Dieter v. Fallon

This is an action to compel the specific performance of a written agreement to exchange land. It was tried before a referee and the referee decided that the written contract was incomplete, inoperative and void; and ordered judgment for the defendant, with costs. The plaintiff appeals.

Sometimes they have refused this relief because they thought better justice could be done by a recovery of damages. Wilson v. Northampton & Banbury Junction Railway Company, L. R., 9 Ch. App., 279.

If the learned referee in this case had thought that the plaintiff ought not to have the relief of a specific performance for any of these reasons, but that he might bring an action at law to recover damages, then the plaintiff would not be quite remediless. But as the referee has decided that the contract is void this decision probably bars any other action upon the contract. And it, therefore, becomes very important to consider the facts carefully.

As early as July, 1888, the defendant had employed Messrs. Ward & Boswell of New York to procure a purchaser for property of the defendant at Au Sable Chasm.

They negotiated for that purpose with the plaintiff, beginning about August of that year.

The plaintiff had three pieces of property, viz., 2,074 Fifth avenue, New York, 705 Gates avenue, Brooklyn, and 26 Patchin avenue, Brooklyn. The defendant went and examined the pieces of property.

After negotiations had been pending for some time the defendant went to his brokers above named, and Ward, one of them, said to him: “ If you will make a proposition in writing just what you will do with him (the plaintiff) I will submit it to him, and if he accepts, all right.”

Therefore the defendant wrote the following and left it with them to be submitted to plaintiff for his acceptance.

New York, January 28, 1889.

Dear Sirs—I will exchange the “Lake View Hotel property,” meaning thereby in good faith, all without further detail of real and personal property now in use or existing, and so called heretofore when negotiating. For the Fifth avenue, Gates avenue and Patchen avenue properties, as heretofore spoken of, all proper ties to be mortgaged as spoken of, i. e., 25,000, 10,000, 12,000 respectively, for the N. Y. properties, and said hotel property to be given with $10,000, in all only upon it including what is now thereon or given to make up $30,000, by Mr. Dieter.

Yours, etc.,

Francis C. Fallon.

(I hereby accept. A. W. Dieter.)

P. S.—Of course it is included in above, that as to Chasm, all is as already supposed assented to, lease five years at $3,000 and ■500 additional yearly, etc.

Francis 0. Fallon.

Of such acceptance defendant was duly notified. This is the contract between the parties.

On the same day defendant wrote plaintiff a letter of the. same date, informing him that defendant had left with the brokers a statement of what he would do as to exchange. In this he said: “ I did not attempt to go into formal detail or form at all. As I meant it merely to be what in effect I already stated to you.” He proceeded to explain why he could • make no better terms. Defendant afterwards examined plaintiff’s title to the property above mentioned.

On the 2d of February, 1889, plaintiff wrote defendant that he understood that the time for delivering deed was March 1st, and that, if he did not hear from defendant to the contrary, he would be at defendant’s brokers that day at twelve o’clock, noon, ready to exchange deeds. Defendant had previously notified plaintiff that he would prepare the lease.

Plaintiff was at the brokers that day and hour ready to.perform. Defendant was not present. Subsequently plaintiff met defendant at the office of defendant’s attorney, and had his deeds ready to deliver, and tendered them to defendant.

The defendant had a deed of the Lake Yiew Hotel, and a bill of sale of the property, and a proposed lease of the Chasm property for five years. The lease required the plaintiff to spend $1,200 a year in advertising, and the defendant insisted that the plaintiff should buy certain views, etc., at a cost of $700. The plaintiff refused to accept such terms, and the defendant refused, and has ever since refused, to execute a deed of the hotel property, or a lease of the Chasm.

It is plain that a contract was made between the parties. The proposal of defendant was written after long negotiations, and at the request of his brokers, to show .just what he would do. It was intended for the plaintiff; was given to him by defendant’s agents, and the terms were accepted by him. There was no question as to what property was intended by each party.

On October previous the plaintiff had gone with defendant, and had examined the Lake Yiew Hotel and Chasm property; and the-defendant had examined plaintiff’s property on Fifth avenue, Gates avenue and Patchin avenue.

Bach knew the exact property as to which they were negotiating. And the referee finds that in the negotiations between them these several pieces of property were mentioned and referred to by the words used by defendant in his proposal of January 28th.

The defendant used the words by which the parties had in their conversations described the pieces of property; and that was sufficient. Coleman v. Manhattan Beach Improvement Company, 94 N. Y., 229 .

But the learned referee held that in other respects the contract was so indefinite as to be inoperative. Now we must notice that the contract was drawn up by defendant;. Unless we suppose that

It is said in the contract that all the properties to be mortgaged “as spoken of:" If the writing had stopped there it might be uncertain. But it proceeds “i. e., 25,000, 10,000 and 12,000 respectively for the New York properties.” The defendant urges that it does not appear what 25,000 means ; whether pounds, dollars or cents. It does not seem necessary to discuss that point.

Oar currency is not in pounds or piasters. It is in dollars. The omission of the dollar mark (which appears in the subsequent part of the paper) cannot make the meaning doubtful.

The three lots belonging to plaintiff had just been mentioned, and defendant was to take them respectively burdened with mortgages to these amounts. The hotel property was to have an incumbrance of $10,000 on it. The expression “to make up $30,-000 by Mr. Dieter,” is only an explanation of the reason why the total property is’ to be taken with this incumbrance.

The objection that the contract does not express the terms of the mortgages in detail is not fatal to its validity. There were already mortgages on all these pieces of property, the amount of which is not quite certain from the case.

That part fixed the terms as to existing mortgages. And as the defendant, in drawing the paper, did not specify any details, he could not complain if any ordinary terms were inserted in the mortgages. In fact, when the plaintiff had executed his deeds and presented them to defendant and his counsel soon after the 1st of March, no objection to them was made.

It is further objected that a part of the contract (contained in the subjoined memorandum) referring to the Chasm property is indefinite. The defendant says it is not plain which of the parties is to be lessor. As defendant was owner he must be lessor.

The Chasm, as was well understood by the parties, -was an important matter in giving value to the hotel. The defendant had published a very elaborate account of the beauties and value of the new hotel and of its having a mónopoly of the Chasm business. He explained his reason for endeavoring to sell the hotel to “be that the sole owner is an elderly lady." The plaintiff, however, acquired title in May, 1888, before these negotiations. Then in this postscript to the proposal, he added: “ Of course it is included in the above that as to Chasm, all is as already supposed assented to, lease five years at $3,000, and 500 additional yearly, etc.

Now the reference to the fact that they had assented to the terms which he proceeds to set forth is harmless. The important part is that the Chasm is to be leased, the length of time and the rent.

The term was to commence when the lease and the other papers were to be delivered. As no time was specified, such delivery would be on reasonable demand. The rent was specified; $3,000 yearly, with an advance of $500 each year. The term was five

In the present case the principal part of the contract was the agreement to exchange property. As no time was mentioned when the exchange was to take place, it was for either party to-tender performance on reasonable notice, and thereupon to require performance from the other party. Altman v. Tillson, 10 N. Y. State Rep., 235; Tipton v. Feitner, 20 N. Y., at 425. Then the language as to the Chasm is: “ Of course it is included in the above that, etc.’’ ‘ That is to say, as a part of the contract for sale, it is agreed that the Chasm should be leased. Hence, the lease of the Chasm is, by necessary construction, to begin with the sale of the hotel property.

The whole arrangement was one transaction, which is apparent from all the negotiations, as well as from the defendant’s advertisement of his hotel above mentioned.

The inducement to purchase was the right for five years to the-possession of the Chasm. And it would be unreasonable to say that there was any doubt as to the time when the lease should begin. It is objected by defendant that the deeds tendered by plaintiff were subject not only to the mortgages but to the interest thereon. If that was wrong, objection should have been made.' The defendant refused to complete the contract and claimed that no contract had been made. It further appears that in January, 1889, the plaintiff applied to defendant’s attorney for consent that he might lease the Fifth avenue property; and that consent was refused; that consequently it was not rented and still remains (at the time of the trial) unrented.

The defendant gave no evidence in the case. We are, therefore, unable to say whether on a second trial it would appear that there should be a judgment for specific performance or whether the plaintiff should be allowed only to recover damages.

That is a question which we do not decide.

The defendant in his verified answer states that on the 2d day of February, 1889, he leased the Chasm for nearly three years to William H. Macey, who is called manager, for the Au Sable Chasm Company. This was before the time when the plaintiff' met him in the office of his attorneys in New York, and when defendant offered him a lease of the Chasm with the condition that, he should spend. $1,200 a year in advertising.

Whether this allegation of the answer is true did not appear on the trial. Whether if true it would prevent a specific performance, or whether specific performance should be granted of a part of the contract, with compensation for that which defendant cannot perform, are questions not before us.

We are of the opinion that the contract was not incomplete, inoperative and void.

Judgment reversed, new trial granted, referee discharged, costs, .to abide the event,

Lardón, J., concurs.

(dissenting).—The plaintiff prosecutes this action to compel the specific performance by the defendant of the alleged contract between the plaintiff and defendant for the exchange of a farm and hotel property called the “ Lake View Hotel ” including the personal property used in carrying on the hotel with conveyances and transfer of the same and also a leasing for five years of premises known as the “Au Sable Chasm property,” all in Essex county, by the defendant for two lots in the city of Brooklyn,, one known as No. 715 Gates avenue and one as No. 26 Patchin avenue, also one lot in the city of New York known as No. 2,074 Fifth avenue by the plaintiff.

The evidence relied upon to prove the contract sought to be enforced is these words:

New York, January 28, 1889.

Dear Sirs.—I will exchange the “Lake View Hotel property,” meaning thereby in good faith, all without further detail of real and personal property now in use or existing, and so called heretofore when negotiating. For the Fifth avenue, Gates avenue and Patchin avenue properties, as heretofore spoken of, all properties to be mortgaged as spoken of, i. e. 25,000, 10,000 and 12,-000 respectively for the N. Y. properties, and said hotel property to be given with $10,000, in all only upon it including what is now thereon or given to make up $30,000, by Mr. Dieter.

Yours, Francis C. Fallon.

“I hereby accept A. W. Dieter.”

P. S. Of course it is included in the above, that as to Chasm, all is as already supposed assented to; lease five years at $3,000 and. 500 additional yearly, etc. Yours,

Francis C. Fallon.

“ I hereby accept. A. W. Dieter.”

This proposition was written by the defendant and signed by him at the office of and left with one Ward, who was acting as> broker, who communicated to plaintiff the fact that such proposition was at his office, and the plaintiff thereafter signed the acceptance.

On the trial the referee admitted certain paroi evidence tending to prove the identity of the property referred to in the above correspondence, and finds that aided by such evidence the ambiguity appearing in the writing as to identity of the land is explained, and that the land and premises described in the complaint are the same to which reference is made in the correspondence or written proposition and acceptance, and that the written proposition and written acceptance thereof constitutes the only written agreement between the parties in reference to this land.

The referee also finds that such written contract is per se indefinite, vague and incomplete as to essential particulars; that the meaning and intent of the parties cannot be spelled out or inferred from its terms with reasonable certainty.

That the references therein are to oral conferences and conversations, not' disclosed in the writing, but essential to full understanding of the agreement between the parties, and no reference

And the referee finds that no written contract, such as is alleged in the complaint for the exchange and leasing of property, is proved.

That the written contract proved is incomplete, inoperative and void and no action for a specific performance of the same can'be maintained, and consequently dismissed the plaintiff’s complaint. Upon these writings alone it is quite apparent that no decree for a specific performance could be predicated.

The writings leave too much for conjecture. The ellipsis would have to be supplied either by paroi extrinsic evidence or filled up by judicial speculation, neither of which could be indulged in with safety to, the parties.

The appellant insists that the omissions in the writing may be or are supplied by the correspondence, the maps and the oral proofs offered on the trial. If the intention of the parties had been fully expressed; in other words, if the writings had not omitted to specify the terms of the agreement arid that omission was not apparent upon the face of the papers themselves, the offer in writing and its acceptance in writing would be a good execution of a contract relating to real estate within the statute of frauds.

If it was not apparent on the face of the writings that there were rights of the parties connected with the transaction and essential to the carrying out of the intention of the parties not expressed in the paper, the expression of consideration, the signing of the offer by one party and the signing of the acceptance by the other, would be a good execution of the agreement.

But the difficulty does not- arise out of a failure to comply with the provisions of the statute of frauds, but rather out. of the fact that the court is required to decree a specific performance of an agreement where it is impossible, from an inspection of the agreement, to determine in what a performance consists:

It is a general and elementary rule that the court will not decree a specific performance of a contract unless its provisions are free from reasonable doubt. Parsons, in his treatise on contracts, lays down the general rule.

“ The contract, of which performance is sought, must be clearly proved, and its terms should be so specific and distinct as to leave no reasonable doubt of the meaning.” Parsons on Contracts, 7th ed., page 354, § 354.

In Pray v. Clark, 113 Mass., 283 , it was held that the agreement in a lease to renew it at its expiration, the rent tobe proportionate to the value of the premises at that time, but with no provisions for determining that valuation, is too vague to be enforced in equity.

The uncertainty in this case does not arise out of doubt as to the identity of the land, for if it did, the parties could clear up any ambiguity upon that subject by paroi testimony. Waring v. Ayres, 40 N. Y., 357 , and cases there cited.

But the doubt in this case grows out of the uncertainty arising out of the incumbrances which are referred to in the contract, as

It will be observed that this writing speaks of these amounts respectively for the New York properties, but the writing does not describe them as in New York but if it may be ascertained by-paroi, which of the lots is to be incumbered by 25,000, and which by 10,000 and 12,000, and yet a decree foi specific performance would require the court to go- outside of the contract to answer that important question.

Again, on what property is the $10,000 designated as hotel property ?

The writing proposes to exchange “ all the real and personal property now existing and so called heretofore when negotiating.” Can the court by a decree give effect to that provision and determine how much of that $10,000 shall be charged against the personal, and how much against the realty ?

But the plaintiff insists that the parties knew when they made and accepted this offer what their previous negotiations were, and in the light of that knowledge there was no uncertainty to them, and that taking the paroi testimony, the letters, maps and exhibits, the meaning and intent of the parties may be ascertained and the apparent uncertainty of the contract removed.

But this action was brought, as appears by the complaint, to enforce a specific performance of a written contract

It cannot be aided by reading with it maps, or other contemporaneous writings, as no reference is made to them in the instrument and they therefore constitute no part of the contract. In Wright v. Weeks, 25 N. Y., 160 , the court says: “If the agreement be vague and indefinite, so that the full intention of the parties cannot be collected from it, it cannot be said that the contract is in writing and it is therefore void.

. “ If the parties have used abbreviations or technical terms, or terms of trade, evidence may be given by paroi to show what meaning such terms and abbreviations acquired by usage and custom ; but not in what sense the parties used them (citing authority

n agreement need not be perfect in itself. It may be made certain and definite and thus valid under the statute by reference to another writing as well as by incorporating the entire contract in one paper.

“But reference must be made to another paper, and so distinct as to make that paper a part of the contract itself.

“ The parties cannot unite two papers so as to make them unitedly constitute a valid contract, unless they are physically joined or the intention to unite them appears on the face of the papers.”

Nor can the parties import into this writing contemporaneous or previous paroi negotiations or agreements, for the purpose of making the writing complete as a contract, except, as we have seen, to explain patent ambiguities apparent on the face of the paper. To do so would be to avoid the statute of frauds not only, but another equally well settled principle of law, that all such previous

There are other questions raised on this appeal, but we see no error committed by the referee that can affect this judgment. Without determining whether the plaintiff may or may not have relief in' some other form of action, we think this contract too vague, uncertain and indefinite to be capable of having a specific performance decreed in equity.

The judgment is affirmed, with costs.

Judgment reversed, new trial granted, referee discharged, costs to abide event.