Parson v. Wolfe

• Decision Date: 30 August 1984
• Docket Number: No. 07-83-0020-CV,07-83-0020-CV
• Parties: Mellane A. PARSON, Appellant, v. Jamie R. WOLFE, Appellee.
• Court: Texas Court of Appeals

Page 689

676 S.W.2d 689

Mellane A. PARSON, Appellant, v. Jamie R. WOLFE, Appellee.

No. 07-83-0020-CV.

Court of Appeals of Texas Amarillo.

Aug. 30, 1984.

Richard F. Stovall, Stovall & Laney, P.C., Plainview, for appellant.

Lucian Morehead, Morehead, Sharp & Tisdel, Plainview, for appellee.

Before REYNOLDS, C.J., and COUNTISS and BOYD, JJ.

COUNTISS, Justice.

This is an equitable conversion case. Dissatisfied with a judgment favorable to the heir of the personalty, the heir of one-half of the realty advances two points of trial court error. We affirm.

Shawna Wolfe, now deceased, and her sister, appellant Mellane A. Parson, contracted on September 17, 1981, to sell 160 acres of their separate realty in Floyd County to their paternal uncle. Before the sale could be closed Mrs. Wolfe died, intestate and childless. After her death, the sale was closed and the proceeds in dispute were placed in the registry of the court.

The dispute is between Mrs. Wolfe's surviving husband, appellee Jamie R. Wolfe, and her sister, Mrs. Parson, her only heirs at law. Mrs. Parson says she inherited one-half of Mrs. Wolfe's interest in the land when Mrs. Wolfe died and she is entitled to the proceeds from that interest. Mr. Wolfe says the land must be treated as personalty, under the doctrine of equitable conversion, and he is entitled to all proceeds from Mrs. Wolfe's interest. ¹ Thus, the single issue raised by Mrs. Parson's points of error is whether the doctrine of equitable conversion is applicable. If it is, Mrs. Wolfe's interest in the land is to be treated as personalty under the laws of descent and distribution and it belongs to Mr. Wolfe.

Equitable conversion is generally defined as that change in the nature of property by which, for certain purposes, realty is considered as personalty or personalty is considered as realty, and the property is transmissible as so considered. Toledo Soc. for Crippled Children v. Hickok, 152 Tex. 578, 261 S.W.2d 692, 698 (1953); Sanderson v. Sanderson, 130 Tex. 264, 109 S.W.2d 744, 748 (1937). The doctrine, developed in the English Court of Chancery over three hundred years ago, is grounded on the maxim that equity regards as done that which in fairness and good conscience should be done. Lampman v. Sledge, 502 S.W.2d 957, 959 (Tex.Civ.App.--Waco 1973, writ ref'd n.r.e.); Simpson, Legislative Changes in the Law of Equitable Conversion by Contract, 44 Yale L.J. 559, 560 (1935). Equitable conversion may occur by will or by contract. Simpson, supra, at 561; see Toledo Soc., supra. In testamentary situations, the doctrine is used to carry out the intent of the testator who directs that certain realty be sold or purchased. Boulware v. Sinclair Prairie Oil Co., 219 S.W.2d 536, 538 (Tex.Civ.App.--Beaumont 1949, writ ref'd); Simmons v. O'Connor, 149 S.W.2d 1107, 1113 (Tex.Civ.App.--Fort Worth 1941, writ dism'd judgmt cor.). See generally 1 H. TIFFANY, REAL PROPERTY §§ 297-98 (3rd ed. 1939). In equitable conversion by contract, however, the doctrine is used to decide the status of the parties' interests during the period between execution of the contract of sale and actual transfer of legal title. See generally TIFFANY, supra, §§ 307-310. It is utilized, for example, to allocate the increase or decrease in value of the property during this period, Guzman v. Acuna, 653 S.W.2d 315, 319 (Tex.App.--San Antonio 1983, writ dism'd), or, as in this case, to determine how the realty or personalty passes upon the death of either the vendor or vendee. Toledo Soc., supra; Lampman, supra; Hardcastle v. Sibley, 107 S.W.2d 432, 437 (Tex.Civ.App.--El Paso 1937, writ ref'd). ²

When there is an equitable conversion by contract, the purchaser of land is regarded in equity as owner of the land and debtor for the purchase money, and the vendor is a secured creditor "having a legal position not unlike that of a mortgagee." Simpson, supra at 559. As indicated by the quotation in marginal note 2, the pivotal question, when determining whether an equitable conversion by contract has occurred, is whether the contract is specifically enforceable. Accord, Sanderson v. Sanderson, supra; Guzman v. Acuna, supra; Willie v. Waggoner, 181 S.W.2d 319, 322 (Tex.Civ.App.--Austin 1944, writ ref'd).

In this case, the contract is properly executed and contains all of the provisions necessary in order for it to be binding on, and specifically enforceable by, either the sellers or the buyer. Mrs. Parson advances two arguments to the contrary, however. First, she points to the following provision in the contract:

It being contemplated that Purchaser will obtain a loan upon the security of the real property above described to provide a part of the consideration hereinabove provided for, the reasonable time hereinafter accorded Purchaser for performance of the obligation required of him by this Contract shall include a reasonable time for processing and consummation of such loan.

That provision, she says, was a condition precedent unfulfilled when Mrs. Wolfe died; thus specific performance was not a viable option at the critical time.

Whether a condition precedent exists is determined from a reading of the entire contract. Hudson v. Wakefield, 645 S.W.2d 427, 430 (Tex.1983). In this case, the choice of the word "contemplated" indicates that a loan was anticipated, and permissible, but it does not indicate that a loan was a condition precedent. See, e.g., Wall v. Ayrshire Corp., 352 S.W.2d 496, 500 (Tex.Civ.App.--Houston 1961, no writ); Zucht v. Stewart Title Guaranty Co., 207 S.W.2d 414, 418 (Tex.Civ.App.--San Antonio 1947, writ dism'd); Newsome v. Brown, 157 S.W. 203, 204 (Tex.Civ.App.--Texarkana 1913, no writ). Additionally, we note that the parties used the word "agree" in other portions of the contract when intending to create a binding duty. Dauray v. Gaylord, 402 S.W.2d 948, 950-51 (Tex.Civ.App.--Dallas 1966, writ ref'd n.r.e.). Thus, from a four-corners reading of the contract, we must conclude that the clause was intended as a measure of the time that was reasonable for the buyer's performance, and not as a condition that, if...