Johnson v. Gregg
| Decision Date | 25 April 1991 |
| Docket Number | No. 17082,17082 |
| Citation | 807 S.W.2d 680 |
| Parties | James E. JOHNSON, Jr. and Kathy Johnson, Plaintiffs-Appellants, v. Edgar W. GREGG, Carol L. Gregg, Rickey Wolfe, Lisa Wolfe, and Peoples Bank of Clever, Defendants-Respondents. |
| Court | Missouri Court of Appeals |
Robert M. Sweere, Springfield, for plaintiffs-appellants.
Robert S. Wiley, Crane, for defendants-respondents, Rickey and Lisa Wolfe.
The Johnsons brought this action against the Greggs seeking specific performance of a contract for the sale of real estate and, in an alternative count, damages. The Johnsons also sued the Wolfes, as subsequent purchasers of the property, and a bank seeking to quiet title in the property. The Wolfes counterclaimed for rent and possession. Following a bench trial, the court found against the Johnsons on their claims and on the Wolfes' counterclaim. The Johnsons appeal; we affirm.
In October 1987, the Johnsons and the Greggs entered an agreement concerning a The contract form contains the following preprinted contingency (the underscored "NA" was supplied by the parties):
five-acre tract of land in Clever, Missouri. Among the improvements on the property were a house and a workshop. The parties memorialized their agreement with two preprinted documents approved for use by members of the Greater Springfield Board of Realtors. The first document was Form 7801, denominated "Real Estate Sale Contract." At the top of page one of the "sale contract" appears the hand-written notation "Lease Option." The contract indicates a sale price of $45,900 with the following terms of payment: $1,000 deposited with the Greggs "as an earnest money deposit to be applied to sale price on closing or to liquidated damages on default of Buyer," $41,900 to be paid by the Johnsons' obtaining a new loan, and $3,000 additional cash on closing
This contract is contingent upon approval and commitment by lender of above financing. Buyer shall make loan application within NA working days after contract acceptance, and exercise diligence to obtain necessary financing and provide all documents deemed necessary by lender.
In the following handwritten provision, the parties stated the contract was contingent on:
500.00 mo. for 12 mos. beginning Nov. 1, 1987--The $1,000 represents 1st and last mo. pay. At the end of 12 mos. $4,000 goes to the credit of buyer's down pay't & 2,000 as rent. If buyer fails to perform at the end of 12 mos. and does not purchase property then all monies rec'd by seller become rent & are non-refundable.
The parties struck from the contract form the following preprinted statement: "If the above contingencies are not met as specified, this contract shall terminate and, if not disputed, Buyer's deposit shall be refunded less any expenses incurred on Buyer's behalf, such as survey, credit report, appraisal and inspections."
In the preprinted paragraph 6, "Closing Date and Possession," the parties did not fill in the blank indicating an anticipated closing date. On page 2, the contract form contains the following preprinted provision:
The second document the parties completed in October 1987 was Form 7805, "Contract Addendum: Agreement for Possession Prior to Closing." By that addendum, the parties agreed the Johnsons would pay the Greggs rent of $500 a month for 12 months and that the Greggs would provide insurance on the property. The addendum contained this "Special Agreement": "This Lease is for 12 months unless buyer decides to exercise his option to purchase."
The Johnsons signed the documents on October 22, 1987; the Greggs on October 28, 1987. Both documents were prepared with the assistance of Frankie Zirkle who is identified in the sale contract as agent for the listing and selling broker. In October 1988, again with the assistance of Ms. Zirkle, the parties executed a "Change Addendum," Board of Realtors Form 8607, in which they agreed to the following:
All original terms to remain the same on contract dated Oct. 28, 1987 and be extended from Nov. 1, 1988 to Nov. 1, 1989, with the exception that all payments made from Nov. 1, 1988 to Nov. 1, 1989 will go 100% toward down payment. [Johnsons] to provide the Greggs with a fire policy.
None of the documents signed by the parties contains an express provision that time was of the essence of the contract.
Some essential facts are undisputed. Throughout the course of the Johnsons' and Greggs' dealings, James Johnson acted on behalf of Kathy Johnson and Edgar Gregg on behalf of Carol Gregg. The Johnsons paid the initial $1,000 and the $500 a month pursuant to the agreement. James Johnson told Edgar Gregg in June 1989 that the Johnsons intended to complete the purchase of the property. In late October 1989, Johnson reiterated to Gregg his intention to consummate the transaction.
Edgar Gregg testified James Johnson told him on several occasions during the latter half of 1989 that "[h]e was trying to buy it...."
Evidence concerning the parties' conduct during the period late October through December 7, 1989, must be recounted in greater detail. Trial testimony crucial to this appeal centered on the Johnsons' attempts to obtain financing and on several telephone conversations, primarily between James Johnson and Edgar Gregg. The telephone conversations, most of which occurred in the period from late October through early December 1989, principally relate to the Johnsons' claim that the Greggs waived certain time limitations in the contract.
Concerning his attempts to obtain financing in order to close the transaction, James Johnson said he had intended to save money from his earnings to be able to complete the purchase. He said that it "finally soaked in in the latter part of October [1989]" that he would not have the cash to close the transaction. Johnson admitted he and his wife made no attempt prior to late October 1989 to obtain a loan to complete the purchase. On or about October 20, 1989, Johnson inquired about (but did not apply for) a loan from defendant People's Bank of Clever, an institution located two blocks from the property the Johnsons wished to purchase. On October 26, 1989, Johnson offered Gregg $10,000 cash and asked Gregg to "carry the balance." Johnson said Gregg declined and told him he needed all his money to "settle his divorce."
In addition to asking Edgar Gregg to serve as lender, Johnson applied for a loan at Commerce Bank of Nixa on November 3. One week later, Commerce Bank notified Johnson that it declined to make the loan. On November 13, Johnson contacted Hugh Merritt, an investor, about providing financing. Merritt inspected the property and told Johnson he would consider making the loan. On November 22, Johnson testified, Merritt told him he would lend him $26,000. After applying the $10,000 credit for rent payments, the Johnsons would have needed approximately $10,000 cash to close the transaction. Johnson said he had the $10,000--$4,000 saved from earnings and $6,000 from his father-in-law--"at home in the speaker."
On several occasions James Johnson and Edgar Gregg spoke by telephone concerning Johnson's attempts to obtain financing. One telephone conversation in late October between Johnson and Gregg precipitated considerable questioning at trial. Johnson testified he told Gregg he would arrange for financing "as soon as possible." Johnson said Gregg asked him, "Are we talking two or three weeks or what?" Johnson said he responded, "I would get it put together as soon as I could." Johnson said he understood Gregg had given him until December 1 to complete the purchase. Johnson testified that pursuant to that telephone conversation he sent a $500 check, dated October 31, to Carol Gregg. 1 The October 31 check bears the notation, "Extension on lease."
Edgar Gregg's testimony about that particular late October telephone conversation differs from Johnson's account. Gregg said he told Johnson, Gregg said the October 31 check was for rent.
Telephone contacts (and attempted telephone contacts) between Johnson and Gregg continued during November and early December 1989. On November 6, Johnson told Gregg about his loan application at Commerce Bank. On November 21, Gregg called Johnson to inquire about Johnson's progress toward obtaining financing. Johnson told Gregg he was "95 percent sure, 99 percent sure, that I had the loan, but that I had not had 100 percent confirmation yet, and that as soon as I did receive Johnson said he attempted twice the evening of November 22 to contact Gregg at his home in Branson at a telephone number Gregg had given him. He reached an answering machine with each call. Later Johnson discovered the telephone number he was dialing was incorrect. On November 23, Thanksgiving, Johnson made no attempt to contact Gregg because "[i]t was a holiday." On the 24th Johnson made two calls, one to Gregg's employer in Branson and one to Carol Gregg's home in Hollister. Someone at Gregg's place of employment told Johnson that Gregg was out of town for "ten days to two weeks." Johnson did not recall with whom he spoke at Carol Gregg's home but Asked whether he was concerned, on and immediately following November 22, that if he did not notify Gregg by December 1 that he had obtained a loan that Gregg might not sell the property to him, Johnson responded, "I knew I had to get ahold of Mr. Gregg, yes."
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