|Morrison v. Thoelke, 155 So. 2d 889, (1963).
ALLEN, Acting Chief Judge.
Appellants, defendants and counter-plaintiffs in the lower court, appeal a summary final decree for appellees, plaintiffs and counter-defendants below. The plaintiff-appellees, owners of certain realty, sued to quiet title, specifically requesting that defendant-appellants be enjoined from making any claim under a recorded contract for the sale of the subject realty. Defendant-appellants counterclaimed, seeking specific performance of the same contract and conveyance of the subject property to them. The lower court, after hearing, entered a summary decree for plaintiffs.
A number of undisputed facts were established by the pleadings, including the facts that appellees are the owners of the subject property, located in Orange County; that on November 26, 1957, appellants, as purchasers, executed a contract for the sale and purchase of the subject property and mailed the contract to appellees who were in Texas; and that on November 27, 1957, appellees executed the contract and placed it in the mails addressed to appellants' attorney in Florida. It is also undisputed that after mailing said contract, but prior to its receipt in Florida, appellees called appellants' attorney and cancelled and repudiated the execution and contract. Nonetheless, appellants, upon receipt of the contract caused the same to be recorded. Additional factual allegations concerning demand for performance, tender of the purchase price and payment of taxes were disputed.
On the basis of the foregoing facts, the lower court entered summary decree for the appellees, quieting title in them. The basis of this decision was, in the words of the able trial judge:
"[The] contract executed by the parties hereto constituted a cloud on the title of Plaintiffs. The Court finds said contract to have been cancelled and repudiated by Plaintiffs prior to its receipt by Defendants and that on this basis there was no legal contract binding on the parties." . . .
Turning to the principal point raised in this appeal, we are confronted with a question apparently of first impression in this jurisdiction. The question is whether a contract is complete and binding when a letter of acceptance is mailed, thus barring repudiation prior to delivery to the offeror, or when the letter of acceptance is received, thus permitting repudiation prior to receipt. Appellants, of course, argue that posting the acceptance creates the contract; appellees contend that only receipt of the acceptance bars repudiation. . . .
The appellant, in arguing that the lower court erred in giving effect to the repudiation of the mailed acceptance, contends that this case is controlled by the general rule that insofar as the mail is an acceptable medium of communication, a contract is complete and binding upon posting of the letter of acceptance. . . . Appellees, on the other hand, argue that the right to recall mail makes the Post Office Department the agent of the sender, and that such right coupled with communication of a renunication prior to receipt of the acceptance voids the acceptance. In short, appellees argue that acceptance is complete only upon receipt of the mailed acceptance. . . .
. . . Corbin, Contracts §§ 78 and 80 (1950 Supp.1961), also devotes some discussion to the "rule" urged by appellants. Corbin writes:
"Where the parties are negotiating at a distance from each other, the most common method of making an offer is by sending it by mail; and more often than not the offeror has specified no particular mode of acceptance. In such a case, it is now the prevailing rule that the offeree has power to accept and close the contract by mailing a letter of acceptance, properly stamped and addressed, within a reasonable time. The contract is regarded as made at the time and place that the letter of acceptance is put into the possession of the post office department."
. . . Corbin negates the effect of the offeree's power to recall his letter:
"The postal regulations have for a long period made it possible for the sender of a letter to intercept it and prevent its delivery to the addressee. This has caused some doubt to be expressed as to whether an acceptance can ever be operative upon the mere mailing of the letter, since the delivery to the post office has not put it entirely beyond the sender's control.
"It is believed that no such doubt should exist. In view of common practices, in view of the difficulties involved in the process of interception of a letter, and in view of the decisions and printed discussions dealing with acceptance by post, it is believed that the fact that a letter can be lawfully intercepted by the sender should not prevent the acceptance from being operative on mailing. If the offer was made under such circumstances that the offeror should know that the offeree might reasonably regard this as a proper method of closing the deal, and the offeree does so regard it, and makes use of it, the contract is consummated even though the letter of acceptance is intercepted and not delivered."
Significantly, Corbin expressly distinguishes cases involving bank drafts or bills of exchange from cases involving bilateral contracts. He writes:
"It should be borne in mind that whenever the receipt of the letter is necessary to produce some legal effect, the interception, and resulting non-delivery of the letter will prevent that effect. For almost all purposes, other than the acceptance of an offer, the mere mailing of a letter is not enough to attain the purpose. Unless it is clearly otherwise agreed, the mailing of a letter is not a sufficient notice to quit a tenancy, it is not actual payment of money that is inclosed, it does not transfer title to a check or other document; it will not ordinarily be sufficient notice required by a contract as a condition precedent to some contractual duty of immediate performance." . . .
The rule that a contract is complete upon deposit of the acceptance in the mails, hereinbefore referred to as "DEPOSITED ACCEPTANCE RULE" and also known as the "rule in Adams v. Lindsell," had its origin, insofar as the common law is concerned, in Adams v. Lindsell. . . . In that case, the defendants had sent an offer to plaintiffs on September 2nd, indicating that they expected an answer "in course of post." The offer was misdirected and was not received and accepted until the 5th, the acceptance being mailed that day and received by defendant-offerors on the 9th. However, the defendants, who had expected to receive the acceptance on or before the 7th, sold the goods offered on the 8th of September. It was conceded that the delay had been occasioned by the fault of the defendants in initially misdirecting the offer. . . .
Examination of the decision in Adams v. Lindsell reveals three distinct factors deserving consideration. The first and most significant is the court's obvious concern with the necessity of drawing a line, with establishing some point at which a contract is deemed complete and their equally obvious concern with the thought that if communication of each party's assent were necessary, the negotiations would be interminable. A second factor, again a practical one, was the court's apparent desire to limit but not overrule the decision in Cooke v. Oxley . . . that an offer was revocable at any time prior to acceptance. In application to contracts negotiated by mail, this latter rule would permit revocation even after unqualified assent unless the assent was deemed effective upon posting. Finally, having chosen a point at which negotiations would terminate and having effectively circumvented the inequities of Cooke v. Oxley, the court, apparently constrained to offer some theoretical justification for its decision, designated a mailed offer as "continuing" and found a meeting of the minds upon the instant of posting assent. Significantly, the factor of the offeree's loss of control of his acceptance is not mentioned. . . .
[I]t would seem clear that in attempting to provide additional justification for the "deposited acceptance" rule, the courts, in fact, served only to confuse and weaken the essential validity of the rule. Thus, the observation that the offeror having chosen to utilize the mails should bear the risk of delay occasioned thereby was extended by subsequent cases to a point wherein the validity of the contract was made to turn on a theory of communication to an agent. As Corbin points out, this fictitious agency theory cannot withstand criticism. . . . However, the ease with which the agency theory is refuted does not necessarily impair the validity of the rule.
Similarly, the "loss of control" theory, having its origin in the observation that under general contract principles an acceptance is manifest only when the offeree loses the power to suppress the manifestation, has, by a process of extension, come to be urged as a factor of primary legal significance. Yet, as was discussed earlier, the "loss of control" was not deemed controlling in the earliest cases. Nor is the general principle that a manifestation of assent must be beyond the party's control to be effective any more sacred than the general rule that assent in contract must be communicated. Yet the latter is obviously qualified in the "deposited acceptance" rule and in many instances of unilateral contract. Why then should the "loss of control" principle not also be - or have been - qualified? . . .
The justification for the "deposited acceptance" rule proceeds from the uncontested premise of Adams v. Lindsell that there must be, both in practical and conceptual terms, a point in time when a contract is complete. In the formation of contracts inter praesentes this point is readily reached upon expressions of assent instantaneously communicated. In the formation of contracts inter absentes by post, however, delay in communication prevents concurrent knowledge of assents and some point must be chosen as legally significant. The problem raised by the impossibility of concurrent knowledge of manifest assent is discussed and a justification for the traditional rule is offered in Corbin, Contracts § 78 (1950).
"A better explanation of the existing rule seems to be that in such cases the mailing of a letter has long been a customary and expected way of accepting the offer. It is ordinary business usage. More than this, however, is needed to explain why the letter is operative on mailing rather than on receipt by the offeror. Even though it is business usage to send an offer by mail, it creates no power of acceptance until it is received. Indeed, most notices sent by mail are not operative unless actually received.
"The additional reasons for holding that a different rule applies to an acceptance and that it is operative on mailing may be suggested as follows: When an offer is by mail and the acceptance also is by mail, the contract must date either from the mailing of the acceptance or from its receipt. In either case, one of the parties will be bound by the contract without being actually aware of that fact. If we hold the offeror bound on the mailing of the acceptance, he may change his position in ignorance of the acceptance; even though he waits a reasonable time before acting, he may still remain unaware that he is bound by contract because the letter of acceptance is delayed, or is actually lost or destroyed, in the mails. Therefore this rule is going to cause loss and inconvenience to the offeror in some cases. But if we adopt the alternative rule that the letter of acceptance is not operative until receipt, it is the offeree who is subjected to the danger of loss and inconvenience. He can not know that his letter has been received and that he is bound by contract until a new communication is received by him. His letter of acceptance may never have been received and so no letter of notification is sent to him; or it may have been received, and the letter of notification may be delayed or entirely lost in the mails. One of the parties must carry the risk of loss and inconvenience. We need a definite and uniform rule as to this. We can choose either rule; but we must choose one. We can put the risk on either party; but we must not leave it in doubt. The party not carrying the risk can then act promptly and with confidence in reliance on the contract; the party carrying the risk can insure against it if he so desires. The business community could no doubt adjust itself to either rule; but the rule throwing the risk on the offeror has the merit of closing the deal more quickly and enabling performance more promptly. It must be remembered that in the vast majority of cases the acceptance is neither lost nor delayed; and promptness of action is of importance in all of them. Also it is the offeror who has invited the acceptance."
The justification suggested by Corbin has been criticized as being anachronistic. Briefly, critics argue that the evident concern with risk occasioned by delay is premised on a time lag between mailing and delivery of a letter of acceptance, which lag, in modern postal systems is negligible. Opponents of the rule urge that if time is significant to either party, modern means of communication permit either party to avoid such delay as the post might cause. . . . At the same time critics of the rule cannot deny that even in our time delay or misdirection of a letter of acceptance is not beyond the realm of possibility. . . .
. . . As Corbin indicated, there must be a choice made, and such choice may, by the nature of things, seem unjust in some cases. Weighing the arguments with reference not to specific cases but toward a rule of general application and recognizing the general and traditional acceptance of the rule as well as the modern changes in effective long-distance communication, it would seem that the balance tips, whether heavily or near imperceptively, to continued adherence to the "Rule in Adams v. Lindsell." This rule, although not entirely compatible with ordered, consistent and sometime artificial principles of contract advanced by some theorists, is, in our view, in accord with the practical considerations and essential concepts of contract law. . . . Outmoded precedents may, on occasion, be discarded and the function of justice should not be the perpetuation of error, but, by the same token, traditional rules and concepts should not be abandoned save on compelling ground.
In choosing to align this jurisdiction with those adhering to the deposited acceptance rule, we adopt a view contrary to that of the very able judge below, contrary to the decisions of other respected courts and possibly contrary to the decision which might have been reached had this case been heard in a sister court in this State. However, we are constrained by factors hereinbefore discussed to hold that an acceptance is effective upon mailing and not upon receipt. Necessarily this decision is limited in any prospective application to circumstances involving the mails and does not purport to determine the rule possibly applicable to cases involving other modern methods of communication. . . . Restatement, Contracts § 65 (1932).
In the instant case, an unqualified offer was accepted and the acceptance made manifest. Later, the offerees sought to repudiate their initial assent. Had there been a delay in their determination to repudiate permitting the letter to be delivered to appellant, no question as to the invalidity of the repudiation would have been entertained. As it were, the repudiation antedated receipt of the letter. However, adopting the view that the acceptance was effective when the letter of acceptance was deposited in the mails, the repudiation was equally invalid and cannot alone, support the summary decree for appellees.
The summary decree is reversed and the cause remanded for further proceedings.
WHITE, J., and MOODY, JAMES S., Associate Judge, concur.