Worley v. Yarborough Ford, Inc.

• Citation: 452 S.E.2d 622,317 S.C. 206
• Decision Date: 01 November 1994
• Docket Number: No. 2278,2278
• Parties: Leonard A. WORLEY, Appellant, v. YARBOROUGH FORD, INC., Respondent. . Heard
• Court: South Carolina Court of Appeals

Page 622

452 S.E.2d 622

317 S.C. 206

Leonard A. WORLEY, Appellant, v. YARBOROUGH FORD, INC., Respondent.

No. 2278.

Court of Appeals of South Carolina.

Heard Nov. 1, 1994.

Decided Dec. 12, 1994.

Robert E. Hoskins, of Foster & Foster, Greenville, for appellant.

Harold P. Threlkeld, Anderson, for respondent.

CURETON, Judge:

This is a breach of contract action. The complaint alleges a breach of contract by the respondent, Yarborough Ford, Inc. (Yarborough), in its failure to return a $25,000 earnest money deposit to appellant, Leonard A. Worley. The trial court directed a verdict for Yarborough. Worley appeals. We affirm.

In February 1992, Worley and Yarborough entered into a contract whereby Worley agreed to buy Yarborough's automobile dealership. At the contract's signing, Worley paid Yarborough $25,000 earnest money. The agreement expressly provided that Yarborough had the option of retaining the earnest money if Worley defaulted. The transaction did not close when Worley lost his financial backer. The contract does not mention a financial backer.

The contract contained two terms which Worley contends are dispositive of the issues in this appeal. Those provisions are:

Buyer shall in good faith diligently and expeditiously pursue the approval of Ford Motor Corporation as required by Seller and Ford Motor Corporation.

Failure to close as a result of Ford Motor Corporation not approving the franchise transfer shall not be a breach by either party.

As part of the approval process, Ford Motor Corporation required Worley to have available approximately $400,000. ¹ Because Worley's financial resources were limited, it was necessary to have a financial backer. Worley testified he initially had a backer at the time the contract was signed. After submitting his application to Ford for the franchise transfer, the backer withdrew his endorsement. Worley testified he then obtained a second backer who subsequently withdrew. As a result, Worley was never able to submit a complete application package to Ford. Consequently, Ford never approved the transfer of the dealership. Yarborough thereafter sold the dealership to another party.

In ruling on a motion for directed verdict, the trial court is required to view the evidence and all inferences that reasonably can be drawn therefrom in the light most favorable to the party opposing the motion. The court should deny the motion where either the evidence yields more than one inference or its inferences are in doubt. Strange v. S.C. Dep't of Highways and Public Transp., --- S.C. ----, 445 S.E.2d 439 (1994). Worley argues the court erred in granting Yarborough's directed verdict motion because there is evidence in the record he diligently and expeditiously pursued approval from Ford by attempting in good faith to obtain financial backing for the deal even after he lost his first financial backer.

In construing a contract, the primary concern of the court is to ascertain and give effect to the intent of the parties. D.A. Davis Constr. Co., Inc. v. Palmetto Properties, Inc., 281 S.C. 415, 315 S.E.2d 370 (1984). The language of a contract must first be considered in determining the intention of the parties to that contract. C.A.N. Enter., Inc. v. South Carolina Health and Human Serv. Fin. Comm'n, 296 S.C. 373, 373 S.E.2d 584 (1988). At trial, Worley argued and the court agreed that the agreement was unambiguous. That being the case, there is no need to resort to extrinsic evidence to ascertain the intention of the parties. Murphy v. Hagan, 275 S.C. 334, 271 S.E.2d 311 (1980).

Ordinarily, the failure of one to perform under a contract because of his inability to obtain financing from a third party on whom he relied to furnish the money will not excuse performance, in the absence of a contract provision in that regard. 17A Am.Jur.2d Contracts § 680 (1991); see Marionneaux v. Smith, 163 So. 206 (La.App.1935). The question then becomes whether there is a provision in the instant agreement, either express or implied, which provides for the return of Worley's earnest money should he be unable to obtain financing to complete the transaction. ²

In granting Yarborough's motion for directed verdict, the trial court concluded financing was not a condition precedent to Worley's obligation to perform under the contract and, thus, as a matter of law, Worley breached the terms of the contract by not performing. A condition precedent entails something that is essential to a right of action, as opposed to a condition subsequent, which is something relied upon to modify or defeat the action. 4 S.C.Juris. Actions, § 25 (1991). In contract law, the term connotes any fact other than the lapse of time, which, unless excused, must exist or occur before a duty of immediate performance arises. Ballenger Corp. v. City of Columbia, 286 S.C. 1, 331 S.E.2d 365 (Ct.App.1985). The question of whether a provision "in a contract constitutes a condition precedent is a question of construction dependent on the intent of the parties to be gathered from the language they employ." Id. at 5, 331 S.E.2d at 368. After reviewing the agreement, we hold as a matter of law that the agreement contains no express provision or condition that makes Worley's ability to obtain financing a condition precedent to his obligation to perform.

Likewise, we conclude as a matter of law that such a condition precedent should not be implied from the facts of this case. Generally, "a condition precedent may not be implied when it might have been provided for by the express agreement." 17A C.J.S. Contracts § 338 (1963); 17A Am.Jur.2d Contracts § 471 (1991). The evidence is uncontradicted that Worley knew he would need substantial finances to close the deal which he did not personally have. Worley's attorney prepared the contract and could have inserted a provision in the contract to the effect that financing was a condition of his obligation to perform. In fact, Paragraph 8 of the agreement is captioned "Conditions on the Obligations of Parties." Nowhere in Paragraph 8 is Worley's ability to obtain financing a condition of his "obligation" to perform under the contract. Moreover, Worley testified he represented to the president of Yarborough that he had the finances covered through a...