Cheatwood v. De Los Santos
| Decision Date | 26 January 1978 |
| Docket Number | No. 5073,5073 |
| Citation | 561 S.W.2d 273 |
| Parties | Charles C. CHEATWOOD et ux., Appellants, v. Rosendo DE LOS SANTOS et ux., Appellees. |
| Court | Texas Court of Appeals |
Herbert C. Martin, Amarillo, for appellants.
O. M. Calhoun, Folley, Snodgrass & Calhoun, Amarillo, for appellees.
Plaintiffs, Rosendo De Los Santos and wife, Santos De Los Santos, sued defendants, Charles C. Cheatwood and wife, Louise Cheatwood, seeking specific performance of an oral contract to convey real property, and judgment for the excess of insurance proceeds paid to defendants, over and above the indebtedness, after the house in question was destroyed by fire. The case was tried by the court without a jury. Findings of fact and conclusions of law were filed. Plaintiffs were granted specific performance of the oral contract and judgment of $6,381.50 against defendants. Defendants have appealed. We affirm.
On March 21, 1974, the defendants as sellers and plaintiffs as purchasers entered into an oral contract for the purchase and sale of a house and lot. The total purchase price of the real property under the oral contract was $7,500. The parties agreed upon a $250.00 cash down payment and the balance payable in monthly installments of $55.00 per month starting on April 21, 1974. The purchasers went into exclusive possession of the premises and made payments pursuant to the contract for nineteen months. On October 16, 1975, the house was destroyed by fire. At the time of the fire, there was in existence a fire insurance policy in the name of defendants covering the premises in the sum of $12,500. Following the fire, the insurer paid defendants the sum of $12,500.
Defendants contend the insurance policy between defendants and the insurer was a personal contract and plaintiffs were not entitled to any of the proceeds. They argue that the oral contract to sell the real property was unenforceable because it violated the Statute of Frauds, Section 26.01, Texas Business and Commerce Code, and since plaintiffs at the time of the fire had not paid the full consideration of $7,500, or made valuable and permanent improvements upon the house, the contract was not enforceable in equity under the rule announced in Hooks v. Bridgewater, 111 Tex. 122, 229 S.W. 1114 (1921). Plaintiffs argue that at the time of the fire they owned equitable title, were entitled to specific performance of the contract, and defendants held the insurance proceeds as trustee for plaintiffs.
On October 28, 1974, Mrs. Cheatwood wrote plaintiffs a letter which in part stated:
"We have not received your payment yet & it is past due 7 days today we cannot continue like this on the payments on that house we need our money when it's due, I paid the county tax on it, since they charge more if it is not paid in October It was only $7.71 so please include that in your payment & the City tax will be due in January & it will be $82.44 this does not have to be paid until January & after that they charge interest & the insurance will be due again in February & you owe us 10 months insurance on this years this is how it goes. We took out the insurance in February 21, 1973.
You bought house March 21,
On January 29, 1975, Mrs. Cheatwood wrote plaintiffs as follows:
Mrs. Cheatwood testified as follows:
"Q How much were they supposed to pay a month?
A Fifty-five dollars a month.
Q And during this time was that ever raised from fifty-five a month?
A Yes.
Q To how much?
A Seventy-six.
Q What was the purpose of the raise?
A Because we just couldn't pay everything and we couldn't come over here and go back to Fritch all the time.
Q What was it for? Paying taxes and insurance?
A No. Because they had not paid any taxes and insurance.
Q You were paying taxes and insurance out of what they were paying you?
A Not out of the fifty-five a month.
Q Did you take it out of the seventy-six dollars a month?
A No. We paid that before. We paid that before they paid us the seventy-six dollars a month.
Q In 1974 you paid the taxes and insurance and did you pay the taxes, did you pay the insurance when it was due in 1975?
A Yes. Out of our own pockets."
She further testified:
"Q And then I will hand you another check, Mrs. Cheatwood, dated January 31st, 1975 for the sum of twenty-five dollars. Is that the increase we were talking about for taxes and insurance?
A I raised the payments then.
Q You raised their payments then.
Q Now, Mrs. Cheatwood, on the 29th of January of 1975 you wrote a letter to Mr. and Mrs. De Los Santos wherein you explained to them you would need twenty-five dollars extra this month because you had to pay some taxes and insurance, did you not?
A I raised their payments.
Q Is that the letter you wrote that date?
A (No response.)
Q Is that your letter?
A Yes, that's my letter.
Q Mrs. Cheatwood, the twenty-five dollar check entered into evidence just now, is it the twenty-five dollars you asked them for in this letter?
A Yes, I raised the payment.
Q And in February 1975 you raised the payments to seventy-six dollars a month?
A Yes.
Q And they paid that up until the time of the fire?
A But no insurance and taxes. That didn't cover the '74 insurance and taxes."
Mr. De Los Santos testified:
"Q And how much were you supposed to pay a month?
A Fifty-five.
Q And when did you start the fifty-five dollar payments?
A The first payment was in April.
A Yes.
Q And did you make that payment?
Q And was there any conversation had at that time concerning taxes and insurance?
A Not right then. But about a month later I asked her if we had insurance on the house and all that and she said since I was buying I was going to have to pay for that. She said thirty-eight dollars and something was principal and interest and the rest was for taxes or insurance.
Q That part of the fifty-five dollars would be for principal and interest and part for taxes and insurance? When did she tell you that?
A Around May or something like that.
Q Did she tell you there was insurance on the property?
A She said it was already paid for and I didn't have to worry about it for that year. It was already fixed up but after that I was going to have to come up with the insurance money.
Q Then did you agree to buy the house on those terms?
A Yes, sir."
He further testified:
"Q Do you know whether or not there was insurance on the house?
A Yes.
Q How did you find out?
A The lady came.
Q Before that did you know there was insurance on the house?
A Yes.
Q You talked to Mrs. Cheatwood about it?
A She told me she was going to raise the payments because of the insurance and taxes and she would take care of the insurance.
Q Was that the purpose of raising your payments to seventy-six a month?
A Yes."
Defendants introduced an insurance premium receipt showing that they paid $172.00 on February 19, 1975, for insurance coverage on the property in question.
Our Supreme Court in Sharp v. Stacy, 535 S.W.2d 345 (Tex.1976) recently stated:
Defendants first argue that under Hooks v. Bridgewater, supra, all of the consideration must have been paid. We disagree. The case most nearly in point is Walker v. Walker, 448 S.W.2d 171 (Tex.Civ.App. Waco 1969, writ ref. n. r. e.) wherein the court clearly held that payment of consideration in full is not required to render a parol sale of real property enforceable if the other two requirements, regarding possession and improvements, have been met. The court said:
"Contention 1 asserts judgment cannot be rendered for the vendee of an oral contract to convey unless the consideration be paid in full ; that it is undisputed that the Bobby Walkers paid only $1076.12 of the $3804. purchase price. Appellants cite Salas v. Salas, Tex.Civ.App. (NRE) 229 S.W.2d 881; Watson v. Druid Hills Co., Tex.Civ.App. (NRE) 355 S.W.2d 65; and Pennington v. Bennett, Tex.Civ.App. (NRE) 436 S.W.2d 182 as controlling. These cases, citing Hooks v. Bridgewater, 111 Tex. 122, 229 S.W. 1114, 15 A.L.R. 216, state that to relieve an oral sale from the operation of the Statute of Frauds, payment of the consideration in full, together with possession, and the making of improvements by the vendee is necessary. The requirement that payment of the consideration be 'in full ' is dicta.
In any event Hooks v. Bridgewater states:
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