Giannetti v. Cornillie

514 N.W.2d 221, 204 Mich. App. 234

• Court: Michigan Court of Appeals
• Decided: March 21, 1994
• Docket: Docket 135381
• Status: Published

Opinions

Hood, J.

Defendants appeal as of right from the trial court’s judgment granting plaintiffs’ petition for specific performance of an alleged agreement to sell real estate. Plaintiffs cross appeal from the trial court’s determination of damages. We reverse.

Defendants were the copersonal representatives of their mother’s estate. In that capacity, they listed her home for sale with a real estate agent. Plaintiffs offered $155,000 for the home and submitted a $2,500 deposit. Defendants counteroffered to sell the home for $160,000.

Upon receiving the counteroffer, plaintiffs orally inquired whether certain items could be included with the home.¹ Defendánts declined. Plaintiffs then purportedly accepted the counteroffer, but changed the mortgage amount from $124,000 to $128,000 and initialed the change. The real estate agent did not submit this modification for defendants’ approval, but, rather, told defendants that plaintiffs had accepted their counteroffer. Defendants signed all the necessary probate court papers for the sale of the property. However, before the closing, defendants sought to rescind the deal.² Plaintiffs declined and sued for specific performance.

Defendants’ main argument is that the trial court clearly erred in finding that there was a contract where defendants never agreed to plaintiffs’ change in the mortgage amount. We reluctantly agree.

As argued by defendants, "[a]n offer is a unilateral declaration of intention, and is not a contract. A contract is made when both parties have executed or accepted it, and not before. A counterpro-position is not an acceptance.” Kamalnath v Mercy Memorial Hosp Corp, 194 Mich App 543, 549; 487 NW2d 499 (1992) (citations omitted). An acceptance must be "unambiguous and in strict conformance with an offer.” Dassance v Nienhuis, 57 Mich App 422, 431; 225 NW2d 789 (1975). " '[A] proposal to accept, or an acceptance, upon terms varying from those offered, is a rejection of the offer, and puts an end to the negotiation, unless the party who made the original offer renews it, or assents to the modification suggested.’ ” Harper Bldg Co v Kaplan, 332 Mich 651, 656; 52 NW2d 536 (1952) (quoting Thomas v Ledger, 274 Mich 16, 21; 263 NW 783 [1935]). Thus, "'[a]ny material departure from the terms of an offer invalidates the offer as made and results in a counter proposition, which, unless accepted, cannot be enforced.’ ” Harper, supra at 655 (quoting Carrollton Acceptance Co v Ruggles Motor Truck Co, 253 Mich 1, 5; 234 NW 134 [1931]).

Plaintiffs argue that the modification of the mortgage amount did not vitiate their purported acceptance because the mortgage amount, unlike the purchase price, was not a material term of the contract. We disagree.

It is clear from the terms of the purchase offer that the obligation to buy the property was "contingent upon [the] Purchaser’s ability to obtain a 30 year conventional] mortgage” in the amount written on the form. Thus, by changing the mortgage amount, plaintiffs modified a condition precedent to the existence of a binding agreement. Therefore, the modification was material and their purported acceptance was only a counteroffer. See Marshall Mfg Co v Berrien Co Package Co, 269 Mich 337, 339; 257 NW 714 (1934) ("The acceptance must be absolute and unconditional, and if conditions are attached or if it differs from the offer, the transaction amounts only to a proposal and a counter-proposal.”).

In other words, before the change, plaintiffs were obligated to buy the property if they obtained a mortgage for $124,000; after the change, no obligation to buy arose unless they obtained a $128,000 mortgage. Thus, the modification had the legal effect of widening the door through which plaintiffs could escape the contract and it was therefore material. See Anderson v Donato, 224 Mich 216, 218; 193 NW 805 (1923) ("It is only by determining the legal effect of the instrument before the alteration and after the alteration that it is possible to decide whether the change is material or not.”). Because the modification was not initialed by defendants, the contract was void under the statute of frauds. MCL 566.106; MSA 26.906.

Because the purchase offer itself clearly states that "no promises have been made other than those that are in writing and signed by all parties involved (no verbal agreements will be binding),” we may not consider plaintiffs’ contention that, although the purchase offer does not say so, the parties contemplated that eighty percent of the purchase price would be financed and that their modification of the mortgage amount merely reflected that understanding. Likewise, the fact that plaintiffs obtained the $128,000 mortgage does not constitute partial performance sufficient to take the alleged agreement out of the operation of the statute of frauds. See Thorbahn v Walker's Estate, 269 Mich 586, 591; 257 NW 892 (1934) (neither full nor partial payment is sufficient to take an agreement relating to realty out of the statute of frauds). The same is true of defendants’ execution of the appropriate sale documents with the probate court.

In light of our decision, it is unnecessary to consider defendants’ argument that plaintiffs voided the agreement by not applying for a mortgage within five days.³ We also decline to consider plaintiffs’ cross appeal regarding the calculation of damages.

Reversed.

B. A. Jasper, J., concurred.

1 Specifically, plaintiffs sought to have a lawn tractor and certain patio furniture included with the home.

2 The deal was rescinded because defendant Henry Cornillie wanted to purchase the home for himself and his wife.

3 Defendants’ argument that the trial court deprived them of a fair trial by not allowing them to present rebuttal testimony is perfunctory and unsupported by the record. We therefore decline to consider it. Community Nat’l Bank of Pontiac v Michigan Basic Property Ins Ass’n, 159 Mich App 510, 520-521; 407 NW2d 31 (1987).