Lucy v. Zehmer

W. O. Lucy was a longtime acquaintance of A. H. Zehmer (defendant), who owned Ferguson Farm. On the evening of December 20, 1952, while Lucy and Zehmer were sharing drinks at Zehmer’s restaurant, Zehmer wrote on a restaurant check, “We hereby agree to sell to W.O. Lucy the Ferguson Farm complete for $50,000.00, title satisfactory to buyer.” The agreement was signed by Zehmer and his wife (defendant). The next day, Lucy arranged for his brother (plaintiff) to pay half the purchase price in exchange for a half interest in the farm. Lucy then hired an attorney to examine title and, upon a satisfactory report, contacted Zehmer to close the transaction. Zehmer refused, claiming he had never really agreed to sell. The Lucys sued the Zehmers, seeking specific performance of the agreement. At trial, Lucy testified that he and Zehmer discussed the transaction for 40 minutes before Zehmer executed the writing. He also testified that the executed agreement was a second draft resulting from Lucy’s request that Zehmer add a title provision and change “I” to “We” because both Zehmer and his wife would need to sign. Zehmer testified that he was severely intoxicated when he wrote the memorandum. Zehmer also testified that (1) he did not believe Lucy had $50,000 and the writing was merely a jest to call Lucy’s bluff; (2) when convincing his wife to sign, Zehmer told her, out of Lucy’s earshot, that the agreement was just a joke; and (3) when Lucy took the writing off the table and offered to pay $5 to bind the deal, Zehmer realized Lucy thought the transaction was serious and promptly told Lucy he wasn’t really selling. Nevertheless, Lucy left the restaurant insisting there had been a sale. The trial court held that there was no binding agreement and denied specific performance. The Lucys appealed.