Callaghan v. Reed

ROBERTS, J. Plaintiffs appeal from a declaratory judgment order of the trial court declaring valid and enforceable an agreement to convey real and personal property. The facts are undisputed. Defendant entered into the subject agreement with his mother, Zelma Reed, on January 1, 1975. The agreement provided that Zelma Reed would sell certain real and personal property to defendant for a stated price and that he would convey to her certain other real property as a down payment and pay the balance at a stated rate annually during his mother’s lifetime. The agreement included the following provision: "* * * It is the intent and purpose of this paragraph that there shall be no actual conveyance by deed from Zelma to Charles until after the death of Zelma, so that in the event Charles predeceases Zelma, Zelma will receive back the real property complete with all right appurtenant thereto. * * *” It was also stated that defendant’s mother agreed to "execute a warranty deed conveying the real property to Charles at the time this agreement is executed, provided that such warranty deed shall not be delivered to Charles until authorized by Zelma.” The agreement further provided that defendant would maintain the premises in good condition, be responsible for all expenses incurred during the life of the agreement and allow his mother or her agents to come on the property at reasonable times to make inspection. It was required that defendant receive written permission from his mother before assigning the property because the contract was based in part upon his knowledge of the land. The agreement was stated to be binding upon the parties and their heirs, successors and assigns. On May 28, 1975, Zelma Reed executed a will, dividing her property among defendant and his three [492] sisters. The will did not make disposition of this property. On January 15, 1978, Zelma Reed died; she had never executed the deed provided for in the agreement. Plaintiffs are defendant’s sisters and the residuary heirs under Zelma Reed’s will. They sought a declaratory judgment that the agreement was void. On appeal they argue that the trial court erred in declaring the agreement enforceable, contending that the agreement is testamentary in nature, too indefinite to be enforceable, and provides for no bilateral obligation. Plaintiffs first argue that because the deed would not change hands until Zelma Reed’s death, the parties attempted to do by agreement what should have been done by means of a will. Defendant’s mother made an enforceable promise to execute a deed; the fact that she did not execute the deed is of no moment, since defendant could require execution of the deed under the terms of the contract. Defendant had possession and present use of the property and the enforceable promise of a deed, with only delivery postponed. A deed or contract to sell real estate is not testamentary in character where it passes a present interest, merely postponing enjoyment. In re Estate of Verbeek, 2 Wash App 144, 467 P2d 178 (1970); Annot. 31 ALR2d 532, 538 (1953). The Supreme Court has held that where a deed is executed with delivery postponed until the death of the grantor, a valid present conveyance of an interest in land is accomplished. Masquart et al v. Dick, et al, 210 Or 459, 310 P2d 742 (1957); Nalley v. First Nat. Bank, Medford, 135 Or 409, 293 P 721, 296 P 61 (1931). We see no reason to distinguish between the execution of a deed and the enforceable promise to execute a deed. Defendant had transferred property to his mother as a down payment and had made the annual payments as required in the agreement. Under these circumstances, the existence of a forfeiture clause in the event that the totality of the consideration was not forthcoming due to defendant’s death did not change the fact that defendant had a [493] sufficient enforceable present interest to prevent the contract from being testamentary in nature. Plaintiffs also contend that the instrument is too indefinite to be enforceable, apparently because the number of payments to be made is indefinite. However, we find the agreement to be clear on its face. The amount of consideration is set by the agreement, as is the amount of down payment and the amount of money to be paid annually. The trial court analogized this to agreements whereby one agrees to support someone for life for consideration presently granted. Here, as there, the number of years for which defendant would be obligated was uncertain, but the extent of his obligation during his mother’s lifetime, however long that might have been, was clear. We find the contract sufficiently definite to be enforceable. Finally defendant contends that there is no bilateral obligation because Zelma Reed only agreed to convey should she predecease her son. We agree with the following conclusion of the trial court: "* * * In the view of this Court, this contention construes an intended condition subsequent to be a condition precedent. In short, it is the clearly expressed intention of the parties to provide for the contrary of this intention. It is of no particular moment that the Decedent had not executed a deed. This part of the agreement was executory and to follow the signing. It was the obvious and expressed intent of the parties that she do so at a later time, and, that provisions be made for an escrow-type delivery upon her death. The same result could have been accomplished by Decedent deeding to Defendant at the time of the execution of the agreement and Defendant executing and placing in escrow a deed back to Decedent in the event he predeceased her. * * *” The trial court properly declared the agreement to be enforceable. Affirmed.