Glass v. Anderson, B-8563
| Decision Date | 23 January 1980 |
| Docket Number | No. B-8563,B-8563 |
| Parties | Robert P. GLASS, Petitioner, v. Gary Lee ANDERSON, Respondent. |
| Court | Texas Supreme Court |
Schlanger, Cook, Cohn, Mills & Grossberg, Joel W. Cook, L. H. Lynch, Houston, for petitioner.
Weitinger, Steelhammer & Tucker, Don E. Brown, Kronzer, Abraham & Watkins, W. James Kronzer, Houston, for respondent.
Buyer Anderson, respondent, sued seller Glass, petitioner, seeking specific performance of six earnest money contracts for the sale of real property. After a non-jury trial, the trial court ordered the contracts specifically performed; the court of civil appeals has affirmed. 582 S.W.2d 479. We reverse the judgment of the court of civil appeals and render judgment for petitioner Glass.
The essential question involved is what effect two separate repudiations of the contracts by the buyer should have on the buyer's right to specific performance. The courts below have held that the buyer's claim for specific performance is unaffected by those repudiations provided he retracts them prior to any material change of position by the seller. We hold that when the buyer repudiates the contracts after time for performance arrives, the contractual obligations of the non-defaulting party are ended, and the repudiating party cannot obtain specific performance of the contracts.
Buyer Anderson and seller Glass entered into six identical contracts, dated May 14, 1974, for the sale of six separate lots with houses situated in Houston. Each contract was to be signed by the buyer and received by seller by May 25. Apparently this was done. The six contracts, together with $1200 earnest money, $200 for each contract, were delivered to the Capital Title Company on May 29. Certificates, dated May 31, that the properties were free of termites were delivered about that date to the title company.
Each contract provided for a cash down payment and a note for the balance payable over 15 years at 9% interest and secured by a vendor's lien and deed of trust lien. The total purchase price for all six tracts was $103,000 of which $25,000 was "cash to be paid contemporaneously with the conveyance of said property." The contracts further provided for seller "to furnish within 15 days from acceptance of this Contract by Seller, an owner's title policy . . . ." Another provision reads ". . . within 5 days from the date title to the above property is shown in Seller . . . Seller agrees to execute and deliver General Warranty Deed to Purchaser conveying said property free and clear of all encumbrances . . . at which time Purchaser agrees to pay said consideration in the manner above provided."
The buyer, Anderson, testified that he had a limited partnership with a Dr. Lou Porter, a dentist, who was to furnish the cash for their venture. Dr. Porter signed the earnest money contracts as buyer along with Anderson. Porter subsequently assigned all his interest in the contracts to Anderson and is not a party to this appeal. The original plan was to buy the six houses, remodel them, and sell them for a profit.
Anderson sought out the seller, Glass, and tried to buy the properties as early as February or March. When Anderson and Glass finally consummated the agreement evidenced by the six contracts, Anderson had trouble getting the cash down payment from Dr. Porter. About June 1, Anderson called the title company and told the closer that he needed some time to get other funds. He also told Glass that the deal was off, and according to Glass, Anderson called Glass "a crook" for keeping his earnest money. Anderson then sought the advice of an attorney, Charles Herndon, who wrote the title company on June 13:
Gentlemen:
My clients, Mr. Anderson and Mr. Porter, have instructed me to direct that the escrow funds now in your possession with regard to the subject files be held as a result of a disagreement on the part of the parties. You will note that several contracts are unsigned by the Seller and some were rejected by the Purchaser. Mr. Anderson has instructed you with regard to the rejection of the unsigned contracts as well as the Seller. You are further directed that you should not commence any title review of the properties if you have not so been informed by Mr. Glass. If you have any questions concerning this matter, please contact me.
Yours very truly,
Glass testified that he considered that the "deal was off." He had the electricity turned back on in two of the three vacant houses so that he could start working on the houses to fix them up to rent. Despite Anderson's repudiation of the contracts, Glass told the title company to continue the title search. Thereafter, the title company issued five title reports dated June 10 and one dated June 19 showing good title in the seller, Glass. Anderson made no objections to the title as required by the contracts, and makes none now inasmuch as he seeks specific performance.
Apparently, nothing further transpired between the two parties until Glass had his attorney, L. H. Lynch, write a letter to Anderson on July 18 and enclose copies of the title reports on the six tracts. Anderson received the letter stating:
Dear Mr. Anderson:
About five days ago Mr. Glass received from Capital Title Co., Inc. the enclosed title reports on the six (6) pieces of property which you contracted to buy in accordance with the Earnest Money Contracts executed by you and Mr. Glass.
Title to the aforesaid properties appears to be good in Mr. Glass and by this letter he hereby notifies you that he will claim as liquidated damages the deposits you have made with the title company in the event you do not consummate this transaction within a reasonable time in accordance with the Earnest Money Contracts executed in this undertaking.
Respectfully,
L. H. Lynch
Lynch received the following reply dated July 30 from Anderson's attorney, Herndon:
Dear Mr. Lynch:
Your letter dated July 19, 1974 has been referred to me for reply. I previously notified Capital Title Company, by letter dated June 13, 1974, as to my client's position with regard to three Earnest Money Contracts unexecuted by your client. These contracts were repudiated by my client by certain statements made to Mr. Glass and also certain statements made to the appropriate closing officer at Capital Title Company, Inc. Mr. Glass has attempted to consummate the contracts by executing the three originals, but such was done after my client had repudiated same. Therefore, Mr. Glass is not entitled to earnest money in the total sum of $600.00, with reference to the contracts.
My client further does not intend to close the remaining three contracts as result of his inability to secure financing therefor. This was a condition that Mr. Robert P. Glass was aware of at the time of the execution of the documents. My client further makes demand for the balance of the earnest money deposited on such three contracts.
Yours very truly,
Herndon's letter unequivocally repudiates all six contracts. Anderson claims, however, that he did not know about the letter and that it was written without his knowledge or authorization. This contention is raised by respondent for the first time in this court. In addition, because there was no sworn denial filed denying Herndon's authority to write the letter as required by Tex.R.Civ.P. 93(h), it is waived. In any event, the July 18 letter was addressed only to Anderson, and the reply of July 30 to Lynch begins, "Your letter dated July 19 (sic), 1974 has been referred to me for reply." The record reflects no other way for Herndon to have come into possession of the letter except that Anderson gave it to him. Anderson does not deny that Herndon represented him generally in the transaction. In such case, the attorney acts as the agent of the client under the general rules of agency. See Dow Chem. Co. v. Benton, 163 Tex. 477, 357 S.W.2d 565, 568 (1962). Under the facts of this case, the client is bound by the acts or omissions of the attorney within the scope of the attorney's authority, express, implied, or apparent, in the accomplishment of the purpose for which he was retained. Herndon's letter of July 30 was, under the facts, the act of his client Anderson. Finally, respondent conceded in his brief that the letter of July 30 constituted a repudiation of the contracts.
After the July 30 letter of repudiation was sent to Glass's attorney and on about August 10, Anderson informed Glass that Anderson had by then secured the necessary financing and was ready to close. Glass put Anderson off by saying that he would have to check with his accountant since he had sold some other property in the interim and that he would let Anderson know later. Anderson testified that despite several conversations with Glass over the next several weeks, including an offer to reimburse Glass for certain expenses, Glass refused to go through with the closing.
The trial court's findings of fact pertinent to the questions presented to us were:
(1) Time was not of the essence in the performance of the contracts;
(2) Any repudiation of the contracts by Anderson was withdrawn by Anderson prior to Glass materially changing his position and before any acceptance of the repudiation by Glass;
(3) Any repudiation of the contract was not accepted by Glass;
(4) Subsequent to the withdrawal of the repudiation by Anderson, he tendered performance and was ready, willing and able to perform;
(5) Glass refused to tender performance by failing to deliver owner's title policies and warranty deeds as required by the contracts; and
(6) Glass repudiated the contracts.
The court of civil appeals found that there was evidence to support these findings and overruled "no evidence" and "insufficient evidence" points of error asserted by Glass. We do not disagree with those holdings; however, we hold that under the facts found, Anderson is not entitled to...
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