Smith v. Sleepy Hollow Investment Co.

KNIGHT, J. —The defendant corporation, Sleepy Hollow Investment Co., was engaged in the business of purchasing and selling real property, and had secured an option to purchase, with power to sell, a large tract of land in Marin County belonging to West Coast Life Insurance Company. The plaintiffs, Smith brothers, alleging that on April 6, 1943, defendant entered into a contract with them for the sale to them of 1,100 acres of the tract, brought this action for the specific performance of the alleged contract. The defendant denied that any contract of purchase and sale had ever been entered into between the parties, and the trial court found in defendant’s favor on that controlling issue. Accordingly judgment was entered for defendant, and plaintiffs appeal.

The evidence supports the trial court’s finding. The following are the facts: Plaintiffs were dairymen, and through a real estate broker named Grandi had been seeking to buy some 1,000 acres of the property. The date fixed for the expiration of defendant’s option to purchase the property from the owner was April 30, 1943; and Grandi had submitted a verbal, unauthorized offer on behalf of plaintiffs to purchase 1,100 acres of the tract at $36 an acre, making a total purchase price of $39,600. On April 3d, at a meeting of the directors of the defendant corporation, at which Samuel Gardiner, one of the directors and the attorney for the corporation, was present, Grandi’s informal offer was reported to the board by George J. Kaenel, the president of the corporation. At the same meeting the board authorized Kaenel to sell 500 acres of the property to one A. J. Raisch; but his authority to close this deal was limited to 48 hours from and after 5 o ’clock April 3, 1943; and the board voted to accept the Smith brothers’ offer if the Raisch transaction was not carried through within the limited time. The sale was not made to Raisch, and on April 5, 1943, Kaenel instructed Gardiner to submit to plaintiffs a proposition for the sale to them of the property. That offer was addressed to Grandi, and read as follows:

[77]“April 5,1943.

“F. Lloyd Grandi:

“Smith Bros, proposal is very nearly satisfactory. We now have a definite authorization from the Board of Directors upon which we can close. I must limit your time to accept to 12 Noon tomorrow, because we are also close to agreement with another party and want to negotiate with him if we do not close with you by tomorrow noon.