Smith v. Hues

• Decision Date: 21 July 1976
• Docket Number: No. 1311,1311
• Parties: Joseph C. W. SMITH, Appellant, v. Alton HUES et ux., Appellee. (14th Dist.)
• Court: Texas Court of Appeals

Page 485

540 S.W.2d 485

Joseph C. W. SMITH, Appellant, v. Alton HUES et ux., Appellee.

No. 1311.

Court of Civil Appeals of Texas Houston (14th Dist.).

July 21, 1976.

Rehearing Denied Sept. 8, 1976.

Frank G. Harmon, James Plummer, Baker & Botts, Ansel M. Kahn, Houston, for appellant.

Eugene Pitman, DeLange, Hudspeth, Pitman & Katz, Houston, for appellees.

J. CURTISS BROWN, Chief Justice.

This is a suit for specific performance of a contract for the sale of real estate.

Alton Hues and his wife, Bethine Hues (the Hues or appellees), brought suit against Joseph C. W. Smith (Smith or appellant) to obtain specific performance of, or in the alternative damages for defendant's breach of, a contract for the sale of land in which plaintiffs were the purchasers and defendant was the seller. After a nonjury trial, the trial court entered a judgment decreeing specific performance. Smith has perfected this appeal.

Shortly prior to February 11, 1971 the parties verbally agreed on a sale by Smith to the Hues of certain land for a price of $1,000 per acre, the exact acreage of the property to be determined by a future survey. On February 11 the parties met with Smith's attorney to discuss a proposed draft of an earnest money contract. One provision of that draft gave the seller a reasonable time not to exceed ninety days in which to cure any objections to the title to the property. At the meeting there was a discussion of an apparently forged deed which purported to convey the property from Smith to a third party. As a result of that discussion the above provision was changed to allow the seller eighteen months to cure such objections. The contract was signed on February 11, 1971. The Hues subsequently found that the title company designated as the escrow agent in the contract was unwilling to accept the earnest money deposit. After contacting Smith's attorney they placed the money with a different title company.

In August, 1971 Smith filed suit to clear his title to the property. A judgment clearing his title was eventually entered in May of 1974. Meanwhile, the Hues had the land surveyed to determine the exact acreage, and in August of 1972, shortly before the expiration of eighteen months from the date the contract was signed, tendered to Smith 10% Of the purchase price in cash along with a promissory note for the remainder, which the contract required. Smith failed to tender to appellees a deed, and this suit was brought shortly thereafter.

Appellant's first point of error asserts that the decree of specific performance is improper because time was of the essence in the contract, and appellees failed to consummate the purchase within the specified time. The contract provided, Inter alia:

'Notwithstanding printed provisions to the contrary, the parties to this contract hereby agree as follows:

'(2) Purchaser shall have sixty (60) days from date of execution hereof in which to consummate said purchase.

'(4) Purchasers will not be required to perform said contract and Sellers sole remedy will be liquidated damages the amount of money deposited in escrow by the purchasers.'

Appellant argues that clause (2) above evidences an intention that time should be of the essence, and in addition, that clause (4) above makes the contract an option contract in which time is always of the essence. From this he reasons that appellees' tender came long after the contract had expired by its own terms.

We agree with appellant that since he, as seller, had a mandatory obligation to accept the sum stipulated to be liquidated damages in lieu of appellees' further liability, thereby relieving appellees of the obligation to pay the purchase price, this contract was an option contract and not an absolute agreement of sale and purchase. Paramount Fire Insurance Co. v. Aetna Casualty & Surety Co., 163 Tex. 250, 353 S.W.2d 841 (1962); Texlouana Producing & Refining Co. v. Wall, 257 S.W. 875 (Tex.Com.App., 1924, jdgmt. adopted); Tabor v. Ragle, 526 S.W.2d 670 (Tex.Civ.App., Fort Worth 1975, writ ref'd n.r.e.); Gala Homes, Inc. v. Fritz, 393 S.W.2d 409 (Tex.Civ.App., Waco 1965, writ ref'd n.r.e.). It has long been the rule that time is always of the essence in an option contract. Johnson v. Portwood, 89 Tex. 235, 34 S.W. 596 (1896); White v. Miller, 518 S.W.2d 383 (Tex.Civ.App., Tyler 1974, writ dism'd).

However, even where time is of the essence, the stipulated time limit may be extended either by agreement or by waiver. Puckett v. Hoover, 140 Tex. 1, 202 S.W.2d 209 (1947); Langley v. Norris, 141 Tex. 405, 173 S.W.2d 454 (1943); Laredo Hides Co. v. H. & H. Meat Products Co., 513 S.W.2d 210 (Tex.Civ.App., Corpus Christi 1974, writ ref'd n.r.e.). Such a waiver 'not only may be shown by parol, but may be made to appear from the circumstances or course of dealing.' Puckett v. Hoover, supra, 202 S.W.2d at 212.

The trial court filed findings of fact and conclusions of law, among which are the following:

'10. That Defendant, by and through his actions and actions of his duly authorized attorneys, led Plaintiffs to believe and represented to Plaintiffs that Plaintiffs would have such time for the completion of the purchase of the property described in Plaintiffs' Exhibit No. 1 as was required for Defendant to remove the cloud upon Defendant's title cast by the document, Plaintiffs' Exhibit No. 2, but not exceeding 18 months from the date of said contract, within which to consummate Plaintiffs' purchase of the property from Defendant, pursuant to Plaintiffs' Exhibit No. 1.

'11. That the Plaintiffs reasonably relied upon such actions and representations on the part of the Defendant and Defendant's attorneys.

'12. That all actions and representations made and demonstrated to Plaintiffs by Defendant's said attorneys were expressly authorized by the Defendant.

'13. That all actions and representations made by Defendant's attorneys to Plaintiffs and demonstrated to Plaintiffs were within the apparent authority of Defendant's said attorneys.

'14. That the Plaintiffs reasonably relied upon the apparent authority conferred upon Defendant's attorneys by Defendant.

'15. That the Defendant is estopped to deny that the Plaintiffs attempt to conclude their purchase pursuant to Plaintiffs' Exhibit No. 1 was timely.

'16. That the Defendant agreed that the time for performance of the contract, Plaintiffs' Exhibit No. 1, by the Plaintiffs would extend to and include the time necessary for Defendant to remove the cloud cast upon his title by Plaintiffs' Exhibit No. 2, but not exceeding 18 months after the date of said Plaintiffs' Exhibit No. 1.

'18. That Defendant's attorneys agreed that the time for performance of the obligations of Plaintiffs for the purchase of property as described in Plaintiffs' Exhibit No. 1 would extend to and include such time as was necessary for Defendant to cause the cloud cast upon his title to said property by Plaintiffs' Exhibit No. 2 to be removed and cancelled, but not to exceed 18 months after the date of Plaintiffs' Exhibit No. 1.'

In his original brief, appellant had no points of error attacking or challenging these findings. After this cause was submitted on oral argument, appellant filed a motion for leave to file a 'Reply and Amended Brief.' We denied appellant's motion for leave to file an amended brief in which new points were raised, and granted his motion for leave to file a reply brief in which no new points were raised. In a 'Reply Brief,' appellant has challenged the above findings of fact as being erroneous because the appellees failed to affirmatively plead estoppel and waiver, as required by Tex.R.Civ.P. 94. This is a new point, not raised in appellant's original brief, and we decline to consider it. See Green Light Co. v. Moore, 485 S.W.2d 360 (Tex.Civ.App., Houston (14th Dist.) 1972, no writ); Reynolds v. Steves, 356 S.W.2d 200 (Tex.Civ.App., San Antonio 1962, no writ); Krumb v. Porter, 152 S.W.2d 495 (Tex.Civ.App., San Antonio 1941, writ ref'd).

It is well settled that absent a proper attack on material findings of fact they are binding on appellant and must be accepted by this court. Whited v. Mullins, 515 S.W.2d 159 (Tex.Civ.App., Houston (1st Dist.) 1974, no writ); Cortez v. Cortez, 457 S.W.2d 131 (Tex.Civ.App., San Antonio 1970, no writ); Hardeman v. Mitchell, 444 S.W.2d 651 (Tex.Civ.App., Tyler 1969, no writ); Curtis v. National Cash Register Co., 429 S.W.2d 909 (Tex.Civ.App., Amarillo 1968, writ ref'd n.r.e.); Kroger Co. v. Warren, 420 S.W.2d 218 (Tex.Civ.App., Houston (1st Dist.) 1967, no writ); McKenzie v. Carte, 385 S.W.2d 520 (Tex.Civ.App., Corpus Christi 1964, writ ref'd n.r.e.); Thompson v. Larry Lightner, Inc., 230 S.W.2d 831 (Tex.Civ.App., San Antonio 1950, writ ref'd n.r.e.); Curry v. E. E. Stone Lumber Co., 218 S.W.2d 293 (Tex.Civ.App., El Paso 1948, writ ref'd n.r.e.). Bein a question of intention, the issue of waiver is one of fact where it is a matter of inference. Ford v. Culbertson, 158 Tex. 124, 308 S.W.2d 855 (1958). Therefore, even though time was of the essence in this contract, we are bound by the trial court's findings that appellant had waived the 60-day time limitation, had agreed to allow appellees eighteen months in which to consummate the purchase, and is now estopped to deny that the appellees made a timely tender of performance. Appellant's first point of error is overruled.

Appellant's second point of error asserts that the contract is unenforceable because it lacks mutuality of obligation and mutuality of remedy. For evidence of the asserted lack of mutuality, appellant points to the aforementioned provision relieving appellees of the obligation to perform the contract and requiring appellant to accept the deposited earnest money as his sole remedy in case of a breach by appellees.

We have held that the provision in question made this contract an option contract. By their very nature such contracts lack mutuality of obligation and remedy at their inception. Yet if...