Cedarwood Associates, L. T. D. v. Trammell

• Decision Date: 19 February 1982
• Citation: 410 So.2d 50
• Parties: CEDARWOOD ASSOCIATES, L. T. D., an Alabama Limited Partnership; Larry C. Herring, as General Partner for Cedarwood Assoc., L. T. D. v. Virgil TRAMMELL, Jr., Sara Jones Trammell, Marguerite Jones Shannon, John D.Trammell. 80-605.
• Court: Alabama Supreme Court

Page 50

410 So.2d 50

CEDARWOOD ASSOCIATES, L. T. D., an Alabama Limited Partnership; Larry C. Herring, as General Partner for Cedarwood Assoc., L. T. D. v. Virgil TRAMMELL, Jr., Sara Jones Trammell, Marguerite Jones Shannon, John D.Trammell.

80-605.

Supreme Court of Alabama.

Feb. 19, 1982.

L. Tennent Lee, III, of Cleary, Lee, Porter, Evans & Rowe, Huntsville, for appellants.

Patrick H. Boone of Perdue, Johnson, Boone & Johnson, Birmingham, for appellees.

BEATTY, Justice.

This is an appeal by defendants Cedarwood Associates, L.T.D., and Larry C. Herring, as general partner for Cedarwood, from a Jefferson County Circuit Court's ruling for plaintiffs in an action for specific performance of a contract for the sale of land. The trial judge determined that the defendants (hereinafter Cedarwood) had breached their contract with Plaintiffs and ordered Cedarwood to execute a warranty deed of the property involved to the plaintiffs, with defendants' waiver of their right of redemption. We affirm.

The first parcel of property involved consists of some thirty-one acres in Jefferson County sold January 3, 1974, by plaintiffs Marguerite Shannon and Sara Trammell to Cedarwood who executed a series of five promissory notes in favor of the sellers Shannon and Trammell as partial payment for this parcel. To secure prompt payment, defendants executed a purchase money mortgage in the amount of $212,500.00 in favor of the sellers. The second parcel involved is a fifteen-acre tract conveyed on January 3, 1974, by plaintiffs Virgil Trammell, Jr., and John D. Trammell to defendants in exchange for five promissory notes, payable on a scaled schedule, and a purchase money mortgage for $89,250.00.

For the first three years, only interest payments became due, and these were paid by Cedarwood. When the date arrived for the payment of two of the ten principal promissory notes, January 7, 1978, and the payments were not made, plaintiffs wrote to defendants stating that foreclosure would be commenced on February 11, 1978, if no agreement could be reached. An agreement was reached and committed to writing on March 1, 1978. The agreement declared the mortgages and two notes to be in default and provided for delaying the payment of each of the ten notes for twelve months; however, the defendants were to meet specific conditions. In essence, these conditions stipulated that defendants make certain payments on the two notes on May 15, 1978, to plaintiffs and in the event defendants failed to do so, defendants would execute a warranty deed conveying all their rights, title and interest in the two parcels to Virgil Trammell, Jr., and waive their right of redemption. This agreement was modified in a writing which extended the date of payment to August 15, 1978. The plaintiffs claim that Cedarwood violated the agreement by the failure to make payments it was obligated to make under the notes and the agreement and by the failure to reconvey the property to Trammell. Cedarwood alleged there were subsequent verbal agreements by which Virgil Trammell agreed to waive the balance due on the Sara Trammell/Marguerite Shannon mortgage. Under these agreements allegedly made in May 1978 and February 1979 with defendant Herring, there was no default. The agreements, according to defendant Herring, stated that Trammell would accept the interest payment on his own mortgage and partial payment on the Trammell/Shannon mortgage as payment in full for the years in question.

The plaintiffs filed suit on December 13, 1979, alleging breach of contract. Defendants counterclaimed alleging the existence of a verbal agreement and modifications. Foreclosure was initiated and consummated on April 14, 1980.

The trial court held an ore tenus hearing on October 6, 1980. After hearing the witnesses and upon consideration of the pleadings and evidence, the trial judge entered a final judgment on October 14, 1980, finding Cedarwood in breach of the written contracts and agreement, plaintiffs' entitlement to a fee simple title in the parcels of land, and denying defendants' counterclaim. A motion to alter, amend or vacate the judgment was denied by the trial court and defendants filed this appeal.

The issues presented are:

(1) At the time of foreclosure, had plaintiffs waived their right to foreclose by accepting partial payment on the matured notes;

(2) After the execution of his mortgage, may a mortgagor agree to waive or release his right of redemption; and if so,

(3) Did the parties enter into an agreement to allow a lesser payment in exchange for defendants' right of redemption if later payments were not met?

(1) Defendants/appellants contend that forfeitures under a mortgage may be waived by continued recognition and receipt of partial payments, and that even without the testimony in the record concerning subsequent oral agreements modifying the payment terms, the course of conduct carried on by Virgil Trammell sufficiently constituted a waiver. Plaintiffs/appellees dispute any waiver and contend that in order for a contract to be validly modified, there must be mutual assent to the new terms by both parties and that there was not a mutually bargained for verbal modification.

The evidence appellants presented at trial in support of their contention consists mainly of testimony of the general partner in Cedarwood, Larry Herring, who stated that Virgil Trammell, acting as the agent for Marguerite Shannon and Sara Trammell, agreed to waive the balance due on the Shannon/Trammell mortgage in 1978 and 1979 if full interest payment was made on the Shannon/Trammell mortgage for the respective years. In addition, appellants contend that Virgil Trammell understood that if any part of the principal was to be paid it would require a sale of all or part of the property by Cedarwood, thus explaining the waiver of payments.

Appellees, on the other hand, presented testimony of appellant Herring that tended to show...