26 Ky.L.Rptr. 1033
Court of Appeals of Kentucky.
Nov. 22, 1904.

Appeal from Circuit Court, Knox County.
"Not to be officially reported."
Action by M. F. Hibbard against E. E. Carter and another.
From a judgment for plaintiff, defendants appeal.

Appellants, E. E. Carter and H. C. Jones, live in Bluefield, W. Va. In April, 1902, they were taking oil leases in Knox county, Ky., and appellee, M. F. Hibbard, executed to them the following writing:

"Received of H. C. Jones and E. E. Carter $10.00 as part payment on lease of oil right on twenty-five acres of land to be taken off East end of my farm where I now live, and adjoining the Berry farm, terms of lease five hundred dollars cash to be paid (of which the $10.00 here receipted is a part), when land is run out and located and a good and sufficient deed is made to oil lease, one eighth (1/8) of oil to be paid to me, and if drilling is not commenced in sixty days from date a rental of one dollar per day is to be paid until such operation is commenced, and to pay same amount of one dollar per day till pipe line is put in after well is completed and ready for producing. Operation to be pushed with all due diligence till well is completed, rental to be paid at bank of John A. Black in Barbourville at the end of each month and placed to my credit. Lease not to take house, nor no well to be located under two hundred (200) yards of house."

After the contract was executed, and befor anything further was done, appellants learned at Barbourville that appellee's title to the land was not good, and that his farm was included in a 36,000-acre survey belonging to other persons. There was some discussion between them as to what should be done. Finally, on the 6th of June, they wrote him this letter:

"Bluefield, W. Va., June 6, 1902.
"Mr. M. F. Hibbard, Girdler, Ky.--My Dear Sir: I am in receipt of your letter of some days ago, as I told you when I was out we would surrender you the contract on your paying the $10.00 back that we had paid you. You have never proven to us that you have anything. We do not propose to pay out any more money till that old survey is run out and you demonstrate to us you have got something. As far as the records show you have nothing outside of the 36,000 acre survey. You return to us the $10.00 we paid you so there will be nobody hurt and no harm done. We have no desire to encumber your land in any way whatever.
"Yours, &c., H. C. Jones."

The letter to which this is the answer is not filed, but it is shown that about the 5th of July appellant Jones met appellee, Hibbard, in Knox county. They differ as to what occurred in that meeting. Jones says it was there agreed that the trade should be rescinded; that they should give up the contract, and Hibbard should return to them the $10 which he had received. Hibbard denies that this was agreed to at that meeting, and says that nothing was said upon the subject. But he does not explain what answer he made to the letter of June 6th, or show that he had any other meeting with Jones before July 23d, and on that day he wrote Jones the following letter:

"Girdler, Ky., July 23, 1902.
"Mr. H. C. Jones, Bluefield, W. Va.--Dear Sir: You said you would give me the contract back for your money back. Send the contract to anybody you want to and notify me at once. If you fail to do this I will sue at once. I have the chance to lease my land.
"Yours truly, M. F. Hibbard."

Jones got this letter on July 27th, and on the same day he mailed the contract to E. T. Oliver, at Barbourville, directing him to deliver it to Hibbard, and collect from him the $10. He also wrote Hibbard at his post office, Girdler, telling him he had sent the contract to Oliver, and for him to get it and pay Oliver the $10. Some time after receiving the contract, Oliver saw Hibbard, and told him he had the contract, and that Jones requested him to collect the $10 and deliver the contract to him. Hibbard then said that he would not pay the $10, and would expect Carter and Jones to carry out the contract. Oliver does not fix the date of this conversation, but Hibbard says it occurred later than August 20th. Carter and Jones thought the matter was settled, until some time in the fall they learned that the $10 was not paid. On November 21, 1902, Hibbard filed this suit against Carter and Jones to recover $490, the balance of the contract price; also $1 a day for each day they had failed to work under the contract. He tendered with his petition a deed of lease acknowledged by himself and wife on the same day the suit was filed. The deed is based upon a survey made by Hibbard in the fall and shortly before the suit was brought. The defendants pleaded, in effect, that Hibbard did not survey and run out the land within 60 days of the date of the contract, and that the contract had been, by consent of parties, rescinded and abandoned. Hibbard testifies that he did not make the survey within 60 days, and that the defendants told him he need not make it until they notified him; but this they deny. On final hearing the court gave judgment against the defendants for $490, with interest, and dismissed the claim for rental at $1 a day for the failure of the defendants to commence operations.

The letter of June 6th was an unequivocal proposition to surrender the contract upon Hibbard's paying them the $10 he had received, and it shows on its face that this proposition had before this been made by word of mouth to Hibbard. It was very natural, when the parties met on July 5th, having not seen each other in the meantime, and Hibbard not having answered the letter of June 6th, that Jones and he would have some talk about the rescinding of this contract. The evidence is clear that this is the only meeting had between them between the letter of June 6th and Hibbard's letter of July 23d, and it will be observed that that letter begins with these words, "You said you would give me the contract back for your money back." If this language does not refer to the conversation between the parties on July 5th, it is hard to understand from the record what it does refer to. But, to whatever previous communication it may have referred, it was clearly an acceptance of the proposition, coupled with the condition that Jones was to send the contract to anybody he wanted, and notify Hibbard at once. Jones immediately sent the contract to Oliver, in Knox county, and notified Hibbard immediately by mail that he had done so. Hibbard says that he did not get this letter, but it was not returned to Jones, and Hibbard admits that some time afterwards he saw Oliver, and that Oliver told him he had the contract to deliver to him, and he refused to take it or pay the $10. As it took Hibbard's letter four days to go to Bluefield, it would reasonably take Jones' letter four days to return, and therefore the contract reached Barbourville about August 1st. If Hibbard got no notice of the acceptance of his proposition until after August 20th, there was a delay of 20 days in notifying him of the acceptance of his offer. On these facts, what are the rights of the parties? When a proposition is made on one side and is accepted on the other, the contract is closed. Hibbard made Jones the proposition, and Jones immediately accepted it, and mailed to Hibbard notice of his acceptance. The general rule is that, where a proposition is made by letter, and is accepted by the person to whom it is made, the contract is closed when the letter of acceptance is mailed by the person accepting it, and the proposition cannot thereafter be withdrawn by the person making it. The rule is thus stated in 9 Cyc. 295: "Where a person makes an offer and requires or authorizes the offeree, either expressly or impliedly, to send his answer by post or telegraph, and the answer is duly posted or telegraphed, the acceptance is communicated, and the contract is complete from the moment the letter is mailed or the telegram sent. *** Since agreements made by means of the post or the telegraph are simply an illustration of the general rule before stated that the offerer takes the risk as to the effectiveness of communication if the acceptance is made in the manner either expressly or impliedly indicated by him, it necessarily follows that the contract is complete as soon as the letter containing the acceptance is mailed or the telegram sent; and it makes no difference whatever that through mistake of the post-office authorities or the telegraph company, or through accident in transmission, it is delayed or is lost in transit, and never received by the offerer."

The only thing in this case to take it out of the general rule stated is that Hibbard said in his letter that, if Jones accepted the proposition, he must notify him at once, and, if he failed to do this, he would sue immediately. Considering the location of the parties--one at Bluefield, W. Va.; the other at Girdler, Knox county, Ky.--the only meaning we can properly give this stipulation is that Jones was to notify him by letter through the mail. He sent his proposition by mail, and, being silent as to how the acceptance was to be signified, must have contemplated that Jones should answer by mail. There seems to have been no other practical way for Jones to answer. The acceptance of Jones was in strict accord with the offer. He at once sent the contract to Oliver, and at once mailed a letter to Hibbard notifying him what he had done, and for him to pay Oliver the $10 and get the contract. The offer of Hibbard being thus accepted, the contract was closed. Hibbard could not subsequently withdraw his offer; nor was he released from the contract by the miscarriage of Jones' letter to him, for Jones was not responsible for this, his acceptance having been in the manner evidently contemplated by Hibbard when he wrote the proposition. We are also satisfied from the long delay of Hibbard to make the survey, or tender a deed, or complain of operations not being begun, that his subsequent refusal to receive the contract and pay the $10 when demanded by Oliver was due to the fact that he had in the meantime changed his mind about rescinding the contract. For this no adequate reason is given. The natural inference from Hibbard's letter of July 23d, under all the facts, is that they had agreed before this to rescind the contract, and that he meant that they must at once close up the agreement by sending the contract to some one to deliver to him, or he would sue them at once.

Judgment reversed, and cause remanded for a judgment for the defendants.

Ky.App. 1904.
83 S.W. 112, 26 Ky.L.Rptr. 1033

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