wide seeking partial specific performance of the option contract as to the land remaining with an abatement of the purchase price in the amount of the condemnation award less the prorated taxes for the year 1969. Plaintiff alleges in his petition that he had performed work to improve Parcel C during the option period in view of his contemplated ownership and that this work was performed with Wyandotte World-Wide's knowledge and consent. In his petition Wilcox alleged that the taking of the 6.85 acres in the condemnation proceedings filed by the Board of Trustees of the Junior College made it impossible for the option contract to be performed in its entirety and that Wilcox having elected to exercise his option was entitled to the condemnation award as a credit or set-off on the option contract price of $70,000.00. In the prayer of his petition Wilcox prayed for specific performance of the option contract with a credit or set-off of the condemnation award or in lieu thereof, damages for the work and labor performed by Wilcox on the total acreage or for the unjust enrichment to Wyandotte World-Wide resulting therefrom.

Wyandotte World-Wide then filed its answer admitting the execution of the real estate option contract and admitting receipt of Wilcox' letter of August 13, 1969, exercising the option. Wyandotte World-Wide admitted in its answer that it had delivered to the escrow agent, Guaranty Title and Abstract Company, a warranty deed and further admitted that subsequent to that time Wilcox had delivered to the escrow agent a cashier check in the amount of $43,575.04. Wyandotte World-Wide admitted in its answer that it had declined to accept Wilcox' offer to pay $43,575.04 for the remainder of the land. Wyandotte World-Wide further alleged in its answer that if Wilcox performed any work or labor on the land he did so without notice to or authority from Wyandotte World-Wide. It is...