Action for specific performance of contract under which defendants agreed inter alia to convey realty to plaintiff, fishing club, and plaintiff agreed to construct club house. The Chancery Court, Kent County, Bramhall, Vice-Chancellor, held, inter alia, that since plaintiff was in default in material respect, by not having constructed club house, specific performance would not be decree and that even if construction of club house would be more expensive than plaintiff had originally contemplated performance of obligation could not be excused on ground of impossibility.
Order in accordance with opinion.
[34 Del.Ch. 29] Complaint for Specific Performance by plaintiff, Safe Harbor Fishing Club, a corporation of the State of Delaware, against defendants Safe Harbor Realty Company, also a corporation of the State of Delaware, and Harry A. Fisher.
William H. Foulk and Edward W. Cooch, Jr., Wilmington, for plaintiff.
Arley B. Magee, Jr., Dover, and Vincent P. Desmond, Chester, Pa., for defendants.
BRAMHALL, Vice Chancellor.
On April 26, 1947, defendant Safe Harbor Realty Company, a corporation of the State of Delaware, and Safe Harbor Fishing Club, of the City of Chester, State of Pennsylvania, entered into a written agreement providing for the sale by the realty company to the fishing club of certain land bordering on the Delaware Bay, in Kent County, near a place known as Pickering Beach, designated on the plot as 541 lots, a parking lot 700 feet long and 100 feet wide, and a tract of land on the shore of the Delaware Bay to be used as a club house. The agreement provided as a consideration for the sale of said lots that the plaintiff would pay to the corporate defendant the sum of $2,000; that the plaintiff would dredge a canal or creek and a basin for boats; that it would erect at the mouth of the creek a club house; that it would gravel the streets ‘ that are laid out on the plot plan they are purchasing’, and would pay to the corporate defendant 50% of the sale of each lot until the said sum of $2,000 was fully paid to the corporate defendant; that in default of said agreement the plaintiff would forfeit all work done on said property as liquidated damages.
Prior to the execution of said agreement the corporate defendant had acquired title to certain real estate in Kent County for a real estate development. A part of the tract was laid off in lots and streets. [34 Del.Ch. 30] Several plots were made of this land, one plot being recorded with the office of the recorder of deeds, at Dover. Defendant Harry A. Fisher, who with his wife and son constitute all of the stockholders of the corporate defendant, conceived the idea of creating a fishing club on a part of his tract and selling lots to the members of the fishing club, with the thought that the fishing club would make certain necessary improvements to the property with the money received from the sale of those lots. As a result of Fisher's efforts a fishing club was formed and later incorporated under the laws of this state. A great many of the 541 lots were sold. The fishing club proceeded to gravel some of the streets. A contract was let by the fishing club for the dredging of the canal and yacht basin. It developed that the gravel and sand excavated in the dredging of the canal and yacht basin was not sufficient to erect a road leading to the proposed site of the club house. A request was made of Fisher by certain of the officers of the fishing club that the site of the club house be transferred from the site shown on the plot to the parking space. In the meantime restrictions had been placed on all of the lots included in the agreement, with the exception of the proposed club house site, prohibiting the sale of intoxicating liquors. An effort was made to remove this restriction against the parking lot by securing the consent of all of the owners of the lots. This effort was not successful. For some reason nothing further was done about the development of the tract. No effort was made to erect a club house at the club house site on the shore of the Delaware Bay or to construct a road leading to it. The members of the fishing club contended that it was unreasonable for defendants to require plaintiff to erect a club house on this site since because of the marshy condition of the land piling would have to be driven six or eight feet before solid ground could be reached. Objection was also made on the ground that it would be impossible to erect a club house at the club house site because there was no road leading to it.
Plaintiff has requested that defendants be ordered and directed to construct a road leading to the club house site; that defendants return to plaintiff the sum of $6,500 which plaintiff spent in dredging the canal and yacht basin and that defendant corporation be directed to perform its obligations pursuant to the agreement of April 26, 1947.
[34 Del.Ch. 31] The parties entered into a written agreement, in which the obligations of all the
parties were set forth. While in some instances,-such as lack of specifications as to the type of club house to be erected on the club house site and the manner in which the streets were to be constructed,-the contract is not specific, and while, in others, certain obligations of the parties may have been omitted, it is not disputed that the contract is binding upon both the parties. At the time of the execution of the contract there was, and is now, no road leading to the club house site. The written agreement is silent as to the construction of the road. It is clear that all parties anticipated that one would be constructed. Plaintiff contends that its construction was the obligation of defendant corporation and in support of that contention calls attention to the testimony of the defendant Fisher. I do not agree with plaintiff's construction of Fisher's testimony in this respect. This witness testified that it was the general understanding that the road was to be constructed by plaintiff from the gravel and dirt excavated in the digging of the canal and yacht basin. While the witness did state that if he had the money he would build a road, there is nothing in his testimony to indicate that he ever definitely agreed to do so. The dirt obtained from the excavating work was not sufficient for the building of the road. After an attempt by plaintiff to change the site of the club house from the original club house site to the parking lot proved futile, nothing was ever done to construct a road or to construct a club house on the club house site.
Plaintiff contends that it was relieved from its duty to erect a club house on the club house site by reason of the excessive cost which would be entailed in the erection of a club house on that site and by reason of the serious difficulty, if not impossibility, of moving materials to the club house site in the absence of the construction of the road. Plaintiff entered into a binding contract. At the time of the execution of the agreement there was no road leading to the club house site. From the testimony of the various witnesses it was obvious that a road leading to the site of the proposed club house would have to be constructed. Nevertheless, plaintiff executed an agreement which contained nothing relative to the construction of the road or as to whose responsibility its construction would be.
[34 Del.Ch. 32] Plaintiff is asking for specific performance of the contract. At the same time it is in default as to an important obligation which it agreed to perform, namely, the erection of a club house on the club house site. Unless plaintiff is excused from the performance of this obligation, it should not be permitted to have specific performance. In the case of Peckham v. Industrial Securities Co., 1 W.W.Harr. 200, 113 A. 799, 801, Chief Justice Pennewill, quoting the leading case of Dermott v. Jones, ...