Adams v. Hazen

96 S.E. 741, 123 Va. 304, 1918 Va. LEXIS 31

• Court: Supreme Court of Virginia
• Decided: September 19, 1918
• Status: Published

Opinion

Sims, J.,

after making the foregoing statement, delivered the following opinion of the court.

The authorities have long since settled what character of executory contract a court of equity will enforce by requiring specific performance of it. Where the contract is in writing it must contain “all the essential elements of a valid executory contract—that is to say, competent parties, a legal subject matter, a valuable consideration and mutual assent. Minor’s Inst. Pt. I (1st ed.), p. 16”; Hairston v. Hill, 118 Va. 339, 342, 87 S. E. 573, 575. “The whole question is one of intention. If the parties are fully agreed, there is a binding contract, notwithstanding the fact that a formal contract is to be prepared and signed; * * *," Boisseau v. Fuller, 96 Va. 45, 46, 30 S. E. 457. It is also true, as urged in behalf of the appellee, that “the parties must be fully agreed and must intend the agreement to be binding.” (And) “if, though fully agreed on the terms of their contract, they do not intend .to be bound until a formal contract is prepared, there is.no contract, and the circumstance that the parties do intend a formal contract to be drawn up is strong evidence to show that they did not intend the previous negotiations to amount to an agreement. Clark on Contracts, p. 38.” Boisseau v. Fuller, supra, 96 Va. pp. 46-7, 30 S. E. 457. The writing is not a contract if it is ‘‘a mere memorandum of incomplete negotiations in which the minds of the parties never met and from which either party could recede at will.” Hairston v. Hill, supra, 118 Va. p. 342, 87 S. E. 575. See also, to same effect, Pom. Spec. Perf. pp. 81-89; Berry v. Wortham, 96 Va. 87-89, 30 S. E. 443; cases cited 12 Michie’s Dig. Va. & W. Va. Cas. 514; Tyron Spec. Perf. of Contracts, New Am. Ed. 230-342; Graham v. Call, 5 Munf. (19 Va.) 396; Milnes v. Gray, 14 Ves. (Jr.) 400; Baker v. Glass, 6 Munf. (20 Va.) 212; Huddleston v. Briscoe, 11 Ves. (Jr.) 592; Hinchman v. Ballard, 7 W. Va. 152; Clinchfield Coal Corp. v. Powers, 107 Va. 393, 59 S. E. 370; Creecy v. Grief, 108 Va. 320, 322-3, 61 S. E. 769. As said by Jessel, N. R., in Winn v. Bull, 7 Ch. Div. 27-32 (quoted with approval in Boisseau v. Fuller, supra, 96 Va. at page 47, 30 S. E. 457: “It comes therefore, to this, that where you have a proposal or agreement made in writing expressed to be subject to a formal contract being prepared, it means what it says; it- is subject to and dependent upon a formal contract being prepared. Where it is not expressly stated to be subject to a formal contract, it becomes a question of construction whether the parties intended the terms agreed on should merely be put into form, or whether they should be subject to a new agreement the terms of which are not expressed in detail.” See to same effect Harrison v. Parmer, 76 Ala. 157, also cited and quoted from with approval in Boisseau v. Fuller, supra, 96 Va. at pages 47-8, 30 S. E. 458. And, “every application for the specific performance of a contract is addressed to the sound discretion of the court, regulated by established principles. The contract must be distinctly proven, and its terms clearly ascertained. It must be reasonable, certain, legal, mutual, based upon a valuable consideration, and the party seeking performance must not have been backward in enforcing his rights, but ready, desirous, prompt and eager.” Darling v. Cumming’s Ex’r, 92 Va. 525, 23 S. E. 881.

In the light of the general principles established by the authorities, some of which are above referred to, we come now to consider and dispose of the questions arising from the positions taken by the appellee in the cause before us, in their order as stated below. '

1. The 1st, 2nd, 5th and 7th grounds of demurrer, all raise one and the same questions, namely:

What is the true construction and effect of .the following clause in the written instrument of March 14, 1917, sought to be enforced as a binding contract, to-wit:

“Terms of sale half cash when transfer papers are properly gotten up, and remainder to be settled by note payable six months from date”?

Construing this clause, along with the whole instrument, we are of opinion that its language is not ambiguous and plainly refers only to such formal papers as were necessary to carry into effect the contract of March 14, 1917. The case before us is not, in truth, one where a further executory contract between the parties was contemplated by them. The only further “papers” which were to be executed by them, as expressly stated in the contract of March 14, 1917, were “transfer papers * * * properly gotten up” and a “note (of appellant) payable six months from date” for the deferred payment of one-half of the purchase money for the timber. That is to say, the further papers to be executed by the parties were not to be of an executory character, in so far as the contract in question was concerned,, but were to consummate and carry into effect that contract—to execute that contract, to the extent of making ■a “transfer” or conveyance to the appellant in accordance with his rights under such contract. It was the same thing in effect as if the contract of March 14, 1917, had provided that the appellee should make to the appellant a good and sufficient deed of conveyance of the timber purchased as set forth in such contract, properly executed to carry such contract into. effect and that appellant, upon the date of delivery to him of such conveyance, should pay to appellee one-half of the purchase money for the timber provided for in the said contract in cash and that appellant should, at the same time, execute and deliver his note to appellee for the remainder of such purchase money payable six months from the date of March 14, 1917, contract.

2. The third ground of demurrer takes the position that the refusal of the appellee and his co-owners to execute the contract of March 14, 1917, unless the words “all merchantable timber” be given a meaning of “all timber measuring fourteen inches in diameter and upward, two feet from the ground, that could be sawed into sound, merchantable lumber,” evidenced that there was not a meeting of the minds of the parties to the contract of March 14, 1917, in its use of the words “merchantable timber.”

We are of opinion .that this position is not well taken. The contract is in itself conclusive that there was a meeting of the minds of all the parties thereto in its use of the words “all merchantable timber” as descriptive of the timber sold and purchased. What may be the proper construction of that language is a wholly different matter. If it has a certain and definite meaning, which may be ascertained by established methods of construction of the provisions of contracts (as we shall presently see it has), that is sufficient, in so far as the validity of the contract in that particular is concerned. As said by this court in Hairston v. Hill, supra, 118 Va. 339, 87 S. E. 573: “These questions of construction arise in a majority of cases that come before the courts for the interpretation and enforcements of contracts, but are never considered as grounds for cancel-ling the instrument.”

So far as appears from the bill none of the co-owners with appellee have questioned the general authority or power of the latter to enter into the contract of March 14, 1917. Their minds met the mind of appellant to the extent of entering into such contract. They differed with the mind of appellant only upon the construction of the terms used in the contract.

3. The fourth ground of demurrer takes the position that the term “merchantable” used in the contract of March 14, 1917, is not one that the law can define.

We are of opinion that this position is not well taken.

In Ragland v. Butler, 59 Va. (18 Gratt.) 323, this court held that the language of a contract, “merchantable * * * timber” bought for the purpose of manufacture into lumber, had a definite meaning which the law can define. It was there held that “merchantable timber” as those words were used in that contract, was such timber as could be manufactured into lumber marketable at the place of delivery of the lumber specified in the contract.

In Stuart v. Pennis, 91 Va. 688, 22 S. E. 509, the contract was for “merchantable timber at $3.00 per tree” of certain size. Upon consideration of the demurrer to the bill for specific performance of the contract this court said: “There was and could be no objection urged against the relief sought growing out of any indefiniteness as to the terms of the contract or as to its subject matter.” •

In McCorkle & Son v. Kincaid, 121 Va. 546, 93 S. E. 642: “Where timber was bought for manufacture into lumber, this court held that “sound merchantable logs, as those words are used in the contract under consideration, are logs that have a commercial value for manufacture into lumber, and such as are ordinarily used for that purpose in that locality.”

We are of opinion, that in the instant case, in which the contract does not limit the purpose for which the timber was bought, beyond the stipulation that it must be “merchantable,” “all merchantable timber,” as those words are used in the contract under consideration, is all timber— whatever its size—that had, at the date of the contract, or may have during the life of the contract, a commercial value in that locality, for the purpose of manufacture into lumber, or for any other purpose. Hence the term “merchantable” used in such contract is one that the law can define, and the contract in that behalf has “a legal subject matter.” (As stated in the contract, the oak, on one portion of the land mentioned and described in the contract, is excepted from the timber sold and purchased as per such contract.)

4. The sixth and only remaining ground of demurrer stated in the court below or urged before us is that .the contract of March 14, 1917, was incomplete and non-enforee,able because (a) it does not fix any time for the removal of the timber or (b) settle the question of interest on the. deferred purchase money.

Taking up these positions in their order", as stated:

(a) It is well settled that where no time for the removal of timber is specified in timber contracts, the contracts will be construed as providing, by implication, for “a .reasonable time” for such removal. Wright v. Camp Mfg. Co., 110 Va. 678, 66 S. E. 843; Carpenter v. Camp. Mfg. Co., 112 Va. 300, 71 S. E. 559; Brown v. Surry Lumber Co., 113 Va. 503, 508, 75 S. E. 84; and authorities cited in such cases. The contract in the case before us, therefore, was not incomplete, .as it must be regarded in a court of equity (or at law, for that matter), nor unenforceable, because of the omission in question.

(b) The contract does settle the question of interest on the deferred purchase money. It is specific in its provision that the note for such deferred purchase money should be made payable “six months from date,” i. e., six months from the date of said contract of March. 14, 1917, i. e., it was to be made payable September 14, 1917. Had the note been executed in accordance with such contract it would have borne no interest unless and until default had been made in its payment on its due date, September 14, 1917. And, as appears from the allegations of the bill, such was also the appellee’s construction of the contract, as evidenced by the form of note he sent appellant to execute.

5. However, should it develop in the further progress of this cause that the allegations of the bill are sustained by a preponderance of the evidence and decree on the merits of the cause be entered in favor of appellant enforcing specific performance of said contract of March 14, 1917, we are of opinion that no interest should be decreed against appellant prior to the entry of such decree, but such decree should provide for the payment by appellant of the principal of the whole of the purchase money aforesaid upon the execution and delivery to him of such a conveyance to him of the timber purchased, as set forth and described in said contract, as is demanded in the bill, duly acknowledged for recordation according to law. In' which case, of course, should there be any delay in the payment by .appellant of such purchase money at the time required by such decree it would all bear interest from such time.

6. With regard to the requirement, that such a deed as is in the bill demanded, duly acknowledged for recordation according to law, should be executed by appellee and his co-owners; we are of opinion that a reasonable construction of the language of the contract—“transfer papers properly gotten up”—is that such language carries with it the mean- . ing that a conveyance in writing such as aforesaid, properly acknowledged for recordation as aforesaid, was within the mutual meaning and contemplation of both parties- to such contract.

7. No question is raised in this cause upon the demurrer to the bill, as to the existence of the other requisites to entitle the appellant to specific performance of the contract, namely, as to there having existed competent parties to, a valuable consideration for the contract, and that the appellant “has not been backward in enforcing his rights but ready, desirous, prompt and eager” and able to comply with all the terms of the contract on his part.

On the whole, therefore, we are of opinion that the court below was in error in sustaining the demurrer to the bill in this cause and the decree complained of will, therefore be set aside and annulled and this cause will be remanded to the court below- for further proceedings to be had therein not in conflict with the views expressed in this opinion.

Reversed.