Douglass v. Brooks, 528

• Decision Date: 04 May 1955
• Docket Number: No. 528,528
• Citation: 242 N.C. 178,87 S.E.2d 258
• Court: North Carolina Supreme Court
• Parties: Katherine Goins DOUGLASS v. Nolan BROOKS, Hazeline B. Chambers and husband, Osbia Chambers.

Page 258

87 S.E.2d 258

242 N.C. 178

Katherine Goins DOUGLASS v. Nolan BROOKS, Hazeline B. Chambers and husband, Osbia Chambers.

No. 528

Supreme Court of North Carolina.

May 4, 1955

Henry L. Kiser, Bessemer City, for plaintiff appellee.

L. B. Hollowell and J. L. Hamme, Gastonia, for defendant appellants.

BOBBITT, Justice.

Appellants do not assign as error the denial of their motions for judgment of involuntary nonsuit. However, they seek indirectly to avail themselves of the accepted rule that a motion for judgment of involuntary nonsuit will be allowed when there is a material variance between allegation and proof. Andrews v. Bruton, 242 N.C. 93, 86 S.E.2d 786, and cases cited. Their contention is that the judgment should be reversed because the trial judge submitted the case to the jury on a theory at variance with the cause of action alleged by plaintiff. In passing, it is noted that a new trial, rather than a reversal of judgment, would result if there is prejudicial error in the trial judge's instructions to the jury.

The complaint, in paragraph 4, alleges the contract as stated above. However, appellants emphasize the following allegations of paragraph 3: 'That said contract was several months in the making and is in part verbal and partially in writing, same being composed of various verbal understandings and agreements, letters, which, taken together, constitute a definite and binding contract between the parties,' copies of these writings, marked Exhibits 1-19, both inclusive, being attached to and by reference made a part of the complaint. It is argued that the contract on which the case was tried was the Contractual Agreement bearing date of 14 February, 1953; and that this was a departure or variance from the contract as alleged.

Appellants' position is untenable. The correspondence indicates the relationship of the parties before and after the Contractual Agreement was signed. The correspondence, in some respects, throws light on certain provisions of the Contractual Agreement but does not vary plaintiff's obligations. For example, Brooks' letter of 18 February, 1953, gives the description of the land referred to in Brooks' letter of 5 February, 1953, and in plaintiff's letter of 11 February, 1953. The two letters last mentioned set forth the contract as alleged. True, when Brooks prepared or had prepared the Contractual Agreement he modified the original agreement by inserting a new provision at variance therewith, to wit: 'Deeds are to be delivered to payee (sic) at the completion of the final payment.' Since the only effect of this modification was to relieve Brooks of his obligation under the original agreement to deliver the deed when plaintiff made the down payment, defendants have no ground for complaint on account thereof. The Contractual Agreement was not signed until April, 1953. However, it appears that Brooks considered the contract as made in February, 1953, for upon that basis he makes the calculation that $220 was in arrears in February, 1954. The Contractual Agreement, a copy of which was attached to the complaint and by reference made a part thereof, was the instrument by which they defined formally and finally the terms of their agreement. Correspondence prior thereto, while relevant to identify and describe the land, was superseded by the Contracual Agreement. This appears plainly from the complaint and attached exhibits. Correspondence subsequent thereto was relevant, as bearing upon the defendants' alleged right to declare an abandonment of the contract by plaintiff rather than upon the terms of the contract. The court below correctly considered and tried plaintiff's case on this basis. Indeed, Brooks testified, referring to the Contractual Agreement: 'That is our agreement; that is it.'

Appellants contend that the court was in error in instructing the jury that the Contractual Agreement was a contract of sale and purchase, as contended by plaintiff, rather than an option, as contended by defendants. This contention is without merit. By its terms, both parties were bound, one to sell and the other to purchase.

The consideration for an option is executed (paid) when the contract is made. The unilateral obligation arising therefrom binds the prospective seller; but the prospective purchaser may or may not exercise his right to purchase upon the terms stated. If he fails to do so, the only result is the loss of the consideration given for the option. In a contract of sale and purchase, bilateral obligations arise, the purchaser's obligation to pay the purchase price and the seller's obligation to sell and convey constituting reciprocal considerations. This distinction has been pointed out in many decisions including Trogden v. Williams, 144 N.C. 192, 56 S.E. 865, 10 L.R.A., N.S., 867; Winders v. Kenan, 161 N.C. 628, 77 S.E. 687. Also, see 55 Am. Jur. 496, Vendor and Purchaser, sec. 29.

Two well-settled rules rest, at least in part, upon the distinction noted above, viz.: In the absence of special cricumstances, (1) time is of the essence of a mere option to purchase land, Bateman v. Kramer Lumber Co., 154 N.C. 248, 70 S.E. 474, 34 L.R.A.,N.S., 615; Winders v. Kenan, supra; and (2) time is not of the essence of a contract of sale and purchase, Falls v. Carpenter, 21 N.C. 237; Davis v. Martin, 146 N.C. 281, 59 S.E. 700; Howell v. Pate, 181 N.C. 117, 106 S.E. 454; Crawford v. Allen, 189 N.C. 434, 127 S.E. 521. As stated by Brown, J., in Davis v. Martin, supra: 'There is decided distinction between an option to purchase, which may be exercised or not by the prospective purchaser, and an absolute contract of sale, wherein one of the parties agrees to sell, and the other to buy, certain property; the sale to be completed within an agreed time. In the latter case, the mere lapse of time with a contract unperformed does not entitle either party to refuse to complete it, and therefore time is not of the essence of the contract; but where the contract is merely an option generally, without consideration, of course, time is of the essence.'

Plaintiff made the $500 down payment. She made additional payments as stated which, although plaintiff was in arrears, were accepted by defendants without objection. The last such payment was plaintiff's check of 14 January, 1954, for $80. No word of dissatisfaction was expressed by Brooks prior to his letter of 8 February, 1954. Plaintiff did nothing to indicate any intention on her part to abandon the contract. Both plaintiff and Brooks treated the contract as subsisting. That Brooks so regarded it appears plainly from the following excerpts from his testimony. 'The latter part of February, 1954, I wired her twice and called her over the telephone to get her to give up the property, call off the deal. So I could sell to this other party for cash.' Again: 'I had accepted a deposit of $800.00 from on party offering to buy the land on a 30-day basis, provided I could clear with my niece Katherine.'

Chief Justice Ruffin, in Falls v. Carpenter, supra, discusses at length the principles of equity applicable in such cases. In that case the purchaser was in arrears, but even so the seller continued to receive and accept from the purchaser payments on account of the balance of purchase price. The seller, for reasons not material here, sold and conveyed the land to another party. The contention that the purchaser's failure to meet payments when due constituted an abandonment by him of the contract was soundly rejected. The conclusion reached is compressed in this sentence: 'Having allowed it (the contract) to subsist after the default he (seller) cannot put an end to it by an action which, supposing it to subsist, is in violation of it; but to that end there must be a previous, formal and...