Jones v. Kelley

• Decision Date: 04 March 1981
• Docket Number: No. B-9739,B-9739
• Citation: 614 S.W.2d 95
• Parties: Eugene C. JONES et ux., Petitioners, v. Jared L. KELLEY, Sr. et al., Respondents.
• Court: Texas Supreme Court

Page 95

614 S.W.2d 95

Eugene C. JONES et ux., Petitioners, v. Jared L. KELLEY, Sr. et al., Respondents.

No. B-9739.

Supreme Court of Texas.

March 4, 1981.

Rehearing Denied April 15, 1981.

Provost, Umphrey, Doyle & McPherson, Steven M. Rienstra, Port Arthur, for petitioners.

Hebinck & Associates, Bernard L. Hebinck, Houston, for respondents.

SPEARS, Justice.

This is a suit for specific performance to convey real estate. Buyers, Jared L. Kelley and Olga Kelley and the Texas Veterans Land Board, brought suit against sellers, Eugene Jones and Della Mae Jones, for specific performance of two earnest money contracts for the sale of a tract of land in Shelby County. Trial was to a jury, and based upon its findings, judgment was entered for the Kelleys decreeing specific performance. The trial court, however, granted that portion of the Joneses' motion for judgment notwithstanding the verdict denying the Kelleys recovery of attorney's fees. The court of civil appeals affirmed the judgment of the trial court. 602 S.W.2d 573. Both parties have filed applications in this court. The Joneses' application attacks the judgment requiring specific performance. The Kelleys' application complains of the failure of the court of civil appeals to hold that presentment of their claim was made, entitling them to the attorney's fees found by the jury.

We reform the judgment of the court of civil appeals to provide for the recovery by the Kelleys of attorney's fees in the amount determined by the jury. In all other respects the judgment is affirmed.

Three issues are presented: (1) whether the four documents consummating the sale of the subject property may be construed together as one contract; (2) whether the description of the property contained in the four documents if they are construed together is sufficient to satisfy the statute of frauds, Tex.Bus. & Com.Code Ann. § 26.01(b)(4); and (3) whether presentment of the Kelleys' claim was established as a matter of law entitling the Kelleys to the jury's award of attorney's fees.

The Joneses owned a 116 acre tract of land in Shelby County. ¹ They listed the tract for sale with a real estate agency specifying that the purchase price was to be paid either in "cash or G.I.". Mr. Kelley, a veteran, secured the aid of the Texas Veterans Land Board to assist him in purchasing the property. The Joneses cooperated with the Kelleys in the financing arrangements with the Veterans Land Board.

Their agreement was to sell the entire 127.55 acre tract and consisted of two earnest money contracts between the Joneses and the Kelleys, the Veterans Land Board Application and Contract for Sale, and the Joneses' affidavit. Under one of the earnest money contracts, the parties agreed that the contract was assignable by the Kelleys to the Veterans Land Board which would take title to 36 acres of the Joneses' property in its name for cash. The Board would then resell that 36 acres to the Kelleys under the provisions of the Texas Veterans Land Act, art. 5421m Tex.Rev.Civ.Stat.Ann. The Joneses would sell the remainder of the property, 91.55 acres, directly to the Kelleys for cash plus a note executed by the Kelleys, the note to be secured by a Deed of Trust lien on the 91 acres. The Joneses would not retain any title or security interest in the land conveyed directly to the Veterans Land Board.

The Kelleys were the grantees in both earnest money contracts in which the Joneses agreed to convey the entire tract they owned in Shelby County to the Kelleys. The relevant portions of the documents may be summarized as follows:

1. An earnest money contract wherein Jones agrees to sell to Kelley, for the sum of $400 per acre, in cash, the premises described as the property "(l)ying and situated in the State of Texas, County of Shelby, and described as follows:"

"36 acres out of the W. W. Wagstaff Survey, A-796 in Shelby County, Texas."

This contract acknowledged that the "(p)urchaser has made application to purchase through Texas Veteran Land Board and has been assigned # 03147."

This contract also provides "(s)eller to furnish current survey by registered Surveyor as required by Veteran Land Board."

2. An earnest money contract wherein Jones agrees to sell to Kelley the premises described as:

"91.55 Acres out of the W. W. Wagstaff Survey A-796 and D. G. Green Survey A-263, in Shelby County, Texas" for a consideration of $400 per acre, with a cash payment of $5,493, and "(p)urchaser to make Note and Deed of Trust in favor of Seller" for the balance of the purchase price.

This contract provides that "(s)eller to furnish current survey by certified Surveyor," and further that "(t)his contract to be closed in conjunction with 36 Ac Vet Land Bd contract # 03147."

3. "Application and Contract of Sale Texas Veterans' Land Program," providing that, with reference to the 36 acre tract, Jones "shall attach hereto a field note description of the above referenced property ...."

4. "Affidavit of Seller Veterans Land Board of Texas" wherein Jones aver that they were the sellers of the described 36 acre tract, and that such tract "is a part of 127.55 acres that I purchased from C. Balsimo on May 1970 for a total consideration of $10,000.00 .... A surveyor field note description of an access easement is being furnished."

The Kelleys, in relying upon their agreement with the Joneses, expended $6,181.40 for survey fees, escrow payments, and fees and payments to the Veterans Land Board.

The Jones couple later refused to convey the property. On September 7, 1977, the Joneses sent a letter to the Veterans Land Board advising them that they would not go through with the sale. The Veterans Land Board replied, by letter to the Joneses, that the Kelleys intended to go through with the sale. Further, an uncontroverted transcript of a telephone conversation appears in the record between Mrs. Kelley and Mr. Jones in which Mrs. Kelley repeatedly told Mr. Jones of her determination to go through with the sale.

The Joneses contend that the description of the acreage in the earnest money contracts does not satisfy the statute of frauds, Tex.Bus. & Com.Code Ann. § 26.01(b)(4). Specifically, they argue that there were two separate and distinct conveyances involved, and neither the 36 acre tract to be conveyed to the Veterans Land Board nor the remaining acreage were sufficiently described. It is conceded, however, that if the documents are construed together as one contract there is an adequate description of the property. ² If the transaction consisted of two separate transactions, the property description is inadequate as to both tracts and the transaction fails.

We hold that the four instruments may be construed together and thus the description satisfies the statute of frauds. The general rule is that separate instruments or contracts executed at the same time, for the same purpose, and in the course of the same transaction are to be considered as one instrument, and are to be read and construed together. Miles v. Martin, 159 Tex. 336, 321 S.W.2d 62, 65 (1959); Veal v. Thomason, 138 Tex. 341, 159 S.W.2d 472, 475 (1942); Braniff Inv. Co. v. Robertson, 124 Tex. 524, 81 S.W.2d 45, 50 (1935); Libby v. Noel, 581 S.W.2d 761, 764 (Tex.Civ.App. El Paso 1979, writ ref'd n. r. e.).

The courts have construed contracts and instruments together in various situations in order to ascertain the intent of the parties. Several decisions indicate that instruments may be construed together or treated as one contract even though they are not between the same parties. See Miles v. Martin, supra. In Board of Insurance Commissioners v. Great Southern Life Ins. Co., 150 Tex. 258, 239 S.W.2d 803 (1951), Texas Bankers Association entered into a trust agreement with Houston Bank and Trust Company. The agreement provided for the establishment of a pension trust and retirement plan for member banks' employees. The trustee was to acquire life insurance on each participant from participating bank funds. Southern Life issued individual life insurance policies on each employee. Southern Life asserted that it had not violated any group insurance law because individual policies had been issued. This court held that the insurance policies, the trust agreement, and the agreement between Great Southern and the Bankers Association must be construed together. We stated: "All of the instruments were a necessary part of the same transaction, without any one of which the transaction was not complete." In the present suit the transaction is the sale of the entire tract. Without the Veterans Land Board financing referred to in the contracts, the sale of the entire tract would not be complete.

In Veal v. Thomason, supra, separate oil and gas leases were involved covering a group of contiguous tracts of land owned by the various lessors in severalty. Each instrument contained recitals showing that the execution of similar leases by other lessors was contemplated by the parties, and the several leases were held to constitute but one contract just as though all of the lessors had signed the same piece of paper.

Although admitting that the documents were executed as part of one transaction, the Joneses argue that the purpose in executing the documents was not the same. The Joneses urge a distinction in that the 36 acre tract was to be sold for cash while as to the remaining acreage, the Joneses were to retain a substantial security interest in the property. In Miles v. Martin, supra, we said that the principle of construing contracts together was a "device for ascertaining and giving effect to the intention of the parties and cannot be applied arbitrarily and without regard to the realities of the situation." Id. 321 S.W.2d at p. 65.

Looking at the complete transaction it was the clear intent of both the Joneses and the Kelleys that the execution of the four documents was for the primary purpose of conveying all the subject property to the Kelleys. The property...