BUSINESS LAW -Format to be used for Briefs (Make sure you divide your briefs
Format to be used for Briefs (Make sure you divide your briefs into these sections):1. Case title & citation2. Issue (a combination of the key facts and the legal question the court is being asked to decide in the case)3. Rule (the law that court identifies as applicable to the case)4. Application (how does the court apply the law to the facts and issue in the case)5. Conclusion (a brief statement of the case outome)196 Va. 493 (1954)W. O. LUCY AND J. C. LUCYv.A. H. ZEHMER AND IDA S. ZEHMER.Supreme Court of Virginia.November 22, 1954.BUCHANAN, J., delivered the opinion of the court.This suit was instituted by W. O. Lucy and J. C. Lucy, complainants, against A. H. Zehmerand Ida S. Zehmer, his wife, defendants, to have specific performance of a contract bywhich it was alleged the Zehmers had sold to W. O. Lucy a tract of land owned by A. H.Zehmer in Dinwiddie county containing 471.6 acres, more or less, known as the Fergusonfarm, for $50,000. J. C. Lucy, the other complainant, is a brother of W. O. Lucy, to whom W.O. Lucy transferred a half interest in his alleged purchase.The instrument sought to be enforced was written by A. H. Zehmer on December 20, 1952,in these words: "We hereby agree to sell to W. O. Lucy the Ferguson Farm complete for$50,000.00, title satisfactory to buyer," and signed by the defendants, A. H. Zehmer and IdaS. Zehmer.The answer of A. H. Zehmer admitted that at the time mentioned W. O. Lucy offered him$50,000 cash for the farm, but that he, Zehmer, considered that the offer was made in jest;that so thinking, and both he and Lucy having had several drinks, he wrote out "thememorandum" quoted above and induced his wife to sign it; that he did not deliver 495*495the memorandum to Lucy, but that Lucy picked it up, read it, put it in his pocket, attemptedto offer Zehmer $5 to bind the bargain, which Zehmer refused to accept, and realizing forthe first time that Lucy was serious, Zehmer assured him that he had no intention of sellingthe farm and that the whole matter was a joke. Lucy left the premises insisting that he hadpurchased the farm.Depositions were taken and the decree appealed from was entered holding that thecomplainants had failed to establish their right to specific performance, and dismissing theirbill. The assignment of error is to this action of the court.W. O. Lucy, a lumberman and farmer, thus testified in substance: He had known Zehmer forfifteen or twenty years and had been familiar with the Ferguson farm for ten years. Seven oreight years ago he had offered Zehmer $20,000 for the farm which Zehmer had accepted,but the agreement was verbal and Zehmer backed out. On the night of December 20, 1952,around eight o’clock, he took an employee to McKenney, where Zehmer lived and operateda restaurant, filling station and motor court. While there he decided to see Zehmer andagain try to buy the Ferguson farm. He entered the restaurant and talked to Mrs. Zehmeruntil Zehmer came in. He asked Zehmer if he had sold the Ferguson farm. Zehmer repliedthat he had not. Lucy said, "I bet you wouldn’t take $50,000.00 for that place." Zehmerreplied, "Yes, I would too; you wouldn’t give fifty." Lucy said he would and told Zehmer towrite up an agreement to that effect. Zehmer took a restaurant check and wrote on the backof it, "I do hereby agree to sell to W. O. Lucy the Ferguson Farm for $50,000 complete."Lucy told him he had better change it to "We" because Mrs. Zehmer would have to sign ittoo. Zehmer then tore up what he had written, wrote the agreement quoted above andasked Mrs. Zehmer, who was at the other end of the counter ten or twelve feet away, tosign it. Mrs. Zehmer said she would for $50,000 and signed it. Zehmer brought it back andgave it to Lucy, who offered him $5 which Zehmer refused, 496*496 saying, "You don’t needto give me any money, you got the agreement there signed by both of us."The discussion leading to the signing of the agreement, said Lucy, lasted thirty or fortyminutes, during which Zehmer seemed to doubt that Lucy could raise $50,000. Lucysuggested the provision for having the title examined and Zehmer made the suggestion thathe would sell it "complete, everything there," and stated that all he had on the farm wasthree heifers.Lucy took a partly filled bottle of whiskey into the restaurant with him for the purpose ofgiving Zehmer a drink if he wanted it. Zehmer did, and he and Lucy had one or two drinkstogether. Lucy said that while he felt the drinks he took he was not intoxicated, and from theway Zehmer handled the transaction he did not think he was either.December 20 was on Saturday. Next day Lucy telephoned to J. C. Lucy and arranged withthe latter to take a half interest in the purchase and pay half of the consideration. OnMonday he engaged an attorney to examine the title. The attorney reported favorably onDecember 31 and on January 2 Lucy wrote Zehmer stating that the title was satisfactory,that he was ready to pay the purchase price in cash and asking when Zehmer would beready to close the deal. Zehmer replied by letter, mailed on January 13, asserting that hehad never agreed or intended to sell.Mr. and Mrs. Zehmer were called by the complainants as adverse witnesses. Zehmertestified in substance as follows:He bought this farm more than ten years ago for $11,000. He had had twenty-five offers,more or less, to buy it, including several from Lucy, who had never offered any specific sumof money. He had given them all the same answer, that he was not interested in selling it.On this Saturday night before Christmas it looked like everybody and his brother came bythere to have a drink. He took a good many drinks during the afternoon and had a pint of hisown. When he entered the restaurant around eight-thirty 497*497 Lucy was there and hecould see that he was "pretty high." He said to Lucy, "Boy, you got some good liquor,drinking, ain’t you?" Lucy then offered him a drink. "I was already high as a Georgia pine,and didn’t have any more better sense than to pour another great big slug out and gulp itdown, and he took one too."After they had talked a while Lucy asked whether he still had the Ferguson farm. He repliedthat he had not sold it and Lucy said, "I bet you wouldn’t take $50,000.00 for it." Zehmerasked him if he would give $50,000 and Lucy said yes. Zehmer replied, "You haven’t got$50,000 in cash." Lucy said he did and Zehmer replied that he did not believe it. Theyargued "pro and con for a long time," mainly about "whether he had $50,000 in cash that hecould put up right then and buy that farm."Finally, said Zehmer, Lucy told him if he didn’t believe he had $50,000, "you sign that pieceof paper here and say you will take $50,000.00 for the farm." He, Zehmer, "just grabbed theback off of a guest check there" and wrote on the back of it. At that point in his testimonyZehmer asked to see what he had written to "see if I recognize my own handwriting." Heexamined the paper and exclaimed, "Great balls of fire, I got ‘Firgerson’ for Ferguson. Ihave got satisfactory spelled wrong. I don’t recognize that writing if I would see it, wouldn’tknow it was mine."After Zehmer had, as he described it, "scribbled this thing off," Lucy said, "Get your wife tosign it." Zehmer walked over to where she was and she at first refused to sign but did soafter he told her that he "was just needling him [Lucy], and didn’t mean a thing in the world,that I was not selling the farm." Zehmer then "took it back over there * * * and I was stilllooking at the dern thing. I had the drink right there by my hand, and I reached over to get adrink, and he said, ‘Let me see it.’ He reached and picked it up, and when I looked backagain he had it in his pocket and he dropped a five dollar bill over there, and he said, ‘Hereis five dollars payment on it.’ * * * I said, ‘Hell no, 498*498 that is beer and liquor talking. I amnot going to sell you the farm. I have told you that too many times before.’"Mrs. Zehmer testified that when Lucy came into the restaurant he looked as if he had had adrink. When Zehmer came in he took a drink out of a bottle that Lucy handed him. She wentback to help the waitress who was getting things ready for next day. Lucy and Zehmer weretalking but she did not pay too much attention to what they were saying. She heard Lucyask Zehmer if he had sold the Ferguson farm, and Zehmer replied that he had not and didnot want to sell it. Lucy said, "I bet you wouldn’t take $50,000 cash for that farm," andZehmer replied, "You haven’t got $50,000 cash." Lucy said, "I can get it." Zehmer said hemight form a company and get it, "but you haven’t got $50,000.00 cash to pay me tonight."Lucy asked him if he would put it in writing that he would sell him this farm. Zehmer thenwrote on the back of a pad, "I agree to sell the Ferguson Place to W. O. Lucy for$50,000.00 cash." Lucy said, "All right, get your wife to sign it." Zehmer came back to whereshe was standing and said, "You want to put your name to this?" She said "No," but he saidin an undertone, "It is nothing but a joke," and she signed it.She said that only one paper was written and it said: "I hereby agree to sell," but the "I" hadbeen changed to "We". However, she said she read what she signed and was then asked,"When you read ‘We hereby agree to sell to W. O. Lucy,’ what did you interpret that tomean, that particular phrase?" She said she thought that was a cash sale that night; but shealso said that when she read that part about "title satisfactory to buyer" she understood thatif the title was good Lucy would pay $50,000 but if the title was bad he would have a right toreject it, and that that was her understanding at the time she signed her name.On examination by her own counsel she said that her husband laid this piece of paper downafter it was signed; that Lucy said to let him see it, took it, folded it and put it 499*499 in hiswallet, then said to Zehmer, "Let me give you $5.00," but Zehmer said, "No, this is liquortalking. I don’t want to sell the farm, I have told you that I want my son to have it. This is alla joke." Lucy then said at least twice, "Zehmer, you have sold your farm," wheeled aroundand started for the door. He paused at the door and said, "I will bring you $50,000.00tomorrow. * * * No, tomorrow is Sunday. I will bring it to you Monday." She said you couldtell definitely that he was drinking and she said to her husband, "You should have taken himhome," but he said, "Well, I am just about as bad off as he is."The waitress referred to by Mrs. Zehmer testified that when Lucy first came in "he wasmouthy." When Zehmer came in they were laughing and joking and she thought they took adrink or two. She was sweeping and cleaning up for next day. She said she heard Lucy tellZehmer, "I will give you so much for the farm," and Zehmer said, "You haven’t got thatmuch." Lucy answered, "Oh, yes, I will give you that much." Then "they jotted downsomething on paper * * * and Mr. Lucy reached over and took it, said let me see it." Helooked at it, put it in his pocket and in about a minute he left. She was asked whether shesaw Lucy offer Zehmer any money and replied, "He had five dollars laying up there, theydidn’t take it." She said Zehmer told Lucy he didn’t want his money "because he didn’t haveenough money to pay for his property, and wasn’t going to sell his farm." Both of themappeared to be drinking right much, she said.She repeated on cross-examination that she was busy and paying no attention to what wasgoing on. She was some distance away and did not see either of them sign the paper. Shewas asked whether she saw Zehmer put the agreement down on the table in front of Lucy,and her answer was this: "Time he got through writing whatever it was on the paper, Mr.Lucy reached over and said, ‘Let’s see it.’ He took it and put it in his pocket," before showingit to Mrs. 500*500 Zehmer. Her version was that Lucy kept raising his offer until it got to$50,000.The defendants insist that the evidence was ample to support their contention that thewriting sought to be enforced was prepared as a bluff or dare to force Lucy to admit that hedid not have $50,000; that the whole matter was a joke; that the writing was not delivered toLucy and no binding contract was ever made between the parties.It is an unusual, if not bizarre, defense. When made to the writing admittedly prepared byone of the defendants and signed by both, clear evidence is required to sustain it.In his testimony Zehmer claimed that he "was high as a Georgia pine," and that thetransaction "was just a bunch of two doggoned drunks bluffing to see who could talk thebiggest and say the most." That claim is inconsistent with his attempt to testify in greatdetail as to what was said and what was done. It is contradicted by other evidence as to thecondition of both parties, and rendered of no weight by the testimony of his wife that whenLucy left the restaurant she suggested that Zehmer drive him home. The record isconvincing that Zehmer was not intoxicated to the extent of being unable to comprehend thenature and consequences of the instrument he executed, and hence that instrument is notto be invalidated on that ground. 17 C.J.S., Contracts, | 133 b., p. 483; Taliaferro Emery,124 Va. 674, 98 S.E. 627. It was in fact conceded by defendants’ counsel in oral argumentthat under the evidence Zehmer was not too drunk to make a valid contract.The evidence is convincing also that Zehmer wrote two agreements, the first one beginning"I hereby agree to sell." Zehmer first said he could not remember about that, then that "Idon’t think I wrote but one out." Mrs. Zehmer said that what he wrote was "I hereby agree,"but that the "I" was changed to "We" after that night. The agreement that was written andsigned is in the record and indicates no such change. Neither are the mistakes in spellingthat Zehmer sought to point out readily apparent. 501*501The appearance of the contract, the fact that it was under discussion for forty minutes ormore before it was signed; Lucy’s objection to the first draft because it was written in thesingular, and he wanted Mrs. Zehmer to sign it also; the rewriting to meet that objection andthe signing by Mrs. Zehmer; the discussion of what was to be included in the sale, theprovision for the examination of the title, the completeness of the instrument that wasexecuted, the taking possession of it by Lucy with no request or suggestion by either of thedefendants that he give it back, are facts which furnish persuasive evidence that theexecution of the contract was a serious business transaction rather than a casual, jestingmatter as defendants now contend.On Sunday, the day after the instrument was signed on Saturday night, there was a socialgathering in a home in the town of McKenney at which there were general comments thatthe sale had been made. Mrs. Zehmer testified that on that occasion as she passed by agroup of people, including Lucy, who were talking about the transaction, $50,000 wasmentioned, whereupon she stepped up and said, "Well, with the high-price whiskey youwere drinking last night you should have paid more. That was cheap." Lucy testified that atthat time Zehmer told him that he did not want to "stick" him or hold him to the agreementbecause he, Lucy, was too tight and didn’t know what he was doing, to which Lucy repliedthat he was not too tight; that he had been stuck before and was going through with it.Zehmer’s version was that he said to Lucy: "I am not trying to claim it wasn’t a deal onaccount of the fact the price was too low. If I had wanted to sell $50,000.00 would be a goodprice, in fact I think you would get stuck at $50,000.00." A disinterested witness testified thatwhat Zehmer said to Lucy was that "he was going to let him up off the deal, because hethought he was too tight, didn’t know what he was doing. Lucy said something to the effectthat ‘I have been stuck before and I will go through with it.’"If it be assumed, contrary to what we think the evidence 502*502 shows, that Zehmer wasjesting about selling his farm to Lucy and that the transaction was intended by him to be ajoke, nevertheless the evidence shows that Lucy did not so understand it but considered itto be a serious business transaction and the contract to be binding on the Zehmers as wellas on himself. The very next day he arranged with his brother to put up half the money andtake a half interest in the land. The day after that he employed an attorney to examine thetitle. The next night, Tuesday, he was back at Zehmer’s place and there Zehmer told him forthe first time, Lucy said, that he wasn’t going to sell and he told Zehmer, "You know yousold that place fair and square." After receiving the report from his attorney that the title wasgood he wrote to Zehmer that he was ready to close the deal.Not only did Lucy actually believe, but the evidence shows he was warranted in believing,that the contract represented a serious business transaction and a good faith sale andpurchase of the farm.In the field of contracts, as generally elsewhere, "We must look to the outward expression ofa person as manifesting his intention rather than to his secret and unexpressed intention.’The law imputes to a person an intention corresponding to the reasonable meaning of hiswords and acts.’" First Nat. Bank Roanoke Oil Co., 169 Va. 99, 114, 192 S.E. 764, 770.At no time prior to the execution of the contract had Zehmer indicated to Lucy by word oract that he was not in earnest about selling the farm. They had argued about it anddiscussed its terms, as Zehmer admitted, for a long time. Lucy testified that if there was anyjesting it was about paying $50,000 that night. The contract and the evidence show that hewas not expected to pay the money that night. Zehmer said that after the writing was signedhe laid it down on the counter in front of Lucy. Lucy said Zehmer handed it to him. In anyevent there had been what appeared to be a good faith offer and a good faith acceptance,503*503 followed by the execution and apparent delivery of a written contract. Both said thatLucy put the writing in his pocket and then offered Zehmer $5 to seal the bargain. Not untilthen, even under the defendants’ evidence, was anything said or done to indicate that thematter was a joke. Both of the Zehmers testified that when Zehmer asked his wife to sign hewhispered that it was a joke so Lucy wouldn’t hear and that it was not intended that heshould hear.The mental assent of the parties is not requisite for the formation of a contract. If the wordsor other acts of one of the parties have but one reasonable meaning, his undisclosedintention is immaterial except when an unreasonable meaning which he attaches to hismanifestations is known to the other party. Restatement of the Law of Contracts, Vol. I, | 71,p. 74."* * * The law, therefore, judges of an agreement between two persons exclusively fromthose expressions of their intentions which are communicated between them. * * *." Clarkon Contracts, 4 ed., | 3, p. 4.An agreement or mutual assent is of course essential to a valid contract but the law imputesto a person an intention corresponding to the reasonable meaning of his words and acts. Ifhis words and acts, judged by a reasonable standard, manifest an intention to agree, it isimmaterial what may be the real but unexpressed state of his mind. 17 C.J.S., Contracts, |32, p. 361; 12 Am. Jur., Contracts, | 19, p. 515.So a person cannot set up that he was merely jesting when his conduct and words wouldwarrant a reasonable person in believing that he intended a real agreement, 17 C.J.S.,Contracts, | 47, p. 390; Clark on Contracts, 4 ed., | 27, at p. 54.Whether the writing signed by the defendants and now sought to be enforced by thecomplainants was the result of a serious offer by Lucy and a serious acceptance by thedefendants, or was a serious offer by Lucy and an acceptance in secret jest by thedefendants, in either event it constituted a binding contract of sale between the parties.504*504Defendants contend further, however, that even though a contract was made, equity shoulddecline to enforce it under the circumstances. These circumstances have been set forth indetail above. They disclose some drinking by the two parties but not to an extent that theywere unable to understand fully what they were doing. There was no fraud, nomisrepresentation, no sharp practice and no dealing between unequal parties. The farm hadbeen bought for $11,000 and was assessed for taxation at $6,300. The purchase price was$50,000. Zehmer admitted that it was a good price. There is in fact present in this casenone of the grounds usually urged against specific performance.Specific performance, it is true, is not a matter of absolute or arbitrary right, but isaddressed to the reasonable and sound discretion of the court. First Nat. Bank Roanoke OilCo., supra, 169 Va. at p. 116, 192 S.E. at p. 771. But it is likewise true that the discretionwhich may be exercised is not an arbitrary or capricious one, but one which is controlled bythe established doctrines and settled principles of equity; and, generally, where a contract isin its nature and circumstances unobjectionable, it is as much a matter of course for courtsof equity to decree a specific performance of it as it is for a court of law to give damages fora breach of it. Bond Crawford, 193 Va. 437, 444, 69 S.E.(2d) 470, 475.The complainants are entitled to have specific performance of the contracts sued on. Thedecree appealed from is therefore reversed and the cause is remanded for the entry of aproper decree requiring the defendants to perform the contract in accordance with theprayer of the bill.Reversed and remanded.
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