Alala v. Peachtree Plantations, Inc.
| Decision Date | 27 January 1987 |
| Docket Number | No. 0921,0921 |
| Citation | 355 S.E.2d 286,292 S.C. 160 |
| Parties | Joseph B. ALALA, Jr., Respondent, v. PEACHTREE PLANTATIONS, INC., J. Patrick Gavaghan, Pete Bailey, Jr., and Tony Corliss, Appellants. . Heard |
| Court | South Carolina Court of Appeals |
Wallace A. Mullinax, Jr., and James G. Johnson, III, of Horton, Drawdy, Ward & Johnson, Greenville, for appellants.
David A. White and Benjamin A. Johnson, of Roddey, Carpenter & White, Rock Hill, for respondent.
Respondent Joseph B. Alala, Jr. brought this suit for specific performance to require appellants Peachtree Plantations, Inc., J. Patrick Gavaghan, Pete Bailey, Jr. and Tony Corliss to purchase a certain tract of land from him and to pay certain costs incurred by him in connection with the tract and with this action. The trial judge granted Alala the relief which he sought. Peachtree, Gavaghan, Bailey and Corliss appeal. We affirm as modified.
Because this is a proceeding in equity, we have the authority to find the facts based on our own view of the preponderance of the evidence. Butler v. Sea Pines Plantation Co., 282 S.C. 113, 317 S.E.2d 464 (Ct.App.1984). However, we are not required to disregard the findings of the trial judge who saw and heard the witnesses and was in a position to judge their credibility. Mann v. Walker, 285 S.C. 194, 328 S.E.2d 659 (Ct.App.1985).
Alala is a lawyer practicing in Gastonia, North Carolina. Gavaghan, Bailey and Corliss are real estate developers doing business in South Carolina. Gavaghan and Bailey consulted Alala and his law firm for legal services and advice in connection with certain tax matters. Through a corporation which they controlled, Gavaghan, Bailey and Corliss thereafter contracted to purchase a tract of land consisting of 416 acres in York County. Using the services of the law firm, they formed Peachtree Plantations to acquire and develop the tract.
Alala became a participant in this venture personally by entering into a contract with Peachtree, Gavaghan, Bailey and Corliss which provided essentially as follows.
Alala agreed to purchase 100 of the 416 acres for a purchase price of $100,000. Peachtree, Gavaghan, Bailey and Corliss agreed to purchase the 100 acres from Alala within two years for an amount equal to the purchase price paid by him "plus any and all costs incurred by but not limited to interest, taxes (other than income), assessments, carrying charges, insurance and attorney's fees."
The parties further agreed that, if Peachtree, Gavaghan, Bailey and Corliss had not purchased the 100 acres from Alala within one year, he could elect to keep the property and release them from their obligation to purchase it.
Alala further agreed that he would exercise his best efforts to obtain a Federal Land Bank loan in the amount of $100,000, which Peachtree, Gavaghan, Bailey and Corliss could assume when they purchased the property from him.
Alala also agreed that if he were unable to obtain the loan from the Federal Land Bank he would cooperate with Peachtree, Gavaghan, Bailey and Corliss to obtain alternative financing.
The parties finally agreed that Alala or his assigns would receive twenty percent of the stock of Peachtree subject to certain terms and conditions not in issue here.
Alala purchased the 100 acres as he had agreed, but did not succeed in obtaining the Federal Land Bank loan. When he called on Peachtree, Gavaghan, Bailey and Corliss two years later to purchase the property from him, they refused to do so. This suit for specific performance followed.
Peachtree, Gavaghan, Bailey and Corliss first argue that the trial judge erred in granting specific performance because Alala breached the contract by not using his best efforts to obtain the Federal Land Bank loan and by not promptly notifying them of his failure to obtain the loan. We address these arguments separately.
Alala applied for the Federal Land Bank loan about nine months after entering into the contract. An officer of the bank replied to him by letter requesting certain additional information regarding his plans for farming operations on the property. Alala determined from this request that he could not qualify for the loan because the property was intended for development, and there were no plans for farming it.
The trial judge found as a matter of law that Alala could not have qualified for a Federal Land Bank loan. We concur in this finding based on our own review of the evidence.
A portion of the Federal Land Bank Policy and Procedure Manual included in the record makes it clear that the bank will not extend credit on land purchased by an investor unless "the land is not being purchased for development within five years."
It is clear from the evidence that the parties contemplated development of the property in less than five years.
Furthermore, an officer of the Federal Land Bank testified that, if the bank had known of the agreement requiring Peachtree, Gavaghan, Bailey and Corliss to purchase the property from Alala, he would not have qualified for a loan unless the articles of incorporation of Peachtree provided that it was organized to carry on farming.
"Equity will not require the doing of a futile task, nor foreclose the rights of a party from obtaining specific performance for failure to do something which in view of all the facts would have been useless." Carmichael v. Dan Nance Corp., 274 S.C. 357, 361, 264 S.E.2d 601, 603 (1980).
Since any further effort which Alala might have made to obtain the Federal Land Bank loan would have been futile, the fact that he made no effort to obtain it after receiving the letter from the officer of the bank is of no consequence.
Within a year after the contract was entered into, Alala notified Gavaghan orally that he was not eligible for the Federal Land Bank loan and confirmed this fact in writing about a year after that when he called on Peachtree, Gavaghan, Bailey and Corliss to purchase the property from him.
The contract contains no provision requiring Alala to give Peachtree, Gavaghan, Bailey and Corliss any particular notice regarding the Federal Land Bank loan, and we decline to read any such provision into it. Moreover, there is no evidence that Peachtree, Gavaghan, Bailey and Corliss were prejudiced in any way by not having received more timely notice.
Therefore, the fact that Alala did not notify Peachtree, Gavaghan, Bailey and Corliss more promptly of his failure to obtain the loan is also of no consequence.
Peachtree, Gavaghan, Bailey and Corliss also argue that the contract should not be enforced because it is not fair, just and equitable when considered in light of the relationship of the parties. They contend that they considered Alala to be their lawyer and he took advantage of the trust which they placed in him.
It is undisputed that Alala had acted as a lawyer for Peachtree, Gavaghan, Bailey and Corliss prior to entering into the contract with them. When a lawyer deals with his client, the burden is on the lawyer to show fairness. Jacobsen v. National Bank of Austin, 65 Ill.App.3d 455, 21 Ill.Dec. 913, 382 N.E.2d 277 (1978). There is, however, no absolute prohibition against a lawyer entering into a business transaction with his client. See S.C.Sup.Ct.R. 32, DR 5-104(A) (Supp.1986) ().
We are convinced from our review of the evidence that there was no conflict between the interests of Alala and those of Peachtree, Gavaghan, Bailey and Corliss. Likewise, we find that Peachtree, Gavaghan, Bailey and Corliss did not expect Alala to exercise his professional judgment as to the terms of the contract. Rather, they approached him seeking his financial participation. Bailey initially proposed the essential terms of the contract to Alala and thereafter negotiated its terms...
To continue reading
Request your trial
-
Hughes v. Oconee Cnty.
... ... v. Grand Strand Entm't, Inc. , 363 S.C. 531, 536, 611 ... S.E.2d 922, 925 (2005); Eagle ... reasonably have been avoided or reduced.”); Alala ... v. Peachtree Plantations, Inc. , 292 S.C. 160, 167, 355 ... ...
-
First Union Nat. Bank of SC v. Soden
...the trial judge who saw and heard the witnesses and was in a better position to judge their credibility. Alala v. Peachtree Plantations, Inc., 292 S.C. 160, 355 S.E.2d 286 (Ct.App.1987). Based on our own review of the evidence, we find ample evidence to support the master's finding that Nan......
-
Lackey v. Green Tree Financial Corp.
...consideration flowed to each party to the contract, and thus, mutuality of obligation existed. See Alala v. Peachtree Plantations, Inc., 292 S.C. 160, 355 S.E.2d 286 (Ct.App.1987). We interpret the trial court's ruling to be that mutuality of remedy was required, i.e., the consideration giv......
-
Kumpf v. United Telephone Co. of Carolinas, Inc., 2005
...United to show what difference early retirement in 1991 would have made to the damage calculation. See Alala v. Peachtree Plantations, Inc., 292 S.C. 160, 355 S.E.2d 286, 290 (1987) ("A party who claims damages should have been minimized has the burden of proving they could have reasonably ......
-
Business Transactions With Clients
...Conduct of Grant, 645 P.2d 23, 23.(Or. 1982), opinion withdrawn in part on denial of reh'g, 647 P.2d 933 (Or. 1982). 14. Id. at 25. 15. 355 S.E.2d 286 (S.C. Ct. App. 1987). 16. Id. at 289. 17. 751 P.2d 344 (Wyo. 1988). 18. Id. at 347. 19. Id. 20. WYOMING RULES OF PROFESSIONAL CONDUCT, R. 1.......