Woolsey v. Brown

539 P.2d 1035, 1975 Utah LEXIS 752

Opinions

MAUGHAN, Justice:

This is an action for specific performance of an oral agreement to purchase real property, in which plaintiffs have alleged full performance and in return seek a conveyance. Defendant counterclaimed. Judgment was rendered in favor of defendant, which included $9,717, as back rent, plus $12.50 per day prospectively. We reverse.

. There is no serious dispute that the parties entered into an oral agreement, on April 12, 1961, under the terms of which plaintiffs were to make a down payment and assume the mortgage payments to Walker Bank. There is á factual disagreement as to the precise terms concerning the down payment. The oral contract was sufficiently definite; there was merely a controversy concerning one of the terms of the agreement, and it was the responsibility of the trial court to determine which version was in fact correct.

According to defendant, she and her husband (now deceased), who was a joint tenant of the realty, agreed orally to sell the home to plaintiffs on the following terms: (1) a down payment of $1,337; however, defendant’s husband represented that he would give plaintiffs credit for the rent they had paid for the previous nine months in the sum of $630, leaving an unpaid balance of $707; (2) plaintiffs were to assume the mortgage payments of $81 per month. The mortgage payments were sufficient to cover principal, interest, property taxes, and insurance.

According to defendant, the balance of $707 was to be paid within 30 days; otherwise, plaintiffs were to pay the $630, for which they had been given credit. Plaintiffs vigorously deny the 30-day time limitation, and their version is supported by the two receipts issued by defendant.

The issuance of the second receipt one year after the first payment on the down payment appears to refute defendant’s version that the full down payment was to be made within 30 days. The receipt further indicates that the agreement required a total payment of $707 and that there was an unpaid balance of $49.

In the spring of 1966, defendant’s husband died and she contacted plaintiffs and ordered them verbally to vacate the house. Plaintiffs sought legal assistance and their attorney prepared a contract, which defendant refused to execute. Plaintiffs sent a cashier’s check in the amount of $49 to defendant, which she refused to negotiate, and it was found in the records of defendant’s former legal counsel at the time of the trial.

This check, which was refused, again reflected the agreement as understood by plaintiffs. Significantly, defendant’s counsel sent a letter, dated April 29, 1966, to plaintiffs which stated that the real estate contract prepared by plaintiffs’ counsel did not “reflect the agreement of the parties”; there was no denial that an agreement existed.¹ Defendant’s counsel, with her approval, sent a letter to plaintiffs stating that defendant was willing to complete the sale on the following conditions: (1) Plaintiffs were to pay the balance of the down payment together with interest; (2) plaintiffs were to pay special improvement liens; (3) plaintiffs were to pay the expenses to terminate the joint tenancy of defendant with her deceased husband.

Plaintiffs, through their counsel, responded in a letter dated May 5, 1966, that they would be happy to pay interest on the balance of the down payment, and they requested that the sum required be computed and submitted to them. Plaintiffs cited their willingness to pay any special improvement assessment; and stated that neither a demand nor information, in that regard, had been given to them. They explained they had believed they had a reasonable time to pay the balance of the down payment, that no demand had been made; and they had been waiting for defendant to present them with a written contract of sale. Plaintiffs declined to pay the costs to remove the joint tenancy; since they were not responsible for the death of defendant’s husband, but they expressed a willingness to accept a warranty deed from defendant, the surviving tenant.

According to defendant, she repudiated the oral agreement in the spring of 1966; yet, thereafter, she sent a notice of a special improvement assessment to plaintiffs for curb and gutter, which they paid in the sum of $656.05. Furthermore, defendant permitted plaintiffs to remain in possession, and , they continued to make the mortgage payments. Subsequently, a fire occurred, and defendant applied the $1,200 proceeds from the insurance to the mortgage indebtedness. The fire insurance was cancelled and defendant procured and paid for a new policy in the sum of $68; the term of the policy was for three years from November 18, 1970 to 1973. Defendant neither informed plaintiffs of the cancellation nor demanded that they pay the insurance. Plaintiffs continued to pay the same mortgage payments which were sufficient to provide a reserve fund for insurance.

The mortgage indebtedness was paid in August, 1973, a date sooner than had been contemplated by the parties, since the fire insurance proceeds had been applied to this fund. The mortgagee returned to defendant the sum of $183.58, which had been in a reserve account to discharge property taxes and insurance. Defendant subsequently paid the property taxes in November, 1973, in the amount of $135.31. In October, 1973, after the mortgage had been discharged by plaintiffs, defendant served upon them a notice to quit. Plaintiffs initiated this action for specific performance. At the termination of the trial, plaintiffs, although contesting they owed an additional $630 on the down payment, tendered the amount to preserve their interest' in the home.

Based on the foregoing facts, the trial court found that plaintiffs had not sustained their burden to prove an enforceable oral contract of sale, which had been sufficiently performed to remove it from the statute of frauds² and entitle them to a decree of specific performance.³ The trial court concluded as a matter of law that plaintiffs had failed to establish the material terms of an oral contract of sale. The evidence clearly preponderates against such a finding.

Plaintiffs were initially tenants paying rent in the amount of $70 per month. After the oral agreement, they proceeded to pay the mortgage payments in the amount of $81 per month which covered property taxes and insurance. They remained in possession and made improvements to the property including carpeting the home and installation of new bathroom fixtures. They discharged a special improvement assessment. They paid all but $49 of the down payment, as evidenced by the receipts issued by defendant. All these acts upon which they rely are exclusively referable to the contract, and they are not reasonably explicable upon any other basis than the existence of a contract.⁴

This action bears a certain similarity to Christensen v. Christensen,⁵ wherein it was urged that the terms of the oral contract were too uncertain to entitle the plaintiffs to specific performance. The uncertainty was the time of payment of the purchase price, which was not set by the terms of the contract. This court observed that, although in cases of this type the law implies payment within a reasonable time, a court of equity will hold that defendant has waived any defense as to uncertainty of time of payment or protraction thereof, beyond what would otherwise be deemed a reasonable time for payment, by accepting other acts of performance rendered under the contract. There we expressed awareness of the principle that a plaintiff seeking specific performance of an oral contract must establish the terms thereof with a greater degree of certainty than is required in an action at law, and he must show a clear mutual understanding and a positive agreement of both parties to the terms of the contract. We there held the facts of the case would be inconsistent with, any other conclusion than that the parties had a definite understanding with respect to the exchange of the real property such as to invoke the office? of equity in its enforcement.

In the instant action, plaintiffs proceeded with performance for 12 years under an oral agreement for the sale of real property. Defendant neither demanded the remaining balance nor did she respond by stating the sum she sought, when so requested by plaintiffs’ counsel; such facts are sufficient to support a waiver of timely payment of the balance. Defendant continued to accept performance including a demand that the special improvement assessment be paid, with which plaintiffs complied. As observed in Christensen v. Christensen, the facts of this case would be inconsistent with any other conclusion than that the parties had a definite understanding, which equity will specifically enforce. Upon payment of the $49 balance plus the difference ($19.73) between the refund by the mortgagee to the defendant and the cost of the insurance and 1973 property taxes by plaintiffs, defendant is to deliver her conveyance.

Equity will not permit a party to accept performance for many years and then claim terms contrary to the evidence, as a basis to substantiate an assertion of indefiniteness, and thus avoid specific performance.

The facts and acts of partial performance in Holmgren Bros. v. Ballard, et al.,6 are completely distinguishable from those here presented.

Reversed and remanded, with instructions to render judgment in accordance with this opinion.

ELLETT and CROCKETT, JJ., concur.

Footnotes

1

. The real estate contract submitted required the seller to pay the real estate taxes and insurance, while, in fact, the mortgage payments covered these expenses.

2

. Sec. 25-5-3, U.C.A.1953.

3

. See. 25-5-8, U.C.A.1953.

4

. In re Roth’s Estate, 2 Utah 2d 40, 269 P. 2d 278 (1954).

5

. 9 Utah 2d 102, 339 P.2d 101 (1959).

6

. 534 P.2d 611 (1975).