McDaniel v. Pettigrew

• Decision Date: 15 April 1976
• Docket Number: No. 18852,18852
• Citation: 536 S.W.2d 611
• Parties: Charles McDANIEL and Faye McDaniel, Appellants, v. Sam W. PETTIGREW et al., Appellees.
• Court: Texas Court of Appeals

Page 611

536 S.W.2d 611

Charles McDANIEL and Faye McDaniel, Appellants, v. Sam W. PETTIGREW et al., Appellees.

No. 18852.

Court of Civil Appeals of Texas,

Dallas.

April 15, 1976.

Rehearing Denied May 13, 1976.

David J. White, Stalcup, Johnson, Meyers & Miller, Dallas, for appellants.

Forrest Wm. Wagner, Pettigrew, Buckley & Wagner, Grand Prairie, for appellees.

CLAUDE WILLIAMS, Chief Justice.

Charles McDaniel and Faye McDaniel appeal from a summary judgment denying them any relief against Sam W. Pettigrew, George V. Delk, and John E. Henry in an action for cancellation and rescission of a contract, notes, deeds of trust, and lien agreements in connection with the purchase and sale of real property. In their petition, under count one, the McDaniels sought cancellation and rescission of a contract to purchase a lot with a residence to be constructed thereon, notes, security instruments, and other instruments in connection with such contract, alleging violation of Tex.Rev.Civ.Stat.Ann. art. 5069--13.01, et seq. (Vernon Supp.1975), known as the Home Solicitation Act. In their alternative count two the McDaniels sought the same relief based upon alleged misrepresentations and failure to perform the contract in question. The trial court sustained the motion for summary judgment filed by Pettigrew, Delk and Henry, and the McDaniels appeal. We affirm in part and reverse in part.

The record is without dispute that Charles and Faye McDaniel had been previously married and divorced and then decided to remarry on October 3, 1973. Either shortly before or after their remarriage, the McDaniels contacted Pat Watson, a licensed real estate broker on Grand Prairie, Texas, concerning the purchase of a home. They selected Pat Watson because she previously had negotiated the purchase of another house by the McDaniels. As a result of this contact, Pat Watson showed the McDaniels a number of houses and lots including an unimproved lot located at 1409 Egyptian Street in Grand Prairie, Texas. This lot was owned by George Delk and John Henry, who were builders. Pat Watson had previously represented Delk and Henry in sales of homes built by them. She advised the McDaniels that Delk and Henry could build a house on the lot for the McDaniels. The McDaniels did not find a house plan which would suit their needs until Pat Watson showed them a set of plans on a home previously built by her husband. The McDaniels stated that they wanted a house built on the Egyptian Street lot to look just like the house built by Pat Watson's husband, except proportionately larger. Pat Watson and the McDaniels went over the plans and specifications and made changes in accordance with the desires of the McDaniels. Pat Watson then contacted Delk and Henry and returned to the McDaniels and advised them that Delk and Henry would sell them the lot and build the house like they wanted for a sum of $65,000.

On October 12, 1973, Pat Watson took a contract of sale between Delk and Henry, as sellers, and Charles McDaniel et ux, as purchasers, to the McDaniels' apartment where Charles McDaniel executed it. McDaniel put up $3,000 as escrow deposit under the contract. On December 6, 1973, Pat Watson took to the McDaniels' apartment a mechanic's lien agreement and note for $70,000 to be executed by them to Delk and Henry so that the sellers could proceed with the construction of the house. Charles and Faye McDaniel executed both instruments at their residence. Construction on the house began about December 11, 1973. On January 14, 1974, a new contract of sale was executed by Charles McDaniel as purchaser, and Henry and Delk as sellers. This contract was the same as the original contract executed on October 12, 1973, with the exception that the McDaniels made a greater down payment and obtained a lower rate of interest.

The McDaniels were never informed of any right to cancel either of the two contracts or other instruments, and no type of notice of cancellation form was provided with any of these instruments.

The construction of the home was completed in April or May 1974, with the exception of a small amount of work to be done in a closet and the installation of some carpets in the front entry hall. When the sellers claimed the house was completed, the McDaniels went to the site and told Pat Watson that they refused to accept the house due to the failure of Delk and Henry to construct the same in a good workmanlike manner and in accordance with the plans and specifications agreed upon between the parties. Pat Watson informed Delk and Henry of the McDaniels' statement.

When the December 6, 1973, note became due on September 6, 1974, and the McDaniels refused to pay it, Mr. Henry requested the McDaniels sign a renewal note and a deed of trust, both dated September 6, 1974, stating that such instruments were needed in order to secure additional time to facilitate sale of the house to another party. Charles McDaniel testified that he told Mr. Henry that he would sign the renewal note, and Henry stated they would all work together to sell the house so that no one would lose any money. The McDaniels did sign the renewal notes and papers tendered by Mr. Henry. The McDaniels also allege in their petition that they signed the renewal obligations in reliance on a representation by Henry that such instruments would not be enforced against them. They contend that this representation was false because the sellers did intend to enforce them, and did post the property for foreclosure under the September 6, 1974, deed of trust. The McDaniels originally filed suit for rescission and injunctive relief against the deed of trust foreclosure. The district court denied the application for temporary injunction and this court affirmed without written opinion. Consequently, Delk and Henry proceeded with the sale and purchased the property themselves on May 6, 1975. Since the bid for the property was insufficient to pay the debt, Delk and Henry filed suit on May 28, 1975, seeking a deficiency judgment against the McDaniels for an amount in excess of $42,000. This action is still pending.

The Home Solicitation Act

In their first seven points of error, appellants Charles and Faye McDaniel contend that the trial court erred in rendering summary judgment against them because the record reveals material issues of fact concerning violations of Tex.Rev.Civ.Stat.Ann. art. 5069--13.01 through 13.06 which would render the transaction in question void.

The statute is entitled 'Home Solicitation Transactions--Rights and Duties of Parties' and was enacted by the legislature on June 11, 1973. The statute gives the consumer the right to rescind a home solicitation transaction as defined in the act; requires certain information and forms to be given to the consumer at the time of the transaction; provides rights, duties, responsibilities, and liabilities of merchants, consumers, and other parties involved in such transactions; and provides penalties for violations. Since no Texas court has construed this statute this is a case of first impression. Although similar statutes have been passed by other states there is a paucity of decisions to guide us in construing the act. ¹

A careful study of the statute in question leads to the definite conclusion that the legislature obviously intended to provide protection to customers purchasing goods, services, or realty in which the merchant or person acting for him engages in a personal solicitation of the sale to the consumer at the residence of the consumer. Stated more simply the act was designed to protect residential occupants from high pressure door-to-door salesmen and allow a 'cooling-off' period within which the sales contract could be rescinded. The legislature clearly delineated the purpose of the legislation in § (5)(A) of the article by defining 'Home solicitation transaction' as meaning:

(A) consumer transaction:

(A) for the purchase of goods . . . or services . . . in which the merchant or person acting for him engages in a Personal solicitation of the sale to the consumer At a residence and the consumer's agreement or offer to purchase is given at the residence to the merchant or person acting for him . . .. (Emphasis added.)

It obviously centers attention upon the personal solicitation by the seller at the residence of the buyer. The next paragraph of the act, § (5)(B), deals with the purchase of realty at the consumer's residence but specifically provides that 'it does not include a sale of realty in which transaction the purchaser is represented by a licensed attorney Or in which the transaction is being negotiated by a licensed real estate broker . . ..' (Emphasis added.) The remaining portions of the act are specific in providing that where the act is applicable the consumer has the right to cancel the agreement within three days; that the seller must furnish the consumer with a contract which contains a statement notifying him of his right to cancel; and that a violation of the act renders the sale void.

In arriving at our conclusions concerning the applicability of this statute to the facts presented to us, we are governed by the statutory admonition that we shall look diligently for the intentions of the legislature, keeping in view at all times the old law, the evil and the remedy. Tex.Rev.Civ.Stat.Ann. art. 10(6) (Vernon 1969). Under this article the provisions of the statute must be liberally construed with a view to affect their objects and that in arriving at the intent and purpose of the law it is proper to consider the history of the subject matter involved, the end to be attained, the mischief to be remedied, and the purpose to be accomplished. Magnolia Petroleum Co. v. Walker, 125 Tex. 430, 83 S.W.2d 929, 934 (1935).

With these rules to govern us we have concluded, and so hold, that the summary-judgment proof in this record demonstrates the inapplicability of the statute and, therefore, appellant's contention of...