Astronautical Development Co. v. University of Ala., Huntsville Foundation Inc.

• Decision Date: 11 December 1969
• Docket Number: 8 Div. 249
• Citation: 229 So.2d 783,285 Ala. 149
• Parties: ASTRONAUTICAL DEVELOPMENT COMPANY, Inc. v. UNIVERSITY OF ALABAMA, HUNTSVILLE FOUNDATION INC.
• Court: Alabama Supreme Court

Page 783

229 So.2d 783

285 Ala. 149

ASTRONAUTICAL DEVELOPMENT COMPANY, Inc. v. UNIVERSITY OF ALABAMA, HUNTSVILLE FOUNDATION INC.

8 Div. 249.

Supreme Court of Alabama.

Dec. 11, 1969.

Culver & Miller, Huntsville, for appellant.

Bell, Richardson, Cleary, McLain & Tucker, Huntsville, for appellee.

PER CURIAM.

This is an appeal from a final decree of the Circuit Court of Madison County, in Equity.

On August 23, 1963, Research Sites Foundation, a corporation, hereinafter referred to as Research Sites, delivered to Tec Productions, Inc., a corporation, hereinafter referred to as Tec, a deed conveying approximately five acres of land situated in a research and industrial park in Huntsville, Madison County, Alabama, known as Research Park.

The deed from Research Sites to Tec contained the following provisions:

'It is expressly agreed by and between the parties hereto that the hereinabove described tract of land is being sold and conveyed to the grantee for the construction thereon of a research or development or manufacturing or testing facility and that as a part of the consideration for the conveyance of said property to it, is the agreement on the part of the grantee to begin construction thereon of a research or development or manufacturing or testing or related facility within one year from the date of this conveyance of title and the grantee covenants and agrees that upon its failure to build thereon for such purpose or purposes within such period of time, the grantor shall have for a period of 90 days immediately following the expiration of said one year period the option to repurchase the above described tract of land for a sum equal to the total purchase price paid by the grantee plus interest at the rate of six percent (6%) per annum, for the period the grantor has retained the purchase price paid by the grantee plus the cost paid by the grantee of any public improvement assessments upon said property, and all costs paid by the grantee in connection with the construction of the sewer herein referred to.'

Although the deed does not so recite, Research Sites received the sum of $15,000 for the said five acres of land, to which we will sometimes hereinafter refer as the suit property.

On October 11, 1963, Tec conveyed a one-half undivided interest in the suit property to Frederick I. Ordway, III. On December 2, 1963, Frederick I. Ordway, III, and wife and Tec conveyed the suit property to Astronautical Development Company.

Based on its contention that the construction of a research or development or manufacturing or testing or related facility had not been begun on the suit property within one year from August 23, 1963, Research Sites on November 20, 1964, served upon Frederick I. Ordway, III, in his individual capacity and as president of Astronautical Development Company, a written instrument which in pertinent part reads as follows:

'Notice is hereby given that Research Sites Foundation, Inc., elects to exercise its option to re-purchase the real property conveyed by it to Tec Productions, Inc., by deed recorded in the Probate Office of Madison County, Alabama, in Deed Book 329, page 177, as provided in said deed.

'Research Sites Foundation, Inc., hereby demands re-conveyance of said real property forthwith and is ready, willing and able to pay to whomever shall be entitled thereto, upon tender of the deed of reconveyance, the price provided for such re-purchase by the aforesaid deed to Tec Productions, Inc.'

The same notice was given to Tec on November 21, 1964, by the service upon its vice president of the notice last quoted above.

The parties upon whom the above quoted notice was served not having tendered a deed reconveying the suit property to Research Sites, the latter, on November 25, 1964, filed its bill of complaint in the Circuit Court of Madison County, in Equity, against Tec, Astronautical Development Company, Inc., and Frederick I. Ordway, III, praying that the court:

'* * * order and direct the specific performance of said agreement by said respondents as therein provided, and further the court order and direct the execution of a deed by said respondents, conveying the said real estate hereinabove described (the suit property), to the complainant, upon payment by the complainant of the purchase price plus interest and such other charges as are provided by said agreement which sum it herewith pays into court on deposit with the Register of this Honorable Court; and complainant offers to do equity in the premises.'

Astronautical Development Company, Inc., and Frederick I. Ordway, III, interposed a demurrer to the bill of complaint on December 8, 1964, which was overruled on December 22, 1964.

We will sometimes hereinafter refer to Astronautical Development Company, Inc., and Frederick I. Ordway, III, as the respondents, since Tec made no appearance.

On January 6, 1965, the respondents filed an answer which contained averments to the effect that the actual construction of a research, development, manufacturing, testing or related facility was begun on the suit property on or prior to August 23, 1964. The respondents' answer contained six paragraphs.

On January 19, 1965, the complainant interposed a demurrer to Paragraphs 5 and 6 of the respondents' answer. On the same day the complainant filed a written motion to strike from Paragraph 6 of the answer the following averments:

'These respondents further state that the complainant bas placed a cloud upon the title of the respondents' property which is described in paragraph 2 of the bill of complaint (suit property) by filing a notice of lis pendens in the office of the Judgeof Probate of Madison County, Alabama, and that such notice has in fact placed a cloud upon the respondents' property which has greatly restricted the respondents from diligently proceeding and completing the building which they have begun and which they have been ready at all times to fully complete and occupy.'

The trial court on March 31, 1965, rendered a decree sustaining complainant's demurrer to Paragraph 5 of the respondents' answer and overruling the demurrer as directed to Paragraph 6 of the answer. In the same decree the trial court sustained complainant's motion to strike from Paragraph 6 the language last above quoted.

The cause came on for a hearing before Judge David R. Archer on June 10, 1965. At the outset of the trial an attorney for the complainant made the following oral statement to the court: 'Comes the Complainant and amends the complaint to reflect a change of the corporate name of the Complainant from Research Sites Foundation, Inc., to University of Alabama, Huntsville Foundation, Inc.' In response to that statement an attorney for the respondents orally moved the court: '* * * to dismiss the bill of complaint filed by the Complainant in its entirety, in that the change of name in this particular instance from one corporation to-wit: Research Sites, Inc., to University of Alabama, Huntsville Foundation Inc., presents a completely new complainant to this action, and one of which (sic) that is not a proper party in this instance.' The trial court overruled that motion.

On the same day, June 10, 1965, the complainant filed its 'Amended Complaint,' which reads:

'COMES NOW the complainant in the above styled cause and moves to amend its complaint by adding the following:

"7. Complainant avers that at the time of its conveyance to the respondent, Tec Productions, Inc., that it was represented to the complainant by the respondent, Tec Productions, Inc., its agents, servants and employees, that the respondent, Tec Productions, Inc., would construct a research and development or manufacturing or testing or related facility on the above described land. Complainant further avers that at the time of the aforesaid conveyance to Tec Productions, Inc., that said representation by Tec Productions, Inc., was made with intention to deceive the complainant and was made with no intention of fulfillment at the time when said false representation was made. Complainant further avers that the conveyance of the property above described by the complainant was made in reliance upon the representations of the respondent, Tec Productions, Inc., and that these representations were part of the consideration for said conveyance by the complainant.'

'Complainant further amends its complaint by adding to its prayer for relief the following:

"Complainant further prays that upon the hearing hereof, the court will order and decree that the deed from the complainant to the respondent, Tec Productions, Inc., is cancelled and rescinded."

After the filing of the 'Amended Complaint' counsel for the respondents orally moved that it be stricken on the ground that its late filing placed the respondents at a great disadvantage in that the said 'Amended Complaint' constituted 'a completely new cause of action and one of which considerable research would be required to adequately demur and to plead to * * *.' The trial court overruled the oral motion, but such action was apparently based on the following statement made by the trial court: 'Now, let the record show that it is agreed and stipulated by the complainant and respondents that testimony be taken in this cause on all matters, except the amended complaint, the amendment to the complaint, which is Paragraph Number 7, and the prayer which is included in that amended complaint.'

Thereafter, on June 10, 1965, the respondents filed an 'Amended Answer' which in pertinent part reads:

'1. That Paragraph 5 of the answer heretofore filed is hereby deleted in its entirety and in place thereof the following is added by way of amendment.

'5. That these Respondents deny that the Complainant has been at any time entitled to the right to repurchase the aforesaid real estate as described in the bill of complaint (suit property), and that the right to repurchase has never at any time accrued to and been available to the...