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February 11, 1957


The opinion of the court was delivered by: Oxner, Justice.

February 11, 1957.

Clarence D. Aust and his wife Lee Aust brought this action for specific performance of an alleged parol executory contract by which Julia Pickens Gaillard agreed to sell and covey to them two lots on the King's Highway at Myrtle Beach, South Carolina. They alleged in their complaint that they went into possession under the contract and in reliance thereon made substantial improvements on the property. Gordon S. Beard and his wife Agnes H. Beard were made parties defendant under an allegation that they subsequently purchased the lots from Miss Gaillard with actual notice of the parol contract, and induced the vendor to violate same and sell the property to them by falsely representing that plaintiffs did not desire to carry out their contract.

Miss Gaillard defaulted. The Beard defendants demurred to the complaint upon the ground that it failed to state facts sufficient to constitute a cause of action. The demurrer was overruled. They duly filed an answer in which they admitted purchasing the property but denied the remaining allegations of the complaint, and further set up a plea of the statute of frauds.

There was a general order of reference to the Master for Horry County. After taking the testimony, he filed a report in which he found that plaintiffs had established the contract alleged in the complaint; that they entered into possession of the property under it and made substantial improvements; that there had been sufficient performance to take the contract out of the statute of frauds; and that the Beards purchased the property with full knowledge of said contract. He recommended that the deed from Miss Gaillard to the Beards be declared null and void and that upon plaintiffs reimbursing the Beards for the amount paid Miss Gaillard, that the latter be required to execute a deed conveying said property to them. The case was heard by the Resident Judge of the 12th Circuit on exceptions by the Beards to the report of the Master. In a formal order he overruled all exceptions and sustained the report. From this order, the Beards have appealed.

The property involved consists of two lots at Myrtle Beach at the intersection of King's Highway and Second Avenue. The adjacent lot to the rear is owned by respondents. They constructed thereon a motor court and are now operating same. They desired to purchase the property in controversy in order to expand their motor court as future needs required and to avoid being cut off from the King's Highway, which constitutes a part of U.S. Highway No. 17, a heavily traveled route between New York and Florida. The only testimony in support of the oral contract was given by respondents themselves which may be briefly summarized as follows:

In response to a letter by respondents, Miss Gaillard, who resided in Columbia, went to Myrtle Beach in April, 1954, and discussed with them the sale of the lots. She offered to sell for $6,000. Respondents replied that they would take the lots at that figure but would need some time to raise the purchase price. Miss Gaillard said that there was "no big rush about that part of it" and "when you get your money together I will come down and we will close the deal." Later during the conversation Miss Gaillard stated that she did not "want to lose anything on the property or make anything" and if she found upon returning home and checking the records that she had more than $6,000 invested, she would let respondents know and they could send her a check for the excess. She assured them that this would not exceed $500. As she was leaving they expressed a desire to clean off the lots and erect some signs on them. Miss Gaillard replied they could do anything they wanted with the lots and to "just consider them yours."

There was testimony that shortly thereafter respondents cleared the lots of some heavy undergrowth, planted some grass and erected two large signs for the purpose of advertising their motor court. The latter necessitated laying two electric underground cables. Respondents admitted, however, on cross-examination that prior to said alleged parol agreement, they maintained two small signs on these lots and that the Crown Service Station also had some signs thereon which were erected with the consent of Miss Gaillard.

According to respondents, they never heard anything further from Miss Gaillard after making the alleged oral agreement. Nor is there any evidence that they thereafter sought to contact her, although they say that they arranged with a friend to borrow $4,000 on the lots. The matter apparently remained at rest until February, 1955, when a Mr. Graham, a real estate agent at Myrtle Beach, came to see them and inquired if they would cooperate in having the lots rezoned. According to respondents' testimony, Mr. Aust objected, stating "I have an agreement to buy those lots from Miss Gaillard and I intend to buy them this spring." Graham then offered them $1,000 if they would go along with the rezoning. Aust says he again objected and told Graham that he had a contract with Miss Gaillard to buy the property and "was going to buy it that spring."

On March 10, 1955, Miss Gaillard conveyed the two lots to appellants for a consideration of $8,500. Shortly thereafter respondents noticed in the paper that an application had been made for rezoning the property. They thereupon went to see Mr. Beard who said he had bought it. During the latter part of March, 1955, this action was commenced.

Graham, the real estate agent, testified for appellants substantially as follows: During the early part of 1955 Mr. Beard, who lived across the highway from these lots, came to his office and inquired about the property. He told Beard that it could not be used for business purposes unless rezoned. On February 18th, he went to see Mr. Aust and inquired if there would be any objection to having the lots rezoned. Aust replied that he did not want it rezoned and remarked, "I would like to have that property but haven't got the money to buy it now." On March 3, 1955, Beard came to Graham's office and made an offer of $8,500 for the lots. He then contacted Miss Gaillard, who was in Columbia, by telephone and transmitted the offer. Miss Gaillard inquired about Aust. He told her that Aust had stated to him that he didn't have the money to buy the property. Miss Gaillard then accepted the offer. The title was examined, deed prepared and forwarded to Miss Gaillard, and the transaction in due course closed. Graham said that Miss Gaillard assured him she had no contract with Aust. The attorney who examined the title reported that it was clear except for some taxes which were later deducted from the purchase price. Miss Gaillard paid Graham a real estate commission of 5%.

Appellants denied knowledge of any contract with Aust and testified that they purchased the property through Graham in good faith and paid the purchase price of $8,500 after being furnished by their attorney with a certificate that the title was good and clear of all encumbrances except for some taxes. They said that they then made application to have this property rezoned. They admitted seeing Aust clean off the lots and erect some signs but stated that signs had been on the property before.

Miss Gaillard, who as previously stated was in default, did not testify on the trial of the case.

Although it is difficult to imagine a business man, especially when counsel has been employed to examine the title, buying real estate with actual knowledge that another was claiming possession under an alleged parol contract of sale, we have a concurrent finding of the Master and the Circuit Judge to that effect. We shall assume for the purpose of this discussion that there is evidence to support this conclusion and that appellants occupy no stronger position than if Miss Gaillard still had title and the action was brought solely against her for the performance of the alleged contract.*fn1

The first question for determination is whether there was a parol contract between respondents and Miss Gaillard. If not, there is nothing to enforce. Finklea v. Carolina Farms Co., 196 S.C. 466, 13 S.E.2d 596. It was incumbent upon respondents to establish such a contract "`by competent and satisfactory proof, such as is clear, definite, and certain.' * * * `The degree of certainty required is reasonable certainty, having regard to the subject-matter of the contract'." Hammassapoulo v. Hammassapoulo, 134 S.C. 54, 131 S.E. 319, 320. In Carson v. Coleman, 208 S.C. 406, 38 S.E.2d 147, 149, it was stated: "Before a Court of Equity will specifically enforce a parol contract on the ground of part performance, all the material terms of the contract must be established to the satisfaction of the Court by proof that is clear, definite and certain." In White v. Felkel, 222 S.C. 313, 72 S.E.2d 531, 536, the Court quoted with approval the following: "`The terms of a contract must be so clear, definite, certain, and precise, and free from obscurity or self-contradiction that neither party can reasonably misunderstand them, and the court can understand ...

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