Hood v. Hawkins, 81-559-A

• Decision Date: 07 June 1984
• Docket Number: No. 81-559-A,81-559-A
• Citation: 478 A.2d 181
• Parties: William H. HOOD, Jr., et al. v. Henry HAWKINS et al. ppeal.
• Court: Rhode Island Supreme Court

Page 181

478 A.2d 181

William H. HOOD, Jr., et al. v. Henry HAWKINS et al.

No. 81-559-Appeal.

Supreme Court of Rhode Island.

June 7, 1984.

Lewis Z. Lavine, Woonsocket, for plaintiffs.

Bradford Gorham, Providence, Kathleen Managhan, Corcoran, Peckham & Hayes, Newport, for defendants.

OPINION

SHEA, Justice.

The plaintiffs appeal from a judgment entered in Superior Court dismissing their complaint pursuant to Rule 41(b)(2) of the Superior Court Rules of Civil Procedure. The plaintiffs, twenty-one in all, are owners of cottages built upon a parcel of land owned by the defendants. ¹ The defendants are Henry and Marion Hawkins, the former owners, and Alfred and Anna Tillinghast, the purchasers. The plaintiffs brought an action to compel specific performance of an oral contract for an option to purchase or for a right of first refusal in the sale of certain lots in a large tract of land, which lots have been leased to the plaintiffs. The complaint also prayed for compensatory and punitive damages. The issues of liability and damages or equitable relief were severed to be tried separately. A trial on the issue of liability before a justice of the Superior Court, sitting without a jury, was conducted. He determined that the plaintiffs had shown no right to relief and dismissed their complaint. We affirm.

I

The land in question comprises approximately 150 acres located on the north side of Bowdish Reservoir in the town of Glocester. The land had been owned by members of the Hawkins family since the turn of the century. In 1961 Henry Hawkins became the sole owner of the fee, and thereafter he remained the sole owner of the property until it was sold to the Tillinghasts in 1972 and 1973.

At the time Hawkins agreed to sell his land to the Tillinghasts, it was divided into parcels A and B. Parcel A was a tract of over 100 acres situated to the north and east of parcel B. In April 1972, Hawkins sold parcel A to the Tillinghasts along with an option to purchase parcel B. Parcel B fronted on the reservoir and contained all of plaintiffs' lots. Parcel B also included land that had not been rented out by Hawkins and land on which Hawkins himself had built cottages. The Tillinghasts exercised their option to purchase parcel B in October 1973.

Beginning in the 1920s and continuing until 1973, the Hawkinses leased lots to numerous tenants, including plaintiffs. Many of the present tenants had written leases. Some acknowledged that Hawkins had only shown them the form that he used for written leases. These forms contained blanks that were filled in to show the date and the name of the tenant, to describe the lot, and to insert other nonstandard information. There were pertinent standard provisions in the leases. Money to be paid was described as rental money, lessees were permitted to build and maintain camps on the leased premises, such building "shall be and remain the personal property of said lessee," and the lessee had the right to remove his building. In addition, permission was given to make other improvements, any building erected was required to conform to the town building regulations, and the lessee was required to secure a permit before building.

The tenants built summer camps on their rented lots. They also improved their lots by clearing, filling, and building beaches and retaining walls. The camps were designed for use, and were used, during the summer months. When a tenant wished to sell his camp and assign his lease, he would first obtain Hawkins's approval, in accordance with lease requirements.

The evidence establishes that over the years Hawkins was repeatedly approached by the tenants with inquiries about a future disposition of the land. These questions usually arose when the annual rental payments were made. The trial justice found that Hawkins answered almost invariably, and with only slight inconsequential variations, that "when he decided to sell, if the price were right and could be agreed on, and if conditions were right, and he was ready to sell, he would give the tenant a chance, or a first chance to buy." The legal effect of this response is the basis of the controversy before the court.

In February 1974 plaintiffs brought this action based upon the oral statement or response of Hawkins. They claimed that when Hawkins decided to sell, they had either an option to purchase the land or a right of first refusal. The trial justice dismissed plaintiffs' complaint against the Hawkinses and the Tillinghasts pursuant to Rule 41(b)(2). The plaintiffs appeal.

II

Our examination of the record has disclosed that defendants Alfred and Anna Tillinghast are not properly before the court. On May 22, 1981, a judgment was entered dismissing the complaint of all plaintiffs against the Tillinghasts under the provisions of Rule 41(b)(2). The plaintiffs did not file a notice of appeal from this judgment.

Rule 3 of the Supreme Court Rules provides that an appellant, in order to perfect an appeal to this court, must specify in his notice of appeal what judgment, order, or decree or part thereof is being appealed and he also must specify the date it was entered. In the case at bar, the only judgment from which plaintiffs filed a notice of appeal was the judgment entered on May 20, 1981, dismissing their complaint against Henry and Marion Hawkins. As a result, only the Hawkinses are properly before the court, and the Tillinghasts' judgment is now res judicata.

The timely filing of a notice of appeal as prescribed by Rule 3 of our rules is mandatory and jurisdictional. See Smith v. Smith, 119 R.I. 642, 645 n. 1, 382 A.2d 182, 183-84 n. 1 (1978); Martin v. Estrella, 107 R.I. 247, 251, 266 A.2d 41, 45 (1970). Failure to comply with this jurisdictional prerequisite deprives the court of the power to decide the issues as they apply to these defendants. See D'Agostino v. Yellow Cab Company of Providence, 104 R.I. 168, 169, 243 A.2d 98, 99 (1968).

We note, however, that if the Tillinghasts were here, the outcome would not be different. We would still be presented with the same issues, and our resolution of them would still be in favor of defendants. Therefore, plaintiffs have not been prejudiced by our lack of jurisdiction over the Tillinghasts because of their failure to appeal the judgment entered on May 22, 1981.

III

The issue is whether the trial justice made an error of law when he determined that Hawkins's response created neither an option nor a right of first refusal. The plaintiffs claim that he misconceived the difference between the two. As we stated, the case was tried without a jury and comes before us following the granting of defendants' motion to dismiss under Rule 41(b)(2).

In ruling on this motion, a trial justice may either determine the case on the record as it exists at the time a defendant files his motion or defer his judgment until both parties have completed their presentations of the evidence. The trial justice sits as a trier of fact as well as of law. Consequently, he weighs and considers the evidence, passes upon the credibility of the witnesses, and draws proper inferences. He need not view the evidence in a light most favorable to a plaintiff. If after examining the evidence, the trial justice is convinced that plaintiff has failed to sustain his burden of proof, then he may grant a defendant's motion to dismiss. On review, we must determine whether the trial justice's findings are supported by the evidence or whether in making such findings he has overlooked or misconceived material evidence. If the trial justice has made supportable findings, we must then determine whether he has applied the correct rule of law. J.K. Social Club v. J.K. Realty Corp., R.I., 448 A.2d 130, 133 (1982).

A

An option can be defined as "a unilateral contract in which the optionor agrees with the optionee that he has a right to buy the optionor's property according to the precise terms and conditions of the contract." Butler v. Richardson, 74 R.I. 344, 350, 60 A.2d 718, 722 (1948). On the issue of an option, plaintiffs agree in their brief "that Hawkins never intended to put a decision in the hands of a tenant." They state further on that "Hawkins always had the power " of control over the disposition of his land. (Emphasis in original.) In effect, plaintiffs concede that they never had an option to purchase their individual lots. The trial justice's finding to that effect was correct.

Corbin describes an option for the purchase of property as a situation in which the buyer has a legal power of acceptance--a power by tendering money to create in himself a right to an immediate conveyance of the property and in the owner a duty of such conveyance. 1A Corbin on Contracts § 259 at 460 (1963). "[T]he crux of the matter is the open discretion in the optionee to take or to leave the proposal." 1 Williston on Contracts § 61A at 199 (3d ed. Jaeger 1957).

The language of Hawkins's response never granted plaintiffs a power of acceptance and never imposed upon himself a duty of conveyance. All discretion over the sale of the land rested with Hawkins. Absent this right in one party and duty upon another, no legally enforceable option could exist.

B

We turn now to the issue of whether plaintiffs had a right of first refusal. The distinction between an option and a right of first refusal has been recognized by this court, the latter being termed an "independent privilege." Butler v. Richardson, 74 R.I. at 349, 60 A.2d at 721. It has also been described as a "valuable prerogative." 11 Williston on Contracts § 1441A at 949 (3d ed. Jaeger 1957). It is not an offer and creates no power of acceptance. It is a transaction by which one party acquires what can be variously described as the "Right of First Refusal," the "First Right to Buy," or the...