Wolford v. Tankersley

• Decision Date: 22 May 1984
• Docket Number: No. 13764,13764
• Citation: 107 Idaho 1062,695 P.2d 1201
• Parties: J.T. WOLFORD, dba Wolford Realty and C.B. Empey and Ilene B. Empey, husband and wife, Plaintiffs-Respondents, Cross-Appellants, v. Lloyd T. TANKERSLEY and Dora Gennette Tankersley, husband and wife, Defendants- Appellants, Cross-Respondents.
• Court: Idaho Supreme Court

Page 1201

695 P.2d 1201

107 Idaho 1062

J.T. WOLFORD, dba Wolford Realty and C.B. Empey and Ilene B. Empey, husband and wife, Plaintiffs-Respondents, Cross-Appellants, v. Lloyd T. TANKERSLEY and Dora Gennette Tankersley, husband and wife, Defendants- Appellants, Cross-Respondents.

No. 13764.

Supreme Court of Idaho.

May 22, 1984.

On Rehearing Feb. 5, 1985.

Harold L. Ryan and Michael B. Sweet, Weiser, for defendants-appellants, cross-respondents

Dale Smith, Fruitland, for plaintiffs-respondents, cross-appellants.

DONALDSON, Chief Justice.

In 1974, the plaintiffs-respondents, Mr. and Mrs. Empey, decided to sell four and one-half acres of their land. They retained Mr. Wolford, as their real estate agent. The defendants-appellants, Mr. and Mrs. Tankersley, purchased the property but three years later a dispute arose over the purchase price.

The events leading up to the dispute began when the Empeys attempted to sell a portion of their property for $18,000. The Tankersleys saw the property and testified that the Empeys told them to contact the Empeys' real estate agent, Mr. Wolford. After talking with Mr. Wolford, the Tankersleys offered to pay $2,500 and assign their interest in a land sale contract. The land was located in Oregon. This land sale contract had a balance owing of approximately $15,000 but was subject to a lien. Mr. Wolford informed the Empeys of this offer, and the Empeys informed Mr. Wolford that they would accept $17,500 for the property. However, the Tankersleys later claimed that they did not offer to pay $17,500, because even though the land sale contract that was being assigned had a balance of $15,082.64, there was a lien on the contract totaling $7,443.85, leaving the Tankersleys with an equity of $7,638.79. They claimed they only intended to transfer this equity plus $2,500.

The agreement signed following the Tankersleys' offer to purchase the Empeys' land did not clarify the price. The parties signed carbon copies of the earnest money agreement, but neither party was present when the other party signed the agreement. This earnest money agreement contained two blanks for the purchase price. When the Tankersleys signed their copy, the blank left for the price at the bottom of the agreement was left blank. The only reference to price was in the first blank, where it was written that the buyers agreed to purchase the property for the sum of $2,500 plus their interest in a land sale contract.

After the buyers signed the agreement, they kept their copy and the real estate agent took the seller's copy, and filled in the second blank to read $17,500. Therefore, when the sellers signed the agreement, the first blank that had been filled in There was no land sale contract prepared, but besides the earnest money agreement, there was an assignment of contract that stated the interest in the contract that was being assigned to the Empeys was subject to a lien. This assignment of contract was prepared by an attorney at the request of Mr. Wolford. However, a deed signed by Mrs. Tankersley, which conveyed the Oregon property to the Empeys as security, stated the consideration to be $17,500. There was also a closing statement, which the Tankersleys denied receiving, that set out a purchase price of $17,500.

still read that the price was $2,500 plus the assignment of contract, and the blank at the bottom of the agreement was now filled in to read that the price was $17,500.

The Empeys first became aware that they were receiving approximately $7,300 less for the property than they had expected to receive when the contract was prepaid in full in April, 1978. The Empeys contacted Mr. Wolford and, after checking his papers he agreed in writing to pay the remainder of their loss. He eventually paid the Empeys $2,000.00 before he persuaded them to join him in filing suit against the Tankersleys.

The Tankersleys said they first became aware of the problem in November, 1978, when they were contacted by the Empeys' attorney. They claimed that the equity in the assigned contract plus $2,500 was all they ever intended to pay for the land, and that they were not aware the asking price was $18,000, or that the Empeys agreed to sell it to them for $17,500.

Mr. and Mrs. Empey and Mr. Wolford filed a suit against Mr. and Mrs. Tankersley. The trial court, sitting without a jury, found that the Tankersleys were unjustly enriched and ordered them to pay the Empeys the reasonable market value of the property on the date of the sale, plus interest. The property was valued at $17,413. The trial court also found that Wolford was not entitled to any relief. This appeal followed. The issues raised by the appellants, Mr. and Mrs. Tankersley, are: (1) whether a party can bring an action for unjust enrichment if an express contract exists between the parties; (2) whether the knowledge of an agent should be imputed to the principal; and (3) whether the Empeys elected their exclusive remedy when they took a promissory note signed by Mr. Wolford.

Concerning the first issue, the Tankersleys argue that if an express contract exists, a party cannot bring an action for unjust enrichment. Following this, they claim that a contract existed between the parties, and therefore, the trial court should not have found for the respondents on the claim of unjust enrichment.

This argument, that an express agreement precludes the application of the equitable remedy of unjust enrichment, is incorrect because this Court has held that even though an agreement exists, unjust enrichment may be imposed. Hixon v. Allphin, 76 Idaho 327, 281 P.2d 1042 (1955). The existence of an express agreement does not in and of itself signify that an action for unjust enrichment cannot be brought. Rather, only when the express agreement is found to be enforceable is a court precluded from applying the equitable doctrine of unjust enrichment in contravention of the express contract. Chandler v. Washington Toll Bridge Authority, 17 Wash.2d 591, 137 P.2d 97 (1943); see Hixon, supra.

Concerning the enforceability of the agreement, no land sale contract was entered into evidence, but the record indicates that the parties intended the earnest money agreement to act as their final statement of the terms, and there was nothing in this agreement to show that the parties contemplated a land sale contract would be entered into. See Luke v. Conrad, 96 Idaho 221, 526 P.2d 181 (1974). However, even though the earnest money agreement was intended to operate as the contract between the parties, to constitute a contract under Idaho law there must be a distinct understanding common to both parties. Hoffman v. SV Company, Inc., 102 Idaho 187, 628 P.2d 218 (1981); Mitchell v. Siqueiros The trial court in his decision and order for partial summary judgment on behalf of the defendants found no mutual assent as to any purchase price between the Empeys and the Tankersleys. We agree. ¹ The earnest money agreement signed by the buyers and sellers contained carbon copies. The buyers signed the agreement first, and at that time the $17,500 price was not set out in the agreement. The only reference to price was the statement that the buyers would assign their interest in a land contract. When the sellers signed the agreement, the buyers' signature was at the bottom and the real estate agent had written in the price of $17,500.

99 Idaho 396, 582 P.2d 1074 (1978); Turner v. Mendenhall, 95 Idaho 426, 510 P.2d 490 (1973).

One problem with the agreement then is that two copies of the earnest money agreement existed with only one of the copies containing the figure $17,500. That alone may not be critical to the enforceability of the agreement, but in addition, the land sale contract, which was to be assigned to the Empeys as part payment of their land, as referred to in the earnest money agreement, did not specify a value nor state that the contract being assigned was subject to a lien. Because of this, the trial court was correct in finding that no enforceable contract existed and in applying the equitable doctrine of unjust enrichment.

Unjust enrichment is a modern designation for the older doctrine of quasi-contract. Smith v. Smith, 95 Idaho 477, 511 P.2d 294 (1973). "The essence of the quasi-contractual theory of unjust enrichment is that the defendant has received a benefit which would be inequitable to retain at least without compensating the plaintiff to the extent that retention is unjust." Hertz v. Fiscus, 98 Idaho 456, 457, 567 P.2d 1, 2 (1977). This Court has also stated that, "[t]he substance of an action for unjust enrichment lies in a promise, implied by law, that a party will render to the person entitled thereto that which in equity and good conscience belongs to the latter." Smith, supra, 95 Idaho at 484, 511 P.2d at 301.

The parties stipulated that the Empeys expected to receive $17,500 for the property, and Mr. Empey testified that he became aware of the lien but "didn't think it had anything to do with the fifteen thousand eighty-two." In concluding that the Tankersleys were unjustly enriched, the trial court stated that "[t]he Tankersleys passively accepted the real property, knowing that under the sales documents they would not have to pay $7,361.21 of the purchase price which the sellers expected to receive and which they, at the time they made their offer, expected to pay."

This Court has often stated that the trial court's findings of fact will not set aside unless they are found to be clearly erroneous. I.R.C.P. 52(a); Credit Bureau, Incorporated of Georgia v. Harrison, 101 Idaho 554, 617 P.2d 858 (1980). This Court has also stated:

"The rules of civil procedure clearly indicate that regard is to be given to the special opportunity of the trial court to judge the credibility of witnesses who appear personally before it. I.R.C.P. 52(a). Where there exists sufficient evidence in the record to support the lower court's findings on credibility, this Court...