Corporation president signed a real estate purchase contract by which he agreed to sell certain property the corporation owned. The contract did not mention the corporation and did not indicate that the president was signing on behalf of the corporation. Purchaser was one of three vendees identified but the only signatory. (The contract said ". . . the undersigned Buyer, whether one or more, agree to purchase . . . . ") The contract provisions included a requirement that the vendor deliver marketable title in fee simple absolute.

Later, apparently prior to the scheduled closing, the president assigned the contract to the corporation. The buyer did not close, and ultimately the corporation brought this damages action. The trial court upheld the purchaser's demurrer based on the irregularities of the purchase agreement. Upon review, however, the state supreme court reversed and remanded.

The appeals court pointed to allegations in the complaint that the buyer intended to be individually bound and that buyer knew it was obtaining a corporate deed of property owned by the corporation. It concluded that the general allegation in the complaint that seller was "ready, willing and able" to close was a sufficient allegation that seller had marketable fee simple title, even though there was no specific allegation of title.

On the question of whether the contract satisfied the Statute of Frauds, the court indicated that there was no requirement that the contract seller own the property at the time that it agrees to sell. Further, absent special circumstances, contract rights are assignable. Here, the allegations were that the buyer knew that the land was owned by the corporation and intended to buy from the corporation. Consequently, there was no reason to conclude that the contract seller could not transfer the benefits of the contract to the corporation or that the corporation could not enforce the contract against the buyer.

Reporter's Comment: This decision at best encourages sloppy vague pleadings and at worst combines the same with judicial discretion that assures legal uncertainty concerning less than strict compliance with the Statute of Frauds in real estate transactions.

Editor's Comment: The editor shares the values of the Reporter, but disagrees with the Reporter's conclusions here. If, indeed, the plaintiff can show at trial that the buyer understood that it was buying land owned by a corporation, then there would seem little reason to object to the process that followed execution of the contract. Of course, the contract would not have been specifically enforceable by buyer at the time it was executed, and, under the "mutuality" doctrine followed in some states, it would not have been specifically enforceable, therefore, by seller. But once the contract was properly assigned to the true owner of the property, it should have been specifically enforceable. And, in any event, this was not a specific enforcement case. If the seller was ready, willing and able to perform, why shouldn't buyer be liable in damages?

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