Greaser v. Williams, s. 84-137

Decision Date16 July 1985
Docket NumberNos. 84-137,84-138,s. 84-137
PartiesAlice T. GREASER, William Paul Greaser and Kerry John Greaser Trustees of the Gerald J. Greaser Trust, as Successor In Interest of G.J. Greaser, Edith B. Chase and Jack Patton, Appellants (Plaintiffs), v. Earl L. WILLIAMS, Jr., and Edith M. Williams, Appellees (Defendants). Earl L. WILLIAMS, Jr., and Edith M. Williams, Appellants (Defendants), v. Alice T. GREASER, William Paul Greaser and Kerry John Greaser Trustees of the Gerald J. Greaser Trust, as Successor In Interest of G.J. Greaser, Edith B. Chase and Jack Patton, Appellees (Plaintiffs).
CourtWyoming Supreme Court

Philip Nicholas of Corthell & King, Laramie, for appellants (plaintiffs) in No. 84-137 and appellees (defendants) in No. 84-138.

Earl L. Williams, Jr., Barkley R. Bonine, Laramie, for appellees (plaintiffs) in No. 84-137 and appellants (defendants) in No. 84-138.

Before * THOMAS, C.J., and ROSE, ** ROONEY, BROWN and CARDINE, JJ.

ROSE, Justice.

This case arose as an action by the trustees of the Gerald J. Greaser trust, Edith B. Chase, and Jack Patton to enforce a promissory note executed by Earl L. Williams, Jr. and Edith M. Williams in the sum of $23,085. The Williamses answered that they had given the note in payment of the interest due on a conditional contract for the sale of real property and that the subsequent forfeiture of that contract by the plaintiffs/sellers caused the note to fail for lack of consideration. The defendants counterclaimed for a partial refund of the interest paid under the conditional sales contract and for restitution of the down payment and other benefits conferred upon the plaintiffs/sellers under the contract.

The trial court dismissed the Williamses' claim for a refund of excess interest and entered summary judgment against them with respect to their counterclaims for restitution. The court agreed with the defendants concerning the enforceability of the promissory note and entered summary judgment in their favor. Both sides have appealed the trial court's rulings.

Our review of the record reveals that questions of fact exist which are material to the plaintiffs' right to recover on the promissory note. We will, therefore, reverse the summary judgment entered against them. We will affirm the trial court's rulings in all other respects.

FACTS

On November 29, 1978, G.J. Greaser, Alice T. Greaser, Edith B. Chase and Jack Patton, as sellers, entered into a Real Estate Sales Contract with Earl L. Williams, Jr. and Edith M. Williams, as buyers. The contract described, in terms of lots and blocks, a parcel of land in Albany County, Wyoming, "containing 15 acres more or less." The contract specified a total sale price of $300,000, with $15,000 to be paid initially and the balance to be paid in ten annual installments beginning November 29, 1979. Interest was payable annually at the rate of nine percent on the unpaid balance. Paragraph (5) of the contract provided that the buyers would receive an acre of land for each $20,000 paid on the principal "That BUYERS shall receive the Deed to any of the above acreage of their choice from time to time by paying to the escrow agent the sum of $20,000.00 per acre, which sum is to be credited to the reduction of the principal, plus interest upon the unpaid balance from date of last payment on the contract. Deeds containing said acreage tracts pursuant to this provision shall always involve contiguous descriptions with the borders of the above tract. The $15,000.00 initial payment cannot be applied toward releasing acreage under this sub-paragraph."

The buyers agreed to contribute one-half of the land necessary for streets on the east and west sides of the subject property and to pay for their share of street improvements at the time of installation. The sellers had the right to declare a forfeiture of the contract upon the buyers' default:

"IT IS FURTHER EXPRESSLY AGREED that time is of the essence of this agreement and the failure on the part of the BUYERS to keep and perform any of the conditions herein provided for, shall work a forfeiture of this agreement at the option of the SELLERS, and the SELLERS shall have the right to take immediate possession of said remaining premises or to institute legal proceedings to recover for the breach of the terms hereof and for the unpaid balance in full remaining unpaid on this contract, and the BUYERS agree in case of such default and upon written demand of the SELLERS, either in person or by registered letter, that the BUYERS will deliver up possession of said premises and all sums paid by the BUYERS hereunder shall be forfeited to the SELLERS."

The parties subsequently entered into an agreement to correct an error in the property description in the Real Estate Sales Contract. The new agreement expressly provided that all other terms and conditions of the original contract would remain unchanged.

The Williamses made the down payment of $15,000 in November, 1978, and paid the first installment of $28,500 toward the principal and $25,650 in interest in November, 1979. In exchange for their payment of $28,500 on the principal, the Williamses received a deed to 1.425 acres of the land.

The following year, instead of paying the second installment, the buyers executed the promissory note which is the subject of this lawsuit. The note was issued for the amount of accrued interest under the Real Estate Sales Contract and was made payable to the sellers on November 29, 1981, one year after the date of the note. The parties disagree as to whether the note was given in partial payment of the amount due under the sales contract or to induce the sellers to forbear declaring a forfeiture.

In any event, the sellers did not exercise their rights to terminate the Real Estate Sales Contract, although the buyers failed to pay the 1980 and 1981 installments. On August 3, 1982, the sellers, acting through their agent, Paul Greaser, sent a letter to Mr. Williams, proposing a means by which the buyers could cure their default. The sellers offered to maintain the contract in effect if the buyers would agree to an increase in the annual rate of interest to 15 1/2 percent on the amounts due under the sales contract and the promissory note and would pay all sums due under both agreements by August 31, 1982. The letter stated that the sellers intended to give notice of default and to declare the sales contract null and void if the Williamses failed to accept the proposal or failed to bring their payments current by August 31, 1982. The letter further informed the buyers that in the event of forfeiture of the contract,

" * * * the personal note you signed would still be outstanding."

The Williamses accepted the terms of the proposal by signing the letter on August 9, 1982. They expressly noted that their acceptance of the proposal did not constitute a waiver of any rights they had or would have under the sales contract.

The buyers failed to abide by the terms of the August, 1982, letter agreement. Accordingly, on November 3, 1982, Paul Greaser, acting on behalf of "Chase, Patton "Please be advised that the above referenced contract [Real Estate Sales Contract, dated November 29, 1978, Chase, Patton and Greaser, Sellers] is in default and pursuant to the terms of the contract, this letter is formal notice to you of your default under the terms and conditions of said contract and our written demand for you to deliver up possession of the premises immediately. We intend to terminate the escrow account located at the First Wyoming Bank and obtain possession of all documents contained therein."

and Greaser, Sellers," sent written notice to the Williamses, declaring the Real Estate Sales Contract to be in default and demanding possession of the property:

The notice also demanded payment of all sums due under the promissory note:

"You should also be advised that we are in possession of your Promissory Note dated November 29, 1980 in the original principal amount of $23,085.00, which note bears interest at the rate of 10% from said date. Demand is hereby made of all sums due pursuant to said note, the interest due thereon being approximately $4,600.00 together with the original principal amount of $23,085.00, making the total amount due approximately $27,685.00."

The sellers subsequently withdrew from escrow all documents pertaining to the sale and retained the $15,000 initial payment plus the value of various improvements to the land as liquidated damages. The improvements consist of a street and a water line installed by the Williamses at a total cost of $92,586.33. Notwithstanding their formal declaration of forfeiture, the sellers have offered to accept full performance of the contract by the buyers.

When the Williamses failed to pay the amounts due under the promissory note, the trustees of the Gerald J. Greaser trust, successor in interest to payee G.J. Greaser, deceased, and payees Chase and Patton initiated this action. The Williamses counterclaimed for restitution and adjustment of interest payments under the terminated Real Estate Sales Contract. The trial court dismissed the counterclaim for a refund of excess interest, as failing to state a basis for relief. The plaintiffs then filed a motion for summary judgment, but did not file a supporting affidavit until approximately one week later. The district court denied the motion for summary judgment, ruling that the supporting affidavit was untimely and could not be considered under this court's holding in DeHerrera v. Memorial Hospital of Carbon County, Wyo., 590 P.2d 1342 (1979). The plaintiffs filed a second motion for summary judgment, supported by the pleadings and the previously filed affidavits of Paul Greaser and Earl Williams. The trial court entered summary judgment against the plaintiffs with respect to their claim on the promissory note and against the Williamses on their counterclaims for...

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