| Colo. | Sep 15, 1895
Lead Opinion
delivered the opinion of the court.
The contract provides for the sale of ten acres of land, which land was to be divided into ninety-six lots, the purchaser, Helbig, agreeing to pay therefor twenty thousand dollars. Of this amount three thousand seven hundred and fifty dollars was to be paid in cash, and for the balance notes secured upon the land were to be executed by Helbig to Wolff. This cash payment was made, and the notes were duly executed and delivered with security, as provided in the agreement.
By the terms of the contract Helbig, at his option, might sell lots and substitute the cash and notes received upon such sales, and receive credit therefor upon his notes held by Wolff. In the sale of lots Helbig was limited to a minimum price of $225 per lot, but the contz’act fixes no maximuzn price. The sales were to be znade upon the following terms: One third cash, one third in one year, and one third in two years. For the deferred payments and intei'est thereon the purchasez’s were to execute notes to Wolff secured upon the lots sold.
It is alleged izi the complaint that on the 11th day of April, 1891, there was a balance due upon the face of the notes given by Helbig of $10,635.13, from which sum the plaintiff was entitled to a reduction of ten per cent commission, leaving a balance of $9,571.62 as the amount actually due defendant; that about this time the plaintiff procured a purchaser, named William C. Calhoun, willing to buy lots 25
The answer of the defendant admits the execution of the contra&ts described in the complaint; denies that the defendant .has failed or refused to perform the covenants or stipulations on his part as required. He denies that plaintiff procured a purchaser, who was -able or willing to buy lots 25 to 44 inclusive, in block 2, for the sum stated in the complaint, or for any sum.
He alleges that Calhoun was a pretended purchaser, without any means whatever; that the price at which plaintiff pretended to have sold him these lots was a fictitious price, far in excess of their real value, and that plaintiff sought to induce the defendant to take a deed of trust back on these
The replication denied all the new matter set up in the answer. The plaintiff also says that Hiram Gr. Wolff, the defendant, was ready and willing to carry out the sale to Calhoun until he was informed that the plaintiff was advancing the money to the purchaser, when the defendant refused to proceed any further therewith. The plaintiff further alleges in the replication that at the time of making said original contract it was understood and agreed by the parties that the plaintiff should not be limited to the market value in selling the property, but should be at liberty to obtain the best possible price for the same.
Errors are assigned upon the overruling of the demurrer to the complaint, upon the motion for a nonsuit, upon the amendment made to the complaint at the close of plaintiff’s case, upon the reception and rejection of evidence, and upon the instructions given and those refused.
The assignment of error based upon the overruling of defendant’s motion for a nonsuit directly raises the question of the right of plaintiff to recover upon the merits as disclosed by his evidence, and for this reason will be first considered. In support of this cause of action plaintiff relied upon the following facts as disclosed by the evidence, viz.: immediately after entering into the contract with Wolff, he .endeavored to negotiate a sale of the lots singly and in pairs from time to time through real estate brokers and others, his efforts in this behalf resulting in varying success until he had sold about thirty-six lots, and from the proceeds of such sales had reduced pro tanto his indebtedness to the defendant.
For the amount remaining the defendant held plaintiff’s notes, secured upon the lots remaining unsold, — sixty or more in number. At this time the transaction with Calhoun
The facts with reference to the transaction with Calhoun are undisputed, and, as stated by Mr. Smith, the broker selected by the plaintiff to negotiate the sale, are as follows:
“ Plaintiff came to me in my office and asked me if I could procure a purchaser for twenty lots in Earl Place on certain terms, that is the party buying the lots would give a certain trust deed of about $350 per lot, he could not tell the exact figures, and a second trust deed, payable to himself, of $2,300 upon the whole twenty-three lots. He said he would like the party-to be one that would take the lots and handle them and trade them or build on them or sell them to parties that would build on them.
“ I told the plaintiff I thought I could get a man to take hold of the lots, and a day or two later I spoke to Mr. Calhoun about it and he said he would be glad to take the lots on these terms, and I then took him to the plaintiff’s office and introduced him to the plaintiff.
“ I told Mr. Calhoun that those lots could be had on those terms and gave him to understand that he was not to invest a dollar. I took him to the plaintiff and told him that was the man I had found, that he would take the lots on those terms.
“ The plaintiff showed me that through this deal, that he would pay his notes to the defendant, amounting to $10,000; that he would liquidate an indebtedness of $10,000, or whatever the price was.
*498 “I had not agreed with the plaintiff to build on those lots. Nothing was said about that except that he would like to get a party that would trade and handle the lots and if possible would put them in the hands of parties that would build on them.”
The transaction was afterwards consummated, in so far as the same could be concluded by Mr. Helbig and Mr. Calhoun, in exact accordance with the foregoing statement of Mr. Smith. There being at this time a balance of principal and interest due Mr. Wolff, amounting to $10,635.13, less 10 per cent commission, or $9,571.62. In other words, the sale which the plaintiff had authorized his agent to make to Mr. Calhoun of the twenty lots in question was for an amount exactly sufficient to discharge plaintiff’s obligation to the defendant. In this transaction Helbig was the vendor and Calhoun the vendee, and the latter was to pay nothing from his own resources. The only money agreed to be paid was to be advanced to Wolff by the vendor.
Upon this state of facts the court was called upon to determine -as a question of law, upon the motion for a nonsuit, whether or not the Calhoun transaction was one embraced within the written agreement between the plaintiff and defendant, this agreement providing, inter alia, that “ the purchaser should pay at least one third of the purchase price in cash.” It is contended by appellant that the Calhoun transaction was fictitious and fraudulent, made with “ a man of straw,” without financial responsibility, and that it was one not contemplated by the parties to the original agreement, and 'not embraced within the true intent and meaning of such an agreement; while the contrary of these propositions is maintained bj’’ appellee.
A fundamental canon of construction, with reference to contracts oral and written, requires that the true intent or meaning of the contracting parties shall be ascertained and the contract be construed, if possible, so as to carry out such intent. In the case of Schuylkill v. Moore, 2 Whart. 491, it is said: “ The best construction is that which is made by view
A construction of the contract that will permit the plaintiff to discharge his obligations to the defendant in the manner attempted by the transaction with Calhoun is one that we think must strike the mind of the average man as so unreasonable that it could not have been contemplated by the parties to the written agreement. The defendant then held the plaintiff’s notes for $10,635.13, secured on upwards of sixty lots. Plaintiff could have canceled the lien and his obligations at any time by paying this amount less 10 per cent: or, if he could secure a bona fide purchaser for a part of the lots, who would- pay the amount in cash, or one third in cash and the balance in notes, plaintiff’s obligations might in this way have been discharged.
It is obvious, however, that he could not do this by selling one lot for a price equal to the whole amount due, — such a consideration being many times the actual value of the lot, and so grossly unreasonable as to be in fraud of defendant’s rights, — and thereby discharge his obligation, leaving him with but little or no security for the unpaid amount. This illustration is sufficient for the purpose of showing that there must be found some rule governing contracts of this nature that will be reasonable and just to the parties and adequately protect the rights of each.
It is to be borne in mind that the chief purpose of the contract is that the defendant shall sell ten acres of land and that the plaintiff shall pay him therefor $20,000. From the evidence it is apparent, I think, that the defendant was willing at all times to convey for this amount, whether the same was paid in cash, or in cash and notes, secured as provided by the contract, as the defendant says he understood it, and as we think he had a right to understand it. It must be assumed that the defendant believed at the time of executing the
, What, then, did the defendant anticipate would be the construction placed upon the written agreement, and what had he the right to expect in view of the circumstances? Nothing less than a construction that would be at once reasonable, just and equitable to the parties, if such can be reasonably deduced from the instrument. This is in accordance with well settled legal principles, and would be interpreting the instrument as mankind in general would construe it.
We think that a construction which would require the plaintiff to find a purchaser or purchasers who would advance the cash required from their own resources, or at least independently of advances made by the plaintiff for the purpose of securing a release of a lien upon the remaining lots, is the only one that meets the requirements of good conscience and equity. The Calhoun transaction did not contemplate that the plaintiff would advance money to Calhoun, because he (the plaintiff) had money of his own or of others that he was desirous of loaning. On the contrary, plaintiff’s avowed purpose wa's to gain an advantage to himself at the expense of the defendant’s security upon the forty or more lots remaining unsold.
Helbig not being limited in the sale of lots to a maximum price, Wolff could only rely upon the self interest of the purchasers to protect him. So long as such purchasers were required to pay one third of the purchase price down, he was content, and it was not until Helbig attempted to remove this safeguard by advancing the cash payment from his own resources that Wolff refused to convey. Helbig could not thus destroy the defendant’s security, and Wolff was justified in refusing to carry out the Calhoun deal. A construe
Aside from these twenty lots, the contract between Wolff and Helbig seems to have been fully executed by Helbig paying his notes in full and Wolff deeding the lots remaining. Wolff should now deed to Helbig lots 25 to 44 inclusive, in block 2, and thereby terminate the controversy.
The judgment of the district court will be reversed.
Reversed.
Dissenting Opinion
dissenting.
I cannot agree with the construction put upon this contract by the chief justice. As I understand the scope of the opinion, one to whom lots are sold and in whose behalf any part of the consideration is advanced by Helbig, by loan or otherwise, cannot be a “purchaser” under this contract.The record shows that one third of the purchase price of the lots sold to Calhoun was advanced by Helbig, to secure the payment of which Helbig gave, or was to give, a second trust deed upon the lots. If Wolff got the cash payment provided for in the contract, which was one third of the amount of the purchase price, less, possibly, the commission belonging to Helbig, and got, in addition thereto, security for the unpaid portion of the purchase money by a trust deed which was a first lien upon the lots sold, which this contract required, then, if the selling price agreed upon was a fair one, Wolff got exactly what he bargained for, and, as it seems to me, it could make no possible difference to him whether Helbig, or some third party, advanced to the veu
Upon the trial of this case, all the issues of fact, including the good faith of the so-called “ Calhoun deal,” as to whether or not Calhoun was merely “ a man of straw,” and the reasonableness of the price at which the lots were sold to him, were submitted to the jury under appropriate instructions from the court, and these issues of fact were all resolved in Helbig’s favor. In my judgment, this was the proper course to pursue, and thereby Wolff’s rights (if he had any) would be amply protected. The hardship of the construction adopted by the majority of the court is to be seen when it is said that, as the record shows, Helbig has paid the entire consideration of $20,000 to Wolff, and the latter still holds the sixteen lots attempted to be sold to Calhoun.
We cannot close our eyes to the fact that, since the time when Calhoun bought, this property has greatly depreciated in value, and for Wolff now to convey these lots to Helbig, without being required to do more, when the value of the property to be conveyed is much less than it was when Wolff should have conveyed it to Calhoun, and much less than Helbig would thereby and at that time have received, is not such a compliance upon Wolff’s part with his contract as fair dealing and equity demand.
I think the judgment of the district court should be affirmed.