Business Law

FRANK J. YEAGER v. BEULAH L. DOBBINS, Executrix under the Will of C. N. DOBBINS,

Deceased

No. 377

Supreme Court of North Carolina

252 N.C. 824; 114 S.E.2d 820; 1960 N.C. LEXIS 440

June 30, 1960, Filed

PRIOR HISTORY: [***1]

Appeal by plaintiff from Gambill, J., November Civil Term, of Yadkin.

Plaintiff's complaint is summarized as follows: Defendant is the widow of C. N. Dobbins who

died 15 June 1958. She is sole devisee and legatee and executrix under the will of deceased. She

is sued in her representative capacity. On and prior to 21 October 1948 plaintiff was a resident of

Lansdowne, Pennsylvania, where he owned his home and was employed in the insurance

business. At this time C. N. Dobbins owned a 210-acre farm in Yadkin County, North Carolina

and, "in writing, contracted with and promised" plaintiff if he would give up his residence and

employment in Pennsylvania, bring his family to North Carolina and take over, operate and work

the farm, Dobbins would convey or devise it to plaintiff. The contract was subject to the

condition that if Dobbins' sons, Charles and James, or either of them, should join plaintiff in

operating and working the farm, it would be conveyed or devised to plaintiff and such son or

sons in equal shares, otherwise to plaintiff solely. In reliance upon the contract, plaintiff sold his

home, gave up his employment, moved his family to the farm, lived thereon and operated

[***2] and worked it until the death of C. N. Dobbins. Neither of the sons joined with plaintiff

in operating and working the farm. The land was not conveyed to plaintiff, and in breach of the

contract Dobbins willed it to his wife, the defendant. The farm, at the death of Dobbins, was

worth $ 105,000.00, including $ 50,000.00 in improvements placed thereon by plaintiff at his

own expense. Plaintiff filed claim with defendant for the sum of $ 105,000.00 but payment was

refused.

In consequence of a motion by defendant that the complaint be made more definite and certain

and that the writing relied on by plaintiff be fully set out, plaintiff filed an amendment and

alleged that the writing is a letter from C. N. Dobbins to plaintiff. It was made a part of the

complaint and attached thereto as an exhibit.

The letter is dated 21 October 1948, addressed to "Dear Frank" and signed, "Your dad, C. N.

Dobbins." Omitting nonessentials, it is as follows:

"I wanted that you should make the decision yourself so that . . . I wouldn't feel that I had over

persuaded you . . . I've been getting the corn out of the field and sowing grain, which is mighty

close akin to work . . . the payoff comes next [***3] summer with the harvest.

"Now to answer more specifically your questions. I had hoped that you, Charles and James could

and would take the farm over and operate it as a jointly owned piece of property. There is

sufficient land and sufficient work for all of you to have a full time job. However I realize that

partnerships are rather hard to make operate and it would probably be just as well or better to

divide the place 3 ways even though it should be operated as an entity. Who knows for sure what

James or Charles will want to do when older? They may not want to farm. You might not like it

after a trial. I would like for any of you boys to have the farm only if you would keep it and work

it . . .

"I would like to turn the whole thing over to you to make as much as you can until Charles gets

through school and comes home; then the two of you to do likewise until James can join you and

then the three of you carry on from there. It appears that I am about through except in an advisory

capacity and possibly that too. I naturally would like to have you and Grace nearby and even

more especially Kathy and Christine.

"The decision is yours to make, Frank. I'd love to have you come [***4] on down as soon as

possible . . .

"As for a house for you to live in, we might at odd times build one. I selected one out of the

October Country Gentleman as being about what would be needed for you boys to live in. You

have better ideas probably . . . .

"One thing is certain you would never be out of a job. . . .

"For my part will try to make it interesting from every angle.

"I am not sure this covers everything you wanted to know. If not I would be glad to explain

further on request."

Defendant demurred to the complaint as amended on the ground that it does not state facts

sufficient to constitute a cause of action, in that the action, sounding in contract, is based solely

and entirely upon the above letter, which upon its face is wholly insufficient in law to constitute

an offer to contract, a contract, "or any other thing upon which plaintiff can as a matter of law

maintain the action."

The court sustained the demurrer. Plaintiff appealed and assigned error.

DISPOSITION: Affirmed.

JUDGES: Moore, J. Parker and Higgins, J.J., dissenting.

OPINIONBY: MOORE

OPINION: [*826] [**822] The complaint alleges that the agreement or contract on the part of

C. N. Dobbins is in writing. Plaintiff amended the complaint and alleged that the writing relied

on is the letter of C. N. Dobbins dated 21 October 1948. It is not alleged that Dobbins agreed or

offered to do anything more than appears in the letter.

The question for decision is whether the letter constitutes a contract or offer to contract sufficient

to support an action for damages for breach of its terms.

Where the alleged contract is made a part of the complaint and is relied on as the sole basis of

recovery, the court will look to its particular provisions rather than the more broadly stated

allegations in the complaint or the conclusions of the pleader [***7] as to its character and

meaning. Williamson v. Miller, 231 N.C. 722, 726, 58 S.E. 2d 743.

The inquiry here does not involve the statute of frauds, G.S. 22-2. Plaintiff alleges that the

agreement on the part of C. N. Dobbins is in writing. Furthermore, the statute of frauds is an

affirmative defense and must be pleaded. Weant v. McCanless, 235 N.C. 384, 386, 70 S.E. 2d

196. This defense may not be raised by demurrer. McCampbell [*827] v. Building and Loan

Ass'n., 231 N.C. 647, 651, 58 S.E. 2d 617.

Upon proper construction of the letter in question depends the propriety of the judgment

sustaining the demurrer. The letter is not a complete contract within itself. This is obvious and

requires no discussion. [**823] The real question is whether it contains a valid offer in express

terms or by necessary implication, the acceptance of which and the performance of conditions

therein contained give rise to a binding contract, the breach of which will support an action for

damages.

In the analysis and construction of the contents of the letter, certain facts and conclusions

inevitably emerge. The letter is in answer to an inquiry by plaintiff, the writer's son-in-law.

[***8] As to whether he will come to North Carolina is for decision of plaintiff. Farming is

hard work, the writer likes it but is about through except in an advisory capacity. He would like

to have his daughter and grand-daughters near him. He has two sons, Charles and James, who

have not finished school.

The writer comes to the main purpose of the letter in this wise: "Now to answer more specifically

your questions." Here he discusses some ideas he has concerning the farm. He had hoped that

plaintiff, Charles and James could and would take the farm over and operate it as a jointly owned

piece of property. There is work enough for all. However he realizes that partnerships are "hard

to make operate." It would probably be as well or better to divide the place three ways but it

should be operated as a unit. He doesn't know whether James or Charles will want to farm when

they are older. Plaintiff might not like it if he tried it. Writer would like for any of the three boys

to have the farm "only" if they "would keep it and work it."

It is our opinion that the foregoing portion of the letter does not comprise an offer to convey or

devise the farm or any part thereof. [***9] The writer is merely discussing ideas and

possibilities. He is giving background information for possible future disposition of the farm. He

has reached no definite decision. He wants plaintiff and writer's sons to have the farm only if they

should like farming, that is, "would keep it and work it." It would appear that the writer does not

wish to convey the land to plaintiff, Charles or James until he is convinced they like farming and

want to farm. There is no positive offer of the land on any definite conditions. The writer is

reserving his decision as to the disposition of the farm until future developments disclose

[*828] the attitudes of plaintiff and the sons toward farming. This is borne out by his summary

or conclusion of the matter.

The writer concludes by making the following proposal: "I would like to turn the whole thing

over to you to make as much as you can until Charles gets through school and comes home; then

the two of you do likewise until James can join you and then the three of you carry on from

there." It is clear that writer offers an interim arrangement. Plaintiff may come to North Carolina,

take over the farm and make as much as he can [***10] until Charles and James finish school.

Then the three are to "carry on from there." There is still no offer to convey or devise. Again final

decision and disposition must await developments.

"When an offer and acceptance are relied on to make a contract, 'The offer must be one which is

intended of itself to create legal relations on acceptance. It must not be an offer intended merely

to open negotiations which will ultimately result in a contract, or intended to call forth an offer in

legal form from the party to whom it is addressed.' 1 Page on Contracts, sec. 26." Elks v.

Insurance Company, 159 N.C. 619, 625, 75 S.E. 808. "If a proposal is one merely to open

negotiations which may or may not ultimately result in a contract, it is not binding though

accepted . . . Care should be taken not to construe as offers letters which are intended merely as

preliminary negotiations." 12 Am. Jur., Contracts, sec. 28, p. 526; Restatement of the Law of

Contracts, sec. 25, p. 31.

"In the formation of a contract an offer and acceptance are essential elements; they constitute the

agreement of [**824] the parties. The offer must be communicated, must be complete, and must

be accepted [***11] in its exact terms. (Citing authority). Mutuality of agreement is

indispensable; the parties must assent to the same thing in the same sense, idem re et sensu, and

their minds must meet as to all the terms." Dodds v. Trust Co., 205 N.C. 153, 156, 170 S.E. 652.

We are of the opinion, and we so hold, that C. N. Dobbins did not make an offer to convey or

devise the farm that will support plaintiff's contention and theory of the case. The court below

properly sustained the demurrer.

It is observed that the demurrer was sustained but the action was not dismissed. G.S. 1-131. As to

whether the allegations are sufficient to support a recovery for betterments or for quantum

meruit, such inquiry does not arise on the demurrer or on this appeal. Pamlico County v. Davis,

249 N.C. 648, 652, 107 S.E. 2d 306; Stewart v. Wyrick, 228 N.C. 429, 433, 45 S.E. 2d 764.

The judgment below is

Affirmed.

DISSENTBY: PARKER; HIGGINS

DISSENT: [*829] Parker and Higgins, JJ., dissenting.

The original complaint alleged that C. N. Dobbins owned a farm in Yadkin County containing

210 acres. "On or about October 21, 1948, C. N. Dobbins, in writing, contracted with and

promised the plaintiff [***12] that if the plaintiff would give up his employment in the

insurance business and his residence in Landsdowne, Pennsylvania, would remove himself and

his family to the farm described in paragraph four, . . . and would take over and operate the farm,

keep it and work it, C. N. Dobbins, in consideration of the plaintiff's doing so, would convey the

farm to the plaintiff prior to the death of C. N. Dobbins, or, if such conveyance was not made

prior to his death, he would devise the farm to the plaintiff by his will. The contract and promise

so made by C. N. Dobbins to the plaintiff were subject to the condition that if Charles N.

Dobbins, Jr., and James Dobbins, the sons of C. N. Dobbins, or either of them, desired to join

with the plaintiff in taking over and operating . . . the farm . . . and if they, or either of them, did

so join with the plaintiff . . . C. N. Dobbins would so convey or devise the farm, in equal shares,

to the plaintiff and such of his said sons as did so join with the plaintiff, . . . but if neither of his

said sons so joined . . . then C. N. Dobbins would so convey or devise the entire farm to the

plaintiff alone."

"On or about January 5, 1949, the plaintiff, in [***13] consideration of and in reliance upon the

contract and promise of C. N. Dobbins, . . . resigned his position of employment in the insurance

business . . . sold his home . . . removed . . . to Yadkin County . . . took over the operation of the

farm and placed improvements thereon . . . of the value of $ 50,000." Neither of the sons joined

the plaintiff in taking over and operating the farm. C. N. Dobbins died suddenly on June 15,

1958. "Notwithstanding his contract and promise as set forth in paragraph five, . . . and

notwithstanding the full performance and fulfillment by the plaintiff of each and every condition

. . . in the promise of C. N. Dobbins, . . . C. N. Dobbins did not convey or devise the farm, . . .

but in breach of his contract and promise . . . devised the said farm together with all other real

and personal property . . . to his wife, Beulah L. Dobbins, and appointed her the executrix of his

will."

The plaintiff filed a claim against the estate for damages resulting to him from the breach of the

contract on the part of C. N. Dobbins. The administrator denied the claim and the plaintiff

brought this action for a breach of contract. Upon motion of [**825] defendant [***14] and

order of the court the plaintiff amended the complaint by attaching the [*830] Dobbins letter --

which letter shows that it was written as a reply to the plaintiff's letter to Mr. Dobbins. The

plaintiff's letter, therefore, may be competent as evidence to explain and to throw light on the

Dobbins letter.

The plaintiff has alleged a contract, performance on his part, breach on the part of Mr. Dobbins,

and damages. For the purpose of testing the sufficiency of the complaint, the demurrer admits all

facts well pleaded. The ultimate factual allegations in a complaint must be controverted -- not by

demurrer, but by answer. The complaint, liberally construed, states a cause of action. When the

answer and evidence are in, the court will then be in a position to determine with safety and

accuracy the sufficiency of the evidence to support the plaintiff's allegation. We think the

demurrer should have been overruled.