Podolnick v. Hamilton

• Decision Date: 29 June 1960
• Docket Number: No. 10792,10792
• Citation: 337 S.W.2d 376
• Parties: Earl PODOLNICK et al., Appellants, v. Mary Jane HAMILTON, Appellee.
• Court: Texas Court of Appeals

Page 376

337 S.W.2d 376

Earl PODOLNICK et al., Appellants, v. Mary Jane HAMILTON, Appellee.

No. 10792.

Court of Civil Appeals of Texas, Austin.

June 29, 1960.

Rehearing Denied July 27, 1960.

Owens & Purser, Austin, for appellants.

Cofer & Cofer, Austin, for appellee.

GRAY, Justice.

This appeal is from a summary judgment awarding appellee a recovery of earnest money paid under the terms of a contract for the purchase and sale of real estate.

Appellee, M. J. or Mary Jane Hamilton, is and at all times material here was the wife of M. W. Hamilton. On November 24, 1958 appellee and her husband entered into a written contract with appellants, Earl Podolnick and Lena Novy Podolnick, Individually and as Joint Independent Executrix of the Estate of Louis Novy, Deceased.

By this contract appellee and her husband contracted to purchase a lot or tract of land in the City of Austin for a total consideration of $21,000 to be paid as follows:

'Five Thousand and no/100 Dollars ($5,000.00), cash, which Purchasers have deposited with Sellers, said sum to be applied on the total consideration of this transaction when consummated; if this transaction is not consummated, said sum shall be delivered in accordance with the terms of this contract.'

The contract further provided:

'If Purchasers default on this constract, the earnest money deposited with Sellers shall be forfeited as liquidated damages for such default.'

It also provided for the furnishing of an abstract, the making of objections to the title to said property as shown by the abstract and providing a tiem for curing the objections. It then provided:

'If said objections are not cured by Sellers or waived by Purchasers within said time, then this contract shall become null and void and the earnest money so deposited shall be returned to Purchasers if title is not good and marketable.'

And further that:

'In the event that Sellers should fail or refuse to consummate this transaction, Purchasers shall be entitled to specific performance of this contract, or damages for such refusal, at the election of Purchasers.'

The $5,000 recited by the contract was paid by M. W. Hamilton by check drawn on the Austin National Bank against an account designated as 'M. W. Hamilton Operating Account.' M. W. Hamilton requested additional time to pay the balance due under the contract and appellant, Earl Podolnick, replied to this request by letter dated February 24, 1959 and addressed to 'Mr. M. W. Hamilton' as follows:

'Dear Mr. Hamilton:

'On November 24, 1958 you and your wife, M. J. Hamilton, entered into a contract to buy the vacant property on the Northeast corner of Enfield Rd. and Exposition Blvd., as described in the contract, for the total sum of $21,000.00 on the basis of $5,000.00 down and the balance payable (10) ten days after abstract delivered and checked for title objections. This abstract was delivered to your attorney immediately and has been checked with no objections being raised.

'With due respect to the owners of this property it is necessary to put you and your wife on notice that you have (7) seven days, Feb. 25, 1959 to March 4, 1959, in which to pay the owned (sic) balance of $16,000.00 in full, to obtain ownership of said property, or forfeit the down payment of $5,000.00.

'Very truly yours,

'(s/Earl Podolnick)

'Earl Podolnick

'CC:

'Mrs. M. J. Hamilton

'Mr. Hume G. Cofer

'Mr. Wroe Owens'

On March 3, 1959 appellee filed this suit whereby she disaffirmed the above contract, asserted her defense of coverture, alleged that the $5,000 'earnest money' deposited at the time of the execution of the contract was paid out of a bank account which was her separate property and prayed for a judgment for its recovery. Her suit pamed as defendants Earl Podolnick and wife, Lena Novy Podolnick, Harold C. Novy, and Merton W. Hamilton. Defendants Lena Novy Podolnick and Harold C. Novy are sued individually and also in their capacities as Joint Independent Executrix and Joint Independent Executor, respectively, of the Estate of Louis Novy, deceased.

Appellee alleged that M. W. (Merton) Hamilton had abandoned her, refused to sue for recovery of her property and asked that it be adjudged that he had no interest in the $5,000. He is not a party to this appeal and will not be further noticed.

The parties, other than M. W. Hamilton, filed motions for summary judgment. These motions were accompanied by affidavits. Appellee's affidavit among other things stated:

'All of the $5,000.00 deposited with Mr. Podolnick was my separate property. When my husband and I married he was almost completely without funds, having no more than $60.00 in one bank account and no more than $310.00 in another. After we married the only money which either of us had was money received by me from the sale of securities which members of my family had given me long before my marriage to Merton W. Hamilton. Neither of us had any income, and we did not have any community property, nor did we acquire any community property before the $5,000.00 deposit was delivered to Mr. Podolnick. During this time all the money, more than $75,000.00 in amount, which was placed in the bank account which we used, at the Austin National Bank, was money received from the sale of securities owned by me before my marriage. The $5,000.00 deposit involved in this case was paid out of said money which I had from the sale of securities owned by me before my marriage.'

The affidavit of Earl Podolnick attached to appellants' motion states 'During the negotiations for the sale of the property described in said contract the Plaintiff, Mary Jane Hamilton, was at all times present, and she was present at the execution of said contract. The purchasers under the terms of said contract were M. W. Hamilton and wife, M. J. Hamilton, and the contract was executed in that manner.

'The Five Thousand and no/100 Dollars ($5,000.00) paid by the check of M. W. Hamilton was the down payment on said property as is recited in the contract above referred to.

'At no time during the negotiations for the purchase of said property up to and including the day the contract was executed did the Plaintiff, Mary Jane Hamilton, ever mention that the Five Thousand and no/100 Dollars ($5,000.00) paid by M. W. Hamilton was her separate property, or that she had any interest in such money, if such fact is true. I do not now know nor have I ever known whether or not said sum of money was the separate property of the Plaintiff and, therefore, now deny that such sum of money represented by the check of M. W. Hamilton was the separate property of the Plaintiff.'

The trial court considered the two motions together, granted appellee's motion and rendered judgment awarding her a recovery of the $5,000 sued for as her separate property.

We think the contract was clearly executory. 43-A Tex.Jur. p. 133, Sec. 120. We also think that the $5,000 was earnest money. The contract itself as above quoted twice so designates it. Appellants' pleadings also so designates it. They say:

'Defendants specifically deny that said money was a part of Plaintiff's separate property and demand strict proof thereof.

'That even if the 'earnest money' which was tendered to the Defendants by M. W. Hamilton was at some time prior to the above described transaction the separate property of the Plaintiff, she is now estopped to assert the separate ownership of the money because she entrusted the money to her husband, M. W. Hamilton, to control and manage and empowered him to act as her agent in transferring the funds described pursuant to the contract of the parties. These defendants reasonably relied on the facts as they appeared to be. Plaintiff was present at the negotiations of the parties to the contract and was present at the signing of the agreement, and she was willingly affixed her signature thereto; though she had many opportunities to do so, she made no effort at any time prior to this suit to inform the Defendants of the separate character of the funds, if such is true. The plaintiff, by her acquiescence in and her ratification of the acts of her husband and her failure to inform the Defendants of the separate character of the property, if such was the fact, is now estopped to assert that the 'earnest money' was her separate property. Unless Plaintiff is held to be so estopped, these Defendants will suffer substantial damage.'

It could not be a down payment on the land for as quoted supra the contract provides that it would be 'applied to the total consideration of this transaction when consummated.' The sale was never consummated.

The status of the $5,000 was not changed after it was 'deposited.' The letter from Earl Podolnick to Mr. Hamilton above quoted was in answer to a request for an extension of the contract and it granted an extension for a definite time--to March 4, 1959. For that reason when appellee's suit was filed on June 3 the contract remained executory. 43-A Tex.Jur.Sec. 217, p. 248. At that time there had not been a 'forfeiture' of the deposit and the contract had not been consummated.

Appellee, having urged her defense of coverture, was not bound by the contract of purchase. Taylor v. Hollingsworth, 142 Tex. 158, 176 S.W.2d 733, 737. There the court said:

'It is true that our present statutes authorize a married woman to incur personal obligations or debts for the benefit of her separate estate, but this power does not authorize her to purchase property and bind herself to a personal executory obligation to pay therefor. 23 Tex.Jur. p. 203, and authorities there cited.'

And the fact that she was joined by her husband, or joined him, in making the contract did not make it binding on her, 23 Tex.Jur. p. 226, Sec. 193. As to her the contract was voidable at her option.

There is no assertion here that the contract was for necessaries for the wife or that it was for the benefit of her separate estate and the contract is of such nature that...